EXHIBIT 4.2
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WARRANT AGREEMENT
between
EXIDE CORPORATION
and
THE BANK OF NEW YORK,
as Warrant Agent
Dated as of September 29, 2000
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Table of Contents
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(continued)
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ARTICLE I
CERTAIN DEFINITIONS
ARTICLE II
ORIGINAL ISSUE OF WARRANTS
Section 2.1. Form of Warrant Certificates............................... 6
Section 2.2. Restrictive Legends........................................ 6
Section 2.3. Execution and Delivery of Warrant Certificates............. 8
ARTICLE III
EXERCISE PRICE, EXERCISE AND REPURCHASE OF WARRANTS
Section 3.1. Exercise Price............................................. 8
Section 3.2. Exercise; Restrictions on Exercise......................... 8
Section 3.3. Method of Exercise; Payment of Exercise Price.............. 9
Section 3.4. Repurchase Offers.......................................... 10
ARTICLE IV
ADJUSTMENTS
Section 4.1. Adjustments................................................ 14
Section 4.2. Notice of Adjustment....................................... 24
Section 4.3. Statement on Warrants...................................... 25
Section 4.4. Notice of Consolidation, Merger, Etc....................... 25
Section 4.5. Fractional Interests....................................... 25
Section 4.6. When Issuance or Payment May Be Deferred................... 25
Section 4.7. No Dilution or Impairment.................................. 26
ARTICLE V
LOSS OR MUTILATION
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ARTICLE VI
RESERVATION AND AUTHORIZATION OF COMMON SHARES
ARTICLE VII
WARRANT TRANSFER BOOKS; RESTRICTIONS ON TRANSFER
Section 7.1. Transfer and Exchange......................................... 27
Section 7.2. Special Transfer Provisions................................... 28
Section 7.3. Surrender of Warrant Certificates............................. 29
ARTICLE VIII
WARRANT HOLDERS
Section 8.1. Warrant Holder Deemed Not a Stockholder....................... 30
Section 8.2. Right of Action............................................... 30
ARTICLE IX
REMEDIES
Section 9.1. Defaults...................................................... 30
Section 9.2. Payment Obligations........................................... 31
Section 9.3. Remedies; No Waiver........................................... 31
ARTICLE X
THE WARRANT AGENT
Section 10.1. Duties and Liabilities........................................ 31
Section 10.2. Right to Consult Counsel...................................... 33
Section 10.3. Compensation; Indemnification................................. 33
Section 10.4. No Restrictions on Actions.................................... 34
Section 10.5. Discharge or Removal; Replacement Warrant Agent............... 34
Section 10.6. Successor Warrant Agent....................................... 35
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ARTICLE XI
MISCELLANEOUS
Section 11.1. Monies Deposited with the Warrant Agent......................... 35
Section 11.2. Payment of Taxes................................................ 35
Section 11.3. No Merger, Consolidation or Sale of Assets of the Company....... 36
Section 11.4. Reports to Holders.............................................. 36
Section 11.5. Notices; Payment................................................ 36
Section 11.6. Binding Effect.................................................. 37
Section 11.7. Counterparts.................................................... 37
Section 11.8. Amendments...................................................... 38
Section 11.9. Headings........................................................ 38
Section 11.10 Common Shares Legend............................................ 38
Section 11.11 Third Party Beneficiaries....................................... 39
Section 11.12 Termination..................................................... 40
Section 11.13 Governing Law................................................... 40
EXHIBIT A FORM OF WARRANT CERTIFICATE
EXHIBIT B FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
WITH TRANSFERS PURSUANT TO REGULATION S
EXHIBIT C-1 FORM OF CERTIFICATE TO BE DELIVERED BY TRANSFEROR
IN CONNECTION WITH TRANSFERS TO INSTITUTIONAL
ACCREDITED INVESTORS
EXHIBIT C-1 FORM OF CERTIFICATE TO BE DELIVERED BY
TRANSFEREES IN CONNECTION WITH TRANSFERS TO
INSTITUTIONAL ACCREDITED INVESTORS
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WARRANT AGREEMENT
WARRANT AGREEMENT, dated as of September 29, 2000 (this "Agreement"),
between EXIDE CORPORATION, a Delaware corporation (the "Company"), and THE BANK
OF NEW YORK, a New York banking corporation (the "Warrant Agent").
W I T N E S S E T H:
WHEREAS, pursuant to the terms of an Investment Agreement dated
September 29, 2000 (the "Investment Agreement"), among the Company and the
initial investors party thereto (the "Initial Investors"), the Company has
agreed to issue to the Initial Investors an aggregate of 786,000 warrants (each,
an "Initial Warrant" and collectively, the "Initial Warrants"), each Initial
Warrant initially entitling the holder thereof to purchase one (1) share of
Common Stock (as defined below) of the Company at an exercise price of $8.99 per
Common Share (as defined below), concurrently with the funding of the Additional
Tranche B Term Loans (as defined in the Investment Agreement);
WHEREAS, the Additional Tranche B Term Loans and the Initial Warrants
will be, immediately upon issuance, separately transferable;
WHEREAS, the Company has agreed (subject to approval of its board of
directors) to issue to, or to the order of, Credit Suisse First Boston and
Xxxxxxx Xxxxx Xxxxxx Inc. an aggregate of 500,000 additional Warrants (each, an
"Additional Warrant" and collectively, the "Additional Warrants," and each
Initial Warrant or Additional Warrant, a "Warrant," and the Initial Warrants and
Additional Warrants collectively, the "Warrants"), each Warrant initially
entitling the holder thereof to purchase one (1) share of Common Stock (as
defined below) of the Company at an exercise price of $8.99 per Common Share (as
defined below); and
WHEREAS, the Company desires to engage the Warrant Agent to act on the
Company's behalf, and the Warrant Agent desires to act on behalf of the Company,
in connection with the issuance of the Warrant Certificates (as defined below)
and the other matters as provided herein, including, without limitation, for the
purpose of defining the terms and provisions of the Warrants and the respective
rights and obligations thereunder of the Company and the record holders thereof
(together with the holders of shares of Common Stock (or other securities)
received upon exercise thereof, the "Holders");
NOW, THEREFORE, in consideration of the foregoing and of the mutual
agreements contained herein and in the Investment Agreement, the Company and the
Warrant Agent hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
"Affiliate" means, as applied to any Person, any other Person directly
or indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Additional Warrant" has the meaning specified in the recitals to this
Agreement.
"Auditors" means, at any time, the independent auditors of the Company
at such time.
"Board" means the board of directors of the Company from time to time.
"Business Day" means a day except a Saturday, Sunday or other day on
which commercial banks in The City of New York, or in the city of the principal
corporate trust office of the Warrant Agent, are authorized by law to close.
"Certificate for Surrender" means the form on the reverse side of the
Warrant Certificate substantially in the form of Exhibit A hereto.
"Closing Date" means the date hereof.
"Commission" means the United States Securities and Exchange
Commission.
"Common Shares" means the shares of the Common Stock of the Company.
"Common Stock" means the Common Stock, par value $0.01 per share, of
the Company and any other capital stock of the Company into which such Common
Stock may be converted or reclassified or that may be issued in respect of, in
exchange for or in substitution for such Common Stock by reason of any stock
splits, stock dividends, distributions, mergers, consolidations or other like
events.
"Company" has the meaning specified in the preamble to this Agreement.
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"Current Market Value" has the meaning specified in Section 4.1(f)
hereof.
"Default" has the meaning specified in Section 9.1 hereof.
"Exchange Act" means the United States Securities Exchange Act of
1934, as amended.
"Exercise Price" has the meaning specified in Section 3.1 hereof.
"Expiration Date" means March 18, 2006.
"Final Surrender Time" has the meaning specified in Section 3.4
hereof.
"Financial Expert" means any investment banking firm reasonably agreed
to by the Company and the Requisite Holders (as defined in the Registration
Rights Agreement).
"Holders" has the meaning specified in the recitals to this Agreement.
"Independent Financial Expert" means a Financial Expert that does not
(and, to the knowledge of the Company after due inquiry, whose directors,
executive officers and 5% stockholders do not) have a direct or indirect
financial interest in the Company or any of its subsidiaries or Affiliates,
which has not been for at least five years and, at the time that it is called
upon to give independent financial advice to the Company, is not (and, to the
knowledge of the Company after due inquiry, none of its directors, executive
officers or 5% stockholders is) a promoter, director or officer of the Company
or any of its subsidiaries or Affiliates.
"Initial Warrant" has the meaning specified in the recitals to this
Agreement.
"Institutional Accredited Investor" shall mean an institution that is
an "accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or
(7) of Regulation D under the Securities Act.
