EXHIBIT 4.4
CLASS B WARRANT AGREEMENT
WARRANT AGREEMENT
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WARRANT AGREEMENT, dated as of October 1, 1998 (this "Agreement")
between Marvel Enterprises, Inc., a Delaware corporation (the "Company"), and
American Stock Transfer & Trust Company, as warrant agent (the "Warrant Agent").
WHEREAS, as consideration paid by the Company in connection with the
settlement and resolution of all disputes between stockholders of Marvel
Entertainment Group, Inc., a Delaware corporation ("Marvel"), and the Debtors
(as herein defined), in connection with a Fourth Amended Joint Plan of
Reorganization under Chapter 11, Xxxxx 00, Xxxxxx Xxxxxx Code (the "Plan of
Reorganization"), for Marvel, the Xxxxx Xxxxx Company, Fleer Corp., Xxxxx X.
Xxxxx Corp., Heroes World Distribution, Inc., Malibu Comics Entertainment, Inc.,
Marvel Characters, Inc., Marvel Direct Marketing Inc., and SkyBox International
Inc. (collectively, the "Debtors"), jointly proposed by the Company and certain
holders of senior secured indebtedness of Marvel, the Company proposes to issue
and deliver warrant certificates (the "Warrant Certificates"), at such time, and
from time to time as provided in the Plan of Reorganization (the "Warrant
Distribution Date") to each holder of an Allowed Unsecured Claim, the LaSalle
Claim, an Allowed Equity Interest or Allowed Class Securities Litigation Claim
(as defined in the Plan of Reorganization) evidencing Class B Warrants (the
"Warrants") to acquire, under certain circumstances, an aggregate of 3,000,000
shares of the 8% cumulative convertible exchangeable preferred stock, $0.01 par
value per share, of the Company (the "Preferred Stock"), such number of Warrants
and shares of Preferred Stock being subject to adjustment as set forth herein;
and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing to so act, in connection with the
issuance of the Warrant Certificates and other matters provided herein.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, and for the purpose of defining the respective
rights and obligations of the Company, the Warrant Agent and the Holders (as
defined herein), the parties hereto agree as follows:
SECTION 1. Certain Definitions. As used in this Agreement, the
following terms shall have the following respective meanings:
"Affiliate" means, (i) with respect to any specified Person, any other
Person that, directly or indirectly, controls, is controlled by or is under
direct or indirect common control with such specified Person, or any
executive officer or director of any such
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specified Person or other Person or (ii) with respect to any natural
Person, any Person having a relationship with such person by blood,
marriage or adoption not more remote than first cousin. For the purposes of
this definition, "control," when used with respect to any specified Person,
means the possession, direct or indirect, of the power to direct the
management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise;
provided, however, that beneficial ownership of 10% or more of the voting
securities of a Person will be deemed to be control. The terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Board of Directors" means the Company's Board of Directors or a duly
appointed committee of the Company's Board of Directors.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in The City of New
York, or the city in which the principal corporate trust office of the
Warrant Agent is located, are authorized or obligated by law or executive
order to be closed.
"Closing Price" means (a) if the Preferred Stock shall be then listed
or admitted to trading on the New York Stock Exchange, the closing price on
the NYSE-Consolidated Tape (or any successor composite tape reporting
transactions on the New York Stock Exchange) or, if such a composite tape
shall not be in use or shall not report transactions in the Preferred
Stock, or if the Preferred Stock shall be listed on a stock exchange other
than the New York Stock Exchange, the last reported sales price regular way
or, in case no such reported sale takes place on such day, the average of
the closing bid and asked prices regular way for such day, in each case on
the principal national securities exchange on which the shares of Preferred
Stock are listed or admitted to trading (which shall be the national
securities exchange on which the greatest number of shares of the Preferred
Stock have been traded on such day or, if the Closing Price is being
determined for the purpose of determining the "Fair Market Value", during
the 20 consecutive trading days referred to in the definition of the term
"Fair Market Value"); or
(b) if the Preferred Stock is not listed or admitted to trading, the
average of the closing sale prices as reported by the NASDAQ National
Market System or, if the Preferred Stock is not included on such system,
the average of the closing bid and asked prices of the Preferred Stock in
the over-the-counter market as reported by any system maintained by the
NASD or any comparable system or, if the Preferred Stock is not included
for quotation in any such system, the average of the closing bid and asked
prices as furnished by two members of the NASD selected reasonably and in
good faith from time to time by the Board of Directors for that purpose; or
(c) if the Preferred Stock is not listed or admitted to trading and in
the absence of one or more such quotations, the Fair Market Value shall be
as reasonably determined
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in good faith by the Board of Directors (which determination shall be
reasonably described in a written notice delivered to the Warrantholders)
or, if an objection is made to such determination by a Qualifying
Warrantholder (as defined below) in accordance with the following sentence,
as determined by an Independent Appraiser in accordance with the following
sentence. In the event that any Qualifying Warrantholder shall object to
the determination of the Board of Directors of the Fair Market Value by
delivering written notice to the Company within ten (10) Business Days
following the receipt by such Qualifying Warrantholder of such
determination of the Board of Directors, the Fair Market Value shall
instead be determined in good faith by an Independent Appraiser. The
determination of the Board of Directors of the Fair Market Value shall be
binding and conclusive if no objection is made to such determination by a
Qualifying Warrantholder in accordance with the terms set forth above in
this paragraph. The fees and expenses of any Independent Appraiser
determining the Fair Market Value shall be borne by the Company and the
determination by such Independent Appraiser of the Fair Market Value shall
be binding and conclusive.
"Common Stock" means the common stock, $0.01 par value per share, of
the Company.
"Company" means Marvel Enterprises, Inc., a Delaware corporation, and
its successors and assigns.
"Consummation Date" has the meaning set forth in the Plan of
Reorganization.
"Current Market Price" means the Closing Price of the Common Stock as
of the day immediately preceding the day on which the Current Market Price
is determined, or, in the case of a firm commitment underwriting, the
Closing Price on the date on which the price at which the Company is
contractually bound to sell its Common Stock in an underwritten offering is
fixed.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Securities and Exchange Commission
thereunder.
"Exercise Price" means the purchase price per share of Common Stock to
be paid upon the exercise of each Warrant in accordance with the terms
hereof, which price shall be determined as described below, in each case
subject to adjustment from time to time pursuant to Section 11 hereof. With
respect to each series of Warrants issued on a particular Warrant
Distribution Date, the Exercise Price shall be an amount per share of
Preferred Stock as follows:
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If the Warrant Distribution Date is But Before: Then the
a date on or after: Exercise
Price
shall be:
[The Consummation Date] [The date 30 days after the $10.65
Consummation Date]
[The date 30 days after the [The date 60 days after the $10.76
Consummation Date] Consummation Date]
[The date 60 days after the [The date 90 days after the $10.86
Consummation Date] Consummation Date]
[The date 90 days after the [The date 120 days after the $10.97
Consummation Date] Consummation Date]
[The date 120 days after the [The date 150 days after the $11.08
Consummation Date] Consummation Date]
[The date 150 days after the [The date 180 days after the $11.19
Consummation Date] Consummation Date]
[The date 180 days after the [The date 210 days after the $11.31
Consummation Date] Consummation Date]
[The date 210 days after the [The date 240 days after the $11.42
Consummation Date] Consummation Date]
[The date 240 days after the [The date 270 days after the $11.53
Consummation Date] Consummation Date]
[The date 270 days after the [The date 300 days after the $11.65
Consummation Date] Consummation Date]
[The date 300 days after the [The date 330 days after the $11.76
Consummation Date] Consummation Date]
[The date 330 days after the [The date 360 days after the $11.88
Consummation Date] Consummation Date]
"Expiration Date" means the first business day occurring more than six
months after the applicable Warrant Distribution Date.
"Fair Market Value" means, with respect to any share of Preferred
Stock, as of the date of determination the average of the daily Closing
Price for each of the 20 consecutive trading days preceding the date of
such computation.
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"Holder" or "Warrantholder" means the registered holder of a Warrant.
"Independent Appraiser" means any nationally recognized investment
banking firm or accounting firm (other than any investment banking firm or
accounting firm having a significant ongoing relationship with the Company
or the Qualifying Warrantholder at the time of the appraisal) selected
jointly in good faith by the Board of Directors and the Qualifying
Warrantholder, whose fees and expenses shall be paid by the Company.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political
subdivision thereof, or other entity.
"Plan of Reorganization" has the meaning set forth in the preamble
hereof.
