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Exhibit 4.6
WARRANT AGREEMENT
Dated as of August 3, 2001
Between
XXXXXXX FASTENERS INC.
and
XXXXXXX FASTENERS INC.,
as Warrant Agent
5,187,180 Warrants,
Each Warrant to Acquire One Share of Common Stock of
XXXXXXX FASTENERS INC.
Par Value $0.01 Per Share
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TABLE OF CONTENTS
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ARTICLE I
ISSUANCE, FORM, EXECUTION, DELIVERY AND
REGISTRATION OF WARRANT CERTIFICATES
SECTION 1.01. Issuance of Warrants....................................... 1
SECTION 1.02. Form of Warrant Certificates............................... 2
SECTION 1.03. Execution of Warrant Certificates.......................... 2
SECTION 1.04. Authentication and Delivery................................ 2
SECTION 1.05. Temporary Warrant Certificates............................. 3
SECTION 1.06. Registration............................................... 4
SECTION 1.07. Registration of Transfers and Exchanges.................... 4
SECTION 1.08. Lost, Stolen, Destroyed, Defaced or Mutilated
Warrant Certificates..................................... 6
SECTION 1.09. Offices for Exercise, etc.................................. 7
ARTICLE II
DURATION AND EXERCISE OF WARRANTS
SECTION 2.01. Duration of Warrants....................................... 8
SECTION 2.02. Exercise, Settlement and Delivery.......................... 8
SECTION 2.03. Cancellation of Warrant Certificates...................... 10
ARTICLE III
OTHER PROVISIONS RELATING TO
RIGHTS OF HOLDERS OF WARRANTS
SECTION 3.01. Enforcement of Rights..................................... 10
ARTICLE IV
CERTAIN COVENANTS OF THE COMPANY
SECTION 4.01. Payment of Taxes.......................................... 11
SECTION 4.02. Qualification Under the Securities Laws................... 11
SECTION 4.03. Reservation of Warrant Shares............................. 11
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SECTION 4.04. Common Stock.............................................. 11
ARTICLE V
ADJUSTMENTS
SECTION 5.01. Adjustment of Exercise Rate; Notices...................... 12
SECTION 5.02. Fractional Warrant Shares................................. 19
ARTICLE VI
CONCERNING THE WARRANT AGENT
SECTION 6.01. Warrant Agent............................................. 19
SECTION 6.02. Conditions of Warrant Agent's Obligations................. 20
SECTION 6.03. Resignation and Appointment of Successor.................. 24
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Amendment................................................. 26
SECTION 7.02. Notices and Demands to the Company and Warrant
Agent................................................... 27
SECTION 7.03. Addresses for Notices to Parties and for
Transmission of Documents............................... 27
SECTION 7.04. Notices to Holders........................................ 27
SECTION 7.05. APPLICABLE LAW............................................ 27
SECTION 7.06. Persons Having Rights Under Agreement..................... 27
SECTION 7.07. Headings.................................................. 28
SECTION 7.08. Counterparts.............................................. 28
SECTION 7.09. Inspection of Agreement................................... 28
EXHIBIT A - Form of Warrant Certificate
EXHIBIT B - Certificate To Be Delivered upon Exchange or Registration of
Transfer of Warrants
EXHIBIT C - Transferee Letter of Representation in Connection with Transfers to
an Institutional "Accredited Investor"
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INDEX OF DEFINED TERMS
Defined Term Section
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Agreement................................................... Recitals
Business Day................................................ 2.01
Capital Stock............................................... 5.01(q)
Cashless Exercise........................................... 2.02(c)
Cashless Exercise Ratio..................................... 2.02(c)
Common Stock................................................ Recitals
Company..................................................... Recitals
Current Market Value........................................ 5.01(q)
Election to Exercise........................................ 2.02(b)
Exchange Act................................................ 5.01(q)
Exchange Agreement.......................................... Recitals
Exercisability Date......................................... 2.01
Exercise Date............................................... 2.02(d)
Exercise Price.............................................. 2.02(a)
Exercise Rate............................................... 2.02(a)
Expiration Date............................................. 2.01
Holders..................................................... Recitals
Holdings.................................................... Recitals
Independent Financial Advisor............................... 5.01(q)
Registrar................................................... 1.06
Registration Rights Agreement............................... Recitals
Related Parties............................................. 6.02(e)
Securities Act.............................................. 1.07
Time of Determination....................................... 5.01(q)
Warrant Agent............................................... 6.01
Warrant Agent Office........................................ 1.09
Warrant Certificates........................................ Recitals
Warrant Exercise Office..................................... 2.02(b)
Warrant Register............................................ 1.06
Warrant Shares.............................................. 1.01
Warrants.................................................... Recitals
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WARRANT AGREEMENT
THIS WARRANT AGREEMENT (this "Agreement") is made and entered into
as of August 3, 2001 between XXXXXXX FASTENERS INC., a Delaware corporation
(together with any successor thereto, the "Company"), and the Company, not in
its individual capacity but solely as warrant agent (together with any successor
Warrant Agent, the "Warrant Agent").
WHEREAS, pursuant to the Exchange Agreement (the "Exchange
Agreement") dated as of the date hereof among Xxxxxxx Holdings Inc.
("Holdings"), the Company, Saratoga Partners III, L.P., Saratoga Partners III,
C.V., Saratoga Management Company, LLC and the noteholders listed on Exhibit A
thereto, and simultaneously with the merger contemplated by the Merger Agreement
(as defined in the Exchange Agreement) dated as of the date hereof the Company
has agreed to issue to the existing stockholders of Holdings (each, a "Holder"
and, collectively, the "Holders") 5,187,180 Warrants (the "Warrants", and the
certificates evidencing the Warrants being hereinafter referred to as "Warrant
Certificates"), each representing the right to acquire initially one share of
Common Stock, par value $0.01 per share, of the Company (the "Common Stock"),
subject to adjustment in accordance with the terms hereof;
WHEREAS, the Holders will have the registration rights with respect
to the Warrant Shares as set forth in the Registration Rights Agreement dated as
of the date hereof between the Company and the investors party thereto to the
extent provided therein (the "Registration Rights Agreement"); and
WHEREAS, the Company desires the Warrant Agent as warrant agent to
assist the Company in connection with the issuance, exchange, cancellation,
replacement and exercise of the Warrants, and in this Agreement wishes to set
forth, among other things, the terms and conditions on which the Warrants may be
issued, exchanged, canceled, replaced and exercised;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
ISSUANCE, FORM, EXECUTION, DELIVERY AND
REGISTRATION OF WARRANT CERTIFICATES
SECTION 1.01. Issuance of Warrants. Each Warrant Certificate shall
evidence the number of Warrants specified therein, and each Warrant evidenced
thereby shall
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represent the right, subject to the provisions contained herein and therein, to
acquire from the Company (and the Company shall issue and sell to such holder of
the Warrant) one (1) fully paid and non-assessable share of Common Stock (the
shares purchasable upon exercise of a Warrant being hereinafter referred to as
the "Warrant Shares" and, where appropriate, such term shall also mean the other
securities or property purchasable and deliverable upon exercise of a Warrant as
provided in Article V) at the price specified herein and therein, in each case
subject to adjustment as provided herein and therein.
SECTION 1.02. Form of Warrant Certificates. The Warrant Certificates
shall be substantially in the form of Exhibit A.
SECTION 1.03. Execution of Warrant Certificates. The Warrant
Certificates shall be executed on behalf of the Company by the chairman of its
Board of Directors, its president or any vice president and attested by its
secretary or assistant secretary, under its corporate seal. Such signatures may
be the manual or facsimile signatures of the present or any future such
officers. The seal of the Company may be in the form of a facsimile thereof and
may be impressed, affixed, imprinted or otherwise reproduced on the Warrant
Certificates. Typographical and other minor errors or defects in any such
reproduction of the seal or any such signature shall not affect the validity or
enforceability of any Warrant Certificate that has been duly countersigned and
delivered by the Warrant Agent.
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
Certificate so signed shall be countersigned and delivered by the Warrant Agent
or disposed of by the Company, such Warrant Certificate nevertheless may be
countersigned and delivered or disposed of as though the person who signed such
Warrant Certificate had not ceased to be such officer of the Company; and any
Warrant Certificate may be signed on behalf of the Company by such persons as,
at the actual date of the execution of such Warrant Certificate, shall be the
proper officers of the Company, although at the date of the execution and
delivery of this Agreement any such person was not such an officer.
SECTION 1.04. Authentication and Delivery. Subject to the
immediately following paragraph, Warrant Certificates shall be authenticated by
manual signature and dated the date of authentication by the Warrant Agent and
shall not be valid for any purpose unless so authenticated and dated. The
Warrant Certificates shall be numbered and shall be registered in the Warrant
Register (as defined in Section 1.06).
Upon the receipt by the Warrant Agent of a written order of the
Company, which order shall be signed by the chairman of its Board of Directors,
its president or any vice president and attested by its secretary or assistant
secretary, and shall specify the amount of Warrants to be authenticated, the
date of such Warrants and such other information as the
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Warrant Agent may reasonably request, without any further action by the Company,
the Warrant Agent is authorized, upon receipt from the Company of the Warrant
Certificates at any time and from time to time, duly executed as provided in
Section 1.03 hereof, to authenticate the Warrant Certificates and deliver them.
Such authentication shall be by a duly authorized signatory of the Warrant Agent
(although it shall not be necessary for the same signatory to sign all Warrant
Certificates).