"Investment Agreement" has the meaning specified in the recitals to
this Agreement.
"Notice Date" has the meaning specified in Section 3.4(b) hereof.
"Officer" means, with respect to the Company, (i) the Chairman of the
Board, the Chief Executive Officer, the Chief Financial Officer, the President,
or any
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Vice President or (ii) the Treasurer or any Assistant Treasurer, the Secretary
or any Assistant Secretary.
"Officers' Certificate" means a certificate signed by one Officer
listed in clause (i) of the definition thereof and one Officer listed in clause
(ii) of the definition thereof; provided, however, that any such certificate may
be signed by any two of the Officers listed in clause (i) of the definition
thereof in lieu of being signed by one Officer listed in clause (i) of the
definition thereof and one Officer listed in clause (ii) of the definition
thereof.
"Opinion of Counsel" means a written opinion signed by legal counsel
who may be an employee of or counsel to the Company.
"Person" means an individual, general partnership, limited
partnership, corporation, trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"Private Placement Legend" means the legend set forth on the Warrant
Certificates in the form set forth in Section 2.2(a) hereof.
"Reference Security" has the meaning specified in Section 4.1(k)
hereof.
"Relevant Value" has the meaning specified in Section 3.4(d) hereof.
"Repurchase Event" means, and shall be deemed to occur on, any date
when (i) the Company consolidates with or merges into or with another person
(but only where the holders of Common Stock receive consideration in exchange
for all or part of such Common Stock), if the Common Stock (or other securities)
thereafter issuable upon exercise of the Warrants is not registered under the
Exchange Act or (ii) the Company sells all or substantially all of its assets to
another person, if the Common Stock (or other securities) thereafter issuable
upon exercise of the Warrants is not registered under the Exchange Act provided
that, in the case of this clause (ii), a "Repurchase Event" shall not be deemed
to have occurred if the consideration for such transaction consists solely of
cash, or (iii) the Company or any subsidiary of the Company purchases Common
Shares pursuant to a tender offer or an exchange offer for a price per Common
Share that is greater than the then Current Market Value per Common Share in
effect at the end of the trading day immediately following the day on which such
tender offer or exchange offer expires.
"Repurchase Notice" has the meaning specified in Section 3.4(a)
hereof.
"Repurchase Obligation" has the meaning specified in Section 9.2
hereof.
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"Repurchase Offer" means the Company's offer to repurchase the
Warrants in accordance with Section 3.4 hereof.
"Repurchase Price" has the meaning specified in Section 3.4(d) hereof.
"Right" has the meaning specified in Section 4.1(c) hereof.
"Securities Act" means the United States Securities Act of 1933, as
amended.
"Securities Offering" means a bona fide public offering or private
placement (to five or more investors) pursuant to Section 4(2) of the Securities
Act, Regulation D thereunder or Regulation S thereunder, made through at least
one investment bank of national standing.
"Spread" means, with respect to any Warrant, the Current Market Value
of the Common Shares subject to such Warrant, less the Exercise Price of such
Warrant, in each case as adjusted as provided herein.
"Subscription Form" means the form on the reverse side of the Warrant
Certificate substantially in the form of Exhibit A hereto.
"Underlying Securities" shall mean the Common Shares (or other
securities) issuable upon exercise of the Warrants.
"Valuation Date" means the date five Business Days prior to the Notice
Date.
"Value Certificate" has the meaning specified in Section 3.4 hereof.
"Value Report" has the meaning specified in Section 4.1(k) hereof.
"Warrant" has the meaning specified in the recitals to this Agreement.
"Warrant Agent" has the meaning specified in the preamble to this
Agreement until a successor Warrant Agent replaces it in accordance with the
provisions of Section 10.5 and thereafter means such successor.
"Warrant Certificates" has the meaning specified in Section 2.1
hereof.
"Warrant Registration Rights Agreement" means the Registration Rights
Agreement, dated the date hereof, between the Company and the Initial Investors.
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ARTICLE II
ORIGINAL ISSUE OF WARRANTS
Section 2.1. Form of Warrant Certificates. Certificates representing
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the Warrants (the "Warrant Certificates") shall be substantially in the form
attached hereto as Exhibit A, shall be dated the date on which such Warrant
Certificates are countersigned by the Warrant Agent and shall have such
insertions as are appropriate or required or permitted by this Agreement and may
have such letters, numbers or other marks of identification and such legends and
endorsements stamped, printed, lithographed or engraved thereon as the Company
may deem appropriate and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any law or with any rule or
regulation pursuant thereto or with any rule or regulation of any securities
exchange on which the Warrants may be listed, or to conform to usage.
Warrants shall be issued initially in registered form
substantially in the form set forth in Exhibit A. The definitive Warrant
Certificates shall be typed, printed, lithographed or engraved or produced by
any combination of these methods or may be produced in any other manner
permitted by the rules of any securities exchange on which the Warrants may be
listed, all as determined by the officers executing such Warrant Certificates,
as evidenced by their execution of such Warrant Certificates.
Section 2.2. Restrictive Legends.
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The Warrant Certificates, shall, subject to Section 7.2(c) hereof,
bear substantially the following legend on the face thereof:
THE WARRANTS REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR
FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN
"INSTITUTIONAL ACCREDITED INVESTOR") OR (B) IT IS NOT A U.S. PERSON AND IS
ACQUIRING THE WARRANTS REPRESENTED BY THIS CERTIFICATE IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, OR
(C) IT IS A PERSON OTHERWISE ELIGIBLE TO ACQUIRE THE WARRANTS IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, (2) AGREES THAT IT WILL NOT, WITHIN THE
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TIME PERIOD REFERRED TO UNDER RULE 144(k) UNDER THE SECURITIES ACT AS IN
EFFECT WITH RESPECT TO SUCH TRANSFER, RESELL OR OTHERWISE TRANSFER THE
WARRANTS REPRESENTED BY THIS CERTIFICATE EXCEPT (A) TO EXIDE CORPORATION
(THE "COMPANY") OR ANY SUBSIDIARY THEREOF, (B) TO AN INSTITUTIONAL
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE WARRANT
AGENT A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THE WARRANTS REPRESENTED BY
THIS CERTIFICATE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE WARRANT
AGENT), (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT SUBJECT TO ANY
CERTIFICATION AND DELIVERY REQUIREMENTS CONTAINED IN THE WARRANT AGREEMENT
GOVERNING THE WARRANTS, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (E) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (F) IN
ANOTHER TRANSACTION EXEMPT FROM OR NOT SUBJECT TO THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THE WARRANTS REPRESENTED BY THIS CERTIFICATE ARE
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THE WARRANTS REPRESENTED BY THIS
CERTIFICATE WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK
THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER
OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE WARRANT AGENT. IF THE
PROPOSED TRANSFER IS PURSUANT TO CLAUSE (B) or (F) OF THE PRECEDING
SENTENCE, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO EACH OF THE
WARRANT AGENT AND THE COMPANY SUCH CERTIFICATIONS OR OTHER INFORMATION AS
EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS
BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE WARRANT
AGREEMENT CONTAINS A PROVISION REQUIRING THE WARRANT AGENT TO REFUSE TO
REGISTER ANY TRANSFER OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IN
VIOLATION OF THE FOREGOING RESTRICTIONS.
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Section 2.3. Execution and Delivery of Warrant Certificates. Warrant
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Certificates evidencing 786,000 Initial Warrants and 500,000 Additional
Warrants, each Warrant to purchase initially one (1) Common Share, may be
executed, on or after the date of this Agreement, by the Company and delivered
to the Warrant Agent for countersignature, and the Warrant Agent shall thereupon
countersign and deliver such Warrant Certificates upon the order and at the
written direction of the Company signed by its Chief Executive Officer or other
duly authorized executive officer to the purchasers thereof on the date of
issuance. The Warrant Agent is hereby authorized to countersign and deliver
Warrant Certificates as required by this Section 2.3 or by Section 3.3, Article
V or Article VII hereof.
The Warrant Certificates shall be executed on behalf of the Company by
its Chairman of the Board, Chief Executive Officer, President, any Vice
President or other duly authorized executive officer of the Company either
manually or by facsimile signature printed thereon. The Warrant Certificates
shall be countersigned by manual signature of the Warrant Agent and shall not be
valid for any purpose unless so countersigned.
In case any officer or director of the Company whose signature shall
have been placed upon any of the Warrant Certificates shall cease to be such
officer or director of the Company before countersignature by the Warrant Agent
and the issuance and delivery thereof, such Warrant Certificates may
nevertheless be countersigned by the Warrant Agent and issued and delivered with
the same force and effect as though such person had not ceased to be such
officer or director of the Company.