"Preferred Stock" has the meaning set forth in the preamble hereof.
"Qualifying Warrantholder" means any Warrantholder (or group of
Warrantholders) that, at the time of any objection to the determination of
the Board of Directors of the Fair Market Value, beneficially owns
collectively, together with its Affiliates, at least ten percent (10%) of
the Warrants on a fully diluted basis.
"Register" has the meaning set forth in Section 5(c) hereof.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar Federal statute, and the rules and regulations of the Securities
and Exchange Commission thereunder.
"Transfer Agent" has the meaning set forth in Section 10 hereof.
"Warrant Agent" means American Stock Transfer & Trust Company or the
successor or successors of such Warrant Agent appointed in accordance with
the terms hereof.
"Warrant Certificates" has the meaning set forth in the preamble
hereof.
"Warrant Distribution Date" has the meaning set forth in the preamble
hereof.
"Warrants" has the meaning set forth in the preamble hereof.
"Warrants Shares" means the shares of Preferred Stock issued or
issuable upon the exercise of the Warrants pursuant to the terms of this
Agreement.
731156.6
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SECTION 2. Appointment of Warrant Agent. The Company hereby appoints
the Warrant Agent to act as agent for the Company in accordance with the terms
and conditions set forth in this Agreement, and the Warrant Agent hereby accepts
such appointment.
SECTION 3. Warrant Certificates. (a) The Warrant Certificates to be
delivered pursuant to this Agreement shall be in registered form only, shall be
substantially in the form set forth in Exhibit A attached hereto and shall have
such insertions as are appropriate or required or permitted by this Agreement
and may have such letters, numbers, designations or other marks of
identification and such legends, summaries and endorsements stamped, printed,
lithographed or engraved thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be required to
comply with any law or with any rule or regulation pursuant thereto or with any
rule or regulation of any securities exchange on which the Warrants may from
time to time be listed. Warrant Certificates shall be dated the date of
countersignature by the Warrant Agent.
(b) The Warrant Certificates shall be issued at such time, and from
time to time, as provided in the Plan of Reorganization. Each Warrant
Certificate issued as of a particular Warrant Distribution Date and the Warrants
represented thereby shall be designated as a separate series (i.e., Class B,
Series 1; Class B, Series 2; etc.).
(c) Pending the preparation of definitive Warrant Certificates,
temporary Warrant Certificates may be issued, which may be printed,
lithographed, typewritten, mimeographed or otherwise produced, and which will be
substantially of the tenor of the definitive Warrant Certificates in lieu of
which they are issued.
(d) If temporary Warrant Certificates are issued, the Company will
cause definitive Warrant Certificates to be prepared without unreasonable delay.
After the preparation of definitive Warrant Certificates, the temporary Warrant
Certificates shall be exchangeable for definitive Warrant Certificates upon
surrender of the temporary Warrant Certificates to the Warrant Agent, without
charge to the Holder. Temporary Warrant Certificates so surrendered for exchange
shall be canceled by the Warrant Agent and disposed of by the Warrant Agent in a
manner satisfactory to the Company. Until so exchanged, the temporary Warrant
Certificates shall in all respects be entitled to the same benefits under this
Agreement as definitive Warrant Certificates.
SECTION 4. Execution of Warrant Certificates. (a) Warrant Certificates
shall be signed on behalf of the Company by its Chairman of the Board, its Chief
Executive Officer, its President or a Vice President of the Company. Such
signature upon the Warrant Certificates may be manual or in the form of a
facsimile signature of the present or any future Chairman of the Board, Chief
Executive Officer, President or Vice President of the Company, and may be
imprinted or otherwise reproduced on the Warrant Certificates and for that
purpose the Company may adopt and use the facsimile signature of any person who
shall have been Chairman of the Board, Chief Executive Officer, President or
Vice President of the Company, notwithstanding the
731156.6
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fact that at the time the Warrant Certificates shall be countersigned and
delivered or disposed of he or she shall have ceased to hold such office.
(b) In case any officer of the Company who shall have signed any of
the Warrant Certificates shall cease to be such officer before the Warrant
Certificates so signed shall have been countersigned by the Warrant Agent, or
delivered to the Holder thereof, such Warrant Certificates nevertheless shall be
countersigned and delivered with the same force and effect as though such person
had not ceased to be such officer of the Company, unless the Warrant Agent has
received written instructions from the Company not to countersign and deliver
such Certificates; and any Warrant Certificate may be signed on behalf of the
Company by any person who, at the actual date of the execution of such Warrant
Certificate, shall be a proper officer of the Company to sign such Warrant
Certificate, although at the date of the execution of this Warrant Agreement any
such person was not such officer.
SECTION 5. Registration and Countersignature. (a) The Company and the
Warrant Agent, on behalf of the Company, shall number and register the Warrant
Certificates in a Register (as hereinafter defined) as they are issued by the
Company which such register shall be maintained in accordance with Section 5(c)
hereof.
(b) Warrant Certificates shall be manually countersigned by the
Warrant Agent and shall not be valid for any purpose unless so countersigned.
The Warrant Agent shall, upon written instructions of the Chairman of the Board,
the Chief Executive Officer, the President or a Vice President of the Company,
initially countersign, issue and deliver Warrants entitling the Holders thereof
to purchase not more than the number of Warrant Shares referred to above in the
first recital hereof and shall countersign and deliver Warrants as otherwise
provided in this Agreement.
(c) The Company shall maintain, or cause to be maintained, a register
(the "Register") of the Warrants at its registered office, at the principal
office of the Warrant Agent or at any other place in the United States of
America designated by the Company, showing (i) the names and the latest known
address of each person who is or has been a Holder; (ii) the number of Warrants
of each series held by each Holder; and (iii) the date and particulars of the
issue and transfer of Warrants. The registered owner on the Register may be
deemed and treated by the Company, the Warrant Agent and all other persons
dealing with the Warrants evidenced thereby as the Holder and absolute owner
thereof for any purpose and as the person entitled to exercise the right
represented thereby, or to the transfer on the books of the Company, any notice
to the contrary notwithstanding, and, until such transfer of the Warrant on such
books in accordance with the provisions of this Agreement, the Company may treat
the registered owner on the Register as the owner for all purposes.
SECTION 6. Registration of Transfers and Exchanges. (a) The Warrant
Agent shall from time to time, subject to the limitations of Section 7 hereof,
register the transfer of any outstanding Warrant Certificates upon the records
to be maintained by it for that purpose, upon
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surrender thereof accompanied by a written instrument or instruments of transfer
in form satisfactory to the Warrant Agent, duly executed by the Holder or
Holders thereof or by the duly appointed legal representative thereof or by a
duly authorized attorney. Upon any such registration of transfer a new Warrant
Certificate(s) of like tenor and representing in the aggregate the number and
series of Warrants transferred, shall be issued to the transferee(s), and the
surrendered Warrant Certificate shall be canceled by the Warrant Agent. Upon any
partial transfer, a new Warrant Certificate of like tenor and representing in
the aggregate the number and series of Warrants which were not so transferred,
shall be issued to, and in the name of, the Warrantholder. Canceled Warrant
Certificates shall thereafter be disposed of in a manner satisfactory to the
Company.
(b) Any Warrant Certificate of a particular series may be exchanged,
subdivided or combined with other Warrant Certificates of the same series
evidencing the same rights as the rights evidenced thereby upon presentation and
surrender thereof at the principal office of the Warrant Agent, together with a
written notice signed by the Holder hereof specifying the denominations in which
new Warrant Certificate(s) are to be issued. Upon presentation and surrender of
any Warrant Certificates of a particular series, together with such written
notice, for exchange, subdivision or combination of such Warrant Certificates,
the Company will issue a new Warrant Certificate or Warrant Certificates, in the
denominations requested, of the same series and like tenor entitling the
Holder(s) thereof to purchase the same aggregate number of Warrant Shares as the
Warrant Certificate(s) so surrendered. Such new Warrant Certificate(s) will be
registered in the name of the Holder submitting such request. Any Warrant
Certificate surrendered for exchange, subdivision or combination shall be
canceled promptly upon the issuance of such new Warrant Certificate(s) and then
be disposed of by such Warrant Agent in a manner satisfactory to the Company.
(c) The Warrant Agent is hereby authorized to countersign and deliver,
in accordance with the provisions of this Section 6 and of Section 5 hereof, the
new Warrant Certificates required pursuant to the provisions of this Section 6.