In case any authorized signatory of the Warrant Agent who shall have
authenticated any of the Warrant Certificates shall cease to be such authorized
signatory before the Warrant Certificate shall be disposed of by the Company,
such Warrant Certificate nevertheless may be delivered or disposed of as though
the person who authenticated such Warrant Certificate had not ceased to be such
authorized signatory of the Warrant Agent; and any Warrant Certificate may be
authenticated on behalf of the Warrant Agent by such persons as, at the actual
time of authentication of such Warrant Certificates, shall be the duly
authorized signatories of the Warrant Agent, although at the time of the
execution and delivery of this Agreement any such person is not such an
authorized signatory.
The Warrant Agent's authentication on all Warrant Certificates shall
be substantially in the form attached as part of Exhibit A.
SECTION 1.05. Temporary Warrant Certificates. Pending the
preparation of definitive Warrant Certificates, the Company may execute, and the
Warrant Agent shall authenticate and deliver, temporary Warrant Certificates,
which are printed, lithographed, typewritten or otherwise produced,
substantially of the tenor of the definitive Warrant Certificates in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Warrant
Certificates may determine, as evidenced by their execution of such Warrant
Certificates.
If temporary Warrant Certificates are issued, the Company will cause
definitive Warrant Certificates to be prepared without unreasonable delay. After
the preparation of definitive Warrant Certificates, the temporary Warrant
Certificates shall be exchangeable for definitive Warrant Certificates upon
surrender of the temporary Warrant Certificates at any office or agency
maintained by the Company for that purpose pursuant to Section 1.09 hereof.
Subject to the provisions of Section 4.01 hereof, such exchange shall be without
charge to the holder. Upon surrender for cancellation of any one or more
temporary Warrant Certificates, the Company shall execute, and the Warrant Agent
shall authenticate and deliver in exchange therefor, one or more definitive
Warrant Certificates representing in the aggregate a like number of Warrants.
Until so exchanged, the holder of a temporary Warrant Certificate shall in all
respects be entitled to the same benefits under this Agreement as a holder of a
definitive Warrant Certificate.
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SECTION 1.06. Registration. The Company will keep, at the office or
agency maintained by the Company for such purpose, a register or registers in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of, and registration of transfer and exchange
of, Warrants as provided in this Article. Each person designated by the Company
from time to time as a person authorized to register the transfer and exchange
of the Warrants is hereinafter called, individually and collectively, the
"Registrar". The Company hereby initially appoints the Warrant Agent as
Registrar. Upon written notice to the Warrant Agent and any acting Registrar,
the Company may appoint a successor Registrar for such purposes.
The Warrant Agent shall act as repository of a master list of names
and addresses of the holders of Warrants (the "Warrant Register"). The Company
shall cause each Registrar to furnish to the Warrant Agent, on a current basis,
such information as to all registrations of transfer and exchanges effected by
such Registrar, as may be necessary to enable the Warrant Agent to maintain the
Warrant Register on as current a basis as is practicable.
SECTION 1.07. Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Warrants. When Warrants are
presented to the Warrant Agent with a request:
(i) to register the transfer of the Warrants; or
(ii) to exchange such definitive Warrants for an equal number of Warrants
of other authorized denominations,
the Warrant Agent shall register the transfer or make the exchange as requested
if the requirements under this Warrant Agreement as set forth in this Section
1.07 for such transactions are met; provided, that the Warrants presented or
surrendered for registration of transfer or exchange:
(x) shall be duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Company and the Warrant Agent,
duly executed by the holder thereof or by his or her attorney, duly
authorized in writing; and
(y) shall be accompanied, in the sole discretion of the Company, by the
following additional information and documents, as applicable:
(A) if such Warrant is being delivered to the Warrant Agent by a
holder for registration in the name of such holder, without
transfer, a certification from such holder to that effect (in
substantially the form of Exhibit B); or
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(B) if such Warrant is being transferred to an institutional
"accredited investor" within the meaning of subparagraph
(a)(1), (a)(2), (a)(3) or (a)(7) of Rule 501 under the
Securities Act, a certification from the transferee (in
substantially the form of Exhibit C) and an opinion of
counsel and/or other information reasonably acceptable to
the Company to the effect that such transfer is in
compliance with the Securities Act;
provided, further, that Warrants may only be exchanged or transferred in
accordance with clause (A) or (B) above.
(b) Legends. Each Warrant Certificate evidencing the Warrants (and
all Warrants issued in exchange therefor or substitution thereof) shall bear a
legend substantially to the following effect:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR
NOT SUBJECT TO, REGISTRATION.
IN ADDITION, THE OFFER, SALE OR TRANSFER OF THIS SECURITY IS FURTHER
RESTRICTED BY THE TERMS OF A WARRANT AGREEMENT DATED AS OF AUGUST 3, 2001.
PURSUANT THERETO, THIS SECURITY MAY ONLY BE OFFERED, TRANSFERRED OR SOLD
TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF
SUBPARAGRAPH (a)(1), (a)(2), (a)(3) OR (a)(7) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR
THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR", FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH,
ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL
OR OTHERWISE TRANSFER SUCH SECURITY ONLY:
(A) TO THE COMPANY, OR
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(B) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF
SUBPARAGRAPH (a)(1), (a)(2), (a)(3) OR (a)(7) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT,
OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR",
FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE
IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES
ACT,
SUBJECT TO THE COMPANY'S RIGHT IN ITS SOLE DISCRETION PRIOR TO ANY SUCH
OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (B) TO REQUIRE THE DELIVERY OF
A WRITTEN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION
SATISFACTORY TO THE COMPANY AND, IN EACH OF THE FOREGOING CASES, THE
DELIVERY OF A COMPLETED CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON
THE OTHER SIDE OF THIS SECURITY BY THE TRANSFEROR TO THE COMPANY AND THE
WARRANT AGENT.
(c) Obligations with Respect to Transfers and Exchanges of
Warrants.
(i) To permit registrations of transfers and exchanges, the Company
shall execute, at the Warrant Agent's request, and the Warrant Agent
shall authenticate Warrants.
(ii) All Warrants issued upon any registration, transfer or exchange of
Warrants shall be the valid obligations of the Company, entitled to
the same benefits under this Warrant Agreement as the 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 1.08. Lost, Stolen, Destroyed, Defaced or Mutilated Warrant
Certificates. Upon receipt by the Company and the Warrant Agent (or any agent of
the Company or the Warrant Agent, if requested by the Company) of evidence
satisfactory to them of the loss, theft, destruction, defacement or mutilation
of any Warrant Certificate and of indemnity satisfactory to them and, in the
case of mutilation or defacement, upon surrender thereof to the Warrant Agent
for cancellation, then, in the absence of notice to the Company or the Warrant
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Agent that such Warrant Certificate has been acquired by a bona fide purchaser
or holder in due course, the Company shall execute, and an authorized signatory
of the Warrant Agent shall manually authenticate and deliver, in exchange for or
in lieu of the lost, stolen, destroyed, defaced or mutilated Warrant
Certificate, a new Warrant Certificate representing a like number of Warrants,
bearing a number or other distinguishing symbol not contemporaneously
outstanding. Upon the issuance of any new Warrant Certificate under this Section
1.08, the Company may require the payment from the holder of such Warrant
Certificate of a sum sufficient to cover any tax, stamp tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Warrant Agent and the
Registrar) in connection therewith. Every substitute Warrant Certificate
executed and delivered pursuant to this Section in lieu of any lost, stolen or
destroyed Warrant Certificate shall constitute an additional contractual
obligation of the Company, whether or not the lost, stolen or destroyed Warrant
Certificate shall be at any time enforceable by anyone, and shall be entitled to
the benefits of (but shall be subject to all the limitations of rights set forth
in) this Agreement equally and proportionately with any and all other Warrant
Certificates duly executed and delivered hereunder. The provisions of this
Section 1.08 are exclusive with respect to the replacement of lost, stolen,
destroyed, defaced or mutilated Warrant Certificates and shall preclude (to the
extent lawful) any and all other rights or remedies notwithstanding any law or
statute existing or hereafter enacted to the contrary with respect to the
replacement of lost, stolen, destroyed, defaced or mutilated Warrant
Certificates.
The Warrant Agent is hereby authorized to authenticate and deliver
the new Warrant Certificates in accordance with the provisions of this Agreement
as required pursuant to the provisions of this Section.
SECTION 1.09. Offices for Exercise, etc. So long as any of the
Warrants remain outstanding, the Company will designate and maintain: (a) an
office or agency where the Warrant Certificates may be presented for exercise,
(b) an office or agency where the Warrant Certificates may be presented for
registration of transfer and for exchange (including the exchange of temporary
Warrant Certificates for definitive Warrant Certificates pursuant to Section
1.05 hereof), and (c) an office or agency where notices and demands to or upon
the Company in respect of the Warrants or of this Agreement may be served. The
Company may from time to time change or rescind such designation, as it may deem
desirable or expedient. In addition to such office or offices or agency or
agencies, the Company may from time to time designate and maintain one or more
additional offices or agencies, where Warrant Certificates may be presented for
exercise or for registration of transfer or for exchange, and the Company may
from time to time change or rescind such designation, as it may deem desirable
or expedient. The Company will give to the Warrant Agent written notice of the
location of any such office or agency and of any change of location thereof. The
Company hereby designates the Warrant Agent at its principal executive office
(the "Warrant Agent Office"), as the
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initial agency maintained for each such purpose. In case the Company shall fail
to maintain any such office or agency or shall fail to give such notice of the
location or of any change in the location thereof, presentations and demands may
be made and notice may be served at the Warrant Agent Office, and the Company
appoints the Warrant Agent as its agent to receive all such presentations,
surrenders, notices and demands.
