Exhibit 10.2
FORM OF WARRANT AGREEMENT
by and between
ENDO PHARMACEUTICALS HOLDINGS INC.
and
UNITED STATES TRUST COMPANY OF NEW YORK,
as
Warrant Agent
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Dated as of , 2000
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TABLE OF CONTENTS
Page
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Section 1. Appointment of Warrant Agent.............................. 3
Section 2. Warrant Certificates...................................... 3
Section 3. Execution of Warrant Certificates......................... 4
Section 4. Registration and Countersignature......................... 4
Section 5. Transfer and Exchange of Warrants......................... 4
Section 6. Registration of Transfers and Exchanges................... 5
Section 7. Terms of Warrants; Exercise of Warrants................... 7
Section 8. Payment of Taxes.......................................... 10
Section 9. Mutilated or Missing Warrant Certificates................. 10
Section 10. Reservation of Warrant Shares............................. 10
Section 11. Obtaining Stock Exchange Listings......................... 10
Adjustment of Exercise Price and Number of Warrant Shares
Section 12. Issuable.................................................. 10
Section 13. Fractional Interests...................................... 15
Section 14. Notices to Warrant Holders; Reservation of Dividends...... 15
Section 15. Notices to the Company and Warrant Agent.................. 16
Section 16. Supplements and Amendments; Actions....................... 17
Section 17. Concerning the Warrant Agent.............................. 18
Section 18. Change of Warrant Agent................................... 18
Section 19. Successors................................................ 19
Section 20. Termination............................................... 19
Section 21. GOVERNING LAW............................................. 19
Section 22. Benefits of This Agreement................................ 19
Section 23. Counterparts.............................................. 19
Section 24. Headings.................................................. 19
Exhibit A. Form of Warrant Certificate............................... 21
Exhibit B. Certificate to be Delivered Upon Transfer................. 28
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WARRANT AGREEMENT (the "Agreement"), dated as of , 2000, by and between Endo
Pharmaceuticals Holdings Inc., a Delaware corporation (together with any
successors and assigns, the "Company"), and United States Trust Company of New
York, as Warrant Agent (the "Warrant Agent").
WHEREAS, pursuant to that certain Agreement and Plan of Merger, dated as of
November 26, 1999 as many be amended and restated from time to time, (the
"Merger Agreement"), by and among the Company, Endo Inc., a Delaware corporation
and wholly owned subsidiary of the Company ("Sub"), and Algos Pharmaceutical
Corporation, a Delaware corporation ("Algos"), the Company proposes to issue
warrants (each a "Warrant," and collectively, the "Warrants") for the purchase
of an aggregate of up to 20,713,968/1/ shares of common stock, par value $.01
per share, of the Company (the "Common Stock," and the shares of Common Stock
issuable upon exercise of the Warrants being referred to herein as the "Warrant
Shares");
WHEREAS, there shall be two classes of Warrants, Class A which shall be
transferable ("Class A Transferable Warrants") and Class B which shall not be
transferable ("Class B Non-Transferable Warrants") and each holder of shares of
common stock of Algos at the time of the stockholder vote relating to the
Merger Agreement may elect to receive all or a portion of such holder's
Warrants to be Class A Transferable Warrants or all or a portion of such
holder's Warrants to be Class B Non-Transferable Warrants and in the event any
such holder of shares of common stock of Algos does not make such an election,
then such holder shall be issued Class A Transferable Warrants. Such election,
once made, will be irrevocable;
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company and the Warrant Agent is willing to act in connection with the
issuance, transfer, exchange and exercise of Warrants as provided herein; and
NOW, THEREFORE, in consideration of the premises and mutual agreements
herein, the Company and the Warrant Agent hereby agree as follows:
Section 1. Appointment of Warrant Agent. The Company hereby appoints the
Warrant Agent to act as agent for the Company in accordance with the
instructions hereinafter set forth in this Agreement, and the Warrant Agent
hereby accepts such appointment.
Section 2. Warrant Certificates. The Class A Transferable Warrants will
initially be issued in global form (the "Global Warrants"), substantially in
the form of Exhibit A hereto. Any certificates evidencing the Global Warrants
to be delivered pursuant to this Agreement (the "Class A Warrant Certificates")
shall be substantially in the form set forth in Exhibit A hereto. Such Global
Warrants shall represent such of the outstanding Class A Transferable Warrants
as shall be specified therein and each shall provide that it shall represent
the aggregate amount of outstanding Class A Transferable Warrants from time to
time endorsed thereon and that the aggregate amount of outstanding Class A
Transferable Warrants represented thereby may from time to time be reduced or
increased, as appropriate. Any endorsement of a Global Warrant to reflect the
amount of any increase or decrease in the amount of outstanding Class A
Transferable Warrants represented thereby shall be made by the Warrant Agent
and the Depositary (as defined below) in accordance with instructions given by
the holder thereof. The Depository Trust Company shall act as the Depositary
with respect to the Global Warrants until a successor shall be appointed by the
Company. Upon written request, a Warrant holder who holds Class A Transferable
Warrants may receive from the Depositary and Warrant Agent Class A Transferable
Warrants in registered form as definitive Warrant Certificates (the "Definitive
Warrants") as set forth in Section 6 below. Class B Non-Transferable Warrants
will be issued in certificated form in the form of Exhibit B hereto, in the
name of and in the denomination as set forth in the applicable letter of
transmittal accompanying the shares of common stock of Algos surrendered by
the holder thereof in connection with the merger of Algos with and into Sub
pursuant to the Merger Agreement.
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(1) These numbers may be adjusted in the final Endo Warrant. See footnotes 2-5
below.
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Section 3. Execution of Warrant Certificates. Warrant Certificates shall be
signed on behalf of the Company by its Chairman of the Board, its President,
Chief Executive Officer, Chief Operating Officer, Chief Financial Officer or
Treasurer or a Vice President and by its Secretary or an Assistant Secretary.
Each such signature upon the Warrant Certificates may be in the form of a
facsimile signature of the present or any future Chairman of the Board,
President, Chief Executive Officer, Chief Operating Officer, Chief Financial
Officer, Treasurer, Vice President, Secretary or Assistant Secretary 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, President, Chief Executive Officer,
Chief Operating Officer, Chief Financial Officer, Treasurer, a Vice President,
Secretary or an Assistant Secretary, notwithstanding the fact that at the time
the Warrant Certificates shall be countersigned and delivered or disposed of
such person shall have ceased to hold such office.
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 disposed of by
the Company, such Warrant Certificates nevertheless may be countersigned and
delivered or disposed of as though such person had not ceased to be such
officer of the Company; 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.
Warrant Certificates shall be dated the date of countersignature by the
Warrant Agent.
Section 4. Registration and Countersignature. The Warrants shall be numbered
and shall be registered on the books of the Company maintained at the principal
office of the Warrant Agent in located at 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx, 00000, Attention: Corporate Trust Division (the "Warrant
Register") as they are issued.
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
President, Chief Executive Officer, Chief Operating Officer, Chief Financial
Officer, Treasurer, a Vice President, the Secretary or an Assistant Secretary
of the Company, initially countersign 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 thereafter countersign and
deliver Warrants as otherwise provided in this Agreement.
The Company and the Warrant Agent may deem and treat the registered holders
(the "Holders") of the Warrant Certificates as the absolute owners thereof
(notwithstanding any notation of ownership or other writing thereon made by
anyone) for all purposes, and neither the Company nor the Warrant Agent shall
be affected by any notice to the contrary.
Section 5. Transfer and Exchange of Warrants. The Warrant Agent shall from
time to time, subject to the limitations of Section 6 hereof, register the
transfer of any outstanding Warrants upon the records to be maintained by it
for that purpose, upon surrender thereof duly endorsed or accompanied (if so
required by it) by a written instrument or instruments of transfer in form
satisfactory to the Warrant Agent, duly executed by the registered Holder or
Holders thereof or by the duly appointed legal representative thereof or by a
duly authorized attorney; provided that Class B Non-Transferable Warrants may
only be transferred (i) as the result or assignment by operation of law (such
as death or merger or otherwise) or (ii) as required by law or any court of
competent jurisdiction (such as in connection with divorce, bankruptcy or
liquidation). A request for a transfer of a Class B Non-Transferable Warrant
shall be accompanied by such documentation establishing satisfaction of the
conditions set forth in clause (i) or (ii) above, as applicable, as may be
reasonably requested by the Company (including opinions of counsel, if
appropriate). Upon receipt of documentation reasonably satisfactory to the
Company, the Company shall authorize the Warrant Agent to permit the transfer
of a Class B Non-Transferable Warrant. The Warrant Agent shall not permit the
transfer of a Class B Non-Transferable Warrant until it is so authorized by the
Company. Unless otherwise authorized by the Company, Class B Non-
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Transferable Warrant Certificate may only be transferred for another Class B
Non-Transferable Warrant Certificate. Subject to the terms of this Agreement,
each Warrant Certificate may be exchanged for another certificate or
certificates entitling the Holder thereof to purchase a like aggregate number
of Warrant Shares as the certificate or certificates surrendered then entitle
each Holder to purchase. Any Holder desiring to exchange a Warrant Certificate
or Certificates shall make such request in writing delivered to the Warrant
Agent, and shall surrender, duly endorsed or accompanied (if so required by the
Warrant Agent) by a written instrument or instruments of transfer in form
satisfactory to the Warrant Agent, the Warrant Certificate or Certificates to
be so exchanged.