ARTICLE III
EXERCISE PRICE, EXERCISE AND REPURCHASE OF WARRANTS
Section 3.1. Exercise Price.
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Each Warrant Certificate shall, when countersigned by the
Warrant Agent, initially entitle the Holder thereof, subject to the provisions
of this Agreement, to purchase the number of Common Shares indicated thereon at
a purchase price (the "Exercise Price") of $8.99 per Common Share, subject to
adjustment as provided in Section 4.1 hereof.
Section 3.2. Exercise; Restrictions on Exercise.
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At any time after the Closing Date and on or before the
Expiration Date, any outstanding Warrants may be exercised on any Business Day;
provided that (a) a registration statement with the Commission relating to the
Common Shares for which such Warrants are being exercised is, at the time of
exercise, in effect or (b) the exercise
8
of such Warrants is exempt from the registration requirements of the Securities
Act. Any Warrants not exercised by 5:00 p.m., New York City time, on the
Expiration Date shall expire and all rights of the Holders of such Warrants
shall terminate. Additionally, the Warrants shall expire and all rights of the
Holders of such Warrants shall terminate as, when and to the extent provided in
Section 4.1(j)(ii) hereof, in the event the Company merges or consolidates with
or sells all or substantially all of its property and assets to a Person (other
than an Affiliate of the Company) if the consideration payable to holders of
Common Stock in exchange for their Common Stock in connection with such merger,
consolidation or sale consists solely of cash or in the event of the
dissolution, liquidation or winding up of the Company.
Section 3.3. Method of Exercise; Payment of Exercise Price. In order
---------------------------------------------
exercise all or any of the Warrants represented by a Warrant Certificate, the
Holder thereof must surrender for exercise the Warrant Certificate to the
Warrant Agent at its corporate trust office address set forth in Section 11.5
hereof, with the Subscription Form set forth on the reverse of the Warrant
Certificate duly executed, together with payment in full of the Exercise Price
then in effect for each Common Share (or other securities) issuable upon
exercise of the Warrants as to which a Warrant is exercised; such payment may be
made in cash or by certified or official bank or bank cashier's check payable to
the order of the Company and shall be made to the Warrant Agent at its corporate
trust office address set forth in Section 11.5 hereof prior to the close of
business on the date the Warrant Certificate is surrendered to the Warrant Agent
for exercise. Notwithstanding the foregoing, the Exercise Price may be paid by
surrendering additional Warrants to the Warrant Agent having an aggregate Spread
equal to the aggregate Exercise Price of the Warrants being exercised. All
payments received upon exercise of Warrants shall be delivered to the Company by
the Warrant Agent as instructed in writing by the Company. If less than all the
Warrants represented by a Warrant Certificate are exercised or surrendered (in
connection with a cashless exercise), such Warrant Certificate shall be
surrendered and a new Warrant Certificate of the same tenor and for the number
of Warrants which were not exercised or surrendered shall be executed by the
Company and delivered to the Warrant Agent and the Warrant Agent shall
countersign the new Warrant Certificate, registered in such name or names as may
be directed in writing by the Holder, and shall deliver the new Warrant
Certificate to the Person or Persons entitled to receive the same. Upon the
exercise of any Warrants following the surrender of a Warrant Certificate in
conformity with the foregoing provisions, the Warrant Agent shall instruct the
Company to transfer promptly to the Holder or, upon the written order of the
Holder of such Warrant Certificate, appropriate evidence of ownership of any
Common Shares or other security or property to which it is entitled, registered
or otherwise placed in such name or names as may be directed in writing by the
Holder, and to deliver such evidence of ownership to the Person or Persons
entitled to receive the same and fractional shares, if any, or an amount in
cash, in lieu of any fractional shares, as provided in Section 4.5 hereof;
provided that the Holder of such Warrant shall be responsible for the payment of
9
any transfer taxes required as the result of any change in ownership of such
Warrants or the issuance of such Common Shares other than to the Holder of such
Warrants and any such transfer shall comply with applicable law. Upon the
exercise of a Warrant or Warrants, the Company shall promptly enter, or cause
any transfer agent of the Common Shares to enter, the name of the person
entitled to receive the Common Shares upon the exercise of such Warrants into
the Company's register of shareholders, and issue certificates (bearing the
legend set forth in Section 11.10 hereof, if applicable, unless a registration
statement with the Commission relating to such Common Shares shall then be in
effect or the Company and the Holder exercising such Warrant or Warrants
otherwise agree) for the number of Common Shares to which said Holder may be
entitled, and deliver such certificate to the Warrant Agent who in turn shall
deliver it to the Person entitled to receive the Common Shares. Upon such
exercise, the Warrant Agent is hereby authorized and instructed to requisition
from any such transfer agent (and all such transfer agents are hereby
irrevocably authorized to comply with all such requests) such certificates. A
Warrant shall be deemed to have been exercised immediately prior to the close of
business on the date of the surrender for exercise, as provided above, of the
Warrant Certificate representing such Warrant and, for all purposes under this
Agreement, the Person entitled to receive any Common Shares upon such exercise
shall, as between such Person and the Company, be deemed to be the Holder of
such Common Shares of record as of the close of business on such date and shall
be entitled to receive, and the Warrant Agent shall make available for delivery
to such Person, any Common Shares to which such Person would have been entitled
had such Person been the registered holder on such date.
Section 3.4. Repurchase Offers.
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(a) Notice of Repurchase Event. Within two Business Days
--------------------------
following the occurrence of a Repurchase Event, the Company shall give notice (a
"Repurchase Notice") to the Holders of the Warrants and the Warrant Agent that
such event has occurred.
(b) Repurchase Offers Generally. Following the occurrence of a
---------------------------
Repurchase Event, the Company shall offer to repurchase for cash or, in the case
of a Repurchase Event that is an exchange offer, at the option of the Holders
for the relevant exchange securities, all outstanding Warrants pursuant to the
provisions of this Section 3.4 (a "Repurchase Offer"). The Company shall give
notice of a Repurchase Offer in accordance with Section 3.4(f) hereof. Each date
on which the Company gives any such notice is referred to as the "Notice Date."
The Repurchase Offer shall commence on the Notice Date for such Repurchase Offer
and shall expire at 5:00 p.m., New York City time, on a date determined by the
Company (the "Final Surrender Time") that is at least 30 but not more than 45
days after the Notice Date. Once a Repurchase Event has
10
occurred, there is no limit on the number of Repurchase Offers that the Company
may make.
(c) Repurchase Offers.
-----------------
(i) In any Repurchase Offer, the Company shall offer to purchase
for cash or, in the case of a Repurchase Event that is an exchange offer,
at the option of the Holders for the relevant exchange securities, at the
Repurchase Price all Warrants outstanding on the Notice Date for such
Repurchase Offer that are properly tendered to the Warrant Agent on or
prior to the Final Surrender Time for such Repurchase Offer.
(ii) Each Holder may, but shall not be obligated to, accept such
Repurchase Offer by tendering to the Warrant Agent, on or prior to the
Final Surrender Time for such Repurchase Offer, the Warrant Certificates
evidencing the Warrants such Holder desires to have repurchased in such
offer, together with a completed Certificate for Surrender in substantially
the form attached to the Warrant Certificate. A Holder may withdraw all or
a portion of the Warrants tendered to the Warrant Agent at any time prior
to the Final Surrender Time for such Repurchase Offer. If less than all the
Warrants represented by a Warrant Certificate shall be tendered, such
Warrant Certificate shall be surrendered and a new Warrant Certificate of
the same tenor and for the number of Warrants which shall not be tendered
shall be executed by the Company and delivered to the Warrant Agent and the
Warrant Agent shall countersign the new Warrant Certificate, registered in
such name or names as may be directed in writing by the Holder, and shall
make available for delivery the new Warrant Certificate to the Person or
Persons entitled to receive the same; provided that the Holder of such
Warrants shall be responsible for the payment of any transfer taxes
required as the result of any change in ownership of such Warrants and any
such transfer shall comply with applicable law.
(d) Repurchase Price.
----------------
(i) The purchase price (the "Repurchase Price") for each warrant
Warrant properly tendered to the Warrant Agent pursuant to a Repurchase
Offer shall, except in the case of a Repurchase Event within the meaning of
clause (iii) of the definition thereof, be equal to the value (the
"Relevant Value") on the Valuation Date of the Common Shares issuable, and
other securities or property of the Company which would have been
delivered, upon exercise of Warrants had the Warrants been exercised
(regardless of whether the Warrants are then exercisable), less the
Exercise Price in effect on the Notice Date for such Repurchase Offer.
