EXHIBIT 4.4
WARRANT AGREEMENT
This WARRANT AGREEMENT, dated as of May 24, 2002 (this "Agreement"), is
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made and entered into by and between Pillowtex Corporation, a Delaware
corporation (the "Company"), and Mellon Investor Services LLC, a New Jersey
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limited liability company, as warrant agent (the "Warrant Agent").
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RECITALS:
A. The Second Amended Joint Plan of Reorganization of Pillowtex
Corporation and its Debtor Subsidiaries (the "Plan") was confirmed by the United
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States Bankruptcy Court in the District of Delaware on May 1, 2002.
B. The Plan provides for the execution and delivery of this Agreement by
the Company.
C. The Company desires to issue the Warrants (as defined below) on the
terms and subject to the conditions herein set forth.
NOW, THEREFORE, in consideration of the mutual covenants herein set forth,
the parties hereto hereby agree as follows:
1. Issuance of Warrants; Form of Warrants.
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1.1 Issuance of Warrants. On the terms and subject to the conditions set
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forth in the Plan, the Company will issue and deliver an aggregate of 3,529,412
(subject to increase as a result of the application of the rounding provisions
set forth in the Plan) warrants (the "Warrants"). Each Warrant will initially
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represent the right to purchase one share of New Common Stock (as defined in
Section 4.1(g) below). The purchase price per Warrant Share (as defined below)
payable upon the exercise of a Warrant (the "Warrant Price") will initially be
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$28.99. The shares of New Common Stock purchasable upon exercise of the Warrants
are hereinafter referred to as the "Warrant Shares." The Warrant Price and the
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number and kind of Warrant Shares purchasable upon exercise of the Warrants are
subject to adjustment pursuant to the provisions of Section 4 hereto.
1.2 Form of Warrants. Each Warrant, including without limitation any
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Warrants that may be issued upon partial exercise, replacement or transfer of
Warrants, will be evidenced by, and subject to the terms of, a Warrant
certificate, which will include the Form of Exercise Notice, Form of Cashless
Exercise Notice and Form of Assignment to be printed on the reverse thereof, in
substantially the form attached hereto as Exhibit A (a "Warrant Certificate"),
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with such changes, marks of identification or designation and legends, summaries
or endorsements printed thereon as the Company may deem appropriate but which do
not change the rights, duties or obligations of the Warrant Agent hereunder, and
as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or with any rule or regulation made
pursuant thereto.
1.3 Countersignature of Warrants. The Warrant Certificates will be
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executed on behalf of the Company by the manual or facsimile signature of its
Chairman of the Board, Chief Executive Officer, President or any Vice President,
and attested by its Secretary or Treasurer or any Assistant Secretary. The
Warrant Certificates will be countersigned by the Warrant Agent and will not be
valid for any purpose unless so countersigned. In case any officer of the
Company who has signed any of the Warrant Certificates ceases to be an officer
of the Company before countersignature by the Warrant Agent and issuance and
delivery by the Company, the Warrant Certificates, nevertheless, may be
countersigned by the Warrant Agent and issued and delivered by the Company with
the same force and effect as though the person who signed the Warrant
Certificates had not ceased to be an officer of the Company.
1.4 Registration of Warrants. The Warrant Agent is hereby authorized and
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instructed to keep or cause to be kept, at the office of the Warrant Agent
designated for such purpose, books for registration and transfer of the Warrant
Certificates issued hereunder. The books will show the names and addresses of
the respective holders of the Warrant Certificates, the number of Warrants
evidenced on its face by each of the Warrant Certificates and the date of each
of the Warrant Certificates. The Company and the Warrant Agent will be entitled
to treat the registered holder of any Warrant Certificate (the "Holder") as the
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sole owner of the Warrants represented by the Warrant Certificate for all
purposes and will not be bound to recognize any equitable or other claim or
interest in such Warrants on the part of any other person or entity. Neither the
Company nor the Warrant Agent will be liable or responsible for any registration
or transfer of any Warrants that are registered or to be registered in the name
of a fiduciary or the nominee of a fiduciary.
2. Transfer and Exchange of Warrants.
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2.1 Transfer and Exchange. Any Warrant Certificate may be transferred,
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split up, combined or exchanged for another Warrant Certificate or Warrant
Certificates entitling the Holder thereof to purchase a like aggregate number of
Warrant Shares as the Warrant Certificate or Warrant Certificates surrendered
then entitled such Holder (or former Holder in the case of a transfer) to
purchase. Any Holder desiring to transfer, split up, combine or exchange any
Warrant Certificate must make a request in writing and deliver it to the Warrant
Agent, and must surrender the Warrant Certificate or Warrant Certificates to be
transferred, split up, combined or exchanged, with the Form of Assignment duly
and properly executed by the Holder thereof, at the office of the Warrant Agent
designated for such purpose. Thereupon, or as promptly as practicable
thereafter, the Company will prepare, execute and deliver to the Warrant Agent,
and the Warrant Agent will countersign and deliver, a Warrant Certificate or
Warrant Certificates, as the case may be, as so requested. Neither the Company
nor the Warrant Agent will be required to issue or deliver any Warrant
Certificates in connection with any transfer, split up, combination or exchange
of Warrants or Warrant Certificates unless and until the person or persons or
entity requesting the issuance or delivery thereof has paid to the Warrant Agent
the amount of any tax or other governmental charge that may be payable in
connection with such transfer, split up, combination or exchange or has
established to the reasonable satisfaction of the Warrant Agent that any tax or
other governmental charge has been paid in full. Holders will not be required to
pay any other charge in connection with the transfer, split up, combination or
exchange of Warrants or Warrant Certificates.
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2.2 Lost, Stolen and Mutilated Warrant Certificates. Upon (a) receipt by
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the Company and the Warrant Agent of (i) evidence satisfactory to the Company
and the Warrant Agent of the loss, theft, mutilation or destruction of a Warrant
Certificate and (ii) security or indemnity as may be reasonably satisfactory to
the Company or the Warrant Agent, and (b) surrender to the Warrant Agent and
cancellation of the Warrant Certificate if mutilated, the Company will prepare,
execute and deliver a new Warrant Certificate of like tenor to the Warrant Agent
and the Warrant Agent will countersign and deliver the new Warrant Certificate
to the Holder in lieu of the Warrant Certificate so lost, stolen, mutilated or
destroyed.
2.3 Payment of Taxes. The Company will pay all documentary or stamp taxes,
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if any, attributable to the initial issuance and transfer of the Warrants
pursuant to the first sentence of Section 1.1 and the initial issuance of the
Warrant Shares upon the exercise of Warrants; provided, however, the Company's
obligations in this regard will in all events be conditioned upon the Holder
cooperating with the Company and the Warrant Agent in any reasonable arrangement
designed to minimize or eliminate any such taxes. Neither the Company nor the
Warrant Agent will be required to pay any tax or other governmental charge that
may be payable in connection with any transfer, split up, combination or
exchange of Warrants or Warrant Certificates.
2.4 Cancellation and Destruction of Warrant Certificates. All Warrant
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Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange will, if surrendered to the Company, be delivered to the
Warrant Agent for cancellation or in canceled form, or, if surrendered to the
Warrant Agent, will be canceled by the Warrant Agent, and no Warrant
Certificates will be issued in lieu thereof except as expressly permitted by
this Agreement. The Company will deliver to the Warrant Agent for cancellation
and retirement, and the Warrant Agent will so cancel and retire, any other
Warrant Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Warrant Agent will destroy such canceled and retired
Warrant Certificates upon written instruction of the Company.