ARTICLE II
DURATION AND EXERCISE OF WARRANTS
SECTION 2.01. Duration of Warrants. Subject to the terms and
conditions established herein, the Warrants shall expire at 5:00 p.m., New York
City time, on September 1, 2006 (or the next Business Day, if such date is not a
Business Day) (the "Expiration Date"). Each Warrant may be exercised on any
Business Day on or after August 3, 2006 (the "Exercisability Date") and at or
prior to 5:00 p.m., New York City time, on the Expiration Date.
"Business Day" shall mean any day on which (i) banks in New York
City, (ii) the principal national securities exchange or market, if any, on
which the Common Stock is listed or admitted to trading and (iii) the principal
national securities exchange or market, if any, on which the Warrants are listed
or admitted to trading are open for business.
SECTION 2.02. Exercise, Settlement and Delivery. (a) Subject to the
provisions of this Agreement, on or after the Exercisability Date and at or
prior to 5:00 p.m., New York City time, on the Expiration Date a holder of
Warrants shall have the right to exercise each Warrant at a price of $0.482 (the
"Exercise Price") for one (1) fully paid and non-assessable Warrant Share,
subject to adjustment in accordance with Article V hereof. The number and kind
of Warrant Shares for which a Warrant may be exercised (the "Exercise Rate")
shall be subject to adjustment from time to time as set forth in Article V
hereof.
(b) Warrants may be exercised on or after the Exercisability Date by
surrendering at any office or agency maintained for that purpose by the Company
pursuant to Section 1.09 (each, a "Warrant Exercise Office") the Warrant
Certificate evidencing such Warrants with the form of election to exercise set
forth on the reverse side of the Warrant Certificate (the "Election to
Exercise") duly completed and signed by the registered holder or holders thereof
or by the duly appointed legal representative thereof or by a duly authorized
attorney and, in the case of a transfer, with such signature guaranteed by an
eligible guarantor institution. Each Warrant may be exercised only in whole.
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(c) A Warrant may be exercised solely by the surrender of the
Warrant and by payment to the Warrant Agent, for the account of the Company, of
the Exercise Price for each share of Common Stock or other securities issuable
upon exercise of such Warrant. The Exercise Price shall be paid in cash or by
certified or official bank check or by wire transfer to an account designated by
the Company for such purpose. Notwithstanding any provisions herein, a Warrant
may also be exercised solely by the surrender of the Warrant, and without
payment of the applicable Exercise Price in cash, for the number of Warrant
Shares equal to the product of (1) the number of Warrant Shares for which such
Warrant is exercisable with payment of the Exercise Price as of the date of
exercise and (2) the Cashless Exercise Ratio (a "Cashless Exercise"). For
purposes of this Agreement, the "Cashless Exercise Ratio" shall equal a
fraction, the numerator of which is the excess of the Current Market Value per
share of the Common Stock on the date of exercise (calculated as set forth in
Section 5.01(q) hereof) over the Exercise Price per share as of the date of
exercise and the denominator of which is the Current Market Value per share of
the Common Stock on the date of exercise (calculated as set forth in Section
5.01(q) hereof). Upon surrender of a Warrant Certificate representing more than
one Warrant, the number of Warrant Shares deliverable upon a Cashless Exercise
shall be equal to the number of Warrants that the holder specifies is to be
exercised multiplied by the Cashless Exercise Ratio. All provisions of this
Agreement shall be applicable with respect to an exercise of a Warrant
Certificate for less than the full number of Warrants represented thereby.
No payment or adjustment shall be made on account of any dividends
on the Warrant Shares issued upon exercise of a Warrant.
(d) Upon such surrender of a Warrant Certificate at any Warrant
Exercise Office (other than any Warrant Exercise Office that also is an office
of the Warrant Agent), such Warrant Certificate shall be promptly delivered to
the Warrant Agent. The "Exercise Date" for a Warrant shall be the date when all
of the items referred to in the first sentence of paragraph (b) of this Section
2.02 are received by the Warrant Agent at or prior to 11:00 a.m., New York City
time, on a Business Day, and the exercise of the Warrants will be effective as
of such Exercise Date. If any items referred to in the first sentence of
paragraph (b) are received after 11:00 a.m., New York City time, on a Business
Day, the exercise of the Warrants to which such item relates will be effective
on the next succeeding Business Day. Notwithstanding the foregoing, in the case
of an exercise of Warrants on the Expiration Date, if all of the items referred
to in the first sentence of paragraph (b) are received by the Warrant Agent at
or prior to 5:00 p.m., New York City time, on such Expiration Date, the exercise
of the Warrants to which such items relate will be effective on the Expiration
Date.
(e) Upon the exercise of a Warrant in accordance with the terms
hereof and the receipt of a Warrant Certificate, the Warrant Agent shall as soon
as practicable, advise the Company in writing of the number of Warrants
exercised in accordance with the terms and
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conditions of this Agreement and the Warrant Certificates, the instructions of
each exercising holder of the Warrant Certificates with respect to delivery of
the Warrant Shares to which such holder is entitled upon such exercise, and such
other information as the Company shall reasonably request.
(f) Subject to Section 5.02 hereof, as soon as practicable after the
exercise of any Warrant or Warrants in accordance with the terms hereof, the
Company shall issue or cause to be issued to or upon the written order of the
registered holder of the Warrant Certificate evidencing such exercised Warrant
or Warrants, a certificate or certificates evidencing the Warrant Shares to
which such holder is entitled, in fully registered form, registered in such name
or names as may be directed by such holder pursuant to the Election to Exercise,
as set forth on the reverse of the Warrant Certificate. Such certificate or
certificates evidencing the Warrant Shares shall be deemed to have been issued
and any persons who are designated to be named therein shall be deemed to have
become the holder of record of such Warrant Shares as of the close of business
on the Exercise Date. After such exercise of any Warrant or Warrants, the
Company shall also issue or cause to be issued to or upon the written order of
the registered holder of such Warrant Certificate, a new Warrant Certificate,
countersigned by the Warrant Agent pursuant to written instruction, evidencing
the number of Warrants, if any, remaining unexercised unless such Warrants shall
have expired.
SECTION 2.03. Cancellation of Warrant Certificates. In the event the
Company shall purchase or otherwise acquire Warrants, the Warrant Certificates
evidencing such Warrants may thereupon be delivered to the Warrant Agent, and if
so delivered, shall at the Company's written instruction be canceled by it and
retired. The Warrant Agent shall cancel all Warrant Certificates properly
surrendered for exchange, substitution, transfer or exercise. The Warrant Agent
shall deliver such canceled Warrant Certificates to the Company.
ARTICLE III
OTHER PROVISIONS RELATING TO
RIGHTS OF HOLDERS OF WARRANTS
SECTION 3.01. Enforcement of Rights. (a) Notwithstanding any other
provision of this Agreement, any holder of any Warrant Certificate, without the
consent of the Warrant Agent, the holder of any Warrant Shares or the holder of
any other Warrant Certificate, may, in and for his own behalf, enforce, and may
institute and maintain any suit, action or proceeding against the Company
suitable to enforce, his right to exercise the Warrant or Warrants evidenced by
his Warrant Certificate in the manner provided in such Warrant Certificate and
in this Agreement.
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(b) Neither the Warrants nor any Warrant Certificate shall entitle
the holders thereof to any of the rights of a holder of Warrant Shares,
including, without limitation, the right to vote or to receive any dividends or
other payments or to consent or to receive notice as stockholders in respect of
the meetings of stockholders or for the election of directors of the Company or
any other matter, or any rights whatsoever as stockholders of the Company.
ARTICLE IV
CERTAIN COVENANTS OF THE COMPANY
SECTION 4.01. Payment of Taxes. The Company will pay all documentary
stamp taxes attributable to the initial issuance of Warrants and of the Warrant
Shares upon the exercise of Warrants; provided, however, that the Company shall
not be required to pay any tax or other governmental charge which may be payable
in respect of any transfer or exchange of any Warrant Certificates or any
certificates for Warrant Shares in a name other than the registered holder of a
Warrant Certificate surrendered upon the exercise of a Warrant. In any such
case, no transfer or exchange shall be made unless or until the person or
persons requesting issuance thereof shall have paid to the Company the amount of
such tax or other governmental charge or shall have established to the
satisfaction of the Company that such tax or other governmental charge has been
paid or an exemption is available therefrom.
SECTION 4.02. Qualification Under the Securities Laws. The
obligations of the Company with respect to registration of the Warrant Shares
are set forth in the Registration Rights Agreement.
SECTION 4.03. Reservation of Warrant Shares. The Company shall at
all times reserve and keep available for issuance upon exercise of the Warrants
such number of its duly authorized but unissued shares of Common Stock or other
securities of the Company purchasable upon exercise of the Warrants as will be
sufficient to permit the exercise in full of all outstanding Warrants, and will
cause appropriate evidence of ownership of such shares of Common Stock or other
securities to be delivered to the Warrant Agent upon its request for delivery of
such, and all such shares of Common Stock or other securities shall, at all
times, be duly approved for listing, subject to official notice of issuance, on
each securities exchange, if any, on which such shares of Common Stock of the
Company or such other securities are then listed.
SECTION 4.04. Common Stock. The Company covenants that all shares of
Common Stock or other securities of the Company that may be issued upon the
exercise of the Warrants will, upon issuance, be (i) duly authorized, validly
issued, fully paid and nonassess-
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able, (ii) free from preemptive and any other similar rights and (iii) free from
any taxes, liens, charges or security interests with respect thereto.
ARTICLE V
ADJUSTMENTS
SECTION 5.01. Adjustment of Exercise Rate; Notices. The Exercise
Rate is subject to adjustment from time to time as provided in this Section.