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(ii) The Relevant Value of the Common Shares and other securities or
property issuable upon exercise of all the Warrants, on any Valuation Date
shall be:
(1) (A) If the Common Shares (or other securities) are
registered under the Exchange Act, deemed to be the average of the
daily market prices (on the stock exchange that is the primary trading
market for the Common Shares (or other securities)) of the Common
Shares (or other securities) for the 20 consecutive trading days
immediately preceding such Valuation Date or, (B) if the Common Shares
(or other securities) have been registered under the Exchange Act for
less than 20 consecutive trading days before such date, then the
average of the daily market prices for all of the trading days before
such date for which daily market prices are available, in the case of
each of (A) and (B), as certified to the Warrant Agent by the
President, any Vice President or the Chief Financial Officer of the
Company (the "Value Certificate"). The market price for each such
trading day shall be: (A) in the case of a security listed or admitted
to trading on any national securities exchange, the closing sales
price on such day, or if no sale takes place on such day, the average
of the closing bid and asked prices on such day, (B) in the case of a
security not then listed or admitted to trading on any national
securities exchange, the last reported sale price on such day, or if
no sale takes place on such day, the average of the closing bid and
asked prices on such day, as reported by a reputable quotation source
designated by the Company, (C) in the case of a security not then
listed or admitted to trading on any national securities exchange and
as to which no such reported sale price or bid and asked prices are
available, the average of the reported high bid and low asked prices
on such day, as reported by a reputable quotation service, or a
newspaper of general circulation in the Borough of Manhattan, City and
State of New York customarily published on each Business Day,
designated by the Company, or, if there shall be no bid and asked
prices on such day, the average of the high bid and low asked prices,
as so reported, on the most recent day (not more than 30 days prior to
the date in question) for which prices have been so reported and (D)
if there are no bid and asked prices reported during the 30 days prior
to the date in question, the Relevant Value shall be determined as if
the Common Shares (or other securities) were not registered under the
Exchange Act; or
(2) If the Common Shares (or other securities) are not
registered under the Exchange Act or if the value cannot be computed
under clause (1) above, deemed to be equal to the value set forth in
the Value Report (as defined below) as determined by an Independent
12
Financial Expert, which shall be selected by the Board in accordance
with Section 3.4(e) hereof, and retained on customary terms and
conditions, using one or more valuation methods that the Independent
Financial Expert, in its best professional judgment, determines to be
most appropriate but without giving effect to any discount for lack of
liquidity, the fact that the Company has no class of equity securities
registered under the Exchange Act or the fact that the Common Shares
and other securities or property issuable upon exercise of the
Warrants represent a minority interest in the Company. The Company
shall cause the Independent Financial Expert to deliver to the
Company, with a copy to the Warrant Agent, within 45 days of the
appointment of the Independent Financial Expert in accordance with
Section 3.4(e) hereof, a value report (the "Value Report") stating the
Relevant Value of the Common Shares and other securities or property
of the Company, if any, being valued as of the Valuation Date and
containing a brief statement as to the nature and scope of the
methodologies upon which the determination of Relevant Value was made.
The Warrant Agent shall have no duty with respect to the Value Report
of any Independent Financial Expert, except to keep it on file and
available for inspection by the Holders. The determination as to
Relevant Value in accordance with the provisions of this Section
3.4(d) shall be conclusive on all Persons. The Independent Financial
Expert shall consult with management of the Company in order to allow
management to comment on the proposed Relevant Value prior to delivery
to the Company of any Value Report of the Independent Financial
Expert.
(iii) The Repurchase Price for each Warrant properly tendered to the
Warrant Agent pursuant to a Repurchase Offer with respect to a Repurchase
Event within the meaning of clause (iii) of the definition thereof shall be
equal to the price that would have been paid for the Common Shares
represented by such Warrant had such Warrant been exercised and such Common
Shares tendered or exchanged in the relevant tender offer or exchange
offer.
(e) Selection of Independent Financial Expert. If clause (d)(ii)(2)
-----------------------------------------
of this Section 3.4 is applicable, the Board shall select an Independent
Financial Expert not more than two Business Days following a Repurchase Event.
Within four Business Days following a Repurchase Event, the Company shall
deliver to the Warrant Agent a notice setting forth the name of the Independent
Financial Expert.
(f) Notice of Repurchase Offer. Each notice of a Repurchase Offer
--------------------------
(an "Offer Notice") given by the Company pursuant to Section 3.4(b) shall be
given by the Company directly to all Holders of the Warrants, with a copy to the
Warrant Agent, shall be given simultaneously with the Repurchase Notice (or, in
the event that Section
13
3.4(d)(ii) is applicable and the Relevant Value of the Common Shares or other
securities or property issuable upon exercise of all the Warrants cannot be
determined pursuant to Section 3.4(d)(ii)(1), then such Offer Notice shall be
given within two Business Days after the Company receives the Value Report with
respect to such offer) and shall specify (A) the Final Surrender Time for such
Repurchase Offer, (B) the manner in which Warrants may be surrendered to the
Warrant Agent for repurchase by the Company, (C) the Repurchase Price at which
the Warrants will be repurchased by the Company, (D) if applicable, the name of
the Independent Financial Expert whose valuation of the Common Shares and other
securities or property was utilized in connection with determining such
Repurchase Price and (E) that payment of the Repurchase Price will be made by
the Warrant Agent. Each such notice shall be accompanied by a Certificate for
Surrender for Repurchase Offer in substantially the form attached to the Warrant
Certificate and a copy of the Value Report, if any.
(g) Payment for Warrants. Upon surrender for repurchase of any
--------------------
Warrants in conformity with the provisions of this Section 3.4, the Warrant
Agent shall thereupon promptly notify the Company of such surrender. On or
before the Final Surrender Time for any Repurchase Offer, the Company shall
deposit with the Warrant Agent funds sufficient to make payment for the Warrants
tendered to the Warrant Agent and not withdrawn. After receipt of such deposit
from the Company, the Warrant Agent shall make payment, by delivering a check in
such amount as is appropriate, to such Person or Persons as it may be directed
in writing by the Holder surrendering such Warrants, net of any transfer taxes
required to be paid in the event that the check is to be delivered to a Person
other than the Holder.
(h) Compliance with Laws. Notwithstanding anything contained in this
--------------------
Section 3.4, if the Company is required to comply with laws, rules, regulations
and securities exchange or clearing procedures, in connection with making any
Repurchase Offer, such laws, rules, regulations and procedures shall govern the
making of such Repurchase Offer.
ARTICLE IV
ADJUSTMENTS
Section 4.1. Adjustments. The Exercise Price and the number of Common
-----------
Shares issuable upon exercise of each Warrant shall be subject to adjustment
from time to time as follows:
(a) Divisions; Consolidations; Reclassifications. In case the Company
--------------------------------------------
shall, on or before the Expiration Date, (i) issue any Common Shares in payment
of a dividend or other distribution with respect to its Common Stock or other
shares of capital stock, (ii) subdivide its issued and outstanding Common
Shares, (iii) consolidate its
14
issued and outstanding Common Shares into a smaller number of shares, or (iv)
reclassify or convert the Common Shares (other than a reclassification in
connection with a merger, consolidation or other business combination governed
by Section 4.1(j)), then the number of Common Shares purchasable upon exercise
of each Warrant immediately prior to the record date for such issue or
distribution or the effective date of such subdivision, consolidation,
reclassification or conversion shall be adjusted so that the Holder of each
Warrant shall thereafter be entitled to receive the kind and number of Common
Shares which such Holder would have been entitled to receive after the happening
of any of the events described above had such Warrant been exercised immediately
prior to the happening of such event or any record date with respect thereto. An
adjustment made pursuant to this Section 4.1(a) shall become effective
immediately after the effective date of such event retroactive to the record
date, if any, for such event.
(b) Rights; Options; Warrants. In case the Company shall issue
-------------------------
rights, options, warrants or convertible or exchangeable securities (other than
an issuance of convertible or exchangeable securities subject to Section 4.1(a))
to all holders of its Common Shares, entitling them to subscribe for or purchase
Common Shares at a price per share which is lower (at the record date for such
issuance) than the then Current Market Value per Common Share, then the Company
shall ensure that at the time of such issuance, the same or a like offer or
invitation is made to the Holders of the Warrants as if their Warrants had been
exercised on the day immediately preceding the record date of such offer or
invitation on the terms (subject to any adjustment pursuant to Section 4.1(a)
for a prior event) on which such Warrants could have been exercised on such
date; provided that if the Board so resolves, the Company shall not be required
to ensure that the same offer or invitation is made to the Holders of the
Warrants, but the number of Common Shares thereafter purchasable upon the
exercise of each Warrant shall instead be adjusted and shall be determined by
multiplying the number of Common Shares theretofore purchasable upon exercise of
each Warrant by a fraction, the numerator of which shall be the sum of (i) the
number of Common Shares outstanding immediately prior to the issuance of such
rights, options, warrants or convertible or exchangeable securities plus (ii)
the number of additional Common Shares which may be purchased or subscribed for
upon exercise, exchange or conversion of such rights, options, warrants or
convertible or exchangeable securities and the denominator of which shall be the
sum of (x) the number of Common Shares outstanding immediately prior to the
issuance of such rights, options, warrants or convertible or exchangeable
securities plus (y) the number of shares which the total consideration received
by the Company for such rights, options, warrants or convertible or exchangeable
securities so offered would purchase at the then Current Market Value per Common
Share.