3. Exercise of Warrants.
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3.1 Exercise of Warrants. (a) Warrants may be exercised by the Holder
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thereof, in whole or in part, at any time and from time to time after the date
hereof and prior to 5:00 p.m., New York City time, on November __, 2009 (the
"Expiration Date") by delivering to the Warrant Agent, at its office designated
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for such purpose, the following:
(i) the Warrant Certificate or Warrant Certificates representing the
Warrants to be exercised, with the Form of Exercise Notice duly and
properly executed by the Holder thereof; and
(ii) cash, a certified or bank cashier's check payable to the order of
the Company, or a wire transfer to an account designated by the Company, in
each case, in an amount equal to the product of (A) the number of Warrant
Shares purchasable upon the exercise of the Warrants designated for
exercise in the Form of Exercise Notice and (B) the Warrant Price.
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(b) In lieu of exercising Warrants pursuant to Section 3.1(a) hereof, the
Holder may elect to exercise the Warrants by delivering to the Warrant Agent, at
its office designated for such purpose, the Warrant Certificate or Warrant
Certificates representing the Warrants to be exercised, with the Form of
Cashless Exercise Notice duly and properly executed by the Holder thereof,
indicating thereon the number of Warrants being submitted for exercise. In such
event, the Warrant Agent will promptly notify the Company in writing of such
election and the details thereof, and the number of Warrant Shares to be issued
on such exercise will be determined by the Warrant Agent using the following
formula:
X = ((O x Y)(C-B)) / ((C x O) + (B x Y))
where,
X is the number of Warrant Shares to be issued to the Holder upon such exercise;
Y is the number of Warrants being submitted for exercise;
B is the Warrant Price (as adjusted to the date of such calculation);
C is the Current Market Price of one share of New Common Stock (at the date of
such calculation); and
O is the number of shares of New Common Stock outstanding (as of the date of
such calculation).
The Warrant Agent will promptly submit to the Company for approval the
details of such calculation, and will not issue any Warrant Shares to the Holder
thereof pursuant to this Section 3.1(b) until it receives written approval of
the Company that such calculation is accurate, which approval shall not be
unreasonably withheld or delayed, and the Warrant Agent may rely conclusively on
such approval.
3.2 Mechanics of Issuance of Warrant Shares. (a) As promptly as
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practicable after an exercise of Warrants in accordance with Section 3.1, and in
any event within 10 Business Days (as defined below) after such exercise, the
Warrant Agent will (i) requisition from any transfer agent for the New Common
Stock certificates representing the number of Warrant Shares to be purchased
(and the Company hereby irrevocably authorizes and directs its transfer agent to
comply with all such requests), (ii) after receipt of the New Common Stock
certificates, cause the certificates to be delivered in accordance with the
instructions set forth in the Form of Exercise Notice or the Form of Cashless
Exercise Notice, as the case may be, to or upon the Holder exercising the
Warrants, registered in the name or names designated by the Holder, (iii) when
appropriate, requisition from the Company the amount of cash to be paid in lieu
of the issuance of fractional Warrant Shares in accordance with the provisions
of Section 5 hereof, and (iv) when appropriate, after receipt of the cash
referred to in clause (iii) of this subsection, deliver the cash in accordance
with the instructions set forth in the Form of Exercise Notice or the Form of
Cashless Exercise Notice, as the case may be, to or upon the order of the Holder
exercising the Warrants; provided, however, that, if shares of New Common Stock
are uncertificated, the Warrant Agent will take such other actions as are
appropriate for uncertificated shares to effect the intent of clauses (i) and
(ii) of this subsection.
(b) If the number of Warrants represented by a Warrant Certificate are not
exercised in full, the Company will prepare, execute and deliver to the Warrant
Agent a new Warrant Certificate evidencing the unexercised number of Warrants
and the Warrant Agent will
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countersign and deliver the new Warrant Certificate to or upon the order of the
Holder exercising the Warrants, registered in the name or names designated by
the Holder.
(c) The Company will take all such action as may be necessary to ensure
that all Warrant Shares delivered upon exercise of Warrants, at the time of
delivery of the certificates for such Warrant Shares, will (subject to payment
of the Warrant Price) be duly and validly authorized and issued, fully paid and
nonassessable and, if shares of New Common Stock are then listed on any national
securities exchange (as defined in the Securities Exchange Act of 1934) or
qualified for quotation on The Nasdaq Stock Market, Inc., will be duly listed or
qualified for quotation thereon, as the case may be.
(d) In the event that the Company is obligated to pay cash in lieu of
fractional Warrant Shares pursuant to Section 5 in connection with any exercise
of Warrants, the Company will make all arrangements necessary so that cash is
available for distribution by the Warrant Agent, if and when appropriate.
(e) The Company will pay all expenses, taxes and other charges payable in
connection with the preparation, issuance and delivery of certificates
representing Warrant Shares or Warrant Certificates representing unexercised
Warrants in connection with any exercise of Warrants in accordance with Section
3.1 hereof, except that, if any certificates representing Warrant Shares or any
Warrant Certificates are to be registered in a name or names other than the
Holder at the time of any exercise of Warrants, the Holder will deliver at the
time of exercise or promptly upon receipt of a written request of the Company
funds sufficient to pay all transfer or similar taxes payable as a result of the
transfer. In connection with any exercise of Warrants in accordance with Section
3.1 hereof, the Warrants will be deemed to have been exercised, any Warrant
Shares issued on account thereof will be deemed to have been issued, any Warrant
Certificate issued in respect of unexercised Warrant in connection therewith
will be deemed to have been issued and the person or entity in whose name any
such Warrant Shares or Warrant Certificate is issued will be deemed for all
purposes to have become a holder of record of such Warrant Shares or the
Warrants represented by such Warrant Certificate as of the date of the exercise.
3.3 Certain Definitions. For purposes of this Agreement, (a) the term
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"Business Day" means any day other than a Saturday, Sunday or a day on which
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banking institutions in the State of New York are authorized or obligated by law
or executive order to close and (b) the term "Trading Day" means any day on
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which shares of New Common Stock are traded on the principal national securities
exchange on which the shares of New Common Stock are listed or admitted to
trading or, if shares of New Common Stock are not so listed or admitted to
trading, on the over-the-counter market.
4. Adjustments of Warrant Price and Warrant Shares. The Warrant Price and
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the number and kind of Warrant Shares purchasable upon exercise of the Warrants
will be subject to adjustment from time to time upon the occurrence of certain
events as provided in this Section 4.