SECTION 7. Terms of Warrants; Exercise of Warrants. (a) The Warrants
issued hereunder shall be identical in form except (i) that each Warrant
Certificate issued as of a particular Warrant Distribution Date and the Warrants
represented thereby shall be designated as a separate series (i.e., Class B,
Series 1; Class B, Series 2; etc.), and (ii) as to variations among each series
of Warrants as to the applicable Exercise Price and the applicable Expiration
Date.
(b) Subject to the terms of this Agreement, each Holder shall have the
right, upon payment of the applicable Exercise Price then in effect for such
Holder's series of Warrants in accordance with the terms of this Agreement, from
and after the date of issuance of such of Warrants until 5:00 p.m., New York
City time, on the applicable Expiration Date for such series of Warrants, to
receive from the Warrant Agent on behalf of the Company the number of fully paid
and nonassessable Warrant Shares which the Holder may at the time be entitled to
receive on exercise of such series of Warrants. Each Warrant not exercised on or
before 5:00 p.m., New
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York City time, on the applicable Expiration Date shall become void and all
rights thereunder and all rights in respect thereof under this Agreement shall
cease as of such time.
(c) The Warrants may be exercised during normal business hours on any
Business Day on or prior to the applicable Expiration Date upon surrender to the
Warrant Agent on behalf of the Company at the principal office of the Warrant
Agent of the certificate or certificates evidencing the Warrants to be exercised
with the form of subscription to purchase on the reverse thereof duly completed
and signed, and upon payment to the Warrant Agent for the account of the Company
of the applicable Exercise Price as adjusted as herein provided, for each of the
Warrant Shares in respect of which such Warrants are then exercised. Payment of
the aggregate Exercise Price for the number of Warrant Shares specified in the
subscription form shall be made by wire transfer or by certified or official
bank check payable to the order of the Company in immediately available funds in
lawful money of the United States of America.
(d) Upon surrender of Warrants in accordance with this Section 7, and
payment of the applicable Exercise Price as provided above, the Warrant Agent
shall thereupon promptly notify the Company, and the Warrant Agent shall deliver
or cause to be delivered, as promptly as possible thereafter, but in any event
within three (3) Business Days of receipt of such surrender and payment, to the
Holder of such Warrant Certificate appropriate evidence of ownership of any
Warrant Shares or other securities or property (including any money) to which
the Holder is entitled, and, to the extent possible, certificates representing
the Warrant Shares or such other securities shall be in such denomination(s) as
such Holder shall request, and registered or otherwise placed in, or payable to
the order of, such name or names as may be directed in writing by the Holder,
and shall deliver or cause to be delivered such evidence of ownership and any
other securities or property (including any money) to the person or persons
entitled to receive the same, together with an amount in cash in lieu of any
fraction of a share as provided in Section 13 hereof. Any such evidence of
ownership shall be deemed to have been issued and any Person so designated to be
named therein shall be deemed to have become a holder of record of such Warrant
Shares as of the date of the surrender of such Warrants and payment of the
applicable Exercise Price, notwithstanding that the stock transfer books of the
Company shall then be closed or that certificates representing such shares shall
not then be actually delivered to the Holder.
(e) The Warrants shall be exercisable either in full or from time to
time in part and, in the event that a Warrant Certificate is surrendered to the
Warrant Agent for exercise of fewer than all of the Warrants represented by such
Warrant Certificate at any time prior to the applicable Expiration Date, a new
certificate evidencing the remaining Warrant or Warrants but otherwise identical
to the surrendered Warrant Certificate (including, without limitation, of the
same series) will be issued by the Company, and the Warrant Agent is hereby
irrevocably authorized to countersign and to deliver the required new Warrant
Certificate pursuant to the provisions of this Section 7 and of Section 4 hereof
as promptly as possible, but in any event within three (3) Business Days of
receipt of the certificate evidencing the Warrants, and the Company, whenever
required by the Warrant Agent, will supply the Warrant Agent with Warrant
Certificates duly executed on behalf of the Company for such purpose.
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(f) All Warrant Certificates surrendered upon exercise of Warrants
shall be canceled by the Warrant Agent. Such canceled Warrant Certificates shall
then be disposed of by the Warrant Agent in a manner satisfactory to the
Company. The Warrant Agent shall account promptly to the Company with respect to
such Warrants exercised and concurrently pay to the Company as promptly as
practicable, but in any event within five (5) Business Days of receipt, all
monies received by the Warrant Agent for the purchase of the Warrant Shares
through the exercise of such Warrants.
(g) The Warrant Agent shall keep copies of this Agreement and any
notices given or received hereunder by or from the Company available for
inspection by the Holders during normal business hours at its office. The
Company shall supply the Warrant Agent from time to time with such numbers of
copies of this Agreement as the Warrant Agent may reasonably request.
SECTION 8. Payment of Taxes. The Company will pay all documentary
stamp taxes and other governmental charges attributable to the initial issuance
of Warrant Shares upon the exercise of Warrants; provided, however, that the
Company shall not be required to pay any tax or taxes which may be payable in
respect of any transfer involved in the issue of any Warrant Certificates or any
certificates for Warrant Shares in a name other than that of the Holder of a
Warrant Certificate surrendered upon the exercise of a Warrant, and the Company
shall not be required to issue or deliver such Warrant Certificates unless or
until the Person or Persons requesting the issuance thereof shall have paid to
the Company the amount of such tax or shall have established to the satisfaction
of the Company that such tax has been paid.
SECTION 9. Mutilated, Destroyed, Lost and Stolen Warrant Certificates.
(a) If (i) any mutilated Warrant Certificate is surrendered to the Warrant Agent
or (ii) the Company and the Warrant Agent receive evidence to their reasonable
satisfaction of the destruction, loss or theft of any Warrant Certificate, and
there is delivered to the Company and the Warrant Agent such certificate or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Company or the Warrant Agent that such Warrant
Certificate has been acquired by a bona fide purchaser, the Company shall
execute and upon the Company's written request the Warrant Agent shall
countersign and deliver, in exchange for any such mutilated Warrant Certificate
or in lieu of and in substitution for any such destroyed, lost or stolen Warrant
Certificate, a new Warrant Certificate of the same series, like tenor and for a
like aggregate number of Warrants. An applicant for such a substitute Warrant
Certificate shall also comply with such other reasonable regulations as the
Company may prescribe.
(b) Upon the issuance of any new Warrant Certificate under this
Section 9, the Company may require the payment by the Holder of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and the payment of such other reasonable charges as the Company may
prescribe, including reimbursement of reasonable fees and expenses of the
Company and the Warrant Agent incidental thereto.
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(c) The provisions of this Section 9 are exclusive and shall preclude
(to the extent lawful) all other rights or remedies with respect to the
replacement of mutilated, destroyed, lost or stolen Warrant Certificates.
SECTION 10. Issuance of Warrant Shares. The Company will keep a copy
of this Agreement on file with the transfer agent for the Preferred Stock (the
"Transfer Agent") and with every subsequent transfer agent for any shares of the
Company's capital stock issuable upon the exercise of the rights of purchase
represented by the Warrants. The Warrant Agent is hereby irrevocably authorized
to requisition, from time to time, from such Transfer Agent the certificates
representing shares of the Preferred Stock and any cash which may be payable as
provided in Section 13 hereof required to honor outstanding Warrants upon
exercise thereof in accordance with the terms of this Agreement. The Company
will supply such Transfer Agent with duly executed certificates representing
shares of Preferred Stock for such purposes and will provide or otherwise make
available any cash which may be payable as provided in Section 13 hereof. The
Company will furnish such Transfer Agent and the Warrant Agent a copy of all
notices of adjustments and certificates related thereto, transmitted to each
Holder of the Warrants pursuant to Section 14 hereof.
SECTION 11. Adjustment of Exercise Price and Number of Warrant Shares
Issuable. The number and kind of Warrant Shares purchasable upon the exercise of
Warrants and the applicable Exercise Price shall be subject to adjustment from
time to time as follows, if at any time after the Consummation Date and prior to
the applicable Expiration Date:
(a) Stock Dividends. The Company shall pay a stock dividend or other
distribution payable in shares of Preferred Stock or the number of
shares of Preferred Stock shall have been increased by a subdivision
or split-up of shares of Preferred Stock, then, on the date of the
payment of such dividend or distribution (retroactive to the record
date) or immediately after the effective date of subdivision or
split-up, as the case may be, the number of Warrant Shares to be
delivered upon exercise of the Warrants will be increased so that the
Warrantholder will be entitled to receive the number of Warrant Shares
that such Warrantholder would have owned immediately following such
action had the Warrants been exercised immediately prior thereto or,
in the case of a stock dividend or distribution, prior to the record
date for determination of shareholders entitled thereto, and the
applicable Exercise Price will be adjusted as provided in Section
11(g) hereof.