Upon registration of transfer, the Warrant Agent shall countersign and
deliver by certified or first class mail a new Warrant Certificate or
Certificates to the persons entitled thereto. The Warrant Certificates may be
exchanged at the option of the Holder thereof, when surrendered at the office or
agency of the Company maintained for such purpose, which initially will be the
corporate trust office of the Warrant Agent located at 000 Xxxxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: Corporate Trust Services, for
another Warrant Certificate, or other Warrant Certificates of different
denominations, of like tenor and representing in the aggregate the right to
purchase a like number of Warrant Shares.
No service charge shall be made for any exchange or registration of transfer
of Warrant Certificates, but the Company may require payment of a sum
sufficient to cover any stamp or other tax or other governmental charge that is
imposed in connection with any such exchange or registration of transfer.
Section 6. Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Definitive Warrants. When Definitive Warrants
are presented to the Warrant Agent with a request:
(i) to register the transfer of the Definitive Warrants; or
(ii) to exchange such Definitive Warrants for an equal number of
Definitive Warrants of other authorized denominations,
the Warrant Agent shall register the transfer or make the exchange as requested
if its requirements under this Agreement are met; provided, however, that the
Definitive Warrants presented or surrendered for registration of transfer or
exchange shall be duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Warrant Agent, duly executed by the Holder
thereof or by such Holder's attorney, duly authorized in writing; provided that
a transfer of Definitive Warrants that are Class B Non-Transferable Warrants
shall be subject to the requirements of Section 5 hereof.
(b) Restrictions on Transfer of a Definitive Warrant for a Beneficial
Interest in a Global Warrant. The Warrant Agent may exchange a Definitive
Warrant for a beneficial interest in a Global Warrant only if the Warrant Agent
has received such Definitive Warrant, duly endorsed or accompanied by
appropriate instruments of transfer, in form satisfactory to the Warrant Agent,
together with written instructions directing the Warrant Agent to make, or to
direct the Depositary to make, an endorsement on the Global Warrant to reflect
an increase in the aggregate amount of the Warrants represented by the Global
Warrant. If such conditions have been satisfied, the Warrant Agent shall cancel
such Definitive Warrant and cause, or direct the Depositary to cause, in
accordance with the standing instructions and procedures existing between the
Depositary and the Warrant Agent, the number of Warrant Shares represented by
the Global Warrant to be increased accordingly. If no Global Warrant is then
outstanding, the Company shall issue and the Warrant Agent shall countersign a
new Global Warrant in the appropriate amount.
(c) Transfer and Exchange of Global Warrants. The transfer and exchange of
Global Warrants or beneficial interests therein shall be effected through the
Depositary, in accordance with this Warrant Agreement (including the
restrictions on transfer set forth herein) and the procedures of the Depositary
therefor.
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(d) Transfer of a Beneficial Interest in a Global Warrant for a Definitive
Warrant.
(i) Any person having a beneficial interest in a Global Warrant may upon
his, her or its request exchange such beneficial interest for a Definitive
Warrant. Upon receipt by the Warrant Agent of written instructions (or such
other form of instructions as is customary for the Depositary) from the
Depositary or its nominee on behalf of any person having a beneficial
interest in a Global Warrant and upon receipt by the Warrant Agent of a
written order or such other form of instructions as is customary for the
Depositary or the person designated by the Depositary as having such a
beneficial interest containing registration instructions, then the Warrant
Agent will cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Warrant Agent, the
aggregate amount of the Global Warrant to be reduced and, following such
reduction, the Company will execute and, upon receipt of a
countersignature, the Warrant Agent will countersign and deliver to the
transferee a Definitive Warrant. All such Warrants shall be Class A
Transferable Warrants.
(ii) Definitive Warrants issued in exchange for a beneficial interest in
a Global Warrant pursuant to this Section 6(d) shall be registered in such
names and in such authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Warrant Agent in writing, provided such designation is in
accordance with this Section 6(d). The Warrant Agent shall deliver such
Definitive Warrants to the persons in whose names such Definitive Warrants
are registered.
(e) Restrictions on Transfer and Exchange of Global
Warrants. Notwithstanding any other provisions of this Warrant Agreement (other
than the provisions set forth in subsection (f) of this Section 6), a Global
Warrant may not be transferred as a whole except by the Depositary to a nominee
of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(f) Authentication of Definitive Warrants in Absence of Depositary. If at
any time:
(i) the Depositary for the Global Warrants notifies the Company that the
Depositary is unwilling or unable to continue as Depositary for the Global
Warrant and a successor Depositary for the Global Warrant is not appointed
by the Company within 90 days after delivery of such notice; or
(ii) the Company, at its sole discretion, notifies the Warrant Agent in
writing that it elects to cause the issuance of Definitive Warrants under
this Warrant Agreement,
then the Company will execute, and the Warrant Agent, upon receipt of an
officers' certificate, signed by the President, Chief Executive Officer, Chief
Operating Officer, Chief Financial Officer or a Vice President of the Company,
requesting the countersignature and delivery of Definitive Warrants, will
countersign and deliver Definitive Warrants, in an aggregate number equal to
the aggregate number of Warrants represented by the Global Warrant, in exchange
for such Global Warrant.
(g) Cancellation and/or Adjustment of a Global Warrant. At such time as all
beneficial interests in a Global Warrant have either been exchanged for
Definitive Warrants, redeemed, repurchased or cancelled, such Global Warrant
shall be returned to or retained and cancelled by the Warrant Agent. At any
time prior to such cancellation, if any beneficial interest in a Global Warrant
is exchanged for Definitive Warrants, redeemed, repurchased or cancelled, the
number of Warrants represented by such Global Warrant shall be reduced and an
endorsement shall be made on such Global Warrant, by the Warrant Agent to
reflect such reduction.
(h) Obligations with Respect to Transfers and Exchanges of Definitive
Warrants.
(i) To permit registrations of transfers and exchanges in accordance
with the terms of this Agreement, the Company shall execute, and the
Warrant Agent shall countersign Definitive Warrants and Global Warrants.
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(ii) All Definitive Warrants and Global Warrants issued upon any
registration, transfer or exchange of Definitive Warrants or Global
Warrants shall be the valid obligations of the Company, entitled to the
same benefits under this Warrant Agreement as the Definitive Warrants or
Global Warrants surrendered upon the registration of transfer or exchange.
(iii) Prior to due presentment for registration of transfer of any
Warrant, the Warrant Agent and the Company may deem and treat the person in
whose name any Warrant is registered as the absolute owner of such Warrant,
and neither the Warrant Agent nor the Company shall be affected by notice
to the contrary.