4.1 Adjustments. The Warrant Price and the number and kind of Warrant
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Shares purchasable upon exercise of a Warrant will be subject to adjustment as
follows:
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(a) Subject to Section 4.1(e), if the Company (i) pays a dividend or
otherwise distributes to holders of its capital stock (whether New Common Stock
or capital stock of any other class), (ii) subdivides its outstanding shares of
New Common Stock into a greater number of shares of New Common Stock, (iii)
combines its outstanding shares of New Common Stock into a smaller number of
shares of New Common Stock, or (iv) issues any shares of its capital stock in a
reclassification of its outstanding shares of New Common Stock (including any
reclassification in connection with a consolidation, merger or other business
combination transaction in which the Company is the continuing or surviving
corporation), then the number and kind of Warrant Shares purchasable upon
exercise of each Warrant immediately prior thereto will be adjusted so that the
Holder of each Warrant will be entitled to receive (A) in the case of a dividend
or distribution, the sum of (1) the number of Warrant Shares that, if the
Warrant had been exercised immediately prior to the record date for determining
the right to receive such dividend or distribution, the Holder would have
received upon exercise and (2) the number and kind of additional shares of
capital stock that the Holder would have been entitled to receive as a result of
such dividend or distribution by virtue of its ownership of such Warrant Shares,
(B) in the case of a subdivision or combination, the number of Warrant Shares
that, if the Warrant had been exercised immediately prior to such subdivision or
combination, the Holder would have received upon exercise, adjusted to give
effect to the subdivision or combination as if such Warrant Shares had been
subject thereto, or (C) in the case of an issuance in a reclassification, the
sum of (1) the number of Warrant Shares that, if the Warrant had been exercised
immediately prior to such reclassification, the Holder would have received upon
exercise and retained after giving effect to the reclassification as if such
Warrants Shares had been subject thereto and (2) the number and kind of
additional shares of capital stock that the Holder would have been entitled to
receive as a result of the reclassification as if such Warrant Shares had been
subject thereto. An adjustment made pursuant to this paragraph (a), in the case
of a dividend or distribution, will be made whenever the dividend or
distribution is made and in the case of a subdivision, combination or
reclassification, will be made and become effective whenever the subdivision,
combination or reclassification becomes effective.
(b) Subject to Section 4.1(e), if the Company issues rights, options or
warrants to holders of the outstanding shares of New Common Stock entitling the
holders of the rights, options or warrants to subscribe for or purchase shares
of New Common Stock at a price per share that is lower on the record date
mentioned below than both the Current Market Price (as hereinafter defined) per
share of New Common Stock and the Warrant Price on such record date, then the
number of Warrant Shares purchasable upon the exercise of each Warrant will be
adjusted to the number that results from multiplying the number of Warrant
Shares purchasable upon exercise of each Warrant immediately prior to such
adjustment by a fraction (not to be less than one), the numerator of which will
be the number of shares of New Common Stock outstanding on such record date plus
the number of additional shares of New Common Stock offered by such rights,
options or warrants for subscription or purchase and the denominator of which
will be the number of shares of New Common Stock outstanding on such record date
plus the number of shares of New Common Stock which the aggregate subscription
or purchase price of the total number of shares of New Common Stock so offered
would purchase at the Current Market Price per share of New Common Stock on such
record date. The adjustment will be made and become effective whenever such
rights, options or warrants are issued. In case the subscription or purchase
price may be paid in a consideration part or all of which is in a form other
than cash, the fair value of that consideration will be as determined by the
Board of
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Directors of the Company, whose determination will be conclusive if based on the
financial advice of a nationally recognized investment banking firm. Except as
provided in Section 4.1(h), no further adjustments of the number of Warrant
Shares will be made upon the actual issuance of shares of New Common Stock upon
exercise of such rights, options or warrants.
(c) Subject to Section 4.1(e), if the Company issues shares of New Common
Stock or securities convertible into or exchangeable for shares of New Common
Stock or rights, options or warrants entitling the holders of such rights,
options or warrants to subscribe for or purchase shares of New Common Stock
(excluding shares of New Common Stock, convertible or exchangeable securities or
rights, options or warrants issued in any of the transactions described in
paragraph (a) or (b) of this Section 4.1) for a purchase price per share of New
Common Stock, for a conversion or exchange price per share of New Common Stock
initially deliverable upon conversion or exchange of such securities, or for a
subscription or purchase price per share of New Common Stock initially
deliverable upon exercise of such rights, options or warrants, that is less than
both the Current Market Price per share of New Common Stock and the Warrant
Price on the date the purchase, conversion, exchange or subscription price of
such additional shares of New Common Stock are first fixed, then the number of
Warrant Shares thereafter purchasable upon the exercise of each Warrant will be
adjusted to the number that results from multiplying the number of Warrant
Shares purchasable upon exercise of each Warrant immediately prior to the
adjustment by a fraction (not to be less than one), the numerator of which will
be the number of shares of New Common Stock outstanding on such date plus the
number of additional shares of New Common Stock so issued or issuable upon the
conversion, exchange or exercise, and the denominator of which will be the
number of shares of New Common Stock outstanding on such date plus the number of
shares of New Common Stock which the aggregate purchase, conversion, exchange or
subscription price received or receivable by the Company for the additional
shares of New Common Stock would purchase at the Current Market Price per share
of New Common Stock on such date. The adjustment will be made and become
effective whenever the shares of New Common Stock or convertible or exchangeable
securities are issued. In case the purchase, conversion, exchange or
subscription price may be paid in a consideration part or all of which is in a
form other than cash, the fair value of that consideration will be as determined
by the Board of Directors of the Company, whose determination will be conclusive
if based on the financial advice of a nationally recognized investment banking
firm. Except as provided in Section 4.1(h), no further adjustment will be made
upon the actual issue of shares of New Common Stock upon conversion or exchange
of the securities convertible into or exchangeable for shares of New Common
Stock or upon exercise of rights, options or warrants entitling the holders of
such rights, options or warrants to subscribe for or purchase shares of New
Common Stock.
(d) For purposes of this Agreement, the "Current Market Price" per share
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of New Common Stock on any date will be the average of the daily closing prices
for 20 consecutive Trading Days commencing 30 Trading Days before the date of
such computation; provided, however, that in the event that the Current Market
Price per share of New Common Stock is determined during a period following the
announcement of (i) a dividend or distribution on New Common Stock payable in
shares of New Common Stock or securities convertible into or exchangeable for
shares of New Common Stock or (ii) any subdivision, combination or
reclassification of shares of New Common Stock, and prior to the expiration of
30 Trading Days after the ex-dividend date of such dividend or distribution, or
the effective date for such
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subdivision, combination or reclassification, then, and in each such case, the
Current Market Price per share will be appropriately adjusted to take into
account ex-dividend trading or to reflect the Current Market Price per share per
New Common Stock equivalent. The closing price for each day (the "Closing
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Price") will be the last sale price, regular way, or, in case no such sale takes
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place on such day, the average of the closing bid and asked prices, regular way,
in either case as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities
exchange on which shares of New Common Stock are listed or admitted to trading
or, if shares of New Common Stock are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter market, as
reported by The Nasdaq Stock Market, Inc. or such other system then in use, or,
if on any such date shares of New Common Stock are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in shares of New Common Stock selected
by the Board of Directors of the Company. If the New Common Stock is not
publicly held or not so listed or traded, or are not the subject of available
bid and asked quotes, "Current Market Price" per share will mean the fair value
per share as determined in good faith by the Board of Directors of the Company.