(a) Adjustment for Change in Capital Stock. If, after the date
hereof, the Company:
(i) pays a dividend or makes a distribution on its
Common Stock in shares of Common Stock;
(ii) subdivides its outstanding shares of Common Stock
into a greater number of shares;
(iii) combines its outstanding shares of Common Stock
into a smaller number of shares;
(iv) pays a dividend or makes a distribution on its
Common Stock in shares of its Capital Stock (as defined below)
(other than Common Stock or convertible securities or rights,
warrants or options for its Common Stock that in any such case are
covered by Section 5.01(b)); or
(v) issues by reclassification of its Common Stock any
shares of its Capital Stock (other than rights, warrants or options
for Common Stock or convertible securities that in any such case are
covered by Section 5.01(b)), other than reclassifications to which
paragraph (i) applies,
then the Exercise Rate in effect immediately prior to such action shall be
adjusted so that the holder of a Warrant thereafter exercised may receive the
number of shares of Capital Stock of the Company that such holder would have
owned immediately following such action if such holder had exercised the Warrant
immediately prior to such action or immediately prior to the record date
applicable thereto, if any (regardless of whether the Warrants are then
exercisable).
The adjustment 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 sub-
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division, combination or reclassification. In the event that such dividend or
distribution is not so paid or made or such subdivision, combination or
reclassification is not effected, the Exercise Rate shall again be adjusted to
be the Exercise Rate which would then be in effect if such record date or
effective date had not been so fixed.
If after an adjustment a holder of a Warrant upon exercise of such
Warrant may receive shares of two or more classes of Capital Stock of the
Company, the Exercise Rate shall thereafter be subject to adjustment upon the
occurrence of an action taken with respect to any such class of Capital Stock as
is contemplated by this Article V with respect to the Common Stock, on terms
comparable to those applicable to Common Stock in this Article V.
(b) Adjustment for Rights Issue or Sale of Common Stock Below
Current Market Value. If, at any time or from time to time, after the date
hereof, the Company (i) distributes any rights, warrants or options to holders
of its Common Stock entitling them to purchase shares of Common Stock at a price
per share less than the Current Market Value as of the Time of Determination or
(ii) grants or sells any Common Stock or any securities convertible into or
exchangeable or exercisable for Common Stock (other than pursuant to the
exercise of (1) the Warrants and (2) any security convertible into, or
exchangeable or exercisable for, the Common Stock as to which the issuance
thereof has previously been the subject of any required adjustment pursuant to
this Article V) at a price per share of Common Stock (or the equivalent thereof)
less than the Current Market Value immediately prior to any adjustment required
pursuant to this Article V, then the Exercise Rate shall be adjusted in
accordance with the formula:
E' = E x (O + N)
--------------------------------
(O + (N x P/M))
where:
E' = the adjusted Exercise Rate;
E = the current Exercise Rate;
O = the number of shares of Common Stock outstanding on the record
date for the distribution to which this paragraph (b) is being
applied or on the date of sale of Common Stock at a price per share
less than the Current Market Value immediately prior to any
adjustment to which this paragraph (b) applies, as the case may be;
N = the number of additional shares of Common Stock issuable upon
exercise of all rights, warrants or options so distributed or the
number of shares of Common
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Stock so sold or the maximum stated number of shares of Common Stock
issuable upon the conversion, exchange, or exercise of any such
convertible, exchangeable or exercisable securities, as the case may
be;
P = the price per share of the additional shares of Common Stock upon
the exercise of any such rights, warrants or options so distributed
or pursuant to any such convertible, exchangeable or exercisable
securities so sold or the sale price of the shares so sold, as the
case may be; and
M = the Current Market Value per share as of the Time of Determination
or at the time of sale, as the case may be.
The adjustment shall become effective immediately after the record
date for the determination of stockholders entitled to receive the rights,
warrants or options to which this paragraph (b) applies or upon consummation of
the sale of Common Stock, or securities convertible, exchangeable or exercisable
for Common Stock, as the case may be. To the extent that shares of Common Stock
are not delivered after the expiration of such rights, options or warrants, or
the conversion privileges with respect to such convertible securities, the
Exercise Rate shall be readjusted to the Exercise Rate that would otherwise be
in effect had the adjustment made upon the issuance of such rights, warrants,
options or convertible securities been made on the basis of delivery of only the
number of shares of Common Stock actually delivered. In the event that such
rights, warrants, options or convertible securities are not so issued, the
Exercise Rate shall again be adjusted to be the Exercise Rate which would then
be in effect if such date fixed for determination of stockholders entitled to
receive such rights, warrants or options or convertible securities had not been
so fixed.
No adjustment shall be made under this paragraph (b) if the
application of the formula stated above in this paragraph (b) would result in a
value of E' that is lower than the value of E.
(c) Adjustment for Other Distributions. If the Company distributes
to all holders of its Common Stock (i) any evidences of indebtedness of the
Company or any of its subsidiaries, (ii) any cash or other assets of the Company
or any of its subsidiaries (it being understood that this clause (ii) shall not
apply to any dividend or distribution referred to in Section 5.01(a)(iv)), or
(iii) any rights, options or warrants to acquire any of the foregoing or to
acquire any other securities of the Company (other than rights, options or
warrants with respect to which an adjustment shall have been made pursuant to
Section 5.01(b) above), the Exercise Rate shall be adjusted in accordance with
the formula:
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E' = E x M
----
M-F
where:
E' = the adjusted Exercise Rate;
E = the Exercise Rate in effect on the record date referenced below;
M = the Current Market Value; and
F = the fair market value (on the record date for the distribution to
which this paragraph (c) applies) of the assets, securities, rights,
warrants or options to be distributed in respect of each share of
Common Stock in the distribution to which this paragraph (c) is
being applied (including, in the case of cash dividends or other
cash distributions giving rise to an adjustment, all such cash
distributed concurrently).
The fair market value for purposes of this paragraph (c) of all property (other
than cash) distributed shall be determined by an Independent Financial Advisor.
The adjustment shall become effective immediately after the record
date for the determination of stockholders entitled to receive the distributions
to which this paragraph (c) applies. In the event that such distribution is not
so made, the Exercise Rate shall again be adjusted to be the Exercise Rate which
would then be in effect if such record date had not been so fixed.
(d) [Reserved.]
(e) When Adjustment May Be Deferred. No adjustment in the Exercise
Rate need be made unless the adjustment would require a change of at least 1.0%
in the Exercise Rate. Any adjustments that are not made shall be carried forward
and taken into account in any subsequent adjustment. However, with respect to a
dividend of the Company's Capital Stock (or rights to acquire such Capital
Stock) adjustments can be deferred only until, and must be made by, the earlier
of (i) three years from the date of such stock dividend and (ii) the date as of
which the aggregate stock dividends for which adjustments have not been made
total at least 1.0% of the then issued and outstanding Common Stock with respect
to which such stock dividends were distributed.
All calculations under this Article V shall be made to the nearest
1/1,000th of a share.
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(f) When No Adjustment Required. (i) No adjustment need be
made for rights to purchase Common Stock pursuant to a Company plan for
reinvestment of dividends or interest or odd-lot purchase programs;
(ii) No adjustment need be made for a change in the par value or
no par value of the Common Stock;
(iii) No adjustment need be made for issuance to employees, officers,
directors or consultants of the Company or any of its subsidiaries of options to
purchase Common Stock up to an aggregate of 12.5% of the Common Stock calculated
on a fully diluted basis; and
(iv) No adjustment need be made with respect to the issuance of
Common Stock issuable upon the exercise or conversion of rights, warrants,
options or convertible securities to the extent the Exercise Rate was adjusted
in accordance with the provisions of this Article with respect to the issuance
of such rights, warrants, options or convertible securities.
(g) Notice of Adjustment. Whenever the Exercise Rate is adjusted,
the Company shall promptly mail to holders of Warrants at the addresses
appearing on the Warrant Register a notice of the adjustment. The Company shall
file with the Warrant Agent and any other Registrar such notice and a
certificate from the Company's independent public accountants briefly stating
the facts requiring the adjustment and the manner of computing it. The
certificate shall be conclusive evidence that the adjustment is correct. Neither
the Warrant Agent nor any such Registrar shall be under any duty or
responsibility with respect to any such certificate except to exhibit the same
during normal business hours to any holder of Warrants desiring inspection
thereof after reasonable notice has been given to the Company by such holder.
(h) Notice of Certain Transactions. If:
(i) the Company takes any action that would require an adjustment in the
Exercise Rate pursuant to paragraph (a), (b) or (c) (unless no
adjustment is to occur pursuant to paragraph (f)); or
(ii) the Company takes any action that would require a supplement to
the Warrant Agreement pursuant to paragraph (i); or
(iii) there is a liquidation or dissolution of the Company;
then the Company shall mail to holders at the addresses appearing on the Warrant
Register and file with the Warrant Agent and any other Registrar a notice
stating the proposed record date for a dividend or distribution or the proposed
effective date of a subdivision, combin-
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ation, reclassification, consolidation, sale, merger, binding share exchange,
transfer, liquidation or dissolution, as the case may be. The Company shall use
its commercially reasonable best efforts to file and give the notice at least 15
days before such date. Failure to file or give the notice or any defect in it
shall not affect the validity of the transaction.
(i) Reorganization of Company; Special Distributions. If the
Company, in a single transaction or through a series of related transactions,
consolidates with or merges with or into any other person or transfers (by
lease, assignment, sale or otherwise) all or substantially all of its properties
and assets to another person or group of affiliated persons (other than a sale
of all or substantially all of the assets of the Company in a transaction in
which the holders of Common Stock immediately prior to such transaction do not
receive securities, cash, or other assets of the Company or any other person) or
is a party to a merger or binding share exchange which reclassifies or changes
its outstanding Common Stock, the Company covenants that prior to entering into
such transaction, the person obligated to deliver securities, cash or other
assets upon exercise of Warrants will enter into a supplemental warrant
agreement. If the issuer of securities deliverable upon exercise of Warrants is
an affiliate of the successor Company, that issuer shall join in the
supplemental warrant agreement.