Section 7. Terms of Warrants; Exercise of Warrants. Subject to the terms of
this Agreement, each Warrant Holder shall have the right, which may be
exercised commencing on or after the Exercisability Date (as defined below) and
until 5:00 p.m., New York City time, on the six-month anniversary of the
Exercisability Date (the "Expiration Date"), to receive from 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 Warrants and payment of the
Exercise Price (as defined below) then in effect for such Warrant Shares
together, if applicable, with cash payable as provided in Section 13 hereof and
any dividends or distributions payable as provided in Section 14 hereof. If the
Exercisability Date is on or prior to March 31, 2002, the Holders shall then
be entitled to receive from the Company (on exercise of such Warrants and
payment of the Exercise Price then in effect for such Warrant Shares)
(together, if applicable, with cash payable as provided in Section 13 hereof
and any dividends or distributions payable as provided in Section 14 hereof)
(a) 20,713,968 Warrant Shares (in the aggregate) (with each Warrant being
exercisable for 1.153846 Warrant Shares)/2/ in the event the Adjustment Event
(as defined in the Merger Agreement) has not occurred prior to the
Exercisability Date or (b) 17,952,106 Warrant Shares (in the aggregate) (with
each Warrant being exercisable for 1.000000 Warrant Shares)/3/ in the event the
Adjustment Event has occurred prior to the Exercisability Date. If the
Exercisability Date is after March 31, 2002 and on or prior to September 30,
2002, the Holder shall then be entitled to receive from the Company (on
exercise of such Warrants and payment of the Exercise Price then in effect for
such Warrant Shares) (together, if applicable, with cash payable as provided in
Section 13 hereof and any dividends or distributions payable as provided in
Section 14 hereof) (a) 11,378,095 Warrant Shares (in the aggregate) (with each
Warrant being exercisable for 0.633803 Warrant Shares)/4/ in the event the
Adjustment Event has not occurred prior to the Exercisability Date or (b)
9,792,058 Warrant Shares (in the aggregate) (with each
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(2) These numbers shall be adjusted in the final Agreement and Warrants in
order to reflect that at the Effective Time such aggregate number, when
taken together with the shares of Parent Common Stock issuable to holders
of Company Common Stock in the Merger, shall equal 35% of the shares of
Parent Common Stock on a fully diluted basis (excluding the effect of the
Algos Warrants as if no Adjustment Event had occurred).
(3) These numbers shall be adjusted in the final Agreement and Warrants in
order to reflect that at the Effective Time such aggregate number, when
taken together with the shares of Parent Common Stock issuable to holders
of Company Common Stock in the Merger, shall equal 40% of the shares of
Parent Common Stock on a fully diluted basis (excluding the effect of the
Algos Warrants and after giving effect to the Adjustment Event as if it had
occurred).
(4) These numbers shall be adjusted in the final Agreement and Warrants in
order to reflect that at the Effective Time such aggregate number, when
taken together with the shares of Parent Common Stock issuable to holders
of Company Common Stock in the Merger, shall equal 29% of the shares of
Parent Common Stock on a fully diluted basis (excluding the effect of the
Algos Warrants as if no Adjustment Event had occurred).
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Warrant being exercisable for 0.545455 Warrant Shares)/5/ in the event the
Adjustment Event has occurred prior to the Exercisability Date. If the
Exercisability Date is after September 30, 2002 and on or prior to March 31,
2003 (the "Ultimate Expiration Date"), the Holders shall then be entitled to
receive from the Company (on exercise of such Warrants and payment of the
Exercise Price then in effect for such Warrant Shares) (together, if applicable,
with cash payable as provided in Section 13 hereof and any dividends or
distributions payable as provided in Section 14 hereof) (a) 4,724,238 Warrant
Shares (in the aggregate) (with each Warrant being exercisable for 0.263158
Warrant Shares)/6/ the event the Adjustment Event has not occurred prior to the
Exercisability Date or (b) 4,045,545 Warrant Shares (in the aggregate) (with
each Warrant being exercisable for 0.225352 Warrant Shares)/7/ in the event the
Adjustment Event has occurred prior to the Exercisability Date. Each Warrant not
exercised prior to the Expiration Date shall become void and all rights
thereunder and all rights in respect thereof under this Agreement shall cease as
of the Expiration Date. Without limiting the foregoing, in the event the
Ultimate Expiration Date occurs before the Exercisability Date, each Warrant
shall become void and all rights thereunder and all rights in respect thereof
under this Agreement shall cease as of the Ultimate Expiration Date. If
applicable, dividends and other distributions will be made upon exercise of the
Warrants as set forth in Section 14 hereof.
"Exercisability Date" shall mean the fifth (5th) Business Day (as defined
below) following the date on which the Company (or any of its subsidiaries)
receives approval from the U.S. Food and Drug Administration (the "FDA") with
respect to its New Drug Application for MorphiDex(R) for the treatment of one
or more pain indications. In addition to the notices required by Section 14
hereof, the Company shall give prompt written notice to the Warrant Agent that
the Exercisability Date has occurred and shall cause the Warrant Agent, on
behalf of and at the expense of the Company, within 5 Business Days after such
notification is received by the Warrant Agent, to mail by first class mail,
postage prepaid, to each Holder a notice specifying that the Exercisability
Date has occurred and that the Warrant has become exercisable pursuant to its
terms and that the Warrant will expire at 5:00 p.m., New York City time, on the
Expiration Date. In addition, the Company shall post appropriate notices of the
Exercisability Date on its web pages and issue press releases to wire services.
A "Business Day" is a day that is not a Legal Holiday. A "Legal Holiday" is a
Saturday, a Sunday, a federally recognized holiday or a day on which banking
institutions are not required to be open in the State of New York.
From and after the Effective Time, Parent agrees to use its reasonable
efforts to continue to process the FDA application for MorphiDex(R) in a timely
fashion. The parties acknowledge that there are many variables in the process
of obtaining FDA approval in such a situation and many different approaches
which may be used by an applicant in order to obtain such approval; as a
result, the parties hereto agree that all determinations relating to such
process and all actions taken in connection with seeking such approval shall be
in the sole
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(5) These numbers shall be adjusted in the final Agreement and Warrants in
order to reflect that at the Effective Time such aggregate number, when
taken together with the shares of Parent Common Stock issuable to holders
of Company Common Stock in the Merger, shall equal 34% of the shares of
Parent Common Stock on a fully diluted basis (excluding the effect of the
Algos Warrants and after giving effect to the Adjustment Event as if it had
occurred).
(6) These numbers shall be adjusted in the final Agreement and Warrant in order
to reflect that at the Effective Time such aggregate number, when taken
together with the shares of Parent Common Stock issuable to holders of
Company Common Stock in the Merger, shall equal 24% of the shares of Parent
Common Stock on a fully diluted basis (excluding the effect of the Algos
Warrants as if no Adjustment Event had occurred).
(7) These numbers shall be adjusted in the final Agreement and Warrants in
order to reflect that at the Effective Time such aggregate number, when
taken together with the shares of Parent Common Stock issuable to holders
of Company Common Stock in the Merger, shall equal 29% of the shares of
Parent Common Stock on a fully diluted basis (excluding the effect of the
Algos Warrants and after giving effect to the Adjustment Event as if it had
occurred).
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discretion of Parent and shall be binding upon the parties for all purposes.
The parties further acknowledge that (i) on August 2, 1999, the Company
received notification from the FDA that such application was not approvable,
(ii) the failure to obtain such approval, either at all or on or before a
certain date, shall not be deemed a breach by Parent of the provisions hereof
and (iii) in any event Parent shall have no responsibility in connection with
the provisions of this paragraph, except for its willful breach hereof.
The initial price per share at which Warrant Shares shall be purchasable upon
exercise of Warrants (the "Exercise Price") shall equal $0.01. A Warrant may be
exercised upon surrender at the office or agency of the Company maintained for
such purpose, which initially will be the corporate trust office of the Warrant
Agent or its agents in located at 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx,
Xxx Xxxx, 00000, Attention: Corporate Trust Division of the Warrant
Certificate(s) evidencing the Warrants to be exercised with the form of election
to purchase on the reverse thereof duly filled in and signed, which signature
shall be guaranteed by a participant in a recognized Signature Guarantee
Medallion Program, and upon payment to the Warrant Agent for the account of the
Company of the Exercise Price, as adjusted as herein provided, for the number of
Warrant Shares together, if applicable, with cash payable as provided in Section
13 hereof and any dividends or distributions as provided in Section 14 hereof in
respect of which such Warrants are then exercised. Payment of the Exercise Price
may be made (a) in the form of cash or by certified or official bank check
payable to the order of the Company in New York Clearing House Funds, (b) by
delivering to the Company a written notice accompanying the surrender of a
Warrant to, at the time of exercise, apply to the payment of the Exercise Price
such number of Warrant Shares as shall be specified in such notice, in which
case an amount equal to the excess of the Current Market Value (as defined in
Section 12(d) hereof) of such Warrant Shares on the date of exercise over the
Exercise Price required for such exercise shall be deemed to have been paid to
the Company and the number of Warrant Shares issuable upon such exercise shall
be reduced by such specified number (a "Cashless Exercise") or (c) any
combination of (a) and (b) above.
Subject to the provisions of Section 6 hereof, upon such surrender of
Warrants and payment of the Exercise Price, the Company shall issue and cause
to be delivered with all reasonable dispatch to or upon the written order of
the Holder and in such name or names as the Warrant Holder may designate a
certificate or certificates for the number of full Warrant Shares issuable upon
the exercise of such Warrants together with cash as provided in Section 13
hereof. Such certificate or certificates shall be deemed to have been issued
and any person so 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 Exercise Price.