(e) No adjustment in the number of Warrant Shares purchasable upon the
exercise of a Warrant will be required unless such adjustment would require an
increase or decrease in the number of Warrant Shares purchasable upon the
hypothetical exercise of a Warrant of at least 1%; provided, however, that any
adjustments which by reason of this paragraph (e) are not required to be made
currently will be carried forward and made at the time and together with the
next subsequent adjustment which, together with any adjustments so carried
forward, would require an increase or decrease in the number of Warrant Shares
purchasable upon the hypothetical exercise of a Warrant of 1% or more. All
calculations with respect to the number of Warrant Shares will be made to the
nearest one-thousandth of a share and all calculations with respect to the
Warrant Price will be to the nearest whole cent. No adjustment in the number of
Warrant Shares purchasable upon the exercise of a Warrant will be made under
clause (i) of paragraph (a) of this Section 4.1 or paragraph (b) or (c) of this
Section 4.1 if the Company issues or distributes to each Holder the shares,
rights, options, warrants, convertible or exchangeable securities or other
securities referred to in the applicable paragraph that such Holder would have
been entitled to receive had the Warrants been exercised prior to the happening
of such event or the record date with respect thereto (provided that, in any
case in which the Holder would have been so entitled to receive a fractional
interest in any such securities or assets, the Company may distribute to the
Holder in lieu of a fractional interest cash in an amount equal to the fair
value of the fractional interest as determined in good faith by the Board of
Directors of the Company). No adjustment in the number of Warrant Shares
purchasable upon the exercise of a Warrant will be made on account of: (1) any
issuance of shares of New Common Stock, or of options, rights or warrants to
purchase, or securities convertible into or exchangeable for, shares of New
Common Stock, pursuant to the Plan, (2) any issuance of shares of New Common
Stock upon the exercise of options, rights or warrants or upon the conversion or
exchange of convertible or exchangeable securities, in either case, issued
pursuant to the Plan or outstanding as of the date hereof, (3) any issuance of
shares of New Common Stock, or of options, rights or warrants, or of other
securities, pursuant to a share purchase rights plan or any similar plan adopted
by the Board of Directors of the Company, (4) any issuance of shares of New
Common Stock, or of options, rights or warrants to purchase, or securities
convertible into or exchangeable for, shares
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of New Common Stock, in accordance with any plan for the benefit of the
employees or directors of the Company existing as of the date hereof or
contemplated by the Plan or any other plan adopted by the directors of the
Company for the benefit of the employees or Directors of the Company or any of
its subsidiaries, (5) any issuance of shares of New Common Stock in connection
with a Company-sponsored plan for reinvestment of dividends or interest, (6) any
issuance of shares of New Common Stock, securities convertible into or
exchangeable for shares of New Common Stock or rights, options or warrants
entitling the holders of such rights, options or warrants to subscribe for or
purchase shares of New Common Stock pursuant to an underwritten public offering,
in the case of an issuance of shares of New Common Stock, for a price per share
of New Common Stock or, in the case of an issuance of convertible or
exchangeable securities or rights, warrants or options involving a conversion or
exchange price per share of New Common Stock initially deliverable upon
conversion or exchange of such convertible or exchangeable securities or a
subscription or purchase price per share of New Common Stock initially
deliverable upon exercise of such rights, options or warrants, as applicable,
that is equal to or greater than 95% of the Closing Price per share of New
Common Stock on the date the offering, conversion, exchange subscription or
purchase price of such additional shares of New Common Stock is first fixed, or
(7) any issuance of shares of New Common Stock or other securities to the owners
of any entity that is acquired by the Company in an arms length transaction
approved by the Board of Directors of the Company. No adjustment in the number
of Warrant Shares will be made for a change in the par value of the shares of
New Common Stock.
(f) Whenever the number of Warrant Shares purchasable upon the exercise of
each Warrant is adjusted as herein provided, the Warrant Price will be adjusted
by multiplying the Warrant Price in effect immediately prior to the adjustment
by a fraction, the numerator of which will be the number of Warrant Shares
purchasable upon the exercise of each Warrant immediately prior to the
adjustment, and the denominator of which will be the number of Warrant Shares so
purchasable immediately thereafter.
(g) For the purpose of this Agreement, the term "New Common Stock" means
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(i) the class of shares designated as the common stock of the Company as of the
date of this Agreement, (ii) all shares of any class or classes (however
designated) of the Company, now or hereafter authorized, the holders of which
have the right, without limitation as to amount, either to all or to a part of
the balance of current dividends and liquidating dividends after the payment of
dividends and distributions on any shares entitled to preference, and the
holders of which are ordinarily entitled to vote generally in the election of
directors of the Company, or (iii) any other class of shares resulting from
successive changes or reclassifications of such shares consisting solely of
changes in par value, or from par value to no par value, or from no par value to
par value. In the event that at any time, as a result of an adjustment made
pursuant to Section 4.1(a), the Warrants become exercisable to purchase Warrant
Shares other than shares of New Common Stock, thereafter the number of such
other shares so purchasable upon exercise of each Warrant and the Warrant Price
payable in respect of such other shares upon the exercise of each Warrant will
be subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Warrant Shares
and the Warrant Price contained in this Section 4.1.
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(h) Upon the expiration of any rights, options, warrants or conversion or
exchange privileges, if any thereof have not been exercised, the Warrant Price
and the number of Warrant Shares purchasable upon the exercise of each Warrant
will, upon expiration, be readjusted and will thereafter be such as it would
have been had it been originally adjusted (or had the original adjustment not
been required, as the case may be) as if (i) the only shares of New Common Stock
so issued were the shares of New Common Stock, if any, actually issued or sold
upon the exercise of such rights, options, warrants or conversion or exchange
privileges and (ii) such shares of New Common Stock, if any, were issued or sold
for the consideration actually received by the Company upon such exercise,
conversion or exchange plus the aggregate consideration, if any, actually
received by the Company for the issuance, sale or grant of all such rights,
options, warrants or conversion or exchange privileges whether or not exercised;
provided, however, that no such readjustment will have the effect of increasing
the Warrant Price or decreasing the number of Warrant Shares purchasable upon
the exercise of each Warrant by an amount in excess of the amount of the
adjustment initially made in respect of the issuance, sale, or grant of such
rights, options, warrants or conversion or exchange privileges.
4.2 Voluntary Adjustment. Subject to the approval of the majority of the
--------------------
outstanding voting stock of the Company, the Company may at any time prior to
the Expiration Date reduce the then current Warrant Price to any amount deemed
appropriate by the Board of Directors.
4.3 Notice of Adjustment. Whenever the Warrant Price or the number or kind
--------------------
of Warrant Shares purchasable upon exercise of the Warrants is adjusted pursuant
to any of the provisions of this Agreement, the Company will promptly give
written notice to the Warrant Agent and the Holders of the adjustment or
adjustments, together with a certificate of a firm of independent public
accountants selected by the Company (who may be the regular accountants employed
by the Company) setting forth the adjustments in the Warrant Price and the
number or kind of Warrant Shares purchasable upon exercise of each Warrant, and
also setting forth a brief statement of the facts requiring the adjustments and
the computations upon which the adjustments are based. The certificate will be
conclusive evidence of the correctness of the adjustments and the Warrant Agent
may rely on it for all purposes. Notwithstanding anything to the contrary
contained herein, the Warrant Agent will have no duty or obligation to
investigate or confirm whether the information contained in such certificate
complies with the terms of this Agreement or is accurate or correct.
4.4 No Adjustment for Dividends. Except as provided in Section 4.1, no
---------------------------
adjustment or payment in respect of any dividends will be made at any time.
4.5 Preservation of Purchase Rights Upon Merger, Consolidation, Etc. In
----------------------------------------------------------------
case of any consolidation of the Company with or merger of the Company into
another entity or in case of any sale, transfer or lease to another entity of
all or substantially all the property of the Company, the Company or the
successor or purchasing entity, as the case may be, will execute an agreement
providing that each Holder will have the right thereafter, upon payment of an
amount equal to the amount payable upon the exercise of a Warrant immediately
prior thereto, to purchase upon exercise of each Warrant the kind and amount of
securities or property that it would have owned or have been entitled to receive
after giving effect to the consolidation, merger, sale, transfer or lease on
account of the Warrant Shares that would have been purchasable upon the exercise
of the Warrant had the Warrant been exercised immediately prior
10
thereto (provided that, to the extent that the Holder would have been so
entitled to receive cash on account of the Warrant Shares, the Holder may elect
in connection with the exercise of a Warrant in accordance with Section 3.1 to
reduce the amount of cash that it would be entitled to receive upon exercise in
exchange for a corresponding reduction in the amount payable upon such
exercise); provided, however, that no adjustment in respect of dividends,
interest or other income on or from such shares or other securities or property
will be made during the term of a Warrant or upon the exercise of a Warrant. The
agreement will provide for adjustments that will be as nearly equivalent as may
be practicable to the adjustments provided for in this Section 4. The provisions
of this Section 4.5 will similarly apply to successive consolidations, mergers,
sales, transfers or leases.