In the event that the Company decreases the purchase price per share
of any outstanding rights, options, warrants or convertible or exchangeable
securities (other than under or as a result of provisions designed to protect
against dilution of the type set
15
forth in this Article IV), then the number of Common Shares thereafter issuable
upon exercise of each Warrant shall be determined by multiplying the number of
Common Shares theretofore issuable upon exercise of each Warrant by a fraction,
the numerator of which shall be the number of outstanding Common Shares plus the
number of Common Shares which may thereafter be purchased or subscribed for upon
exercise, exchange or conversion of such rights, options, warrants or
convertible or exchangeable securities and the denominator of which shall be (x)
the number of outstanding Common Shares plus (y) the number of Common Shares
which the aggregate decreased purchase price would have purchased at the then
Current Market Value per Common Share.
In the event that the Company increases the number of Common Shares
which may be purchased or subscribed for upon exercise, exchange or conversion
of any outstanding rights, options, warrants or convertible or exchangeable
securities (other than under or as a result of provisions designed to protect
against dilution of the type set forth in this Article IV), then the number of
Common Shares thereafter issuable upon exercise of each Warrant shall be
determined by multiplying the number of Common Shares theretofore issuable upon
exercise of each Warrant by a fraction, the numerator of which shall be the
number of outstanding Common Shares plus the number of Common Shares which may
thereafter be purchase or subscribed for upon exercise, exchange or conversion
of such rights, option, warrants or convertible or exchangeable securities and
the denominator of which shall be (x) the number of outstanding Common Shares
plus (y) the number of Common Shares which theretofore could have been purchase
or subscribed fro upon exercise, exchange or conversion of such rights, options,
warrants or convertible or exchangeable securities.
Except as otherwise provided above or in Section 4.1(m), such
adjustment shall be made whenever such rights, options, warrants or convertible
or exchangeable securities are issued, or the date of any such decrease in
purchase price or such increase in underlying Common Shares, and shall become
effective retroactively immediately after the record date for the determination
of stockholders entitled to receive such rights, options, warrants or
convertible or exchangeable securities or to such decrease or increase.
(c) Issuance of Common Shares at Lower Values. In case the shall sell
-----------------------------------------
and issue any Common Share or Right (as defined below) (excluding (i) any Right
issued in any of the transactions described in Section 4.1(a) or (b) above and
(ii) Common Shares issued pursuant to the Warrants or any Right issued in any
transaction described in Section 4.1(a) or (b) above and (iii) Common Shares or
Rights issued as consideration when any corporation or business is acquired,
merged into or becomes part of the Company or a subsidiary of the Company in an
arm's-length transaction between the Company and a Person other than an
Affiliate of the Company) at a price per Common Share (determined in the case of
any such Right, by dividing (x) the
16
total consideration receivable by the Company in consideration of the sale and
issuance of such Right, plus the total consideration payable to the Company upon
exercise, conversion or exchange thereof, by (y) the total number of Common
Shares covered by such Right) that is lower than the Current Market Value per
Common Share in effect immediately prior to the date of such sale or issuance
(or, in the case of a Securities Offering of Common Shares or Rights, the date
not more than five business days prior to the date of such sale or issuance on
which the Company fixes the price therefor) then the number of Common Shares
thereafter purchasable upon the exercise of each Warrant shall be determined by
multiplying the number of Common Shares theretofore purchasable upon exercise of
such Warrant by a fraction, the numerator of which shall be the number of Common
Shares outstanding immediately after such sale or issuance and the denominator
of which shall be the number of Common Shares outstanding immediately prior to
such sale or issuance plus the number of Common Shares which the aggregate
consideration received (determined as provided below) for such sale or issuance
would purchase at such Current Market Value per Common Share. For purposes of
this Section 4.1(c), the Common Shares which the holder of any such Right shall
be entitled to subscribe for or purchase shall be deemed to be issued and
outstanding as of the date of sale and issuance of such Right and the
consideration received by the Company therefor shall be deemed to be the
consideration received by the Company for such Right, plus the consideration or
premiums stated in such Right to be paid for the Common Shares covered thereby.
In case the Company shall sell and issue any Right together with one or more
other securities as part of a unit at a price per unit, then in determining the
"price per Common Share" and the "consideration received by the Company" for
purposes of the first sentence of this Section 4.1(c), the Board shall
determine, in good faith, the fair value of the Right then being sold as part of
such unit. For purposes of this paragraph, a "Right" shall mean any right,
option, warrant or convertible or exchangeable security containing the Right to
subscribe for or acquire one or more Common Shares, excluding the Warrants.
(d) Distributions of Debt, Assets, Subscription Rights or Convertible
-----------------------------------------------------------------
Securities. In case the Company shall make a distribution to holders of its
----------
Common Shares of (i) evidences of its indebtedness, or assets, or other
dividends or distributions, or (ii) any options, warrants or other rights to
subscribe for or purchase any of the foregoing (excluding (1) regular periodic
dividends not exceeding $600,000 in the aggregate in any fiscal quarter, (2) any
issuance of Common Shares referred to in Section 4.1(a) above, (3) distributions
in connection with the dissolution, liquidation or winding- up of the Company
governed by Section 4.1(j) and (4) distributions of securities referred to in
Section 4.1(a), Section 4.1(b) or Section 4.1(c)), then, in each case, the
number of Common Shares purchasable after the record date for the determination
of stockholders entitled to receive such distribution (or the date provided for
in Section 4.1(m), if applicable) upon the exercise of each Warrant, shall be
determined by multiplying the number of Common Shares purchasable upon the
exercise of such Warrant immediately
17
prior to such date by a fraction, the numerator of which shall be the Current
Market Value per Common Share immediately prior to such date and the denominator
of which shall be the Current Market Value per Common Share immediately prior to
such date less (a) any cash so distributed per Common Share plus (b) the then
fair value (as determined in good faith by the Board and set forth in a Board
resolution delivered to the Warrant Agent and, upon request, to any Holder) of
the evidences of its indebtedness, or non-cash assets or other non-cash
dividends or distributions, options or subscription or purchase rights so
distributed attributable to one Common Share (notwithstanding the foregoing, if
the fair value in the above formula equals or exceeds the Current Market Value
per Common Share, then the Current Market Value per Common Share shall be equal
to such fair value). Such adjustment shall be made whenever any such
distribution is made, and shall become effective on the date of distribution
retroactive to the record date for the determination of stockholders entitled to
receive such distribution (or the date provided for in Section 4.1(m), if
applicable).
(e) Expiration of Rights, Options and Conversion Privileges. Upon the
-------------------------------------------------------
expiration of any rights, options, warrants or conversion or exchange privileges
(including, without limitation, any Rights) that have previously resulted in an
adjustment hereunder, if any thereof shall not have been exercised, exchanged or
converted, the Exercise Price and the number of Common Shares issuable upon the
exercise of each Warrant shall, upon such expiration, be readjusted and shall
thereafter, upon any future exercise, be such as they would have been had they
been originally adjusted (or had the original adjustment not been required, as
the case may be) as if (i) the only Common Shares so issued were the Common
Shares, if any, actually issued or sold upon the exercise, exchange or
conversion of such rights, options, warrants or conversion or exchange rights
(including, without limitation, any Rights) and (ii) such Common Shares, if any,
were issued or sold for the consideration actually received by the Company upon
such exercise, exchange or conversion plus the consideration, if any, actually
received by the Company for issuance, sale or grant of all such rights, options,
warrants or conversion or exchange rights (including, without limitation, any
Rights) whether or not exercised; provided, however, that no such readjustment
shall (except by reason of an intervening adjustment under Section 4.1(a)) have
the effect of decreasing the number of Common Shares issuable upon the exercise
of each Warrant by an amount in excess of the amount of the adjustment initially
made in respect of the issuance, sale or grant of such rights, options, warrants
or conversion exchange privileges.