On or after the Exercisability Date, the Warrants shall be exercisable, at
the election of the Holders thereof, either in full or from time to time in
part and, in the event that a certificate evidencing Warrants is exercised in
respect of fewer than all of the Warrant Shares issuable on such exercise at
any time prior to the Expiration Date, a new certificate evidencing the
remaining Warrant or Warrants will be issued, and the Warrant Agent is hereby
irrevocably authorized to countersign and to deliver the required new Warrant
Certificate or Certificates pursuant to the provisions of this Section 7 and of
Section 3 hereof, and the Company, whenever required by the Warrant Agent, will
promptly supply the Warrant Agent with Warrant Certificates duly executed on
behalf of the Company for such purpose.
All Warrant Certificates surrendered upon exercise of Warrants shall be
cancelled by the Warrant Agent. Such cancelled Warrant Certificates shall then
be either delivered to the Company or disposed of by the Warrant Agent in a
manner consistent with the Warrant Agent's customary procedure for such
disposal and in a manner reasonably satisfactory to the Company. The Warrant
Agent shall account promptly to the Company with respect to Warrants exercised
and concurrently pay to the Company all monies received by the Warrant Agent
for the purchase of the Warrant Shares through the exercise of such Warrants.
The Warrant Agent shall keep copies of this Agreement 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 request.
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Section 8. Payment of Taxes. The Company will pay all documentary stamp
taxes 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 registered 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 or Missing Warrant Certificates. In case any of the
Warrant Certificates shall be mutilated, lost, stolen or destroyed, the Company
may in its discretion issue and the Warrant Agent may countersign, in exchange
and substitution for and upon cancellation of the mutilated Warrant
Certificate, or in lieu of and substitution for the Warrant Certificate lost,
stolen or destroyed, a new Warrant Certificate of like tenor and representing
an equivalent number of Warrants, but only upon receipt of evidence
satisfactory to the Company and the Warrant Agent of such loss, theft or
destruction of such Warrant Certificate and indemnity, if requested, also
satisfactory to them. Applicants for such substitute Warrant Certificates shall
also comply with such other reasonable regulations and pay such other
reasonable charges as the Company or the Warrant Agent may prescribe.
Section 10. Reservation of Warrant Shares. The Company will at all times
reserve and keep available, free from preemptive rights, out of the aggregate
of its authorized but unissued Common Stock or its authorized and issued Common
Stock held in its treasury, for the purpose of enabling it to satisfy any
obligation to issue Warrant Shares upon exercise of Warrants, the maximum
number of shares of Common Stock which may then be deliverable upon the
exercise of all outstanding Warrants.
The Company will keep a copy of this Agreement on file with the transfer
agent for the Common 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 stock certificates 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 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 a copy of all notices of adjustments and certificates related
thereto transmitted to each Holder pursuant to Section 14 hereof.
The Company covenants that all Warrant Shares which may be issued upon
exercise of Warrants will, upon payment of the Exercise Price therefor and
issue, be validly authorized and issued, fully paid, nonassessable, free of
preemptive rights and free from all taxes, liens, charges and security
interests with respect to the issuance thereof. The Company will use its
reasonable best efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof as may be
necessary to enable the Company to perform its obligations under this
Agreement.
Section 11. Obtaining Stock Exchange Listings. The Company will from time to
time take all action which may be necessary so that the Warrants and,
immediately upon their issuance upon exercise of the Warrants, the Warrant
Shares will be listed on the principal securities exchanges and markets within
the United States of America, if any, on which other shares of Common Stock are
then listed.
Section 12. Adjustment of Exercise Price and Number of Warrant Shares
Issuable.
(a) If the Company:
(i) pays a dividend or makes a distribution on its Common Stock in
shares of its Common Stock or other capital stock of the Company; or
(ii) subdivides, splits, combines or reclassifies its outstanding shares
of Common Stock into a different number of securities of the same class,
10
then the number of shares of Common Stock issuable upon the exercise of each
Warrant (the "Exercise Rate") in effect immediately prior to such action shall
be proportionately adjusted so that the Holder of any Warrant thereafter
exercised may receive the aggregate number and kind of shares of capital stock
of the Company which such Holder would have owned immediately following such
action if such Warrant had been exercised immediately prior to such action and
the Exercise Price in effect immediately prior to such action shall be adjusted
to a price determined by multiplying the Exercise Price in effect immediately
prior to such action by a fraction, the numerator of which shall be the number
of shares of Common Stock outstanding before giving effect to such action and
the denominator of which shall be the number of shares of Common Stock and/or
such other capital stock outstanding referred to in the foregoing clause (a)(1)
after giving effect to such action.
An adjustment pursuant to this Section 12(a) shall become effective
immediately after the record date in the case of a dividend or distribution and
immediately after the effective date in the case of a subdivision, combination
or reclassification.
If, after an adjustment pursuant to this Section 12(a), a Holder of a
Warrant upon exercise of it may receive shares of two or more classes of
capital stock of the Company, the board of directors of the Company shall
determine the allocation of the adjusted Exercise Price between the classes of
capital stock. After such allocation, the exercise privilege and the Exercise
Price of each class of capital stock shall thereafter be subject to adjustment
on terms comparable to those applicable to Common Stock in this Section 12.
Such adjustment shall be made successively whenever any event listed above
shall occur.
(b) Adjustment for Certain Issuances of Common Stock. If the Company issues
or sells to any Affiliate (as defined in Section 12(d) hereof) of the Company
shares of its Common Stock or distributes to any Affiliate of the Company any
rights, options or warrants entitling them to purchase shares of Common Stock,
or securities convertible into or exchangeable for Common Stock, in each case,
at a price per share less than the Current Market Value on the record date for
determining entitlements of such Affiliates to participate in such issuance,
sale or distribution (the "Time of Determination") and prior to such issuance,
sale or distribution the Company did not first offer to issue, sell or
distribute such shares of its Common Stock or such rights, options or warrants
or such securities convertible into or exchangeable for Common Stock to all
holders of Common Stock on the same economic terms and on a pro rata basis with
the issuance, sale or distribution to the Affiliates of the Company, then the
Exercise Rate shall be adjusted in accordance with the formula:
E' = E x O + N
-----
O + N x P
-----
M
and the Exercise Price shall be adjusted in accordance with the following
formula:
EP' = EP x E
-
E'
where:
E' = the adjusted Exercise Rate.
E = the Exercise Rate immediately prior to the Time of Determination
for any such issuance, sale or distribution.
EP' = the Adjusted Exercise Price.
EP = the Exercise Price immediately prior to the Time of Determination
for any such issuance, sale or distribution.
O = the number of Fully Diluted Shares (as defined below) outstanding
immediately prior to the Time of Determination for any such
issuance, sale or distribution.
11
N = the number of additional shares of Common Stock issued, sold or
issuable upon exercise of such rights, options or warrants.
P = the per share price received and receivable by the Company in the
case of any issuance or sale of Common Stock or rights, options
or warrants as to which such adjustment is being made, inclusive
of the exercise price per share of Common Stock payable upon
exercise of such rights, options or warrants.
M = the Current Market Value per share of Common Stock on the Time of
Determination for any such issuance, sale or distribution.
For purposes of this Section 12(b), the term "Fully Diluted Shares" shall
mean (i) the shares of Common Stock outstanding as of a specified date, and
(ii) the shares of Common Stock into or for which rights, options, warrants or
other securities of the Company outstanding as of such date are exercisable or
convertible (other than the Warrants).
Any adjustments shall be made successively whenever any such rights, options
or warrants are issued and shall become effective immediately after the
relevant Time of Determination. Notwithstanding the foregoing, the Exercise
Rate and the Exercise Price shall not be subject to adjustment in connection
with (i) the issuance of any shares of Common Stock upon exercise of any such
rights, options or warrants which have previously been the subject of an
adjustment under this Agreement for which the required adjustment has been made
and (ii) any exercise of the Warrants. If at the end of the period during which
any such rights, options or warrants are exercisable, not all rights, options
or warrants shall have been exercised, the Warrant shall be immediately
readjusted to what it would have been if "N" in each of the above formulas had
been the number of shares actually issued.
(c) When De Minimis Adjustment May Be Deferred. No adjustment in the
Exercise Rate need be made unless the adjustment would require an increase or
decrease of at least 1% in the Exercise Rate. Notwithstanding the foregoing,
any adjustments that are not made shall be carried forward and taken into
account in any subsequent adjustment, provided that no such adjustment shall be
deferred beyond the date on which a Warrant is exercised.