4.6 Warrant Certificates. Whether or not any adjustments in the Warrant
--------------------
Price or the number or kind of Warrant Shares purchasable upon the exercise of
the Warrants has been made, Warrant Certificates theretofore or thereafter
issued may continue to express the same Warrant Price and number and kind of
Warrant Shares as are stated in the Warrant Certificate initially issued.
5. Fractional Interests. Neither the Company nor the Warrant Agent will
--------------------
be required to issue fractional Warrant Shares or fractional interests in any
other securities upon exercise of the Warrants. If any fraction of a Warrant
Share or other security would, except for the provisions of this Section 5, be
issuable upon the exercise of the Warrants, the Company will pay an amount in
cash (a) in lieu of a fractional Warrant Share, equal to the Current Market
Price for one share of New Common Stock on the Trading Day immediately preceding
the date on which the Warrants are presented for exercise, multiplied by such
fraction of a Warrant Share, or (b) in lieu of a fractional interest in any
other security, equal to the fair value of such fractional interest, determined
in a manner as similar as possible, taking into account the difference in the
fractional interest being valued, to the calculation described in clause (a) of
this Section 5.
6. Warrant Agent Matters.
---------------------
6.1 Appointment of Warrant Agent. The Company hereby appoints the Warrant
----------------------------
Agent to act as agent for the Company and the Holders in accordance with the
express terms and conditions hereof, and the Warrant Agent hereby accepts such
appointment.
6.2 Concerning the Warrant Agent. (a) The Company will pay to the Warrant
----------------------------
Agent reasonable compensation for all services rendered by it hereunder and,
from time to time, on demand of the Warrant Agent, its reasonable expenses and
counsel fees and other disbursements incurred in the preparation, delivery,
administration, execution and amendment of this Agreement and the exercise and
performance of its duties hereunder. The Company will indemnify the Warrant
Agent for, and hold it harmless against, any loss, liability, suit, action,
proceeding, damage, judgment, claim, settlement, cost or expense, incurred
without gross negligence or bad faith (as each is finally determined by a court
of competent jurisdiction) on the part of the Warrant Agent, for any action
taken, suffered or omitted by the Warrant Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability arising therefrom, directly
or indirectly.
11
(b) The Warrant Agent will be liable hereunder only for its own gross
negligence or bad faith (as each is finally determined by a court of competent
jurisdiction). Notwithstanding anything in this Agreement to the contrary, in no
event will the Warrant Agent be liable for special, punitive, incidental,
indirect or consequential loss or damage of any kind whatsoever (including but
not limited to lost profits), even if the Warrant Agent has been advised of the
likelihood of such loss or damage and regardless of the form of the action. Any
liability of the Warrant Agent under this Agreement will be limited to the
amount of fees paid by the Company to the Warrant Agent. The provisions of this
Section 6 will survive the termination or expiration of this Agreement and the
resignation or removal of the Warrant Agent.
(c) The Warrant Agent will be protected and will incur no liability for or
in respect of any action taken, suffered or omitted by it in connection with its
administration of this Agreement in reliance upon any Warrant Certificate or
certificate evidencing Warrant Shares or New Common Stock or other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged by the proper
person or persons.
6.3 Merger or Consolidation or Change of Name of Warrant Agent. Any person
----------------------------------------------------------
or entity into which the Warrant Agent or any successor Warrant Agent may be
merged or with which it may be consolidated, or any person or entity resulting
from any merger or consolidation to which the Warrant Agent or any successor
Warrant Agent is a party, or any person or entity succeeding to the corporate
trust or shareholder services business of the Warrant Agent or any successor
Warrant Agent, will be the successor to the Warrant Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, provided that such person or entity would be eligible
for appointment as a successor Warrant Agent under the provisions of Section
6.5.
6.4 Duties of Warrant Agent. The Warrant Agent undertakes the duties and
-----------------------
obligations expressly imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the Holders, by their acceptance of
Warrant Certificates, will be bound:
(a) The Warrant Agent may consult with legal counsel (who may be legal
counsel for the Company), and the written advice or opinion of such counsel will
be full and complete authorization and protection to the Warrant Agent as to any
action taken, suffered or omitted by it in good faith and in accordance with
such written advice or opinion.
(b) Whenever in the performance of its duties under this Agreement the
Warrant Agent deems it necessary or desirable that any fact or matter be proved
or established by the Company prior to taking or suffering any action hereunder,
such fact or matter may be deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board, the Chief Executive
Officer, the President or any Vice President of the Company and delivered to the
Warrant Agent; and such certificate will be full authorization to the Warrant
Agent for any action taken, suffered or omitted in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
12
(c) The Warrant Agent will not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Warrant
Certificates or be required to verify the same, and all such statements and
recitals are and will be deemed to have been made by the Company only.
(d) The Warrant Agent will not be under any responsibility or liability in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution and delivery hereof by the Warrant Agent) or in
respect of the validity or execution of any Warrant Certificate (except the due
countersignature thereof by the Warrant Agent); nor will it be responsible or
liable for any breach by the Company of any covenant or condition contained in
this Agreement or in any Warrant Certificate; nor will it be responsible or
liable for any adjustment required under the provisions of Section 4 hereof or
responsible for the manner, method or amount of any adjustment or the
ascertaining of the existence of facts that would require any adjustment (except
with respect to the exercise of Warrants evidenced by Warrant Certificates after
actual written notice of any adjustment); nor will it by any act hereunder be
deemed to make any representation or warranty as to the authorization or
reservation of any shares of stock or other securities to be issued pursuant to
this Agreement or any Warrant Certificate or as to whether any shares of stock
or other securities will, when issued, be validly authorized and issued, fully
paid and nonassessable.
(e) The Company will perform, execute, acknowledge and deliver or cause to
be performed, executed, acknowledged and delivered all such further and other
acts, instruments and assurances as may reasonably be required by the Warrant
Agent for the carrying out or performing by the Warrant Agent of the provisions
of this Agreement.
(f) The Warrant Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the Chief Executive Officer, the President or
any Vice President of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it will not be liable for any
action taken, suffered or omitted to be taken by it in good faith in accordance
with instructions of any such officer.
(g) The Warrant Agent and any stockholder, director, officer or employee
of the Warrant Agent may buy, sell or deal in any of the Warrants or other
securities of the Company 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 will preclude the Warrant Agent from acting
in any other capacity for the Company or for any other legal entity.
(h) The Warrant Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorneys, accountants or agents, and the Warrant Agent will not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys, accountants or agents or for any loss to the Company or the
holders of Warrant resulting from any such act, default, neglect or misconduct,
absent gross negligence or bad faith (as each is finally determined by a court
of competent jurisdiction) in the selection and continued employment thereof.
13
(i) The Warrant Agent will not be under any duty or responsibility to
insure compliance with any applicable federal or state securities laws in
connection with the issuance, transfer or exchange of Warrant Certificates.