(f) Current Market Value. For the purposes of any computation under
--------------------
this Article IV, the "Current Market Value" per Common Share or of any other
security (herein collectively referred to as a "security") at any date herein
specified shall be:
(i) if the security is not registered under the Exchange Act, the
value of the security (1) most recently determined as of a date within
the six months
18
preceding such date by an Independent Financial Expert selected by the Company
in accordance with the criteria for such valuation set out in Section 4.1(k), or
(2) if no such determination shall have been made within such six-month period
or if the Company so chooses, determined as of such a date by an Independent
Financial Expert selected by the Company in accordance with the criteria for
such valuation set out in Section 4.1(k), or
(ii) if the security is registered under the Exchange Act, the average
of the daily market prices of the security for the 20 consecutive trading days
immediately preceding such date or, if the security has been registered under
the Exchange Act for less than 20 consecutive trading days before such date,
then the average of the daily market prices for all of the trading days before
such date for which daily market prices are available. The market price for each
such trading day shall be: (A) in the case of a security listed or admitted to
trading on any national securities exchange, the closing sales price, regular
way, on such day, or if no sale takes place on such day, the average of the
closing bid and asked prices on such day on the principal national securities
exchange on which such security is listed or admitted, as determined by the
Board in good faith, (B) in the case of a security not then listed or admitted
to trading on any national securities exchange, the last reported sale price on
such day, or if no sale takes place on such day, the average of the closing bid
and asked prices on such day, as reported by a reputable quotation source
designated by the Company, (C) in the case of a security not then listed or
admitted to trading on any national securities exchange and as to which no such
reported sale price or bid and asked prices are available, the average of the
reported high bid and low asked prices on such day, as reported by a reputable
quotation service, or a newspaper of general circulation in the Borough of
Manhattan, City and State of New York customarily published on each Business
Day, designated by the Company, or, if there shall be no bid and asked prices on
such day, the average of the high bid and low asked prices, as so reported, on
the most recent day (not more than 30 days prior to the date in question) for
which prices have been so reported and (D) if there are no bid and asked prices
reported during the 30 days prior to the date in question, the Current Market
Value of the security shall be determined as if the security were not registered
under the Exchange Act.
(g) Consideration Received. For purposes of any computation
----------------------
respecting consideration received pursuant to this Section 4.1, the following
shall apply:
(i) in the case of the issuance of Common Shares for cash, the
consideration shall be the amount of such cash, provided that in no case
shall any deduction be made for any commissions, discounts or other
expenses incurred by
19
the Company for any underwriting of the issue or otherwise in connection
therewith;
(ii) in the case of the issuance of Common Shares for a consideration
in whole or in part other than cash, the consideration other than cash
shall be deemed to be the fair market value thereof as determined in good
faith by the Board (irrespective of the accounting treatment thereof),
whose determination shall be conclusive and described in reasonable detail
in a Board resolution which shall be provided promptly thereafter to the
Warrant Agent and (upon request) to any Holder; and
(iii) in the case of the issuance of rights, options, warrants or
securities convertible into or exchangeable for Common Shares (including,
without limitation, any Rights), the aggregate consideration received
therefor shall be deemed to be the consideration received by the Company
for the issuance of such rights, options, warrants or securities
convertible into or exchangeable for Common Shares, plus the additional
minimum consideration, if any, to be received by the Company upon the
exercise, conversion or exchange thereof (the consideration in each case to
be determined in the same manner as provided in clauses (i) and (ii) of
this Section 4.1(g)).
(h) De Minimis Adjustments. No adjustment in the number of Common
----------------------
Shares purchasable hereunder shall be required unless such adjustment would
require an increase or decrease of at least one percent (1%) in the number of
Common Shares purchasable upon the exercise of each Warrant; provided, however,
that any adjustments which by reason of this Section 4.1(h) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations shall be made to the nearest one-ten-billionth of a
share.
(i) Adjustment of Exercise Price. Whenever the number of Common
----------------------------
Shares purchasable upon the exercise of each Warrant is adjusted, as herein
provided, the Exercise Price per Common Share payable upon exercise of such
Warrant shall be adjusted (calculated to the nearest $0.01) so that it shall
equal the price determined by multiplying such Exercise Price immediately prior
to such adjustment by a fraction the numerator of which shall be the number of
Common Shares purchasable upon the exercise of each Warrant immediately prior to
such adjustment and the denominator of which shall be the number of Common
Shares so purchasable immediately thereafter.
If after an adjustment, a Holder of a Warrant upon exercise of it may
receive shares of two or more classes in the capital of the Company, the Company
shall determine the allocation of the adjusted Exercise Price between such
classes of shares in a manner that the Board deems fair and equitable to the
Holders. After such allocation, the
20
exercise privilege and the Exercise Price of each class of shares shall
thereafter be subject to adjustment on terms comparable to those applicable to
Common Shares in this Article IV.
Such adjustment shall be made successively whenever any event listed
above shall occur.
(j) Consolidation, Merger, Etc.
--------------------------
(i) Subject to the provisions of Subsection (ii) below of this
Section 4.1(j), in case of the consolidation of the Company with, or merger
of the Company with or into, or of the sale of all or substantially all of
the properties and assets of the Company to, any Person, and in connection
therewith consideration is payable to holders of Common Shares (or other
securities or property purchasable upon exercise of Warrants) in exchange
therefor, the Warrants shall remain subject to the terms and conditions set
forth in this Agreement and each Warrant shall, after such consolidation,
merger or sale, entitle the Holder to receive upon exercise the number of
shares in the capital or other securities or property (including cash) of
or from the Person resulting from such consolidation or surviving such
merger or to which such sale shall be made or of the parent of such Person,
as the case may be, that would have been distributable or payable on
account of the Common Shares if such Holder's Warrants had been exercised
immediately prior to such merger, consolidation or sale (or, if applicable,
the record date therefor); and in any such case the provisions of this
Agreement with respect to the rights and interests thereafter of the
Holders of Warrants shall be appropriately adjusted by the Board in good
faith so as to be applicable, as nearly as may reasonably be, to any
shares, other securities or any property thereafter deliverable on the
exercise of the Warrants.
(ii) Notwithstanding the foregoing, (x) if the Company merges or
consolidates with, or sells all or substantially all of its property and
assets to, another Person (other than an Affiliate of the Company) and
consideration is payable to holders of Common Shares in exchange for their
Common Shares in connection with such merger, consolidation or sale which
consists solely of cash, or (y) in the event of the dissolution,
liquidation or winding up of the Company, then the Holders of Warrants
shall be entitled to receive distributions on the date of such event on an
equal basis with holders of Common Shares (or other securities issuable
upon exercise of the Warrants) as if the Warrants had been exercised
immediately prior to such event, less the Exercise Price. Upon receipt of
such payment, if any, the rights of a Holder shall terminate and cease and
such Holder's Warrants shall expire. If the Company has made a Repurchase
Offer that has not expired at the time of such transaction, the holders of
the Warrants will be entitled to receive the higher of (i) the amount
payable to the holders of the
21
Warrants described above and (ii) the Repurchase Price payable to the
holders of the Warrants pursuant to such Repurchase Offer. In case of any
such merger, consolidation or sale of assets, the surviving or acquiring
Person and, in the event of any dissolution, liquidation or winding up of
the Company, the Company shall deposit promptly with the Warrant Agent the
funds, if any, necessary to pay the Holders of the Warrants. After receipt
of such deposit from such Person or the Company and after receipt of
surrendered Warrant Certificates, the Warrant Agent shall make payment by
delivering a check in such amount as is appropriate (or, in the case of
consideration other than cash, such other consideration as is appropriate)
to such Person or Persons as it may be directed in writing by the Holder
surrendering such Warrants.
(k) If required pursuant to Section 4.1(f)(i), the Current Market
Value shall be deemed to be equal to the value set forth in the Value Report (as
defined below) as determined by an Independent Financial Expert, which shall be
selected by the Board, and retained on customary terms and conditions, using one
or more valuation methods that the Independent Financial Expert, in its
professional judgment, determines to be most appropriate. The Company shall
cause the Independent Financial Expert to deliver to the Company, with a copy to
the Warrant Agent, within 45 days of the appointment of the Independent
Financial Expert, a value report (the "Value Report") stating the value of the
Common Shares and other securities or property of the Company, if any, being
valued as of the Valuation Date and containing a brief statement as to the
nature and scope of the examination or investigation upon which the
determination of value was made. The Warrant Agent shall have no duty with
respect to the Value Report of any Independent Financial Expert, except to keep
it on file and available for inspection by the Holders. The determination as to
Current Market Value in accordance with the provisions of this Section 4.1(k)
shall be conclusive on all Persons. The Independent Financial Expert shall
consult with management of the Company in order to allow management to comment
on the proposed value prior to delivery to the Company of any Value Report.