All calculations under this Section 12 shall be made to the nearest cent or
to the nearest 1/100th of a share, as the case may be.
(d) Certain Definitions. "Current Market Value" per share of Common Stock or
of any other security (herein collectively referred to as a "Security") at any
date shall be:
(1) if the Security is not registered under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), (i) the value of the Security
determined in good faith by the board of directors of the Company and
certified in a board resolution, based on the most recently completed
arm's-length transaction between the Company and a person other than an
Affiliate of the Company and the closing of which occurs on such date or
shall have occurred within the six months preceding such date or (ii) if no
such transaction shall have occurred on such date or within such six-month
period, the value of the Security determined as of a date within 30 days
preceding such date by an Independent Financial Expert (as defined below),
or
(2) if the Security is registered under the Exchange Act, the average of
the daily closing bid prices of such Security for 30 consecutive Business
Days selected by the Company from the period of 45 Business Days preceding
such date, but only if such Security shall have been listed on a national
securities exchange or the Nasdaq National Market or traded through an
automated quotation system during such entire 45-Business Day period.
The "closing bid price" for any Security on each Business Day means the
closing price, regular way, on such day on the principal exchange on which such
Security is traded, or if no sale takes place on such day, the average of the
closing bid and asked prices on such day.
12
"Independent Financial Expert" shall mean any nationally recognized
investment banking firm that is not an Affiliate of the Company. Any such
person may receive customary compensation and indemnification by the Company
for opinions or services it provides as an Independent Financial Expert.
"Affiliate" of any specified person means any other person which directly or
indirectly through one or more intermediaries controls or is controlled by, or
is under common control with, such specified person. For the purposes of this
definition, "control" (including with correlative meanings, the terms
"controlling," "controlled by" and "under common control with") as used with
respect to any person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
person, whether through the ownership of voting securities, by agreement or
otherwise.
"Ordinary Cash Distribution" means any quarterly cash dividend on the Common
Stock to the extent that the aggregate cash dividend per share of Common Stock
in any calendar quarter does not exceed the greater of (x) the amount per share
of Common Stock of the next preceding quarterly cash dividend on the Common
Stock (as adjusted to reflect subdivisions or combinations of the Common Stock)
and (y) 3.0% of the average of the last reported sales prices of the Common
Stock during the ten trading days immediately prior to the date of declaration
of such dividend.
(e) When No Adjustment Required. If an adjustment is made upon the
establishment of a record date for an issuance, sale or distribution subject to
subsection (a) or (b) hereof and such issuance, sale or distribution is
subsequently cancelled or is not otherwise made, the Exercise Rate and Exercise
Price then in effect shall be readjusted, effective as of the date when the
board of directors of the Company determines to cancel such issuance, sale or
distribution or when it is otherwise evident that such issuance, sale or
distribution will not be so made, to that which would have been in effect if
such record date had not been fixed. If an adjustment would be required under
both subsections (a) and (b) above, such adjustments will be determined without
duplication.
To the extent the Warrants become convertible into cash, no adjustment need
be made thereafter as to the amount of cash into which such Warrants are
exercisable. Interest will not accrue on the cash.
(f) Notice of Adjustment. Whenever the Exercise Rate or Exercise Price is
adjusted, the Company shall provide the notices required by Section 14 hereof.
(g) Voluntary Reduction. The Company from time to time may increase the
Exercise Rate or reduce the Exercise Price by any amount for any period of time
(including, without limitation, permanently) if the period is at least 20
Business Days after the Company has given notice of such increase or reduction
in accordance with Section 14 hereof.
An increase of the Exercise Rate or reduction in the Exercise Price under
this subsection (g) (other than a permanent increase) does not change or adjust
the Exercise Rate otherwise in effect for purposes of subsection (a) and (b) of
this Section 12.
(h) When Issuance or Payment May Be Deferred. In any case in which this
Section 12 shall require that an adjustment in the Exercise Rate or Exercise
Price be made effective as of a record date for a specified event, the Company
may elect to defer until the occurrence of such event (i) issuing to the Holder
of any Warrant exercised after such record date the Warrant Shares and other
capital stock of the Company, if any, issuable upon such exercise over and
above the Warrant Shares and other capital stock of the Company, if any,
issuable upon such exercise on the basis of the Exercise Rate prior to such
adjustment, and (ii) paying to such Holder any amount in cash in lieu of a
fractional share pursuant to Section 13 hereof; provided, however, that the
Company shall deliver to the Warrant Agent and shall cause the Warrant Agent,
on behalf of and at the expense of the Company, to deliver to such Holder a due
xxxx or other appropriate instrument evidencing such Holder's right to receive
such additional Warrant Shares, other capital stock and cash upon the
occurrence of the event requiring such adjustment.
13
(i) Reorganizations. In case of (i) any capital reorganization, other than
in the cases referred to in Section 12(a) and (b) hereof and other than any
capital reorganization that does not result in any reclassification of the
outstanding shares of Common Stock into shares of other stock or other
securities or property, or (ii) the consolidation or merger of the Company with
or into another corporation (other than a merger or consolidation in which the
Company is the continuing corporation and which does not result in any
reclassification of the outstanding shares of Common Stock into shares of other
stock or other securities or property), or (iii) the sale of all or
substantially all of the assets of the Company (collectively such actions being
hereinafter referred to as "Reorganizations"), there shall thereafter be
deliverable upon exercise of any Warrant in accordance with the terms hereof
(in lieu of the number of shares of Common Stock theretofore deliverable) the
number of shares of stock or other securities or property to which a holder of
the number of shares of Common Stock that would otherwise have been deliverable
upon the exercise of such Warrant would have been entitled upon such
Reorganization if the Exercisability Date had occurred and such Warrant had
been exercised in full immediately prior to such Reorganization. In case of any
Reorganization, appropriate adjustment, as determined in good faith by the
board of directors of the Company, whose determination shall be described in a
duly adopted resolution certified by the Company's Secretary or Assistant
Secretary, shall be made in the application of the provisions herein set forth
with respect to the rights and interests of Holders so that the provisions set
forth herein shall thereafter be applicable, as nearly as possible, in relation
to any such shares or other securities or property thereafter deliverable upon
exercise of Warrants.
The Company shall not effect any such Reorganization unless prior to or
simultaneously with the consummation thereof the successor corporation (if
other than the Company) resulting from such Reorganization or the corporation
or other entity purchasing such assets shall expressly assume, by a
supplemental warrant agreement or other acknowledgment executed and delivered
to the Warrant Agent, the obligation to deliver to the Warrant Agent and to
cause the Warrant Agent to deliver to each such Holder such shares of stock,
securities or assets as, in accordance with the foregoing provisions, such
Holder may be entitled to purchase in accordance with the terms hereof upon the
occurrence of the Exercisability Date, and the due and punctual performance and
observance of each and every covenant, condition, obligation and liability
under this Agreement to be performed and observed by the Company in the manner
prescribed herein.
The foregoing provisions of this Section 12(i) shall apply to successive
Reorganization transactions.
(j) Form of Warrants. Irrespective of any adjustments in the number or kind
of shares purchasable upon the exercise of the Warrants, Warrants theretofore
or thereafter issued may continue to express the same price and number and kind
of shares as are stated in the Warrants initially issuable pursuant to this
Agreement.
(k) Warrant Agent's Disclaimer. The Warrant Agent has no duty to determine
when an adjustment under this Section 12 should be made, how it should be made
or what it should be. The Warrant Agent has no duty to determine whether any
provisions of a supplemental warrant agreement under subsection (i) of this
Section 12 are correct. The Warrant Agent makes no representation as to the
validity or value of any securities or assets issued upon exercise of Warrants.
The Warrant Agent shall not be responsible for the Company's failure to comply
with this Section 12.
(l) Miscellaneous. For purpose of this Section 12 the term "shares of Common
Stock" shall mean (i) shares of the class of stock designated as the Common
Stock, par value $.01 per share, of the Company as of the date of this
Agreement, and (ii) shares of any other class of stock resulting from
successive changes or reclassification 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 this Section 12, the Holders of Warrants shall become entitled to
purchase any securities of the Company other than, or in addition to, shares of
Common Stock, thereafter the number or amount of such other securities so
purchasable upon exercise of each Warrant shall 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 contained in subsections (a)
through (l) of this Section 12, inclusive, and the provisions of Sections 7, 8,
10 and 13 with respect to the Warrant Shares or the Common Stock shall apply on
like terms to any such other securities.