(j) In the event the Warrant Agent believes any ambiguity or uncertainty
exists hereunder or in any notice, instruction, direction, request or other
communication, paper or document received by the Warrant Agent hereunder, the
Warrant Agent shall deliver to the Company a written notice setting forth the
Warrant Agent's belief therefor and the Warrant Agent may refrain from taking
any action and will be fully protected and will not be liable in any way to the
Company or any Holder or other person or entity for refraining from taking such
action, unless the Warrant Agent receives written instructions signed by the
Company which eliminates such ambiguity or uncertainty to the satisfaction of
the Warrant Agent.
6.5 Change of Warrant Agent. The Warrant Agent or any successor Warrant
-----------------------
Agent may resign and be discharged from its duties under this Agreement upon 30
calendar days' notice in writing mailed to the Company and to each transfer
agent of the New Common Stock by registered or certified mail, and to the
Holders by first-class mail. The Company may remove the Warrant Agent or any
successor Warrant Agent upon 30 calendar days' notice in writing, mailed to the
Warrant Agent or successor Warrant Agent, as the case may be, and to each
transfer agent of the New Common Stock by registered or certified mail, and to
the Holders by first-class mail. If the Warrant Agent resigns or is removed or
otherwise becomes incapable of acting, the Company will appoint a successor to
the Warrant Agent. If the Company fails to make such appointment within a period
of 30 calendar days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Warrant Agent or by any Holder (who will, with such notice, submit
his Warrant Certificate for inspection by the Company), then any Holder or the
Warrant Agent may apply to any court of competent jurisdiction for the
appointment of a successor Warrant Agent. Any successor Warrant Agent, whether
appointed by the Company or by such a court, will be a person or entity
organized and doing business under the laws of the United States or of the State
of New York, or of any other state of the United States, so long as such person
or entity is in good standing, is authorized under such laws to exercise
corporate trust powers or shareholder services and is subject to supervision or
examination by federal or state authority and which has at the time of its
appointment as Warrant Agent a combined capital and surplus of at least $50
million. After appointment, the successor Warrant Agent will be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Warrant Agent without further act or deed; but the predecessor Warrant
Agent will deliver and transfer to the successor Warrant Agent any property at
the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Company will file notice thereof in writing
with the predecessor Warrant Agent and each transfer agent of the Common Stock,
and mail by first-class mail a notice thereof to each Holder. Failure to give
any notice provided for in this Section 6.5, however, or any defect therein,
will not affect the legality or validity of the resignation or removal of the
Warrant Agent or the appointment of the successor Warrant Agent, as the case may
be. Notwithstanding anything to the contrary contained herein, no resignation or
removal of the Warrant Agent or any successor Warrant Agent will become
effective prior to the effectiveness of the appointment of a successor Warrant
Agent therefor.
14
7. Rights and Notices.
------------------
7.1 No Rights as a Stockholder; Notices to Holders. Nothing contained in
----------------------------------------------
this Agreement or in the Warrant Certificate will be construed as conferring
upon the Holders or their transferees the right to vote, or to receive
dividends, or to consent or to receive notice as a stockholder in respect of any
meeting of stockholders for the election of directors of the Company or any
other matter, or any rights whatsoever as a stockholder of the Company;
provided, however, that if, at any time prior to the Expiration Date and prior
to the exercise of all of the Warrants, any of the following events occur:
(a) the Company declares any dividend payable in any securities upon its
shares of New Common Stock or makes any distribution (other than a regular cash
dividend or cash distributions payable out of surplus or net profits legally
available therefor) to the holders of its shares of New Common Stock;
(b) the Company offers to the holders of its New Common Stock any shares
of capital stock of the Company or any subsidiary or securities convertible into
or exchangeable for shares of capital stock of the Company or any subsidiary or
any option, right or warrant to subscribe for or purchase any thereof;
(c) any reclassification of the New Common Stock, any consolidation of the
Company with or merger of the Company into another person or entity, any sale,
transfer or lease to another person or entity of all or substantially all the
property of the Company, or any proposal of the Company to effect any of the
foregoing transactions that has been publicly announced by the Company; or
(d) any proposal by the Company to effect a dissolution, liquidation or
winding up of the Company that has been publicly announced by the Company;
then in any one or more of such events the Company will give notice of the event
to the Holders, as provided in Section 11 hereof, such giving of notice to be
completed at least 10 calendar days prior to the date fixed as a record date or
the date of closing the transfer books for the determination of the stockholders
entitled to such dividend, distribution or subscription rights, or for the
determination of stockholders entitled to vote on the proposed reclassification,
consolidation, merger, sale, transfer or lease, dissolution, liquidation or
winding up; provided, however, that no such notice will be required in respect
of any of the matters referred to in the penultimate sentence of Section 4.1(e).
The notice will specify the record date or the date of closing the transfer
books, as the case may be, for the event. Failure to mail or receive the notice
or any defect therein or in the mailing thereof will not affect the validity of
any action taken in connection with the event.
7.2 Agreements Respecting Warrants. The Company will not enter into any
------------------------------
agreement or instrument which would preclude the exercise of the Warrants as
herein provided.
8. Agreement of Warrant Holders. Every Holder by accepting a Warrant
----------------------------
Certificate consents and agrees with the Company and the Warrant Agent and with
every other Holder that:
15
(a) The Warrant Certificates are transferable only in accordance with the
terms of this Agreement and only on the registry books of the Warrant Agent if
surrendered at the office of the Warrant Agent designated for such purpose, duly
endorsed or accompanied by a proper instrument of transfer, and otherwise in
compliance with Section 2;
(b) The Company and the Warrant Agent may deem and treat the person or
entity in whose name the Warrant Certificate is registered as the absolute owner
thereof and of the Warrants evidenced thereby (notwithstanding any notations of
ownership or writing on the Warrant Certificate made by anyone other than the
Company or the Warrant Agent) for all purposes whatsoever, and neither the
Company nor the Warrant Agent will be affected by any notice to the contrary;
(c) The Holder expressly waives any right to receive any fractional
Warrants and any fractional securities upon exercise or exchange of a Warrant;
and
(d) Notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Warrant Agent will have any liability to any Holder or other
person or entity as a result of its inability to perform any of its obligations
under this Agreement by reason of any preliminary or permanent injunction or
other order, decree or ruling issued by a court of competent jurisdiction or by
a governmental, regulatory or administrative agency or commission, or any
statute, rule, regulation or executive order promulgated or enacted by any
governmental authority, prohibiting or otherwise restraining performance of such
obligation; provided, however, that the Company will use reasonable efforts to
have any such order, decree or ruling lifted or otherwise overturned as soon as
possible.
9. Reservation of New Common Stock. The Company will, for so long as
-------------------------------
Warrants remain outstanding, reserve and keep available, solely for issuance and
delivery upon the exercise of Warrants, a number of shares of New Common Stock
(or, if applicable, other securities) sufficient to provide for the exercise of
all outstanding Warrants. The transfer agent for the New Common Stock (or, if
applicable, other securities) will be irrevocably authorized and directed at all
times until the exercise or expiration of the Warrants to reserve such number of
authorized shares of New Common Stock (or, if applicable, other securities) as
necessary for such purpose. The Company will keep copies of this Agreement on
file with the transfer agent and will supply the transfer agent with duly
executed stock certificates for that purpose.