The supplemental warrant agreement shall provide that the holder of
a Warrant may exercise it for the kind and amount of securities, cash or other
assets which such holder would have received immediately after the
consolidation, merger, binding share exchange or transfer if such holder had
exercised the Warrant immediately before the effective date of the transaction,
assuming (to the extent applicable) that such holder (i) was not a constituent
person or an affiliate of a constituent person to such transaction; (ii) made no
election with respect thereto; and (iii) was treated alike with the plurality of
non-electing holders. The supplemental warrant agreement shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article V. The successor Company shall mail to
holders of Warrants at the addresses appearing on the Warrant Register a notice
briefly describing the supplemental warrant agreement.
(j) Adjustment by Board of Directors. If any event occurs as to
which, in the opinion of the Board of Directors of the Company, the provisions
of this Article V are not strictly applicable or if strictly applicable would
not fairly protect the rights of the holder of the Warrant in accordance with
the essential intent and principles of such provisions, then the Board of
Directors of the Company shall make an adjustment in the application of such
provisions, in accordance with such essential intent and principles, so as to
protect such rights as aforesaid; provided, however, that in no event shall any
such adjustment have the effect of decreasing the Exercise Rate as otherwise
determined pursuant to any of the provisions of this Article V except in the
case of a combination of shares of a type contemplated in clause (iii) of
paragraph (a) above and then in no event to an amount less than the Exercise
Rate as adjusted pursuant to clause (iii) of paragraph (a) above. The Company
may make such in-
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creases in the Exercise Rate, in addition to those otherwise required by this
Section, as it considers to be advisable in order that any event treated for
Federal income tax purposes as a dividend of stock or stock rights shall not be
taxable to the recipients.
(k) Warrant Agent's Adjustment Disclaimer. The Warrant Agent has no
duty to determine whether a supplemental warrant agreement under paragraph (i)
need be entered into or whether any provisions of any supplemental warrant
agreement are correct.
(l) Specificity of Adjustment. Irrespective of any adjustments in
the number or kind of shares purchasable upon the exercise of the Warrants,
Warrant Certificates theretofore or thereafter issued may continue to express
the same number and kind of Warrant Shares per Warrant as are stated on the
Warrant Certificates initially issuable pursuant to this Agreement.
(m) Adjustments to Par Value. The Company shall make such
adjustments to the par value of the Common Stock in order that, upon exercise of
the Warrants, the Warrant Shares will be fully paid and non-assessable.
(n) [Reserved].
(o) No Other Adjustment for Dividends. Except as provided in
this Article V, no payment or adjustment will be made for dividends on any
Common Stock.
(p) Multiple Adjustments. After an adjustment to the Exercise Rate
under this Article V, any subsequent event requiring an adjustment under this
Article V shall cause an adjustment to the Exercise Rate as so adjusted;
provided that the Exercise Rate shall not be adjusted more than once for any one
event giving rise to an adjustment pursuant to this Article V.
(q) Definitions.
"Capital Stock" means, with respect to any corporation, any and all
shares, interests, rights to purchase, warrants, options, participations or
other equivalents of or interests (however designated), including convertible
securities, in stock issued by that corporation.
"Current Market Value" per share of Common Stock or of any other
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 by a nationally recognized investment bank or
appraisal firm that is not an affiliate of the Company (an "Independent
Financial Advisor"), 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
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such date, (ii) if no such transaction shall have occurred on such date or
within such six-month period, the value of the security most recently determined
as of a date within the six months preceding such date by an Independent
Financial Advisor or (iii) if neither clause (i) nor (ii) is applicable, the
value of the security determined as of such date by an Independent Financial
Advisor, or (2) if the security is registered under the Exchange Act, the
average of the daily closing bid prices for each Business Day during the period
commencing 15 Business Days before such date and ending on the date one day
prior to such date or, if the security has been registered under the Exchange
Act for less than 15 consecutive Business Days before such date, then the
average of the daily closing bid prices for all of the Business Days before such
date for which daily closing bid prices are available. If the closing bid is not
determinable for at least 10 Business Days in such period, the Current Market
Value of the security shall be determined as if the security were not registered
under the Exchange Act.
"Time of Determination" means the time and date of the determination
of stockholders entitled to receive rights, warrants, or options or a
distribution, in each case, to which paragraphs (b) and (c) apply.
SECTION 5.02. Fractional Warrant Shares. The Company will not be
required to issue fractional Warrant Shares upon exercise of the Warrants or
distribute Share certificates that evidence fractional Warrant Shares. In lieu
of fractional Warrant Shares, there shall be paid to the registered holders of
Warrant Certificates at the time Warrants evidenced thereby are exercised as
herein provided an amount in cash equal to the same fraction of the Current
Market Value, as defined in paragraph (q) of Section 5.01 of this Agreement, per
Share on the Business Day preceding the date the Warrant Certificates evidencing
such Warrants are surrendered for exercise. Such payments will be made by check
or by transfer to an account maintained by such registered holder. If any holder
surrenders for exercise more than one Warrant Certificate, the number of Warrant
Shares deliverable to such holder may, at the option of the Company, be computed
on the basis of the aggregate amount of all the Warrants exercised by such
holder.
ARTICLE VI
CONCERNING THE WARRANT AGENT
SECTION 6.01. Warrant Agent. The Company is hereby initially
appointed as warrant agent in respect of the Warrants and the Warrant
Certificates (the "Warrant Agent") upon the terms and subject to the conditions
herein and in the Warrant Certificates set forth, and hereby accepts such
appointment; provided that upon written request by the holders of not less than
a majority of the Warrants the Company shall appoint a Warrant Agent (with an
appropriate amendment to this Agreement) reasonably acceptable to a majority of
holders
24
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(all fees and expenses of such Warrant Agent to be borne by the Company in
accordance with Section 6.02(a)); provided, further, that the provisions of
Sections 6.02 and 6.03 (other than 6.03(a)) shall not be in effect until a
Warrant Agent other than the Company shall be appointed. The Warrant Agent shall
have the powers and authority specifically granted to and conferred upon it in
the Warrant Certificates and hereby and such further powers and authority to act
on behalf of the Company as the Company may hereafter grant to or confer upon it
and it shall accept in writing. All of the terms and provisions with respect to
such powers and authority contained in the Warrant Certificates are subject to
and governed by the terms and provisions hereof.
SECTION 6.02. Conditions of Warrant Agent's Obligations. The Warrant
Agent accepts its obligations herein set forth upon the terms and conditions
hereof and in the Warrant Certificates, including the following, to all of which
the Company agrees and to all of which the rights hereunder of the holders from
time to time of the Warrant Certificates shall be subject:
(a) The Warrant Agent shall be entitled to reasonable compensation
to be agreed upon with the Company in writing for all services rendered by
it and the Company agrees promptly to pay such compensation and to
reimburse the Warrant Agent for its out-of-pocket expenses (including fees
and expenses of counsel) incurred without gross negligence or willful
misconduct on its part in connection with the services rendered by it
hereunder. The Company also agrees to indemnify the Warrant Agent and any
predecessor Warrant Agent, their directors, officers, affiliates, agents
and employees for, and to hold them and their directors, officers,
affiliates, agents and employees harmless against, any loss, liability or
expense of any nature whatsoever (including, without limitation, fees and
expenses of counsel) incurred without gross negligence or willful
misconduct on the part of the Warrant Agent, arising out of or in
connection with its acting as such Warrant Agent hereunder and its
exercise of its rights and performance of its obligations hereunder. The
obligations of the Company under this Section 6.02 shall survive the
exercise and the expiration of the Warrant Certificates and the
resignation and removal of the Warrant Agent.
(b) In acting under this Agreement and in connection with the
Warrant Certificates, the Warrant Agent is acting solely as agent of the
Company and does not assume any obligation or relationship of agency or
trust for or with any of the owners or holders of the Warrant
Certificates. The Warrant Agent shall not be accountable for and makes no
representation as to the validity or value of any securities or assets
issued upon exercise of Warrants.
(c) The Warrant Agent may consult with counsel of its selection and
any advice or written opinion of such counsel shall be full and complete
authorization and
25
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protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with such advice or opinion.
(d) The Warrant Agent shall be fully protected and shall incur no
liability for or in respect of any action taken or omitted to be taken or
thing suffered by it in reliance upon any Warrant Certificate, notice,
direction, consent, certificate, affidavit, opinion of counsel,
instruction, statement or other paper or document reasonably believed by
it to be genuine and to have been presented or signed by the proper
parties.
(e) The Warrant Agent, and its officers, directors, affiliates and
employees ("Related Parties"), may become the owners of, or acquire any
interest in, Warrant Certificates, shares or other obligations of the
Company with the same rights that it or they would have if it were not the
Warrant Agent hereunder and, to the extent permitted by applicable law, it
or they may engage or be interested in any financial or other transaction
with the Company and may act on, or as depositary, trustee or agent for,
any committee or body of holders of shares or other obligations of the
Company as freely as if it were not the Warrant Agent hereunder. Nothing
in this Agreement shall be deemed to prevent the Warrant Agent or such
Related Parties from acting in any other capacity for the Company.
(f) The Warrant Agent shall not be under any liability for interest
on, and shall not be required to invest, any monies at any time received
by it pursuant to any of the provisions of this Agreement or of the
Warrant Certificates.