14
Section 13. Fractional Interests. The Company shall not be required to issue
fractional Warrant Shares 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 the exercise
thereof shall be computed on the basis of the aggregate number of Warrant
Shares purchasable on exercise of the Warrants so presented. If any fraction of
a Warrant Share would, except for the provisions of this Section 13, be
issuable on the exercise of any Warrants (or specified portion thereof), the
Company shall pay an amount in cash equal to the excess of the Current Market
Value of a Warrant Share over the Exercise Price on the day immediately
preceding the date the Warrant is presented for exercise, multiplied by such
fraction.
Section 14. Notices to Warrant Holders; Reservation of Dividends. No later
than April 6, 2001, the Company shall give written notice of the occurrence or
non-occurrence of the Adjustment Event to the Warrant Agent and shall cause the
Warrant Agent, on behalf of and at the expense of the Company, within 10 days
after such notification is received by the Warrant Agent, to mail by first
class mail, postage prepaid, to each Holder a notice of such occurrence or non-
occurrence of the Adjustment Event. Upon any adjustment pursuant to Section 12
hereof, the Company shall give prompt written notice of such adjustment to the
Warrant Agent and shall cause the Warrant Agent, on behalf of and at the
expense of the Company, within 10 days after notification is received by the
Warrant Agent of such adjustment, to mail by first class mail, postage prepaid,
to each Holder a notice of such adjustment(s) and shall deliver to the Warrant
Agent a certificate of the Chief Financial Officer of the Company, setting
forth in reasonable detail (i) the number of Warrant Shares purchasable upon
the exercise of each Warrant and the Exercise Price of such Warrant after such
adjustment(s), (ii) a brief statement of the facts requiring such adjustment(s)
and (iii) the computation by which such adjustment(s) was made. Where
appropriate, such notice may be given in advance and included as a part of the
notice required under the other provisions of this Section 14.
In case the Exercisability Date has occurred and:
(a) the Company shall authorize the issuance to all holders of shares of
Common Stock of rights, options or warrants to subscribe for or purchase
shares of Common Stock or of any other subscription rights or warrants; or
(b) the Company shall authorize the distribution to all holders of
shares of Common Stock of evidences of its indebtedness or assets or cash;
or
(c) of any consolidation or merger to which the Company is a party and
for which approval of any stockholders of the Company is required, or of
the conveyance or transfer of the properties and assets of the Company
substantially as an entirety, or of any reclassification or change of
Common Stock issuable upon exercise of the Warrants (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), or a tender offer
or exchange offer for shares of Common Stock; or
(d) of the voluntary or involuntary dissolution, liquidation or winding
up of the Company; or
(e) the Company proposes to take any action that would require an
adjustment to the Exercise Rate pursuant to Section 12 hereof;
then the Company shall give prompt written notice to the Warrant Agent and
shall cause the Warrant Agent, on behalf of and at the expense of the Company
to give to each of the registered holders of the Warrant Certificates at his,
her or its address appearing on the Warrant Register, at least 30 days (or 20
days in any case specified in clauses (a) or (b) above) prior to the applicable
record date hereinafter specified, or the date of the event 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 to be entitled to receive any such rights, options,
warrants or distribution 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 (iii) the date on which any such consolidation, merger, conveyance,
transfer, dissolution, liquidation or winding up is expected to become
effective or consummated, and the date as of which it is expected that holders
of record of shares of Common
15
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 by the Company or the Warrant Agent to give such notice or any defect
therein shall not affect the legality or validity of any distribution, right,
option, warrant, consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding up, or the vote upon any action.
The Company shall give prompt written notice to the Warrant Agent and shall
cause the Warrant Agent, on behalf of and at the expense of the Company to give
to each Holder written notice of any determination to make a distribution or
dividend to the holders of its Common Stock of any assets (including cash
(other than any Ordinary Cash Distribution)), debt securities, preferred stock,
or any rights or warrants to purchase debt securities, preferred stock, assets
or other securities (other than Common Stock, or rights, options, or warrants
to purchase Common Stock) of the Company, which notice shall state the nature
and amount of such planned dividend or distribution and the record date
therefor, and shall be given by the Company at least 20 days prior to such
record date therefor.
At any time prior to the date that is 30 Business Days after the
Exercisability Date, with respect to any distribution or dividend made by the
Company to all of the holders of its Common Stock for which notice to the
Holders of the Warrants under this Section 14 would be required had such
dividend or distribution occurred after the Exercisability Date and except for
such distributions or dividends as are provided for in Section 12 hereof, the
Company shall hold in reserve the amount of any such dividend or distribution
that would have been payable to the Holders in respect of their Warrant Shares
had the Holders exercised their Warrants immediately prior to such dividend or
distribution. The Company shall release to each Holder of Warrants his, her or
its pro rata share of such reserved dividends or distributions upon the
exercise of such Holder's Warrants pursuant to Section 7 hereof. Any notice
delivered to the Holders by the Company pursuant to this Section 14 shall state
the nature and amount of such dividend or distribution that shall be held in
reserve.
Nothing contained in this Agreement or in any Warrant Certificate shall be
construed as conferring upon the Holders the right to vote or to consent or to
receive notice as stockholders in respect of the meetings of stockholders or
the election of directors of the Company or any other matter, or any rights
whatsoever as stockholders of the Company.
Section 15. Notices to the Company and Warrant Agent. Any notice or demand
authorized by this Agreement to be given or made by the Warrant Agent or by any
Holder to or on the Company shall be sufficiently given or made when received
at the office of the Company expressly designated by the Company as its office
for purposes of this Agreement (until the Warrant Agent is otherwise notified
in accordance with this Section 15 by the Company), as follows:
Endo Pharmaceuticals Holdings Inc.
c/o Kelso & Company
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Managing Director
with a copy to General Counsel
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
16
Any notice pursuant to this Agreement to be given by the Company or by any
Holder(s) to the Warrant Agent shall be sufficiently given when received by the
Warrant Agent at the address appearing below (until the Company is otherwise
notified in accordance with this Section by the Warrant Agent).
United States Trust Company of New York
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Division
Section 16. Supplements and Amendments; Actions. The Company and the Warrant
Agent may from time to time supplement or amend this Agreement without the
approval of any holders of Warrants 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 rights of any holder of Warrants hereunder. Any amendment
or supplement to this Agreement that has a material adverse effect on the
rights of holders hereunder shall require the written consent of registered
holders of a majority of the then outstanding Warrants, which consent shall
then be effective against all the Holders of Warrants hereunder. The consent of
each holder of a Warrant affected shall be required for any amendment pursuant
to which the Exercise Price would be increased or the number of Warrant Shares
purchasable upon exercise of Warrants would be decreased (not including
adjustments contemplated hereunder). The Warrant Agent shall be entitled to
receive and shall be fully protected in relying upon an officers' certificate
and opinion of counsel as conclusive evidence that any such amendment or
supplement is authorized or permitted hereunder, that it is not inconsistent
herewith, and that it will be valid and binding upon the Company in accordance
with its terms.
Any actions seeking enforcement of the rights of Holders hereunder
(including paragraph 3 of Section 7 hereof) may be brought either by the
Warrant Agent or the Holders of more than 50% of the Warrants issued hereunder
and then outstanding.
Section 17. Concerning the 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 of
Warrants, shall be bound:
(a) The statements contained herein and in the Warrant Certificate 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 any action taken by it. The Warrant Agent
assumes no responsibility with respect to the distribution of the Warrants
except as herein otherwise provided.
(b) The Warrant Agent shall not be responsible for any failure of the
Company to comply with the covenants contained in this Agreement or in the
Warrants to be complied with by the Company.
(c) The Warrant Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself
(through its employees) or by or through its attorneys or agents (which
shall not include its employees) and shall not be responsible for the
misconduct of any agent appointed with due care.
(d) The Warrant Agent may consult at any time with legal counsel
satisfactory to it (who may be counsel for the Company), and the Warrant
Agent shall incur no liability or responsibility to the Company or to any
Holder in respect of any action taken, suffered or omitted by it hereunder
in good faith and in accordance with the opinion or the advice of such
counsel.
(e) Whenever in the performance of its duties under this Agreement the
Warrant Agent shall deem 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 (unless such evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by the Chairman of the
Board, the President, Chief Financial Officer, one of the Vice Presidents,
the Treasurer or the Secretary of the Company and delivered to the Warrant
Agent; and such certificate shall
17
be full authorization to the Warrant Agent for any action taken or suffered
in good faith by it under the provisions of this Agreement in reliance upon
such certificate.