10. Representations and Warranties of the Company. The Company hereby
---------------------------------------------
represents and warrants to the Warrant Agent that:
(a) The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all requisite
corporate power and authority to execute, deliver and perform its obligations
hereunder and to consummate the transactions contemplated hereby;
(b) The execution, delivery and performance of this Agreement by the
Company and the consummation by the Company of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on the part
of the Company;
16
(c) The execution, delivery and performance of this Agreement by the
Company and the consummation by the Company of the transactions contemplated
hereby in accordance with the terms hereof will not conflict with, violate or
constitute a breach of any material contract, agreement or instrument by which
the Company is bound or any judgment, order, decree, law, statute, rule,
regulation or other judicial or governmental restriction to which the Company is
subject;
(d) This Agreement constitutes the legal, valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms,
except as the enforceability hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally; and
(e) The Warrants, when issued and delivered to the initial Holders as
provided in this Agreement, and the Warrant Shares issued upon exercise of the
Warrants, when issued, paid for and delivered as provided in this Agreement,
will be validly issued, fully paid and nonassessable.
11. Notices. All notices, requests, waivers, releases, consents and other
-------
communications required or permitted by this Agreement (collectively, "Notices")
-------
must be in writing. Except as expressly otherwise provided herein with respect
to manner of delivery, notices will be deemed sufficiently given for all
purposes when delivered in person, when sent by facsimile transmission (receipt
confirmed), when sent by first-class mail, postage prepaid or upon confirmation
of receipt when dispatched by a nationally recognized overnight courier service
to the appropriate party as follows: (a) if to a Holder, at the address of such
Holder as shown in the registry books maintained by the Warrant Agent; (b) if to
the Company, at Xxx Xxxx Xxxxxx Xxxxx, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000 (marked
for the attention of the Chief Financial Officer and the General Counsel), or at
such other address as the Company may have furnished to the Holders and the
Warrant Agent in writing; and (c) if to the Warrant Agent, at 00 Xxxx Xxxxxx,
0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Relationship Manager, or at such
other address as the Warrant Agent may have furnished to the Company and the
Holders in writing.
12. Amendment and Waiver. No failure or delay of the Holder in exercising
--------------------
any power or right hereunder (other than a failure to exercise Warrants in
accordance with the provisions hereof) will operate as a waiver thereof, nor
will any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. No notice or demand on the Company in any case will entitle the
Company to any other or future notice or demand in similar or other
circumstances. Subject to the last sentence of this Section 12, (a) if the
Company so directs, the Company and the Warrant Agent will supplement or amend
this Agreement without the approval of any Holders in order to cure any
ambiguity or correct or supplement any provision contained herein which may be
defective or inconsistent with any other provisions herein and (b) the Company
and the Warrant Agent may from time to time supplement or amend this Agreement,
with the consent of Holders of at least 50% of the Warrants then outstanding,
for any other purpose. Notwithstanding anything in this Agreement to the
contrary, no supplement or amendment which increases the Warrant Price,
decreases the period of time remaining during which the Warrants may be
exercised, changes in a manner adverse to Holders the number of Warrant Shares
purchasable upon the exercise of Warrants,
17
reduces the percentage set forth in clause (b) of the immediately preceding
sentence or amends this sentence will be made without the consent of all of the
Holders. Notwithstanding anything to the contrary herein, upon the delivery of a
certificate from an appropriate officer of the Company which states that the
proposed supplement or amendment is in compliance with the terms of this Section
12 and, provided such supplement or amendment does not change the Warrant
Agent's rights, duties, liabilities or obligations hereunder, the Warrant Agent
will execute such supplement or amendment. Any amendment, modification or waiver
effected pursuant to and in accordance with the provisions of this Section 12
will be binding upon all Holders and upon each future Holder, the Company and
the Warrant Agent. In the event of any amendment, modification or waiver, the
Company will give prompt notice thereof to all Holders and, if appropriate,
notation thereof will be made on all Warrant Certificates thereafter surrendered
for registration of transfer or exchange.
13. Successors and Assigns. This Agreement will be binding upon and inure
----------------------
to the benefit of the parties hereto, their respective successors and permitted
assigns, and, subject to Sections 1.4 and 8(b), all Holders, but will not be
assignable or delegable by any party without the prior written consent of the
other parties. In the absence of such prior written consent, any purported
assignment or delegation of any right or obligation hereunder will be null and
void.
14. Rights of the Parties. Except as provided in Section 13, nothing
---------------------
expressed or implied in this Agreement is intended or will be construed to
confer upon or give any person or entity other than the parties hereto and the
Holders any rights or remedies under or by reason of this Agreement or any
transaction contemplated hereby. All rights of action in respect of this
Agreement, other than the rights granted to the Warrant Agent hereunder, are
vested in the Holders, and any Holder without the consent of the Warrant Agent
or any other Holder may, on such Holder's own behalf and for such Holder's own
benefit, enforce such Holder's rights hereunder, including the right to
exercise, exchange or surrender for transfer such Holder's Warrant Certificates
in accordance with the provisions hereof.
15. Titles and Headings. Titles and headings to Sections herein are
------------------
inserted for convenience of reference only, and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement.
16. Certain Interpretive Matters. (a) Unless the context otherwise
----------------------------
requires, (i) all references to Sections or Exhibits are to Sections or Exhibits
of or to this Agreement, (ii) each term defined in this Agreement has the
meaning assigned to it, (iii) "or" is disjunctive but not necessarily exclusive,
and (iv) words in the singular include the plural and vice versa. All references
to "$" or dollar amounts are to lawful currency of the United States of America.
(b) No provision of this Agreement will be interpreted in favor of, or
against, any party hereto by reason of the extent to which such party or its
counsel participated in the drafting of this Agreement or by reason of the
extent to which any such provision is inconsistent with any prior draft of this
Agreement.
17. Entire Agreement. This Agreement, together with the Exhibit attached
----------------
hereto, constitute the entire agreement among the parties hereto with respect to
the subject matter hereof,
18
and there are no agreements among the parties hereto with respect thereto except
as expressly set forth herein.
18. Severability. In case any provision contained in this Agreement is
------------
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions will not in any way be affected or impaired thereby.
The Company and the Warrant Agent will endeavor in good faith to replace the
invalid, illegal or unenforceable provisions with valid, legal and enforceable
provisions the economic effect of which comes as close as possible to that of
the invalid, illegal or unenforceable provisions.
19. Governing Law. This Agreement will be governed by and construed in
-------------
accordance with the laws of the State of New York, without giving effect to the
principles of conflict of laws thereof.
20. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which so executed will be deemed to be an original; such
counterparts will together constitute but one agreement.
19
IN WITNESS WHEREOF, the parties to this Agreement have executed this
Agreement as of the date first above written.
PILLOWTEX CORPORATION,
a Delaware corporation
By: /s/ XXXX X. XXXXXXXX
------------------------------------
Xxxx X. Xxxxxxxx, Vice President
MELLON INVESTOR SERVICES LLC,
as Warrant Agent
By: /s/ XXXXXXX X. XXXXXXX
------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
EXHIBIT A
---------
PILLOWTEX CORPORATION
WARRANT CERTIFICATE
THE WARRANTS REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS SET FORTH IN THE WARRANT AGREEMENT (AS HEREINAFTER DEFINED), A COPY
OF WHICH WILL BE MADE AVAILABLE BY THE ISSUER UPON REQUEST. THE TRANSFER OR
EXCHANGE OF THESE WARRANTS MUST BE REGISTERED IN ACCORDANCE WITH THE WARRANT
AGREEMENT.