(g) The Warrant Agent shall not be under any responsibility in
respect of the validity of this Agreement (or any term or provision
hereof) or the execution and delivery hereof (except the due execution and
delivery hereof by the Warrant Agent) or in respect of the validity or
execution of any Warrant Certificate (except its authentication thereof).
(h) The recitals and other statements contained herein and in the
Warrant Certificates (except as to the Warrant Agent's authentication
thereon) shall be taken as the statements of the Company and the Warrant
Agent assumes no responsibility for the correctness of the same. The
Warrant Agent does not make any representation as to the validity or
sufficiency of this Agreement or the Warrant Certificates, except for its
due execution and delivery of this Agreement; provided, however, that the
Warrant Agent shall not be relieved of its duty to authenticate the
Warrant Certificates as authorized by this Agreement. The Warrant Agent
shall not be accountable for the use or application by the Company of the
proceeds of the exercise of any Warrant.
26
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(i) Before the Warrant Agent acts or refrains from acting with
respect to any matter contemplated by this Warrant Agreement, it may
require:
(1) an officers' certificate stating on behalf of the Company
that, in the opinion of the signers, all conditions precedent, if
any, provided for in this Warrant Agreement relating to the proposed
action have been complied with; and
(2) if reasonably necessary in the judgment of the Warrant
Agent, an opinion of counsel for the Company stating that, in the
opinion of such counsel, all such conditions precedent have been
complied with, provided that such matter is one customarily opined
on by counsel.
Each Officers' Certificate or, if requested, an opinion of counsel
with respect to compliance with a condition or covenant provided for in
this Warrant Agreement shall include:
(1) a statement that the person making such certificate
or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such person, he or she
has made such examination or investigation as is necessary to enable
him or her to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
(j) The Warrant Agent shall be obligated to perform such duties as
are herein and in the Warrant Certificates specifically set forth and no
implied duties or obligations shall be read into this Agreement or the
Warrant Certificates against the Warrant Agent. The Warrant Agent shall
not be accountable or under any duty or responsibility for the use by the
Company of any of the Warrant Certificates authenticated by the Warrant
Agent and delivered by it to the Company pursuant to this Agreement. The
Warrant Agent shall have no duty or responsibility in case of any default
by the Company in the performance of its covenants or agreements contained
in the Warrant Certificates or in the case of the receipt of any written
demand from a holder of a Warrant
27
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Certificate with respect to such default, including, without limiting the
generality of the foregoing, any duty or responsibility to initiate or
attempt to initiate any proceedings at law or otherwise or, except as
provided in Section 8.02 hereof, to make any demand upon the Company.
(k) Unless otherwise specifically provided herein, any order,
certificate, notice, request, direction or other communication from the
Company made or given under any provision of this Agreement shall be
sufficient if signed by its chairman of the Board of Directors, its
president, its treasurer, its controller or any vice president or its
secretary or any assistant secretary.
(l) The Warrant Agent shall have no responsibility in respect of any
adjustment pursuant to Article V hereof.
(m) The Company agrees that it will perform, execute, acknowledge
and deliver, or cause to be performed, executed, acknowledged and
delivered, all such further and other acts, instruments and assurances as
may reasonably be required by the Warrant Agent for the carrying out or
performing by the Warrant Agent of the provisions of this Agreement.
(n) The Warrant Agent is hereby authorized and directed to accept
written instructions with respect to the performance of its duties
hereunder from any one of the chairman of the Board of Directors, the
president, the treasurer, the controller, any vice president or the
secretary of the Company or any other officer or official of the Company
reasonably believed to be authorized to give such instructions and to
apply to such officers or officials for advice or instructions in
connection with its duties, and it shall not be liable for any action
taken or suffered to be taken by it in good faith in accordance with
instructions with respect to any matter arising in connection with the
Warrant Agent's duties and obligations arising under this Agreement. Such
application by the Warrant Agent for written instructions from the Company
may, at the option of the Warrant Agent, set forth in writing any action
proposed to be taken or omitted by the Warrant Agent with respect to its
duties or obligations under this Agreement and the date on or after which
such action shall be taken or omitted and the Warrant Agent shall not be
liable for any action taken or omitted in accordance with a proposal
included in any such application on or after the date specified therein
(which date shall be not less than 10 Business Days after the Company
receives such application unless the Company consents to a shorter
period), provided that (i) such application includes a statement to the
effect that it is being made pursuant to this paragraph (n) and that
unless objected to prior to such date specified in the application, the
Warrant Agent will not be liable for any such action or omission to the
extent set forth in such paragraph (n) and (ii) prior to taking or
omitting any such action, the Warrant
28
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Agent has not received written instructions objecting to such proposed
action or omission.
(o) 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 other evidence
in respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed on behalf of
the Company by any one of the chairman of the Board of Directors, the
president, the treasurer, the controller, any vice president or the
secretary of the Company or any other officer or official of the Company
reasonably believed to be authorized to give such instructions and
delivered to the Warrant Agent; and such certificate shall 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.
(p) The Warrant Agent shall not be required to risk or expend its
own funds in the performance of its obligations and duties hereunder.
SECTION 6.03. Resignation and Appointment of Successor. (a)
The Company agrees, for the benefit of the holders from time to time of the
Warrant Certificates, that there shall at all times be a Warrant Agent
hereunder.
(b) The Warrant Agent may at any time resign as Warrant Agent by
giving written notice to the Company of such intention on its part, specifying
the date on which its desired resignation shall become effective; provided,
however, that such date shall be at least 60 days after the date on which such
notice is given unless the Company agrees to accept less notice. Upon receiving
such notice of resignation, the Company shall promptly appoint a successor
Warrant Agent, qualified as provided in Section 6.03(d) hereof, by written
instrument in duplicate signed on behalf of the Company, one copy of which shall
be delivered to the resigning Warrant Agent and one copy to the successor
Warrant Agent. As provided in Section 6.03(d) hereof, such resignation shall
become effective upon the earlier of (x) the acceptance of the appointment by
the successor Warrant Agent or (y) 60 days (or, if a longer period is specified
by the Warrant Agent pursuant to the first sentence hereof, such longer period)
after receipt by the Company of notice of such resignation. The Company may, at
any time and for any reason, and shall, upon obtaining knowledge of any event
set forth in the next succeeding sentence, remove the Warrant Agent and appoint
a successor Warrant Agent by written instrument in duplicate, specifying such
removal and the date on which it is intended to become effective, signed on
behalf of the Company, one copy of which shall be delivered to the Warrant Agent
being removed and one copy to the successor Warrant Agent. The Warrant Agent
shall be removed as aforesaid if it shall become incapable of acting, or shall
be
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adjudged a bankrupt or insolvent, or a receiver of the Warrant Agent or of its
property shall be appointed, or any public officer shall take charge or control
of it or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation. Any removal of the Warrant Agent and any
appointment of a successor Warrant Agent shall become effective upon acceptance
of appointment by the successor Warrant Agent as provided in Section 6.03(d). As
soon as practicable after appointment of the successor Warrant Agent, the
Company shall cause written notice of the change in the Warrant Agent to be
given to each of the registered holders of the Warrants in the manner provided
for in Section 8.04 hereof.
(c) Upon resignation or removal of the Warrant Agent, if the Company
shall fail to appoint a successor Warrant Agent within a period of 60 days after
receipt of such notice of resignation or removal, then the holder of any Warrant
Certificate or the retiring Warrant Agent may apply to a court of competent
jurisdiction for the appointment of a successor to the Warrant Agent. Pending
appointment of a successor to the Warrant Agent, either by the Company or by
such a court, the duties of the Warrant Agent shall be carried out by the
Company.
(d) Any successor Warrant Agent, whether appointed by the Company or
by 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 and having,
at the time of its appointment, a combined capital and surplus of at least $50
million. Such successor Warrant Agent shall execute and deliver to its
predecessor and to the Company an instrument accepting such appointment
hereunder and all the provisions of this Agreement, and thereupon such successor
Warrant Agent, without any further act, deed or conveyance, shall become vested
with all the rights, powers, duties and obligations of its predecessor
hereunder, with like effect as if originally named as Warrant Agent hereunder,
and such predecessor shall thereupon become obligated to (i) transfer and
deliver, and such successor Warrant Agent shall be entitled to receive, all
securities, records or other property on deposit with or held by such
predecessor as Warrant Agent hereunder and (ii) upon payment of the amounts then
due it pursuant to Section 6.02(a) hereof, pay over, and such successor Warrant
Agent shall be entitled to receive, all monies deposited with or held by any
predecessor Warrant Agent hereunder.
(e) Any corporation or bank into which the Warrant Agent hereunder
may be merged or converted, or any corporation or bank with which the Warrant
Agent may be consolidated, or any corporation or bank resulting from any merger,
conversion or consolidation to which the Warrant Agent shall be a party, or any
corporation or bank to which the Warrant Agent shall sell or otherwise transfer
all or substantially all of its corporate trust business, shall be the successor
to the Warrant Agent under this Agreement (provided that such corporation or
bank shall be qualified as aforesaid) without the execution or filing of any
document or any further act on the part of any of the parties hereto.
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(f) No Warrant Agent under this Warrant Agreement shall be
personally liable for any action or omission of any successor Warrant Agent.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Amendment. This Agreement and the terms of the
Warrants may be amended by the Company and the Warrant Agent, without the
consent of the holder of any Warrant Certificate, for the purpose of curing any
ambiguity, or of curing, correcting or supplementing any defective or
inconsistent provision contained herein or therein, or to effect any assumptions
of the Company's obligations hereunder and thereunder by a successor corporation
under the circumstances described in Section 5.01(d) hereof or in any other
manner that the Company may deem necessary or desirable and that shall not
materially adversely affect the interests of the holders of the Warrant
Certificates.