(b) Combination of Stock. If the number of shares of Preferred Stock
outstanding shall have been decreased by a combination of the
outstanding shares of Preferred Stock, then, immediately after the
effective date of such combination, the number of Warrant Shares to be
delivered upon exercise of each Warrant will be decreased so that the
Warrantholder thereafter will be entitled to receive the number of
Warrant Shares that such Warrantholder would have owned immediately
731156.6
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following such action had such Warrant been exercised immediately
prior thereto, and the applicable Exercise Price will be adjusted as
provided in Section 11(g) hereof.
(c) Reorganization, Etc. If any capital reorganization of the Company,
or any reclassification of the Preferred Stock, or any consolidation
of the Company with or merger of the Company with or into any other
Person or any sale, lease or other transfer of all or substantially
all of the assets of the Company to any other Person, shall be
effected in such a way that the holders of Preferred Stock shall be
entitled to receive stock, other securities, cash or other assets
(whether such stock, other securities, cash or other assets are issued
or distributed by the Company or another Person) with respect to or in
exchange for Preferred Stock, then, upon exercise of each Warrant, the
Warrantholder shall have the right to receive the kind and amount of
stock, other securities, cash or other assets receivable upon such
reorganization, reclassification, consolidation, merger or sale, lease
or other transfer by a holder of the number of Warrant Shares that
such Warrantholder would have been entitled to receive upon exercise
of such Warrant had such Warrant been exercised immediately before
such reorganization, reclassification, consolidation, merger or sale,
lease or other transfer, subject to adjustments (as determined in good
faith by the Board of Directors of the Company). Adjustments for
events subsequent to the effective date of such a reorganization,
reclassification, consolidation, merger, sale or transfer of assets
shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Agreement. In any such event, effective
provisions shall be made in the certificate or articles of
incorporation of the resulting or surviving corporation, in any
contract of sale, merger, conveyance, lease, transfer or otherwise so
that the provisions set forth herein for the protection of the rights
of the Warrantholders shall thereafter continue to be applicable; and
any such resulting or surviving corporation shall expressly assume the
obligation to deliver, upon exercise, such shares of stock, other
securities, cash and property. The provisions of this Section 11 shall
similarly apply to successive consolidations, mergers, sales, leases
or transfers.
(d) Adjustment for Rights Issue. In case the Company shall issue
rights, options, warrants or other securities convertible or
exchangeable for Preferred Stock or for any other such right, option
or warrant (collectively, "Rights") to all holders of its outstanding
Preferred Stock entitling them to subscribe for, purchase or obtain
upon conversion or exchange shares of Preferred Stock at a Price Per
Share which is lower at the record date mentioned below than either
(x) the then current Fair Market Value per share of Preferred Stock or
(y) the Exercise Price, or both, the number of Warrant Shares
thereafter purchasable upon the exercise of each Warrant shall be
determined by multiplying the number of Warrant Shares theretofore
purchasable upon exercise of each Warrant by a fraction, the numerator
of which shall be the number of shares of Preferred Stock outstanding
on the date
731156.6
12
of issuance of such Rights plus the additional Number of Shares of
Preferred Stock offered for subscription, purchase or issuance upon
conversion or exchange in connection with such Rights and the
denominator of which shall be the number of shares of Preferred Stock
outstanding on the date of issuance of such Rights plus the number of
shares which the aggregate Gross Proceeds received or receivable by
the Company upon exercise of such Rights would purchase at the greater
of (x) the Fair Market Value per share of Preferred Stock at such
record date or (y) the Exercise Price. Such adjustment shall be made
whenever Rights are issued, and shall become effective immediately
after the record date for the determination of stockholders entitled
to receive Rights. As used herein, "Price Per Share" shall be defined
and determined in accordance with the following formula:
P = R/N
where
P = Price Per Share;
R = the "Gross Proceeds" received or receivable by the Company in
respect of Rights which shall be the total amount received or
receivable by the Company in consideration for the issuance and
sale of such Rights plus the aggregate amount of additional
consideration payable to the Company upon exercise thereof;
provided that the proceeds received or receivable by the Company
shall be the cash proceeds before deducting therefrom any cash
compensation paid or discount allowed in the sale, underwriting
or purchase thereof by underwriters or dealers or others
performing similar services; and
N = the "Number of Shares," which in the case of Rights is the
maximum number of shares of Preferred Stock initially issuable
upon exercise thereof.
(e) Adjustment for Other Distributions. (i) In case the Company shall
distribute to all holders of its shares of Preferred Stock (x)
evidences of indebtedness or assets (excluding cash dividends or
distributions payable out of the consolidated earnings or surplus
legally available for such dividends or distributions and dividends or
distributions referred to in paragraphs (a), (c) or (d) above) of the
Company or any subsidiary or (y) shares of capital stock of a
subsidiary of the Company (such evidences of indebtedness, assets and
securities as set forth in clauses (x) and (y) above, collectively,
"Assets"), then in each case the number of Warrant Shares thereafter
purchasable upon the exercise of each Warrant shall be determined by
multiplying the number of Warrant Shares theretofore purchasable upon
the exercise of each Warrant by a fraction, the
731156.6
13
numerator of which shall be the Fair Market Value per share of
Preferred Stock on the date of such distribution and the denominator
of which shall be such Fair Market Value per share of Preferred Stock
less the fair value as of such record date as determined reasonably
and in good faith by the Board of Directors of the Company of the
portion of the Assets applicable to one share of Preferred Stock. Such
adjustment shall be made whenever any such distribution is made, and
shall become effective on the date of distribution retroactive to the
record date for the determination of stockholders entitled to receive
such distribution.
(ii) In case the Company shall issue any shares of Preferred
Stock or Common Stock or rights, options or warrants to acquire
shares of Preferred Stock or Common Stock, other than Exempted
Issuances (as defined below) and other than issuances covered by
other clauses of this Section 11, within the first six months
after the Consummation Date at an Issue Price (as defined below)
which is lower than (A) in the case of issuances of shares of
Preferred Stock or rights, options or warrants to acquire shares
of Preferred Stock, the then current Exercise Price, or (B) in
the case of issuances of shares of Common Stock or rights,
options or warrants to acquire shares of Common Stock, the
quotient of the current Exercise Price divided by the number of
shares of Common Stock (the "Conversion Number") then issuable on
conversion of a share of Preferred Stock, then the Exercise Price
of all outstanding Warrants and Warrants issued thereafter shall
be adjusted to a price equal to the Issue Price, if the
adjustment is triggered by the issuance of shares of Preferred
Stock or of rights, options or warrants to acquire shares of
Preferred Stock, or equal to the product of the Issue Price
multiplied by the Conversion Number, if the adjustment is
triggered by the issuance of shares of Common Stock or of rights,
options or warrants to acquire shares of Common Stock. "Exempted
Issuances" means securities issuances contemplated by the Plan of
Reorganization (including securities issuable on conversion or
exercise of securities contemplated by the Plan of
Reorganization), issuances of shares of Preferred Stock as
dividends on shares of Preferred Stock and issuances pursuant to
employee benefit plans of shares of, and options to acquire
shares of, Common Stock, provided that such issuances pursuant to
employee benefit plans which are vested or scheduled to vest
prior to the Expiration Date do not exceed, in the aggregate, 5%
of the sum of the shares of Common Stock outstanding as of the
Consummation Date and subject to issuance upon conversion of
shares of Preferred Stock outstanding as of the Consummation
Date. "Issue Price" means (i) in the case of the issuance of
Preferred Stock or Common Stock for cash, the amount of the cash
proceeds received or receivable by the Company before deducting
therefrom any cash compensation paid or discount allowed in the
sale, underwriting or purchase thereof by underwriters or dealers
or others
731156.6
14
performing similar services; (ii) in the case of the issuance of
Preferred Stock or Common Stock for a consideration in whole or
in part other than cash, the fair value of such consideration as
determined by the Board of Directors of the Company in good
faith.