NO. WARRANTS
----------- ---------------
VOID AFTER 5:00 P.M. NEW YORK CITY TIME
ON November __, 2009
THIS CERTIFIES THAT for value received, _____________, or its registered
assigns (the "Holder"), is the owner of the number of Warrants set forth above
------
that initially entitle it to purchase from Pillowtex Corporation, a Delaware
corporation (the "Company"), at any time and from time to time on or prior to
-------
5:00 p.m. New York City time on November __, 2009 (the "Expiration Date"), a
---------------
like number of fully paid and nonassessable shares of the common stock, par
value $0.01 per share, of the Company (the "Common Stock") at an initial
------------
purchase price of $28.99 per share (the "Warrant Price"), subject to adjustment
-------------
as provided in the Warrant Agreement. The shares of Common Stock purchasable
upon exercise of the Warrants are hereinafter referred to as the "Warrant
-------
Shares." Subject to the terms and conditions of the Warrant Agreement, the
------
Warrants may be exercised by surrendering to the Warrant Agent (as defined
below) this Warrant Certificate, with the Form of Exercise Notice or the Form of
Cashless Exercise Notice, as the case may be, on the reverse side hereof duly
executed, together with (if exercised pursuant to Section 3.1(a) of the Warrant
Agreement) cash, a certified or bank cashier's check payable to the order of the
Company, or a wire transfer to an account designated by the Company, in each
case in an amount of lawful currency of the United States of America equal to
the product of (a) the number of Warrant Shares purchasable upon the exercise of
the Warrants designated for exercise in the Form of Exercise Notice and (b) the
Warrant Price.
The number and kind of Warrant Shares that may be purchased upon exercise
of the Warrants evidenced by this Warrant Certificate are the number as of the
date of the original issue of such Warrants, based on the shares of Common Stock
of the Company as constituted at such date. As provided in the Warrant
Agreement, the Warrant Price and the number and kind of Warrant Shares
purchasable upon exercise of the Warrants are subject to adjustment.
This Warrant Certificate and the Warrants it represents are subject to, and
entitled to the benefits of, all of the terms, provisions and conditions of the
Warrant Agreement, dated as of May __, 2002 (the "Warrant Agreement"), by and
-----------------
between the Company and Mellon Investor Services LLC, a New Jersey limited
liability company, as warrant agent (the "Warrant Agent"), which Warrant
-------------
Agreement is hereby incorporated herein by reference and made a part hereof and
to which Warrant Agreement reference is hereby made for a full description of
the rights, limitation of rights, obligations and duties hereunder of the
Company and the Holder. A copy of the Warrant Agreement will be made available
to the Holder by the Company upon request of the Holder.
Subject to the provisions set forth in the Warrant Agreement or in this
Certificate, this Warrant Certificate, with or without other Warrant
Certificates, may be transferred, split up, combined or
A-1
exchanged for another Warrant Certificate or Warrant Certificates, entitling the
Holder to purchase a like aggregate number of Warrant Shares as the Warrant
Certificate or Warrant Certificates surrendered entitled such Holder (or former
Holder in the case of a transfer) to purchase, upon presentation and surrender
hereof at the office of the Warrant Agent designated for such purpose, with the
Form of Assignment (if appropriate) and the related Certificate duly and
properly executed.
The Company will not be required to issue fractional Warrant Shares or
other fractional interests in securities upon the exercise of any Warrants
evidenced by this Warrant Certificate, but in lieu thereof a cash payment will
be made, as provided in the Warrant Agreement.
Nothing contained in the Warrant Agreement or in this Warrant Certificate
will be construed as conferring upon the holder of this Warrant Certificate the
right to vote, or to receive dividends, or to consent or (except as provided in
the Warrant Agreement) to receive notice in respect of any meeting of
stockholders for the election of directors of the Company or any other matter,
or any rights whatsoever as a stockholder of the Company.
This Warrant Certificate will not be valid or obligatory for any purpose
until it has been countersigned by the Warrant Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
executed by its corporate officers duly authorized.
Attest: PILLOWTEX CORPORATION
By:
------------------------------------- --------------------------------
Name: Name:
---------------------------
Title:
--------------------------
Dated: , 2002
------------
Countersigned:
MELLON INVESTOR SERVICES LLC,
as Warrant Agent
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
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Form of Reverse Side of Warrant Certificate
FORM OF ASSIGNMENT
------------------
(To be Executed if the Holder Desires to Transfer Warrants)
FOR VALUE RECEIVED, __________________________________________ hereby
sells, assigns, and transfers unto ____________________________________________
_______________________________________________________________________________
(Please print name, address and SSN/Tax ID# of transferee)
the right to purchase ________ Warrants represented by this Warrant Certificate,
together with all right, title, and interest therein, and does hereby
irrevocably constitute and appoint ______________________ attorney-in-fact, to
transfer such Warrants on the books of the within named Company, with full power
of substitution.
Dated: ,
--------------- ------
------------------------------------------
Signature
Signature Guaranteed:
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FORM OF EXERCISE NOTICE
-----------------------
(To be Executed if the Holder Desires to Exercise Warrants
Pursuant to Section 3.1(a) of the Warrant Agreement)
TO: PILLOWTEX CORPORATION
1. The undersigned hereby irrevocably elects pursuant to Section 3.1(a)
of the Warrant Agreement to exercise __________ Warrants evidenced by this
Warrant Certificate to purchase the Warrant Shares issuable upon the exercise of
such Warrants and requests that such Warrant Shares be issued in the name of:
Name:
--------------------------------------------
Address:
--------------------------------------------
SSN/Tax Id#:
--------------------------------------------
2. If such number of Warrants is not all the Warrants evidenced by this
Warrant Certificate, a new Warrant Certificate for the balance remaining of such
Warrants should be registered in the name of and delivered to:
Name:
--------------------------------------------
Address:
--------------------------------------------
SSN/Tax Id#:
--------------------------------------------
3. If there is any cash to be distributed in lieu of the issuance of
fractional shares, the cash should be paid to the order of and delivered to:
Name:
--------------------------------------------
Address:
--------------------------------------------
SSN/Tax Id#:
--------------------------------------------
Dated: ,
--------------- ------ --------------------------------------------
Signature
Signature Guaranteed:
A-4
FORM OF CASHLESS EXERCISE NOTICE
--------------------------------
(To be Executed if the Holder Desires to Exercise Warrants
Pursuant to Section 3.1(b) of the Warrant Agreement)
TO: PILLOWTEX CORPORATION
1. The undersigned hereby irrevocably submits for exercise, pursuant to
Section 3.1(b) of the Warrant Agreement, __________ Warrants evidenced by this
Warrant Certificate to purchase a number of Warrant Shares to be determined
using the formula set forth in Section 3.1(b) of the Warrant Agreement, and
requests that such Warrant Shares be issued in the name of:
Name:
--------------------------------------------
Address:
--------------------------------------------
SSN/Tax Id#:
--------------------------------------------
2. If such number of Warrants is not all the Warrants evidenced by this
Warrant Certificate, a new Warrant Certificate for the balance remaining of such
Warrants should be registered in the name of and delivered to:
Name:
--------------------------------------------
Address:
--------------------------------------------
SSN/Tax Id#:
--------------------------------------------
3. If there is any cash to be distributed in lieu of the issuance of
fractional shares, the cash should be paid to the order of and delivered to:
Name:
--------------------------------------------
Address:
--------------------------------------------
SSN/Tax Id#:
--------------------------------------------
Dated: ,
--------------- ------ --------------------------------------------
Signature
Signature Guaranteed:
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NOTICE
------
Signatures on the foregoing Form of Assignment, Form of Cashless Exercise
Notice and Form of Exercise Notice and in the related Warrant Certificates must
correspond to the name as written upon the face of this Warrant Certificate in
every particular, without alteration or enlargement or any change whatsoever.
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
A-6