The Company and the Warrant Agent may modify this Agreement and the
terms of the Warrants with the consent of the holders of not less than a
majority in number of the then outstanding Warrants for the purpose of adding
any provision to or changing in any manner or eliminating any of the provisions
of this Agreement or modifying in any manner the rights of the holders of the
outstanding Warrants; provided, however, that no such modification that
decreases the Exercise Rate, reduces the period of time during which the
Warrants are exercisable hereunder, otherwise materially and adversely affects
the exercise rights of the holders of the Warrants, reduces the percentage
required for modification, or effects any change to this Section 7.01 may be
made with respect to an outstanding Warrant without the consent of the holder of
such Warrant. Notwithstanding any other provision of this Agreement, the Warrant
Agent's consent must be obtained regarding any supplement or amendment which
alters the Warrant Agent's rights or duties (it being expressly understood that
the foregoing shall not be in derogation of the right of the Company to remove
the Warrant Agent in accordance with Section 6.03 hereof).
Any modification or amendment made in accordance with this Agreement
will be conclusive and binding on all present and future holders of Warrant
Certificates whether or not they have consented to such modification or
amendment or waiver and whether or not notation of such modification or
amendment is made upon such Warrant Certificates. Any instrument given by or on
behalf of any holder of a Warrant Certificate in connection with any consent to
any modification or amendment will be conclusive and binding on all subsequent
holders of such Warrant Certificate.
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SECTION 7.02. Notices and Demands to the Company and Warrant Agent.
If the Warrant Agent shall receive any notice or demand addressed to the Company
by the holder of a Warrant Certificate pursuant to the provisions hereof or of
the Warrant Certificates, the Warrant Agent shall promptly forward such notice
or demand to the Company.
SECTION 7.03. Addresses for Notices to Parties and for Transmission
of Documents. All notices hereunder to the parties hereto shall be deemed to
have been given when sent by certified or registered mail, postage prepaid, or
by facsimile transmission, confirmed by first class mail, postage prepaid,
addressed to any party hereto as follows:
To the Company:
Xxxxxxx Fasteners Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Chief Executive Officer
or at any other address of which either of the foregoing shall have notified the
other in writing.
SECTION 7.04. Notices to Holders. Notices to holders of Warrants
shall be mailed to such holders at the addresses of such holders as they appear
in the Warrant Register. Any such notice shall be sufficiently given if sent by
first-class mail, postage prepaid.
SECTION 7.05. APPLICABLE LAW. THE VALIDITY, INTERPRETATION AND
PERFORMANCE OF THIS AGREEMENT AND EACH WARRANT CERTIFICATE ISSUED HEREUNDER AND
OF THE RESPECTIVE TERMS AND PROVISIONS THEREOF SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS THEREOF.
SECTION 7.06. Persons Having Rights Under Agreement. Nothing in this
Agreement expressed or implied and nothing that may be inferred from any of the
provisions hereof is intended, or shall be construed, to confer upon, or give
to, any person or corporation other than the Company, the Warrant Agent and the
holders of the Warrant Certificates any right, remedy or claim under or by
reason of this Agreement or of any covenant, condition, stipulation, promise or
agreement hereof; and all covenants, conditions, stipulations, promises and
agreements in this Agreement contained shall be for the sole and exclusive
benefit of the
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Company and the Warrant Agent and their successors and of the holders of the
Warrant Certificates.
SECTION 7.07. Headings. The descriptive headings of the several
Articles and Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
SECTION 7.08. Counterparts. This Agreement may be executed in
any number of counterparts, each of which so executed shall be deemed to be
an original; but such counterparts shall together constitute but one and the
same instrument.
SECTION 7.09. Inspection of Agreement. A copy of this Agreement
shall be available during regular business hours at the principal corporate
trust office of the Warrant Agent, for inspection by the holder of any Warrant
Certificate. The Warrant Agent may require such holder to submit his Warrant
Certificate for inspection by it.
[Signature Pages Follow]
33
S-1
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the day and year first above written.
XXXXXXX FASTENERS INC.
By: /s/ Xxxx X. Xxxxxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Chief Executive Officer
XXXXXXX FASTENERS INC., as Warrant Agent
By: /s/ Xxxx X. Xxxxxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Chief Executive Officer
34
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
[FACE]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
IN ADDITION, THE OFFER, SALE OR TRANSFER OF THIS SECURITY IS FURTHER RESTRICTED
BY THE TERMS OF A WARRANT AGREEMENT DATED AS OF AUGUST 3, 2001. PURSUANT
THERETO, THIS SECURITY MAY ONLY BE OFFERED, TRANSFERRED OR SOLD TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1),
(a)(2), (a)(3) OR (a)(7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING
THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
"ACCREDITED INVESTOR", FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH SECURITY ONLY:
(A) TO THE COMPANY, OR
(B) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF
SUBPARAGRAPH (a)(1), (a)(2), (a)(3) OR (a)(7) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR
THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR", FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH,
ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT,
SUBJECT TO THE COMPANY'S RIGHT IN ITS SOLE DISCRETION PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER PURSUANT TO CLAUSE (B) TO REQUIRE THE
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DELIVERY OF A WRITTEN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER
INFORMATION SATISFACTORY TO THE COMPANY AND, IN EACH OF THE FOREGOING CASES, THE
DELIVERY OF A COMPLETED CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE
OTHER SIDE OF THIS SECURITY BY THE TRANSFEROR TO THE COMPANY AND THE WARRANT
AGENT.
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Series 1 No. [ ] [ ] Warrants
WARRANT CERTIFICATE
XXXXXXX FASTENERS INC.
This Warrant Certificate certifies that [ ], or registered assigns,
is the registered holder of [ ] Warrants (the "Warrants") to purchase shares
of Common Stock, par value $0.01 per share (the "Common Stock"), of XXXXXXX
FASTENERS INC., a Delaware corporation (the "Company"). The Warrants are
governed by the terms of the warrant agreement (the "Warrant Agreement") dated
as of August 3, 2001 by and between the Company and Xxxxxxx Fasteners Inc., as
Warrant Agent. Subject to the provisions set forth herein and in the Warrant
Agreement, at any time from 9:00 a.m., New York City time, on or after August 3,
2006 until 5:00 p.m., New York City time, on September 1, 2006 (or the next
Business Day, if such date is not a Business Day) (the "Expiration Date"), a
holder of Warrants shall have the right to exercise each Warrant at a price of
$.482 (the "Exercise Price") for one fully paid and nonassessable share of
Common Stock (a "Warrant Share" or, if adjusted, the "Warrant Shares", which may
also include any other securities or property, such adjustment and inclusion
each as provided in the Warrant Agreement) upon surrender of this Warrant
Certificate at any office or agency maintained for that purpose by the Company
(the "Warrant Agent Office"). A Warrant may be exercised solely by the surrender
of the Warrant and by payment to the Warrant Agent, for the account of the
Company, of the Exercise Price for each share of Common Stock or other
securities issuable upon exercise of such Warrants. The Exercise Price shall be
paid in cash or by certified or official bank check or by wire transfer to an
account designated by the Company for such purpose. Notwithstanding any
provisions herein, a Warrant may also be exercised solely by surrender of the
Warrant, and without payment of the Exercise Price in cash, for the number of
Warrant Shares equal to the product of (1) the number of Warrant Shares for
which such Warrant is exercisable with payment of the Exercise Price as of the
date of exercise and (2) the Cashless Exercise Ratio (a "Cashless Exercise").
For purposes of this Warrant, the "Cashless Exercise Ratio" shall equal a
fraction, the numerator of which is the excess of the Current Market Value of
one share of Common Stock on the date of exercise (calculated as set forth in
Section 5.01(q) of the Warrant Agreement) over the Exercise Price per share as
of the date of exercise and the denominator of which is the Current Market Value
of one share of Common Stock on the date of exercise (calculated as set forth in
Section 5.01(q) of the Warrant Agreement). Upon surrender of a Warrant
Certificate representing more than one Warrant, the number of Warrant Shares
deliverable upon a Cashless Exercise shall be equal to the number of Warrants
that the Holder specifies is to be exercised multiplied by the Cashless Exercise
ratio. All provisions of the Warrant Agreement shall be applicable with respect
to an exercise of a Warrant Certificate for less than the full number of
Warrants represented thereby.
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The Company has initially designated its principal executive office
as the initial Warrant Agent Office. The number of Warrant Shares issuable upon
exercise of the Warrants is subject to adjustment upon the occurrence of certain
events set forth in the Warrant Agreement.
Reference is hereby made to the further provisions on the reverse
hereof which provisions shall for all purposes have the same effect as though
fully set forth at this place.
This Warrant Certificate shall not be valid unless authenticated by
the Warrant Agent, as such term is used in the Warrant Agreement.
All terms used herein but not defined herein have the meanings
ascribed to such terms in the Warrant Agreement.
THIS WARRANT CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS
THEREOF.
A-4
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WITNESS the seal of the Company and signatures of its duly
authorized officers.
Dated:
XXXXXXX FASTENERS INC.
By:
__________________________________
Name:
Title:
Certificate of Authentication:
This is one of the Warrants referred to in the within mentioned Warrant
Agreement:
[ ],
as Warrant Agent
By: _____________________________
Authorized Signatory
A-5
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[FORM OF WARRANT CERTIFICATE]
[REVERSE]
XXXXXXX FASTENERS INC.