(iii) In case the Company shall issue any shares of
Preferred Stock or Common Stock or rights, options or warrants to
acquire shares of Preferred Stock or Common Stock, other than
Exempted Issuances and other than issuances covered by other
clauses of this Section 11, more than six months after the
Consummation Date but prior to the Expiration Date for an Issue
Price which is lower than (A) in the case of issuances of shares
of Preferred Stock or rights, options or warrants to acquire
shares of Preferred Stock, both the then current Exercise Price
and the product of the Conversion Number multiplied by the
Current Market Price of the Common Stock on the date of issuance,
or (B) in the case of issuances of shares of Common Stock or
rights, options or warrants to acquire shares of Common Stock,
both the quotient of the current Exercise Price divided by the
Conversion Number and the Current Market Price of the Common
Stock on the date of issuance, then the Exercise Price of all
outstanding Warrants and Warrants issued thereafter shall be
changed to an amount equal to the Issue Price, if the adjustment
is triggered by the issuance of shares of Preferred Stock or of
rights, options or warrants to acquire shares of Preferred Stock,
or equal to the product of the Issue Price multiplied by the
Conversion Number, if the adjustment is triggered by the issuance
of shares of Common Stock or of rights, options or warrants to
acquire shares of Common Stock.
(f) Carryover. Notwithstanding any other provision of this Section 11,
no adjustment shall be made to the number of Warrant Shares to be
delivered to the Warrantholder (or to the applicable Exercise Price)
if such adjustment represents less than 1% of the number of Warrant
Shares to be so delivered, but any lesser adjustment shall be carried
forward and shall be made at the time and together with the earlier to
occur of (i) the exercise of all or any portion of a Warrant and (ii)
the next subsequent adjustment that, together with any adjustments so
carried forward, shall amount to 1% or more of the number of Warrant
Shares to be so delivered.
(g) Exercise Price Adjustment.
(i) Whenever the number of Warrant Shares purchasable upon the
exercise of the Warrants is adjusted as provided pursuant to this
Section 11, the applicable Exercise Price payable upon the
exercise of a Warrant shall be adjusted by multiplying such
Exercise Price immediately prior to such adjustment by a
fraction, the numerator of which shall be the number of
731156.6
15
Warrant Shares purchasable upon the exercise of the Warrant
immediately prior to such adjustment, and the denominator of
which shall be the number of Warrant Shares purchasable
immediately thereafter; provided, however, that the applicable
Exercise Price for each Warrant Share shall in no event be less
than the par value of such Warrant Share.
(ii) If at any time, the Company shall pay to holders of record
of Preferred Stock any cash dividends or other cash
distributions, then, on the date of the payment of such dividend
or distribution (retroactive to the record date), the applicable
Exercise Price payable upon the exercise of such Warrant shall be
adjusted by reducing the applicable Exercise Price by the amount
of such dividend or distribution applicable to one share of
Preferred Stock; provided, however, that the applicable Exercise
Price for each Warrant Share shall in no event be less than the
par value of such Warrant Share.
(h) Decrease in Exercise Price. The Company, in its sole discretion,
shall have the right at any time, or from time to time, to decrease
the applicable Exercise Price of the Warrants and/or increase the
number of Warrants Shares issuable upon the exercise of the Warrants,
including as it considers to be advisable in order that any event
treated for federal income tax purposes as a dividend of stock or
stock rights shall not be taxable to recipients.
(i) Other Adjustments.
(A) In case the Company shall issue any shares of Preferred
Stock or Common Stock or rights, options or warrants to acquire
shares of Preferred Stock or Common Stock, other than Exempted
Issuances and other than issuances covered by other clauses of
this Section 11, more than six months after the Consummation Date
but prior to the Expiration Date for an Issue Price which is (x)
in the case of issuances of shares of Preferred Stock or rights,
options or warrants to acquire shares of Preferred Stock, equal
to or greater than the then current Exercise Price but less than
the product of the Conversion Number multiplied by the Current
Market Price of the Common Stock on the date of issuance, or (y)
in the case of issuances of shares of Common Stock or rights,
options or warrants to acquire shares of Common Stock, equal to
or greater than the quotient of the current Exercise Price
divided by the Conversion Number but less than the Current Market
Price of the Common Stock on the date of issuance, then the Board
of Directors shall make such adjustments, if any, in the
application of the purchase rights of the Holders pursuant to
this Section 11, in accordance with the essential intent and
principles of the provisions of this Section 11, as shall be
reasonably necessary, in the good faith
731156.6
16
opinion of the Board of Directors, to protect such purchase
rights as aforesaid.
(B) If any event occurs as to which the foregoing provisions
of this Section 11 are not strictly applicable or, if strictly
applicable, would not, in the good faith judgment of the Board of
Directors, fairly protect the purchase rights of the Holders in
accordance with the essential intent and principles of such
provisions, then the Board of Directors shall make such
adjustments in the application of such provisions, in accordance
with such essential intent and principles, as shall be reasonably
necessary, in the good faith opinion of the Board of Directors,
to protect such purchase rights as aforesaid.
(j) Further Equitable Adjustments. If, after one or more adjustments
to the applicable Exercise Price pursuant to this Section 11, the
applicable Exercise Price cannot be reduced further without falling
below the greater of (i) $0.01 or (ii) the lowest positive exercise
price legally permissible for warrants to acquire shares of Preferred
Stock, the Company shall make further adjustments to compensate the
Holder, consistent with the foregoing principles, as the Board of
Directors, acting in good faith, deems necessary, including an
increase in the number of Warrant Shares issuable upon exercise of
outstanding Warrants and/or a cash payment to the Holders.
SECTION 12. Statement on Warrants. Irrespective of any adjustment(s)
in the number or kind of Warrant Shares issuable upon the exercise in whole or
in part of the Warrants or the applicable Exercise Price, Warrants theretofore
or thereafter issued may continue to express the same number and kind of Warrant
Shares as are stated in the Warrants initially issuable from time to time
pursuant to this Agreement, all subject to further adjustment as provided
herein.
SECTION 13. Fractional Interest. The Company shall not be required to
issue fractional shares of Common Stock on the exercise of Warrants. If more
than one Warrant shall be presented for exercise in full at the same time by the
same Holder, the number of full Warrant Shares which shall be issuable upon such
exercise shall be computed on the basis of the aggregate number of shares of
Preferred Stock acquirable on exercise of the Warrants so presented. If any
fraction of a share of Preferred Stock would, except for the provisions of this
Section 13, be issuable on the exercise of any Warrant (or specified portion
thereof), the Company shall (i) direct and deposit with the Transfer Agent an
amount sufficient to pay an amount in cash calculated by it to equal the then
current Fair Market Value per share multiplied by such fraction computed to the
nearest whole cent and (ii) deliver to the Transfer Agent a written certificate
of an officer of the Company setting forth the then current Fair Market Value
per share which certificate shall be conclusive evidence of the correctness of
the matters set forth therein, absent clear error. The Holders, by their
acceptance of the Warrant Certificates, expressly waive any and all rights to
731156.6
17
receive any fraction of a share of Preferred Stock or a stock certificate
representing a fraction of a share of Preferred Stock.
SECTION 14. Notices to Warrantholders. (a) Upon any adjustment of the
applicable Exercise Price or number of Warrant Shares issuable pursuant to
Section 11 hereof, the Company shall as promptly as practicable (x) give a
written certificate of the Company to the Warrant Agent of such adjustment or
adjustments which certificate shall set forth for each series of Warrant (i) the
number of Warrant Shares issuable upon the exercise of a Warrant of such series
and the applicable Exercise Price after such adjustment, (ii) a brief statement
of the facts requiring such adjustment, (iii) the computation by which such
adjustment was made, and (y) cause to be given to each of the registered Holders
of the Warrant Certificates at his address appearing on the Register written
notice of such adjustments by first-class mail, postage prepaid. The Warrant
Agent shall be entitled to rely on the above-referenced certificate(s) and shall
be under no duty or responsibility with respect to any such certificate(s),
except to exhibit the same from time to time to any Holder desiring an
inspection thereof during reasonable business hours. The Warrant Agent shall not
at any time be under any duty or responsibility to any Holder to determine
whether any facts exist that may require any adjustment of the number of Warrant
Shares or other stock or property issuable on exercise of the Warrants or the
applicable Exercise Price, or with respect to the nature or extent of any such
adjustment when made, or with respect to the method employed in making such
adjustment or the validity or value (or the kind or amount) of any Warrant
Shares or other stock or property which may be issuable on exercise of the
Warrants. The Warrant Agent shall not be responsible for any failure of the
Company to make any cash payment or to issue, transfer or deliver any Warrant
Share or stock certificates or other stock, securities or property upon the
exercise of any Warrant.
(b) In addition to the notice requirements in Section 14(a), the
Company will give to the Warrantholder all notices which are required to be
given by the Company under the Restated Certificate of Incorporation to the
holders of Preferred Stock.