(l) When No Adjustment Required. No adjustment need be made for:
---------------------------
(i) exercises of Rights granted to and held by directors of the
Company or employees of the Company or any of its subsidiaries, and
existing on the Closing Date;
(ii) Rights granted to and held by directors of the Company or
employees of the Company or its subsidiaries after the Closing Date or
Common Shares issued or granted to such employees or directors after the
Closing Date, whether or not upon the exercise, exchange or conversion of
any such Rights, to the extent that all such Common Shares do not have (and
such Rights are not exercisable, exchangeable or convertible for Common
Shares having) an aggregate equity value in excess of 5.0% of the equity
value of the Company
22
(such percentage to be calculated on a fully-diluted basis after giving
effect to all Common Stock and Rights outstanding on the Closing Date), as
determined in good faith by the Board and set forth in a Board resolution
delivered to the Warrant Agent and (upon request) to any Holder;
(iii) rights to purchase Common Shares pursuant to a Company plan
for reinvestment of dividends or interest;
(iv) a Securities Offering of any security trading on any national
securities exchange or in the over the counter market, or of a security
directly or indirectly convertible or exchangeable for any such security
(the latter security being a "Reference Security"), where such security (or
the Reference Security as applicable) is sold to investors at a price at
least equal to the closing sale, bid or ask price (whichever is customary)
of such security (or the Reference Security as applicable) on the date (not
more than five business days prior to the consummation of such Securities
Offering) on which the Company fixes such price for such sale; or
(v) additional Warrants issued after the Closing Date and prior to
November 1, 2000, as contemplated by the third recital of this Agreement
To the extent the Warrants become convertible into cash, no adjustment
need be made thereafter as to the cash. Interest will not accrue on the cash.
(m) Detachable Rights, Options or Warrants. Rights, options or
--------------------------------------
warrants distributed by the Company to all holders of Common Shares entitling
the holders thereof to subscribe for or purchase shares of the Company's capital
stock (either initially or under certain circumstances), which rights, options
or warrants, until the occurrence of a specified event or events (a "Trigger
Event"), (i) are deemed to be transferred with such shares of Common Shares,
(ii) are not exercisable and (iii) are also issued in respect of future
issuances of Common Shares, shall be deemed not to have been distributed for
purposes of Section 4.1(b) or Section 4.1(d) (and no adjustment under such
Section will be required) until the date of occurrence of the earliest Trigger
Event. If such right, option or warrant is subject to subsequent events, upon
the occurrence of which such right, option or warrant shall become exercisable
to purchase different securities, evidences of indebtedness or other assets or
entitle the holder to purchase a different number or amount of the foregoing or
to purchase any of the foregoing at a different purchase price, then the
occurrence of each such event shall be deemed to be the date of issuance and
record date with respect to a new right, option or warrant (and a termination or
expiration of the existing right, option or warrant without exercise by the
holder thereof). In addition, in the event of any distribution (or deemed
distribution) of rights or warrants, or any Trigger Event or other event (of the
type described in the preceding sentence) with respect thereto, that resulted in
an adjustment
23
under Section 4.1(b) or Section 4.1(d), (1) in the case of any such rights,
options or warrants which shall all have been redeemed or repurchased without
exercise by any holders thereof, the Exercise Price and the number of Common
Shares issuable upon the exercise of each Warrant shall be readjusted upon such
final redemption or repurchase to give effect to such distribution or Trigger
Event, as the case may be, as though it were a cash distribution, equal to the
per share redemption or repurchase price received by a holder of Common Shares
with respect to such rights, options or warrants (assuming such holder had
retained such rights, options or warrants), made to all holders of Common Shares
as of the date of such redemption or repurchase, and (2) in the case of such
rights, options or warrants all of which shall have expired or been terminated
without exercise, the Exercise Price and the number of Common Shares issuable
upon the exercise of each Warrant shall be readjusted as if such rights, options
or warrants had never been issued.
(n) Other Adjustments. In the event that at any time, as a result of
-----------------
an adjustment made pursuant to this Section 4.1, Holders shall be entitled to
receive any securities of the Company other than Common Shares, thereafter the
number of such other securities so receivable upon exercise of the Warrants and
the Exercise Price applicable to such exercise shall be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as practicable
to the provisions with respect to the Common Shares contained in this Section
4.1.
(o) Other Events. If any event occurs as to which the foregoing
------------
provisions of this Section 4.1 are not strictly applicable or, if strictly
applicable, would not fairly and adequately protect the purchase rights of the
Warrants in accordance with the essential intent and principles of such
provisions, then there shall be made such adjustments in the application of such
provisions, in accordance with such essential intent and principles, as shall be
reasonably necessary to protect such purchase rights as aforesaid, but in no
event shall any such adjustment have the effect of increasing the Exercise Price
or decreasing the number of Common Shares issuable upon exercise of each
Warrant.
(p) Additional Warrants Entitled to All Adjustments. The Exercise
-----------------------------------------------
Price and the number of Common Shares issuable upon exercise of each Additional
Warrant shall be subject to any and all adjustments to which the Exercise Price
and the number of Common Shares issuable upon exercise of each Initial Warrant
is subject, including without limitation any such adjustment arising, or
relating to any fact, event, circumstance or other matter arising or existing,
prior to the date on which such Additional Warrant is issued.
Section 4.2. Notice of Adjustment. Whenever the number of Common
--------------------
Shares purchasable upon the exercise of each Warrant or the Exercise Price is
adjusted, as herein provided, the Company shall cause the Warrant Agent promptly
to mail, at the expense of the Company, to each Holder notice of such adjustment
or adjustments and
24
shall deliver to the Warrant Agent a certificate of the Auditors setting forth
the number of Common Shares purchasable upon the exercise of each Warrant and
the Exercise Price after such adjustment, setting forth a brief statement of the
facts requiring such adjustment and setting forth the computation by which such
adjustment was made. The Warrant Agent shall be entitled conclusively to rely on
such certificate and shall be under no duty or responsibility with respect to
any such certificate, except to exhibit the same, from time to time, to any
Holder desiring an inspection thereof during reasonable business hours upon
reasonable notice. The Warrant Agent shall not at any time be under any duty or
responsibility to any Holders to determine whether any facts exist which may
require any adjustment of the Exercise Price or the number of Common Shares
purchasable on exercise of the Warrants or any of the other adjustments set
forth in Section 4.1, or with respect to the nature or extent of any such
adjustment when made, or with respect to the method employed in making such
adjustment, or the validity or value (or the kind or amount) of any Common
Shares which may be purchasable on exercise of the Warrants. The Warrant Agent
shall not be responsible for any failure of the Company to make any cash payment
or to issue, transfer or deliver any Common Shares or share certificates upon
the exercise of any Warrant.
Section 4.3. Statement on Warrants. Irrespective of any adjustment in
---------------------
the Exercise Price or the number or kind of shares purchasable upon the exercise
of the Warrants, Warrants theretofore or thereafter issued may continue to
express the same price and number and kind of shares as are stated in the
Warrants initially issuable pursuant to this Agreement.
Section 4.4. Notice of Consolidation, Merger, Etc. In case at any
------------------------------------
time after the date hereof and prior to 5:00 p.m., New York City time, on the
Expiration Date, there shall be any (i) consolidation or merger involving the
Company or sale, transfer or other disposition of all or substantially all of
the Company's property, assets or business or (ii) any other transaction
contemplated by Section 4.1(a), (b), (c), (d) or (j) above then, in any one or
more of such cases, the Company shall cause to be mailed to the Warrant Agent
and shall cause the Warrant Agent to mail by overnight mail, return receipt
requested, at Company's expense, to each Holder of a Warrant, at the earliest
practicable time (and, in any event, not less than 10 Business Days before any
date set for definitive action), notice of the date on which such transaction
shall take place. Such notice shall also set forth such facts as shall indicate
the effect of such action (to the extent such effect may be known at the date of
such notice) on the Exercise Price and the kind and amount of the Common Shares
and other securities, money and other property deliverable upon exercise of the
Warrants. Such notice shall also specify the date as of which the holders of
record of the Common Shares or other securities or property issuable upon
exercise of the Warrants shall be entitled to exchange their shares for
securities, money or other property deliverable upon such reorganization, sale,
consolidation, merger, dissolution, liquidation or winding up, as the case may
be.
25
Section 4.5. Fractional Interests. If more than one Warrant shall be
--------------------
presented for exercise in full at the same time by the same Holder, the number
of full Common Shares which shall be issuable upon such exercise thereof shall
be computed on the basis of the aggregate number of Common Shares purchasable on
exercise of the Warrants so presented. The Company shall not be required to
issue fractional Common Shares upon the exercise of Warrants. If any fraction of
a Common Share would, except for the provisions of this Section 4.5, be issuable
on the exercise of any Warrant (or specified portion thereof), the Company may
pay an amount in cash calculated by it to be equal to the then Current Market
Value per Common Share multiplied by such fraction computed to the nearest whole
cent.