(f) The Company agrees to pay the Warrant Agent reasonable compensation
for all services rendered by the Warrant Agent in the performance of its
duties under this Agreement, to reimburse the Warrant Agent for all
expenses, taxes and governmental charges and other charges of any kind and
nature incurred by the Warrant Agent (including reasonable fees and
expenses of the Warrant Agent's counsel and agents) in the performance of
its duties under this Agreement, and to indemnify the Warrant Agent and
save it harmless against any and all liabilities, including judgments,
costs and counsel fees, for anything done or omitted by the Warrant Agent
in the performance of its duties under this Agreement, except as a result
of the Warrant Agent's negligence or bad faith.
(g) 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 and indemnity satisfactory to the
Warrant Agent 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 the Warrant Agent may consider proper, whether with or without
any such security or indemnity. 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 Warrants 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 their respective rights or interests may appear.
(h) 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
transactions 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 or such director, officer or
employee. Nothing herein shall preclude the Warrant Agent from acting in
any other capacity for the Company or for any other legal entity including,
without limitation, acting as Transfer Agent or as a lender to the Company
or an Affiliate thereof.
(i) The Warrant Agent shall act hereunder solely as agent, and its
duties shall be determined solely by the provisions hereof. The Warrant
Agent shall not be liable for anything which it may do or refrain from
doing in connection with this Agreement except for its own negligence or
bad faith.
(j) The Warrant Agent will not incur any liability or responsibility to
the Company or to any Holder for any action taken in reliance on any
notice, resolution, waiver, consent, order, certificate, or other paper,
document or instrument reasonably believed by it to be genuine and to have
been signed, sent or presented by the proper party or parties.
(k) The Warrant Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Warrant Agent) or in respect of the
validity or execution of any Warrant (except its countersignature thereof);
nor shall the Warrant Agent by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
Warrant Shares (or other stock) to be issued pursuant to this Agreement or
any Warrant, or as to whether any Warrant Shares (or other stock) will,
when issued, be validly issued, fully paid and nonassessable, or as to the
Exercise Price or the number or amount of Warrant Shares or other
securities or other property issuable upon exercise of any Warrant.
(l) The Warrant Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
the Chairman of the Board, the President, any Vice President or the
Secretary of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and shall not be liable for any
action taken or suffered to be taken by it in good faith and without
negligence in accordance with instructions of any such officer or officers.
Section 18. Change of Warrant Agent. The Warrant Agent may resign at any
time and be discharged from its duties under this Agreement by giving to the
Company 30-days' notice in writing. The Warrant Agent
18
may be removed by like notice to the Warrant Agent from the Company. If the
Warrant Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Warrant Agent. If the
Company shall fail to make such appointment within a period of 30 days after
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 shall with such notice submit his, her or its Warrant for inspection by
the Company), then any Holder may apply to any court of competent jurisdiction
for the appointment of a successor to the Warrant Agent. Pending appointment of
a successor warrant agent, either by the Company or by such court, the duties
of the Warrant Agent shall be carried out by the Company. Any successor warrant
agent, whether appointed by the Company or such a court, shall be a bank or
trust company in good standing, incorporated under the laws of the United
States of America or any State thereof or the District of Columbia and having
at the time of its appointment as warrant agent a combined capital and surplus
of at least $10,000,000. After appointment, the successor warrant agent shall
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
former Warrant Agent shall 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 such purpose. Failure
to file any notice provided for in this Section 18, however, or any defect
therein, shall 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. In the event of such resignation or removal, the Company or
the successor warrant agent shall mail by first class mail, postage prepaid, to
each Holder, written notice of such removal or resignation and the name and
address of such successor warrant agent.
Section 19. Successors. All the covenants and provisions of this Agreement
by or for the benefit of the Company, the Warrant Agent or any holder of
Warrants shall bind and inure to the benefit of their respective successors and
assigns hereunder.
Section 20. Termination. This Agreement shall terminate at 5:00 p.m., New
York City time, on the Expiration Date. Notwithstanding the foregoing, this
Agreement will terminate on any earlier date if all Warrants have been
exercised pursuant to this Agreement.
Section 21. GOVERNING LAW. THIS AGREEMENT AND EACH WARRANT CERTIFICATE
ISSUED HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE
STATE OF NEW YORK AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF SAID STATE, WITHOUT REGARD TO THE CONFLICT OF LAW RULES THEREOF.
Section 22. Benefits of This Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company, the
Warrant Agent and the registered Holders of the Warrant Certificates any legal
or equitable right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the Warrant Agent
and the registered Holders of the Warrant Certificates.
Section 23. 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 24. Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
19
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, as of the day and year first above written.
ENDO PHARMACEUTICALS HOLDINGS INC.
By: _________________________________
Name:
Title:
UNITED STATES TRUST COMPANY OF NEW YORK,
as Warrant Agent
By: _________________________________
Name:
Title:
20
EXHIBIT A
[Form of Warrant Certificate]
[Face]
THIS SECURITY IS A GLOBAL CERTIFICATE AND IS REGISTERED IN THE NAME OF A
DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS
SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON
OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE WARRANT AGREEMENT, DATED AS OF , 2000, BY AND BETWEEN THE
COMPANY AND THE WARRANT AGENT (THE "WARRANT AGREEMENT"), AND NO TRANSFER OF
THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO
THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE WARRANT AGREEMENT. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (A NEW YORK CORPORATION) ("DTC") TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
21
EXERCISABLE ON OR AFTER THE EXERCISABILITY DATE
AND ON OR BEFORE THE EXPIRATION DATE
No. _________ ___ Class A Transferable Warrants
Class A Transferable Warrant Certificate
ENDO PHARMACEUTICALS HOLDINGS INC.
This Warrant Certificate certifies that , or registered assigns, is the
registered holder of Class A Transferable Warrants expiring on or before the
Expiration Date (the "Warrants") to purchase shares of Common Stock, par value
$.01 per share (the "Common Stock"), of Endo Pharmaceuticals Holdings Inc., a
Delaware corporation (the "Company"). Each Warrant entitles the holder upon
exercise to receive from the Company on or after the Exercisability Date and on
or before 5:00 p.m. New York City Time on the six-month anniversary of the
Exercisability Date (the "Expiration Date") a number of fully paid and
nonassessable shares of Common Stock (each such share, a "Warrant Share") as
determined in the following paragraph at the initial exercise price (the
"Exercise Price") equal to $0.01 payable upon surrender of this Warrant
Certificate and payment of the Exercise Price in the manner set forth in the
Warrant Agreement, subject only to the conditions set forth herein and in the
Warrant Agreement referred to on the reverse hereof.
If the Exercisability Date is on or prior to March 31, 2002, the Holder
shall then be entitled to receive from the Company (on exercise of such
Warrants and payment of the Exercise Price then in effect for such Warrant
Shares) (together, if applicable, with cash payable as provided in Section 13
hereof and any dividends or distributions payable as provided in Section 14
hereof) (a) 1.153846/8/ Warrant Shares in the event the Adjustment Event (as
defined in that certain Agreement and Plan of Merger, dated as of November 26,
1999, by and among the Company, Endo Inc., a Delaware corporation and wholly
owned subsidiary of the Company, and Algos Pharmaceutical Corporation, a
Delaware corporation) has not occurred prior to the Exercisability Date or (b)
1.000000/9/ Warrant Shares in the event the Adjustment Event has occurred prior
to the Exercisability Date. If the Exercisability Date is after March 31,
2002 and on or prior to September 30, 2002, the Holder shall then be entitled to
receive from the Company (on exercise of such Warrants and payment of the
Exercise Price then in effect for such Warrant Shares) (together, if
applicable, with cash payable as provided in Section 13 hereof and any
dividends or distributions payable as provided in Section 14 hereof) (a)
0.633803/10/ Warrant Shares in the event the Adjustment Event has not occurred
prior to the Exercisability Date
--------
(8) This number shall be adjusted in the final Agreement and Warrants in order
to reflect that at the Effective Time the aggregate number on which it is
based, when taken together with the shares of Parent Common Stock issuable
to holders of Company Common Stock in the Merger, shall equal 35% of the
shares of Parent Common Stock on a fully diluted basis (excluding the
effect of the Algos Warrants as if no Adjustment Event had occurred).
(9) This number shall be adjusted in the final Agreements and Warrant in order
to reflect that at the Effective Time the aggregate number on which it is
based, when taken together with the shares of Parent Common Stock issuable
to holders of Company Common Stock in the Merger, shall equal 40% of the
shares of Parent Common Stock on a fully diluted basis (excluding the
effect of the Algos Warrants and after giving effect to the Adjustment
Event as if it had occurred).