(c) With respect to each series of Warrants, prior to the applicable
Expiration Date, and for so long as such series of Warrants have not been
exercised in full, in the event of:
(i) any taking by the Company of a record of the holders of any class
of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any
class or any other securities, indebtedness or property, or to receive any
other right, option or warrant; or
(ii) any capital reorganization of the Company, any reclassification
or recapitalization of the capital stock of the Company (other than a
change in par value, or from par value to no par value, or from no par
value to par value, or as a result of a subdivision or combination), any
consolidation or merger involving the Company and any other party or any
transfer of all or substantially all the assets of the Company to any other
731156.6
18
party or any tender offer or exchange offer by the Company for shares of
Common Stock or Preferred Stock; or
(iii) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
then the Company shall cause to be filed with the Warrant Agent and shall cause
to be given to each Warrantholder of such series of Warrant at such
Warrantholder's address appearing on the Warrant Register, at least twenty (20)
days prior to the applicable record date hereinafter specified, or promptly in
the case of events for which there is no record date, by first class mail,
postage prepaid, a written notice stating (i) the date as of which the holders
of record of shares of Common Stock or Preferred Stock are entitled to receive
any such rights, options, warrants or distributions are to be determined, or
(ii) the initial expiration date set forth in any tender offer or exchange offer
for shares of Common Stock or Preferred Stock, or (iii) the date on which any
such reclassification, consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding up is expected to become effective or consummated, as
well as the date as of which it is expected that the holders of record of shares
of Common Stock shall be entitled to exchange such shares for securities or
other property, if any, deliverable upon such reclassification, consolidation,
merger, conveyance, transfer, dissolution, liquidation or winding-up. The
failure to give the notice required by this Section 14 or any defect therein
shall not affect the legality or validity of any distribution, right, option,
warrant, reclassification, consolidation, merger, conveyance, transfer,
dissolution, liquidation, winding up or action, or the vote upon any of the
foregoing.
(d) If there is any conversion adjustment under Section 6 of the
Restated Certificate of Incorporation with respect to the Preferred Stock at any
time from after the date hereof and prior to the Expiration Date, an adjustment
shall be made to the number of shares of Preferred Stock issuable upon exercise
of this Warrant as if this Warrant was exercised for Preferred Stock as of the
date hereof.
SECTION 15. Reservation of Warrant Shares, Etc. (a) The Company hereby
agrees that at all times there shall be reserved for issuance and delivery upon
exercise of the Warrants, free from preemptive rights, liens, security interests
and other encumbrances, such number of shares of authorized but unissued or
treasury shares of Preferred Stock and Common Stock, or other stock or
securities deliverable pursuant to Section 11, as shall be required for issuance
or delivery upon exercise of the Warrants. Without limiting the generality of
the foregoing, the Company agrees that it will not take any action which would
result in Warrant Shares when issued not being validly and legally issued and
fully paid and nonassessable. The Company hereby represents that, as of the date
hereof, it has sufficient shares of Preferred Stock and Common Stock reserved
for issuance upon exercise of all outstanding Warrants.
731156.6
19
SECTION 16. Warrant Agent. The Warrant Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions,
by all of which the Company and the Holders, by their acceptance thereof, shall
be bound:
(a) The statements contained herein and in the Warrant Certificates
shall be taken as statements of the Company, and the Warrant Agent
assumes no responsibility for the correctness of any of the same
except such as describe the Warrant Agent or action taken or to be
taken by it. The Warrant Agent assumes no responsibility with respect
to the distribution of the Warrant Certificates or Warrant Shares or
payment or refund of the applicable Exercise Price except as herein
otherwise provided.
(b) The Warrant Agent may consult at any time with counsel
satisfactory to it and the Warrant Agent shall incur no liability or
responsibility to the Company or to any holder of any Warrant
Certificate in respect to any action taken, suffered or omitted by it
hereunder in good faith and in accordance with the opinion or the
advice of such counsel.
(c) The Company agrees to pay to the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent in the
execution of this Agreement, to reimburse the Warrant Agent for all
expenses, taxes and governmental charges and other charges of any kind
and nature reasonably incurred by the Warrant Agent in the execution
of this Agreement and to indemnify the Warrant Agent and save it
harmless against any and all liabilities, including judgments,
reasonable costs and counsel fees, for anything done or omitted by the
Warrant Agent in the execution of this Agreement except as a result of
its negligence, bad faith or willful misconduct.
(d) The Warrant Agent shall be under no obligation to institute any
action, suit or legal proceeding or to take any other action likely to
involve expense unless the Company or one or more Holders shall
furnish the Warrant Agent with reasonable security for any costs and
expenses which may be incurred, but this provision shall not affect
the power of the Warrant Agent to take such action as it may consider
proper, whether with or without any such security. All rights of
action under this Agreement or under any of the Warrants may be
enforced by the Warrant Agent without the possession of any of the
Warrant Certificates or the production thereof at any trial or other
proceeding relative thereto, and any such action, suit or proceeding
instituted by the Warrant Agent shall be brought in its name as
Warrant Agent and any recovery of judgment shall be for the ratable
benefit of the Holders, as the respective rights or interests may
appear.
(e) The Warrant Agent, and any stockholder, director, officer or
employee of it, may buy, sell or deal in any of the Warrants or other
securities of the Company
731156.6
20
or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not
Warrant Agent under this Agreement. Nothing herein shall preclude the
Warrant Agent from acting in any other capacity for the Company or for
any other legal entity.
(f) The Warrant Agent shall not at any time be under any duty or
responsibility to any Holder or the Company to make or cause to be
made any adjustment of the applicable Exercise Price or number of the
Warrant Shares or other securities or property deliverable as provided
in this Agreement, or to determine whether any facts exist which may
require any of such adjustments, or with respect to the nature or
extent of any such adjustments, when made, or with respect to the
method employed in making the same. The Warrant Agent shall not be
accountable with respect to the validity or value or the kind or
amount of any Warrant Shares or of any securities or property which
may at any time be issued or delivered upon the exercise of any
Warrant or with respect to whether any such Warrant Shares or other
securities will when issued be validly issued and fully paid and
nonassessable, and makes no representation with respect thereto.
SECTION 17. Merger, Consolidation or Change of Name of Warrant Agent.
(a) Any corporation into which the Warrant Agent may be merged or with which it
may be consolidated, or any corporation resulting from any merger or
consolidation to which the Warrant Agent shall be a party, or any corporation
succeeding to the business of the Warrant Agent, shall be the successor to the
Warrant Agent hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto. In case at the time such
successor to the Warrant Agent shall succeed to the agency created by this
Agreement, and in case at that time any of the Warrant Certificates shall have
been countersigned but not delivered, any such successor to the Warrant Agent
may adopt the countersignature of the original Warrant Agent; and in case at
that time any of the Warrant Certificates shall not have been countersigned, any
successor to the Warrant Agent may countersign such Warrant Certificates either
in the name of the predecessor Warrant Agent or in the name of the successor to
the Warrant Agent; and in all such cases such Warrant Certificates shall have
the full force and effect provided in the Warrant Certificates and in this
Agreement.
(b) In case at any time the name of the Warrant Agent shall be changed
and at such time any of the Warrant Certificates shall have been countersigned
but not delivered, the Warrant Agent whose name has been changed may adopt the
countersignature under its prior name, and in case at that time any of the
Warrant Certificates shall not have been countersigned, the Warrant Agent may
countersign such Warrant Certificates either in its prior name or in its changed
name, and in all such cases such Warrant Certificates shall have the full force
and effect provided in the Warrant Certificates and in this Agreement.
731156.6
21
SECTION 18. Resignation and Removal of Warrant Agent; Appointment of
Successor. (a) No resignation or removal of the Warrant Agent and no appointment
of a successor warrant agent shall become effective until the acceptance of
appointment by the successor warrant agent as provided herein. The Warrant Agent
may resign its duties and be discharged from all further duties and liability
hereunder (except liability arising as a result of the Warrant Agent's own
negligence or willful misconduct) after giving written notice to the Company.