The Warrants evidenced by this Warrant Certificate are part of a
duly authorized issue of Warrants expiring at 5:00 p.m., New York City time, on
September 1, 2006 (or the next Business Day, if such date is not a Business Day)
(the "Expiration Date"), each of which represents the right at any time on or
after August 3, 2006, and on or prior to such Expiration Date, to exercise such
Warrant at a price of $.482 (the "Exercise Price") for one share of Common Stock
of the Company, subject to adjustment as set forth in the Warrant Agreement. The
Warrants are issued pursuant to a Warrant Agreement dated as of August 3, 2001
(the "Warrant Agreement"), duly executed and delivered by the Company to Xxxxxxx
Fasteners Inc., 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.
Warrants may be exercised by surrendering at any Warrant Agent
Office this Warrant Certificate with the form of Election to Exercise set forth
hereon duly completed and executed.
If all of the items referred to in the preceding paragraph are
received by the Warrant Agent at or prior to 11:00 a.m., New York City time, on
a Business Day, the exercise of the Warrant to which such items relate will be
effective on such Business Day. If any items referred to in the preceding
paragraph are received after 11:00 a.m., New York City time, on a Business Day,
the exercise of the Warrants to which such item relates will be deemed to be
effective on the next succeeding Business Day. Notwithstanding the foregoing, in
the case of an exercise of Warrants on the Expiration Date, if all of the items
referred to in the preceding paragraph are received by the Warrant Agent at or
prior to 5:00 p.m., New York City time, on such Expiration Date, the exercise of
the Warrants to which such items relate will be effective on the Expiration
Date.
As soon as practicable after the exercise of any Warrant or
Warrants, the Company shall issue or cause to be issued to or upon the written
order of the registered holder of this Warrant Certificate, a certificate or
certificates evidencing the Warrant Share or Warrant Shares to which such holder
is entitled, in fully registered form, registered in such name or names as may
be directed by such holder pursuant to the Election to Exercise, as set forth on
the reverse of this Warrant Certificate. Such certificate or certificates
evidencing the Warrant Share or Warrant Shares shall be deemed to have been
issued and any persons who are desig-
A-6
40
nated to be named therein shall be deemed to have become the holder of record of
such Warrant Share or Warrant Shares as of the close of business on the date
upon which the exercise of this Warrant was deemed to be effective as provided
in the preceding paragraph.
The Company will not be required to issue fractional shares of
Common Stock upon exercise of the Warrants or distribute Warrant Share
certificates that evidence fractional shares of Common Stock. In lieu of
fractional shares of Common Stock, there shall be paid to the registered Holder
of this Warrant Certificate at the time such Warrant Certificate is exercised an
amount in cash equal to the same fraction of the Current Market Value (as
defined in the Warrant Agreement) per share on the Business Day preceding the
date this Warrant Certificate is surrendered for exercise.
Warrant Certificates, when surrendered at any office or agency
maintained by the Company for that purpose by the registered holder thereof in
person or by legal representative or attorney duly authorized in writing, may be
exchanged for a new Warrant Certificate or new Warrant Certificates evidencing
in the aggregate a like number of Warrants, in the manner and subject to the
limitations provided in the Warrant Agreement, without charge except for any tax
or other governmental charge imposed in connection therewith.
Upon due presentment for registration of transfer of this Warrant
Certificate at any office or agency maintained by the Company for that purpose,
a new Warrant Certificate evidencing in the aggregate a like number of Warrants
shall be issued to the transferee 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 hereof as the absolute owner of this Warrant Certificate (notwithstanding
any notation of ownership or other writing hereon made by anyone) for the
purpose of any exercise hereof and for all other purposes, and neither the
Company nor the Warrant Agent shall be affected by any notice to the contrary.
"Business Day" shall mean any day on which (i) banks in New York
City, (ii) the principal national securities exchange or market, if any, on
which the Common Stock is listed or admitted to trading and (iii) the principal
national securities exchange or market, if any, on which the Warrants are listed
or admitted to trading are open for business.
A-7
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(FORM OF ELECTION TO EXERCISE)
(To be executed upon exercise of Warrants on the Exercise Date)
The undersigned hereby irrevocably elects to exercise [ ] of the
Warrants represented by this Warrant Certificate for the whole number of Warrant
Shares issuable upon the exercise of such Warrants. The undersigned requests
that a certificate representing such Warrant Shares be registered in the name of
______________________ whose address is _____________________________ and that
such certificate be delivered to ___________________________ whose address is
__________________________. Any cash payments to be paid in lieu of a fractional
Warrant Share should be made to __________________ whose address is
________________________ and the check representing payment thereof should be
delivered to ______________________ whose address is ______________________.
Dated:
Name of holder of
Warrant Certificate:
______________________________________
(Please Print)
Tax Identification or
Social Security Number:
___________________________________
Address:
__________________________________________________
Signature:
__________________________________________________
Note: The above signature must correspond with the name
as written upon the face of this Warrant Certificate
in every particular, without alteration or
enlargement or any change whatever.
Signature Guaranteed By:
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Warrant Agent which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program"
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as may be determined by the Warrant Agent in addition to or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
A-9
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[FORM OF ASSIGNMENT]
For value received _______________________ hereby sells, assigns and
transfers unto _____________________ the within Warrant Certificate, together
with all right, title and interest therein, and does hereby irrevocably
constitute and appoint __________________________ attorney, to transfer said
Warrant Certificate on the books of the within-named Company, with full power of
substitution in the premises.
Dated:
Signature:
____________________________________________________
Note: The above signature must correspond with the name
as written upon the face of this Warrant Certificate
in every particular, without alteration or
enlargement or any change whatever.
Signature Guaranteed By:
____________________________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Warrant Agent which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Warrant Agent in
addition to or in substitution for, STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.
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EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF WARRANTS
Re: Warrants to Purchase Common Stock (the "Warrants")
of Xxxxxxx Fasteners Inc.
This Certificate relates to ____ Warrants held by ______ (the
"Transferor").
The Transferor has requested the Warrant Agent by written order to
exchange or register the transfer of a Warrant or Warrants.
In connection with such request and in respect of each such Warrant,
the Transferor hereby certifies that the Transferor is familiar with the Warrant
Agreement relating to the above captioned Warrants and the restrictions on
transfers thereof as provided in Section 1.07 of such Warrant Agreement, and
that the transfer of this Warrant does not require registration under the
Securities Act of 1933, as amended (the "Act"), because such Warrant is being
acquired for the Transferor's own account, without transfer (in satisfaction of
Section 1.07(a)(y)(A) of the Warrant Agreement).
______________________________________
[INSERT NAME OF TRANSFEROR]
By:
____________________________________
Date:
______________________
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EXHIBIT C
[Form of Transferee Letter of Representation]
XXXXXXX FASTENERS INC.
0000 Xxxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
Ladies and Gentlemen:
In connection with our proposed purchase of warrants to purchase
Common Stock, par value $0.01 per share (the "Securities"), of Xxxxxxx Fasteners
Inc. (the "Company") we confirm that:
1. We understand that the Securities have not been registered under
the Securities Act of 1933, as amended (the "Securities Act"), and, unless
so registered, may not be offered, sold or otherwise transferred except as
permitted in the following sentence. We agree on our own behalf and on
behalf of any investor account for which we are purchasing Securities to
offer, sell or otherwise transfer such Securities only to an institutional
"accredited investor" within the meaning of subparagraph (a)(1), (a)(2),
(a)(3) or (a)(7) of Rule 501 under the Securities Act that is acquiring
the Securities for its own account or for the account of such an
institutional "accredited investor", for investment purposes and not with
a view to, or for offer or sale in connection with, any distribution in
violation of the Securities Act, subject to any requirement of law that
the disposition of our property or the property of such investor account
or accounts be at all times within our or their control and to compliance
with any applicable state securities laws. If any resale or other transfer
of the Securities is proposed to be made, the transferor shall deliver a
letter from the transferee substantially in the form of this letter to the
warrant agent under the Warrant Agreement pursuant to which the Securities
were issued (the "Warrant Agent") which shall provide, among other things,
that the transferee is an institutional "accredited investor" within the
meaning of subparagraph (a)(1), (a)(2), (a)(3) or (a)(7) of Rule 501 under
the Securities Act and that it is acquiring such Securities for investment
purposes and not for distribution in violation of the Securities Act. The
Warrant Agent and the Company reserve the right prior to any offer, sale
or other transfer of the Securities to require the delivery of a written
opinion of counsel, certifications, and/or other information satisfactory
to the Company and the Warrant Agent.
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2. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (a)(2), (a)(3) or (a)(7) of Regulation D under the Securities
Act) purchasing for our own account or for the account of such an
institutional "accredited investor", and we are acquiring the Securities
for investment purposes and not with a view to, or for offer or sale in
connection with, any distribution in violation of the Securities Act and
we have such knowledge and experience in financial and business matters as
to be capable of evaluating the merits and risks of our investment in the
Securities, and we and any accounts for which we are acting are each able
to bear the economic risk of our or its investment for an indefinite
period.
3. We are acquiring the Securities purchased by us for our own
account or for one or more accounts as to each of which we exercise sole
investment discretion.
4. Unless we have the consent of the Company to acquire a lesser
amount (which consent shall not be unreasonably withheld) we are acquiring
a minimum of 100,000 Securities or, if the total number of Securities
owned by the transferor is less than 100,000, such lesser amount.
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47
5. You and your counsel are entitled to rely upon this letter and
you are irrevocably authorized to produce this letter or a copy hereof to
any interested party in any administrative or legal proceeding or official
inquiry with respect to the matters covered hereby.
Very truly yours,
_______________________________________
(Name of Purchaser)
By:
____________________________________
Date:
_________________________________
Upon transfer the Securities would be registered in the name of the
new beneficial owner as follows:
Name:______________________________
Address:___________________________
Taxpayer ID Number:________________
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