(10) This number shall be adjusted in the final Agreement and Warrants in order
to reflect that at the Effective Time the aggregate number on which it is
based, when taken together with the shares of Parent Common Stock issuable
to holders of Company Common Stock in the Merger, shall equal 29% of the
shares of Parent Common Stock on a fully diluted basis (excluding the
effect of the Algos Warrants as if no Adjustment Event had occurred).
22
or (b) 0.545455/11/ Warrant Shares in the event the Adjustment Event has
occurred prior to the Exercisability Date. If the Exercisability Date is after
September 30, 2002 and on or prior to March 31, 2003, the Holders shall then be
entitled to receive from the Company (on exercise of such Warrants and payment
of the Exercise Price then in effect for such Warrant Shares) (together, if
applicable, with cash payable as provided in Section 13 hereof and any
dividends or distributions payable as provided in Section 14 hereof) (a)
0.263158/12/ Warrant Shares in the event the Adjustment Event has not occurred
prior to the Exercisability Date or (b) 0.225352/13/ Warrant Shares in the
event the Adjustment Event has occurred prior to the Exercisability Date.
The Exercise Price and number of Warrant Shares issuable upon exercise of
the Warrants are subject to adjustment upon the occurrence of certain events as
set forth in the Warrant Agreement.
No Warrant may be exercised before the Exercisability Date or after 5:00
p.m., New York City Time, on the Expiration Date and to the extent not
exercised by such time such Warrants shall become void.
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 NEW YORK.
--------
(11) This number shall be adjusted in the final Agreement and Warrants in order
to reflect that at the Effective Time the aggregate number on which it is
based, when taken together with the shares of Parent Common Stock issuable
to holders of Company Common Stock in the Merger, shall equal 34% of the
shares of Parent Common Stock on a fully diluted basis (excluding the
effect of the Algos Warrants and after giving effect to the Adjustment
Event as if it had occurred).
(12) This number shall be adjusted in the final Agreement and Warrants in order
to reflect that at the Effective Time the aggregate number on which it is
based, when taken together with the shares of Parent Common Stock issuable
to holders of Company Common Stock in the Merger, shall equal 24% of the
shares of Parent Common Stock on a fully diluted basis (excluding the
effect of the Algos Warrants as if no Adjustment Event had occurred).
(13) This number shall be adjusted in the final Agreement and Warrants in order
to reflect that at the Effective Time the aggregate number on which it is
based, when taken together with the shares of Parent Common Stock issuable
to holders of Company Common Stock in the Merger, shall equal 29% of the
shares of Parent Common Stock on a fully diluted basis (excluding the
effect of the Algos Warrants and after giving effect to the Adjustment
Event as if it had occurred).
23
IN WITNESS WHEREOF, Endo Pharmaceuticals Holdings Inc. has caused this
Warrant Certificate to be signed by an officer and by its Secretary, each by
a facsimile of his or her signature, and has caused a facsimile of its
corporate seal to be affixed hereunto or imprinted hereon.
Dated: ,
ENDO PHARMACEUTICALS HOLDINGS INC.
By: _________________________________
Name:
Title:
By: _________________________________
Name:
Title:Secretary
Countersigned:
UNITED STATES TRUST COMPANY
OF NEW YORK,
as Warrant Agent
By: _________________________________
Name:
Title:
24
[Form of Warrant Certificate]
[Reverse]
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 Common Stock, par value $.01 per share,
of the Company (the "Common Stock"), and are issued or to be issued pursuant to
a Warrant Agreement dated as of , 2000 (the "Warrant Agreement"), duly
executed and delivered by the Company to United States Trust Company of New
York, 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 holder) of the Warrants. A copy of the Warrant Agreement may be
obtained by the holder hereof upon written request to the Company.
Warrants may be exercised at any time on or after the "Exercisability Date"
and on or before the "Expiration Date." The holder of Warrants evidenced by
this Warrant Certificate may exercise them by surrendering this Warrant
Certificate, with the form of election to purchase set forth hereon properly
completed and executed, together with payment in the manner provided for in the
Warrant Agreement at the office of the Warrant Agent. In the event that upon
any exercise of Warrants evidenced hereby, the number of Warrants exercised
shall be less than the total number of Warrants evidenced hereby, there shall
be issued to the holder hereof or his, her or its assignee a new Warrant
Certificate evidencing the number of Warrants not exercised.
The Warrant Agreement provides that upon the occurrence of certain events
the number of Warrants set forth on the face hereof and the Exercise Price may,
subject to certain conditions, be adjusted. No fractions of a share of Common
Stock will be issued upon the exercise of any Warrant, but the Company will pay
the cash value thereof determined as provided in the Warrant Agreement.
Warrant Certificates, when surrendered at the office of the Warrant Agent by
the registered holder thereof in person or by legal representative or attorney
duly authorized in writing, may be exchanged, in the manner and subject to the
limitations provided in the Warrant Agreement, but without payment of any
service charge, for another Warrant Certificate or Warrant Certificates of like
tenor evidencing in the aggregate a like number of Warrants.
Upon due presentation for registration of transfer of this Warrant
Certificate 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, 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, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary. Neither the
Warrants nor this Warrant Certificate entitles any holder hereof to any rights
of a stockholder of the Company.
25
[Form of Election to Purchase]
(To Be Executed upon Exercise of Warrant)
The undersigned hereby irrevocably elects to exercise the right, represented
by this Warrant Certificate, to receive shares of Common Stock and herewith
tenders payment for such shares to the order of Endo Pharmaceuticals Holdings
Inc. in the amount of $ payable in (select one or more: (i) cash and/or (ii)
pursuant to a Cashless Exercise) in accordance with the terms hereof and of the
Warrant Agreement. The undersigned requests that a certificate for such shares
be registered in the name of , whose address is and that such shares be
delivered to whose address is . If said number of shares is less than
all of the shares of Common Stock purchasable hereunder, the undersigned
requests that a new Warrant Certificate representing the remaining balance of
such shares be registered in the name of , whose address is , and that
such Warrant Certificate be delivered to , whose address is .
Signature:
Date:
Signature Guaranteed:
26
SCHEDULE OF EXCHANGES OF CERTIFICATED WARRANTS
The following exchanges of a part of this Global Warrant for certificated
Warrants have been made:
Number of
Warrants of
Amount of Amount of this Global
decrease in increase in Warrant Signature of
Number of Number of following authorized
Date of Warrants of this Warrants of this such decrease officer of
Exchange Global Warrant Global Warrant (or increase) Warrant Agent
-------- ---------------- ---------------- ------------- -------------
27
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF
CLASS A TRANSFERABLE WARRANTS
Re: Class A Transferable Warrants to Purchase Common Stock (the "Warrants") of
Endo Pharmaceuticals Holdings Inc.
This Certificate relates to Warrants held in* book-entry or *
certificated form by (the "Transferor").
The Transferor:*
[_]has requested the Warrant Agent by written order to deliver in exchange
for its beneficial interest in the Global Warrant held by the depository
a Warrant or Warrants in definitive, registered form equal to its
beneficial interest in Warrants represented by such Global Warrant (or
the portion thereof indicated above); or
[_]has requested the Warrant Agent by written order to deliver in exchange
or register the transfer of a Warrant or Warrants.
_____________________________________
[INSERT NAME OF TRANSFEROR]
By: _________________________________
Date: ______________________
*Check applicable box.
28
INDEX OF DEFINED TERMS
Affiliate................................................................... 13
Agreement................................................................... 3
Algos....................................................................... 3
Business Day................................................................ 8
Cashless Exercise........................................................... 9
closing bid price........................................................... 12
Common Stock................................................................ 3
Company..................................................................... 3
Current Market Value........................................................ 12
Definitive Warrants......................................................... 3
Exchange Act................................................................ 12
Exercisability Date......................................................... 8
Exercise Price.............................................................. 9
Exercise Rate............................................................... 11
Expiration Date............................................................. 7
FDA......................................................................... 8
Fully Diluted Shares........................................................ 3
Global Warrants............................................................. 3
Holders..................................................................... 4
Independent Financial Expert................................................ 13
Legal Holiday............................................................... 8
Merger Agreement............................................................ 3
Ordinary Cash Distribution.................................................. 13
Reorganizations............................................................. 14
Security.................................................................... 12
shares of Common Stock...................................................... 13
Sub......................................................................... 3
Time of Determination....................................................... 11
Transfer Agent.............................................................. 10
Ultimate Expiration Date.................................................... 8
Warrant..................................................................... 3
Warrant Agent............................................................... 3
Warrant Certificates........................................................ 3
Warrant Register............................................................ 4
Warrant Shares.............................................................. 3
Warrants.................................................................... 3
29