The Company may remove the Warrant Agent upon written notice, and the Warrant
Agent shall thereupon in like manner be discharged from all further duties and
liabilities hereunder, except as aforesaid. The Warrant Agent shall, at the
Company's expense, cause to be mailed (by first class mail, postage prepaid) to
each Holder at his last address as shown on the Register a copy of said notice
of resignation or notice of removal, as the case may be. Upon such resignation
or removal, the Company shall appoint in writing a new warrant agent. If the
Company shall fail to make such appointment within a period of 30 days after it
has been notified in writing of such resignation by the resigning Warrant Agent
or after such removal, then the resigning Warrant Agent or the Holder of any
Warrant may apply to any court of competent jurisdiction for the appointment of
a new warrant agent. Any new warrant agent, whether appointed by the Company or
by such a court, shall be a corporation doing business under the laws of the
United States or any state thereof, in good standing and having a combined
capital and surplus of not less than US$50,000,000. After acceptance in writing
of such appointment by the new warrant agent, it shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally named
herein as the Warrant Agent, without any further assurance, conveyance, act or
deed; but if for any reason it shall be necessary or expedient to execute and
deliver any further assurance, conveyance, act or deed, the same shall be done
at the expense of the Company and shall be legally and validly executed and
delivered by the resigning or removed Warrant Agent. Not later than the
effective date of any such appointment, the Company shall give notice thereof to
the resigning or removed Warrant Agent. Failure to give any notice provided for
in this Section 18(a), however, or any defect therein, shall not affect the
legality or validity of the resignation of the Warrant Agent or the appointment
of a new warrant agent, as the case may be.
(b) Any corporation into which the Warrant Agent or any new warrant
agent may be merged shall be a successor Warrant Agent under this Agreement
without any further act. Any such successor Warrant Agent shall, at the Warrant
Agent's expense, promptly cause notice of its succession as Warrant Agent to be
mailed (by first class mail, postage prepaid) to each Holder at such Holder's
last address as shown on the Register.
SECTION 19. Money and Other Property Deposited with the Warrant Agent.
Any money, securities and other property which at any time shall be deposited by
the Company or on its behalf with the Warrant Agent pursuant to this Agreement
shall be and are hereby assigned, transferred and set over to the Warrant Agent
in trust for the purpose for which such moneys, securities or other property
shall have been deposited, which such purpose shall be stated in writing in
reasonable detail and delivered to the Warrant Agent; but such moneys,
securities or other property need not be segregated from other funds, securities
or other property of the
731156.6
22
Warrant Agent except to the extent required by law. The Warrant Agent shall
distribute any money deposited with it for payment and distribution to any
Holder by mailing by first-class mail a check in such amount as is appropriate
to such Holder at the address shown on the Register, or as it may be otherwise
directed in writing by such Holder, upon surrender of such Holder's Warrants.
Any money or other property deposited with the Warrant Agent for payment and
distribution to any Holder that remains unclaimed for two years, less one day
after the date the money was deposited with the Warrant Agent, shall be paid to
the Company upon its request therefor.
SECTION 20. Compliance with Government Regulations; Qualification
under the Securities Laws.
(a) The Company covenants that if the shares of Preferred Stock or
Common Stock required to be reserved for purposes of exercise of
Warrants require, under any federal or state law, registration with or
approval of any governmental authority before such shares may be
issued upon exercise or to allow the resale or transfer thereof by the
Holders generally, the Company will, unless the Company has received
an opinion of counsel to the effect that such registration is not then
permitted by such laws, use reasonable best efforts to cause such
shares to be duly so registered or approved, as the case may be;
provided that in no event shall such shares of Preferred Stock or
Common Stock be issued, and the exercise of all Warrants shall be
suspended, for the period during which any such registration or
approval is required for the issuance of such shares upon exercise but
is not in effect; provided, further, that the Expiration Date shall be
extended one day for each day (or portion thereof) that any such
suspension is in effect. The Company shall promptly notify the Warrant
Agent of any such suspension, and the Warrant Agent shall have no
duty, responsibility or liability in respect of any shares of
Preferred Stock or Common Stock issued or delivered prior to its
receipt of such notice. The Company shall promptly notify the Warrant
Agent of the termination of any such suspension, and such notice shall
set forth the number of days that the applicable Exercise Period shall
be extended as a result of such suspension. The foregoing provisions
of this Section 20 shall not require that the Company effect or obtain
any such registration or approval of such shares of Preferred Stock or
Common Stock in order to allow the resale or transfer thereof by any
Person that may be an underwriter for purposes of Section 1145 of
Chapter 11, Title 11 of the United States Code or to whom such
registration or approval requirement is applicable as a result of that
Person being an Affiliate of the Company or Marvel.
(b) The Company covenants that it shall, until the expiration of one
year after the final Expiration Date of any Warrants, make available
adequate current public information with respect to the Company so as
to satisfy paragraph (c) of Rule 144 under the Securities Act.
731156.6
23
(c) The Company covenants that it shall use commercially reasonable
efforts to have the Preferred Stock listed on the New York Stock
Exchange, subject to official notice of issuance and subject to
satisfaction of the Warrants with listing requirements, as soon as
practicable after the date hereof.
SECTION 21. Notices. (a) Any notice pursuant to this Agreement to be
given by the Warrant Agent or by any Holder to the Company shall be deemed given
(x) if delivered personally, then at the time of delivery, (y) if sent by
overnight courier service, then at the time of delivery, or (z) if mailed by
first-class, certified or overnight mail, five (5) Business Days after having
been deposited in the mail with postage prepaid, in each case addressed (until
another address is filed in writing by the Company with the Warrant Agent), as
follows:
Marvel Enterprises, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: 212-682-5272
Telephone: 000-000-0000
Attention: Corporate Secretary
(b) In case the Company shall fail to maintain such office or agency
or shall fail to give such notice of the location or of any change in the
location thereof, presentations may be made and notices and demands may be
served at the principal office of the Warrant Agent.
(c) Any notice pursuant to this Agreement to be given by the Company
or by any Holder to the Warrant Agent shall be deemed given (x) if delivered
personally, then at the time of delivery, (y) if sent by overnight courier
service, then at the time of delivery, or (z) if mailed by first-class,
certified or overnight mail, five (5) Business Days after having been deposited
in the mail with postage prepaid, in each case addressed (until another address
is filed in writing by the Warrant Agent with the Company), as follows:
American Stock Transfer & Trust Company
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(d) Any notice pursuant to this Agreement to be given by the Company
or by the Warrant Agent to any Holder shall be deemed given (x) if delivered
personally, then at the time of delivery, (y) if sent by overnight courier
service, then at the time of delivery, or (z) if mailed by first-class,
certified or overnight mail, five (5) Business Days after having been deposited
in the mail with postage prepaid, in each case addressed to the Holder at such
Holder's address as shown on the Register. Failure to mail a notice or
communication to a Holder or any defect in it shall not affect its sufficiency
with respect to other Holders.
731156.6
24
(e) If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not the addressee
receives it.
(f) If the Company mails a notice or communication to a Holder or
Holders, it shall deliver a copy of such notice to the Warrant Agent at the same
time.
SECTION 22. Supplements and Amendments. The Company and the Warrant
Agent may from time to time supplement or amend this Agreement without the
approval of any Holders in order to cure any ambiguity or to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provision herein, or to make any other provisions in regard to
matters or questions arising hereunder which the Company and the Warrant Agent
may deem necessary or desirable and which shall not in any way adversely affect
the interests of the Holders. Any amendment or supplement to this Agreement that
has an adverse effect on the interests of Holders, including supplements or
amendments referred to in the first sentence of this Section 22, shall require
the written consent of Holders representing a majority of the then outstanding
Warrants. The consent of each Holder affected shall be required for any
amendment pursuant to which the applicable Exercise Price would be increased or
number of Warrant Shares purchasable upon exercise of Warrants would be
decreased.
SECTION 23. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Warrant Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
SECTION 24. Termination. With respect to each series of Warrants, this
Agreement (other than the Company's obligations with respect to Warrants of such
series previously exercised and with respect to indemnification under Section
18) shall terminate at 5:00 p.m., New York City time, on the applicable
Expiration Date.
SECTION 25. Governing Law. This Agreement and each Warrant Certificate
issued hereunder shall be governed by and construed in accordance with the laws
of the State of Delaware.
SECTION 26. Benefits of This Agreement. (a) Nothing in this Agreement
shall be construed to give any person other than the Company, the Warrant Agent
and the Warrantholders (or other respective successors or assigns) any legal or
equitable right, remedy or claim under this Agreement. This Agreement shall be
for the sole and exclusive benefit of the Company, the Warrant Agent and the
Warrantholders (and other respective successors or assigns).
(b) Prior to the exercise of the Warrants, no Holder as such, shall be
entitled to any rights of a stockholder of the Company, including, without
limitation, the right to receive dividends or subscription rights, the right to
vote, to consent, to exercise any preemptive right, to receive any notice of
meetings of stockholders for the election of directors of the Company or any
other matter or to receive any notice of any proceedings of the Company, except
as may be
731156.6
25
specifically provided for herein. No provisions hereof, in the absence of
affirmative action by the Warrantholder hereof to purchase Warrant Shares, and
no enumeration herein of the rights or privileges of the Warrantholder shall
give rise to any liability of such Warrantholder as a stockholder of the
Company.
(c) All rights of action in respect of this Agreement are vested in
the Holders, and any Holder without the consent of the Warrant Agent or the
Holder, may, on such Holder's own behalf and for such Holder's own benefit,
enforce, and may institute and maintain any suit, action or proceeding against
the Company suitable to enforce, or otherwise in respect of, such Holder's
rights hereunder, including the right to exercise, exchange or surrender for
purchase such Holder's Warrants in the manner provided in this Agreement.
SECTION 27. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
SECTION 28. Headings. The headings of the Sections of this Agreement
have been inserted for convenience of reference only, are not to be considered a
part hereof and shall in no way modify or restrict any of the terms or
provisions hereof.
SECTION 29. Severability. Any term or provision of this Agreement or
the Warrants which is invalid or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the other terms and
provisions of this Agreement or the Warrants or affecting the validity or
enforceability of any of the terms or provisions of this Agreement or the
Warrants in any other jurisdiction.
731156.6
26
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, as of the day and year first above written.
MARVEL ENTERPRISES, INC.
By: /S/ XXXXXXX X. XXXXXX, III
---------------------------------------
Name: Xxxxxxx X. Xxxxxx, III
Title: Executive Vice President, Business Affairs
AMERICAN STOCK TRANSFER & TRUST
COMPANY
By: /s/ XXXXXXX X. XXXXXX
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
731156.6
27
EXHIBIT A
EXERCISABLE ON OR BEFORE 5:00 P.M. NEW YORK CITY TIME ON
-----------------.
Class B, Series __ No._______________ Cusip No._______________
_________________Class B, Series __ Warrants
[Form of Class B, Series __ Warrant Certificate]
MARVEL ENTERPRISES, INC.
(Incorporated under the laws of the State of Delaware)
This Warrant Certificate certifies that _________ or its registered
assigns, is the registered holder of Class B, Series __ Warrants expiring
__________ (the "Warrants") to purchase shares of Preferred Stock (the
"Preferred Stock"), of Marvel Enterprises, Inc., a Delaware corporation (the
"Company"). Each Warrant entitles the registered holder upon exercise at any
time during normal business hours after the date hereof and on or before 5:00
p.m., New York City time, on _______________, to receive from the Company
_________ fully paid and nonassessable shares of Preferred Stock (each such
share a "Warrant Share") at the initial exercise price (the "Exercise Price") of
$_______ per share payable in accordance with the terms, provisions and
conditions of the Warrant Agreement referred to on the reverse hereof upon
surrender of this Warrant Certificate and payment of the Exercise Price at the
office or agency of the Warrant Agent, but only subject to the terms, provisions
and conditions set forth herein and in the Warrant Agreement. The Exercise Price
and number of Warrant Shares issuable upon exercise of the Warrants are subject
to adjustment from time to time upon the occurrence of certain events set forth
in the Warrant Agreement.
No Warrant may be exercised after 5:00 p.m., New York City time, on
___________ and, to the extent not exercised by such time, such Warrants shall
become void.
Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse hereof and such further provisions shall
for all purposes have the same effect as though fully set forth at this place.
The terms of this Warrant Certificate are qualified in their entirety
by reference to the Warrant Agreement and, in the event of a conflict between
the terms of this Warrant Certificate and the terms of the Warrant Agreement,
the terms of the Warrant Agreement shall
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731156.6
control the rights, interests and obligations of the holders of the Warrants,
the Warrant Agent and the Company with respect to the Warrants.
This Warrant Certificate shall not be valid unless countersigned by
the Warrant Agent, as such term is used in the Warrant Agreement.
This Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be signed by a duly authorized Officer.
Dated:
MARVEL ENTERPRISES, INC.
By
----------------------------------
Name:
Title:
Countersigned:
AMERICAN STOCK TRANSFER & TRUST COMPANY,
as Warrant Agent
By
------------------------------------
Authorized Signature
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731156.6
[REVERSE SIDE]
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants expiring on the Expiration Date entitling the
holder on exercise to receive shares of Preferred Stock of the Company and are
issued or to be issued pursuant to a Warrant Agreement dated as of _________ __,
1998 (the "Warrant Agreement"), duly executed and delivered by the Company to
American Stock Transfer & Trust Company, as Warrant Agent (the "Warrant Agent"),
which Warrant Agreement is hereby incorporated by reference in and made a part
of this instrument and is hereby referred to for a description of the rights,
limitation of rights, obligations, duties and immunities thereunder of the
Warrant Agent, the Company and the holders (the words "holders" or "holder"
meaning the registered holders or registered holders) of the Warrants. A copy of
the Warrant Agreement may be obtained by the holder hereof upon written request
to the Company. By accepting initial delivery, transfer or exchange of this
Warrant, the duly registered holder shall be deemed to have agreed to the terms
of the Warrant Agreement as it may be in effect from time to time, including any
amendments or supplements duly adopted in accordance therewith.
Payment of the Exercise Price may be made, at the option of the
holder, in cash by wire transfer or by certified or official bank check payable
to the order of the Company in immediately available funds in lawful money of
the United States of America.
Upon due presentation for registration of transfer of this Warrant
Certificate, with or without other Warrant Certificates, at the office of the
Warrant Agent, a new Warrant Certificate or Warrant Certificates of like tenor
and evidencing in the aggregate a like number of Warrants shall be issued to the
transferee(s) in exchange for this Warrant Certificate, with or without other
Warrant Certificates, subject to the limitations provided in the Warrant
Agreement, without charge except for any tax or other governmental charge
imposed in connection therewith.
The Company and the Warrant Agent may deem and treat the registered
holder(s) thereof as the absolute owner(s) of this Warrant Certificate
(notwithstanding any notation of ownership or other writing hereon made by
anyone), for the purpose of any exercise hereof, of any distribution to the
holder(s) hereof, and for all other purposes. Neither the Warrants nor this
Warrant Certificate entities any holder hereof to any rights of a stockholder of
the Company.
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731156.6
SUBSCRIPTION FORM
(To be executed only upon exercise of Warrants represented by this
Warrant Certificate)
To: American Stock Transfer & Trust Company,
as Warrant Agent
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
The undersigned hereby irrevocably exercises [_____________] of the
Class B, Series __ Warrants represented by this Warrant Certificate and herewith
makes payment in accordance with the terms and conditions specified in this
Warrant Certificate and in the Warrant Agreement and surrenders this Warrant
Certificate and all right, title and interest therein to and directs that the
shares of Preferred Stock of Marvel Enterprises, Inc. (the "Warrant Shares")
deliverable upon the exercise of such Class B, Series __ Warrants be registered
or placed in the name and at the address specified below and delivered thereto.
Dated:
---------------------------------------
(Signature of Owner)
---------------------------------------
(Street Address)
---------------------------------------
(City) (State) (Zip Code)
Signature Guaranteed By:
---------------------------------------
Securities and/or check or other property (including, if such number of Class B,
Series __ Warrants exercised shall not be all of the Class B, Series __ Warrants
evidenced by this Warrant Certificate, a new Warrant Certificate for the balance
remaining of such Class B, Series __ Warrants) to be issued or delivered to:
Name:
Street Address:
City, State and Zip Code:
Please insert social security or identifying number:
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731156.6
FORM OF ASSIGNMENT
For value received from the Assignee(s) named below, the undersigned
registered Holder of this Warrant Certificate hereby sells, assigns, and
transfers unto the Assignee(s) named below (including the undersigned with
respect to any Class B, Series __ Warrants constituting a part of the Class B,
Series __ Warrants evidenced by this Warrant Certificate not being assigned
hereby) all of the right of the undersigned under this Warrant Certificate, with
respect to the number of Class B, Series __ Warrants set forth below:
Social Security
or other
Name of Assignee Address Identifying No. No. of Warrants
---------------- ------- --------------- ---------------
and does hereby irrevocably constitute and appoint the undersigned's attorney to
make such transfer on the books of maintained for the purposes, with full power
of substitution in the premises.
Dated:
----------------------------------
(Signature of Owner)
----------------------------------
(Street Address)
----------------------------------
(City) (State) (Zip Code)
Signature Guaranteed By:
----------------------------------
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731156.6