Section 4.6. When Issuance or Payment May Be Deferred. In any case in
----------------------------------------
which this Article IV shall require that an adjustment in the Exercise Price be
made effective as of a record date for a specified event, the Company may elect
to defer until the occurrence of such event (i) issuing to the holder of any
Warrant exercised after such record date the Common Shares and other shares in
the capital of the Company, if any, issuable upon such exercise over and above
the Common Shares and other shares in the capital of the Company, if any,
issuable upon such exercise and (ii) paying such holder any amount in cash in
lieu of a fractional share; provided, however, that the Company shall deliver to
such Holder a due xxxx or other appropriate instrument evidencing such Holder's
right to receive such additional Common Shares, other shares and cash upon the
occurrence of the event requiring such adjustment.
Section 4.7. No Dilution or Impairment. The Company will not by
-------------------------
amendment of its charter or through reorganization, consolidation, merger,
dissolution, sale of assets or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of this Agreement, but
will at all times in good faith assist in the carrying out of all such terms and
in the taking of all such action as may be necessary or appropriate in order to
protect the rights of the Holders against dilution or other impairment. Without
limiting the generality of the foregoing, the Company will not (a) increase the
par value of the Common Shares above the Exercise Price or (b) take any action
that would, after giving effect to the provisions of Article IV, result in a
reduction of the Exercise Price to an amount below the par value per Common
Share unless the Company takes all action necessary in order to protect the
Holders against dilution or other impairment as contemplated by this Article IV.
At all times, the Company will take all such action (including, without
limitation, reducing the par value of the Common Shares) as may be necessary or
appropriate in order that the Company may validly and legally issue Common
Shares upon the exercise of the Warrants.
ARTICLE V
LOSS OR MUTILATION
26
Upon receipt by the Company and the Warrant Agent of evidence
reasonably satisfactory to them of the ownership and the loss, theft,
destruction or mutilation of any Warrant Certificate and of indemnity or bond
reasonably satisfactory to them and (in the case of mutilation) upon surrender
and cancellation thereof, then, in the absence of notice to the Company or the
Warrant Agent that the Warrants represented thereby have been acquired by a bona
fide purchaser, the Company shall execute and the Warrant Agent shall
countersign and deliver to the registered Holder of the lost, stolen, destroyed
or mutilated Warrant Certificate, in exchange for or in lieu thereof, a new
Warrant Certificate of the same tenor and for a like aggregate number of
Warrants. Upon the issuance of any new Warrant Certificate under this Article V,
the Company may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and other
reasonable expenses (including the fees and expenses of the Warrant Agent) in
connection therewith. Every new Warrant Certificate executed and delivered
pursuant to this Article V in lieu of any lost, stolen or destroyed Warrant
Certificate shall constitute a contractual obligation of the Company whether or
not the allegedly lost, stolen or destroyed Warrant Certificates shall be at any
time enforceable by anyone and shall be entitled to the benefits of this
Agreement equally and proportionately with any and all other Warrant
Certificates duly executed and delivered hereunder.
ARTICLE VI
RESERVATION AND AUTHORIZATION OF COMMON SHARES
The Company shall at all times reserve and keep available such number
of its authorized but unissued Common Shares deliverable 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 Common Shares
to be delivered to the Warrant Agent upon its request for delivery thereof upon
the exercise of the Warrants. The Company represents, warrants, covenants and
agrees that all Common Shares of the Company that may be issued upon the
exercise of the Warrants will, upon issuance, be duly authorized, validly
issued, fully paid, non-assessable and not subject to any calls for funds and
free from pre-emptive rights and all taxes, liens, charges and security
interests with respect to the issue thereof. The Warrant Agent shall have no
duty to verify availability of such Common Shares set aside by the Company.
ARTICLE VII
WARRANT TRANSFER BOOKS; RESTRICTIONS ON TRANSFER
Section 7.1. Transfer and Exchange. The Warrant Certificates
---------------------
shall be issued in registered form only. The Warrant Agent shall keep at its
office a register for the registration of Warrant Certificates and transfers or
exchanges of Warrant Certificates
27
as herein provided and other appropriate data as determined by the Warrant
Agent. The Company shall, upon reasonable notice to the Warrant Agent, have
access to such register during the Warrant Agent's regular business hours. All
Warrant Certificates issued upon any registration of transfer or exchange of
Warrant Certificates shall be the valid obligations of the Company, evidencing
the same obligations, and entitled to the same benefits under this Agreement, as
the Warrant Certificates surrendered for such registration of transfer or
exchange.
A Holder may transfer its Warrants only by written application to the
Warrant Agent stating the name of the proposed transferee and otherwise
complying with the terms of this Agreement. No such transfer shall be effected
until, and such transferee shall succeed to the rights of a Holder only upon,
final acceptance and registration of the transfer by the Warrant Agent in the
register. Prior to the registration of any transfer of Warrants by a Holder as
provided herein, the Company, the Warrant Agent, and any agent of the Company
may treat the person in whose name the Warrants are registered as the owner
thereof for all purposes and as the person entitled to exercise the rights
represented thereby, any notice to the contrary notwithstanding. When Warrant
Certificates are presented to the Warrant Agent with a request to register the
transfer or to exchange them for an equal amount of Warrants, the Warrant Agent
shall register such transfer or make such exchange as requested if its
requirements for such transactions are met. To permit registrations of transfers
and exchanges, the Company shall execute Warrant Certificates at the Warrant
Agent's request. No service charge shall be made for any registration of
transfer or exchange of Warrants, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer of Warrants.
Section 7.2. Special Transfer Provisions. The following provisions
---------------------------
shall apply with respect to the registration of any proposed transfer of
Warrants:
(a) Transfers to Non-U.S. Persons at Any Time. The Warrant Agent
-----------------------------------------
shall register any proposed transfer of Warrants in accordance with Rule 904
under the Securities Act only upon receipt of a certificate substantially in the
form of Exhibit B from the proposed transferor.
(b) Transfers to Any Other Person. The following provisions shall
-----------------------------
apply with respect to the registration of any proposed transfer of Warrants not
specified in paragraph (a) above (including any Institutional Accredited
Investor). The Warrant Agent shall register any proposed transfer of Warrants to
any such Person if (x) the transferor has delivered to the Warrant Agent and the
Company a certificate substantially in the form of Exhibit C-1 hereto and, if
the Company or the Warrant Agent reasonably require as specified by paragraph
(d) thereof, an Opinion of Counsel to the effect set forth therein and (y) the
proposed transferee has delivered to the Warrant Agent and the
28
Company a certificate substantially in the form of Exhibit C-2 hereto if such
transferee is an Institutional Accredited Investor.
(c) Private Placement Legend. Upon the transfer, exchange or
------------------------
replacement of Warrant Certificates not bearing the Private Placement Legend,
the Warrant Agent shall deliver Warrant Certificates that do not bear the
Private Placement Legend. Upon the transfer, exchange or replacement of Warrant
Certificates bearing the Private Placement Legend, the Warrant Agent shall
deliver only Warrant Certificates that bear the Private Placement Legend unless
there is delivered to the Warrant Agent an opinion of counsel reasonably
satisfactory to the Company and its counsel and the Warrant Agent to the effect
that neither such legend nor the related restrictions on transfer are required
in order to maintain compliance with the provisions of the Securities Act.
(d) Transfers of Interests in Warrants Not Bearing the Private
----------------------------------------------------------
Placement Legend. Notwithstanding paragraphs (a) and (b) of this Section 7.2,
----------------
the Warrant Agent shall register the transfer of any interest in any Warrant
represented by a Warrant Certificate not bearing the Private Placement Legend
without requiring any additional certification.
(e) General.
-------
(i) By its acceptance of any Warrants represented by a Warrant
Certificate bearing the Private Placement Legend, each Holder of such
Warrants acknowledges the restrictions on transfer of such Warrants set
forth in this Agreement and in the Private Placement Legend and agrees that
it will transfer such Warrants only as provided in this Agreement. The
Warrant Agent shall not register a transfer of any Warrants unless such
transfer complies with the restrictions on transfer of such Warrants set
forth in this Agreement and is in compliance with applicable laws and
applicable rules, regulations and procedures of any securities exchange or
clearing agency in effect from time to time. In connection with any
transfer of Warrants, each Holder agrees by its acceptance of Warrants to
furnish the Warrant Agent or the Company such certifications, legal
opinions or other information as either of them may reasonably require to
confirm that such transfer is being made pursuant to an exemption from, or
a transaction not subject to, the registration requirements of the
Securities Act; provided that the Warrant Agent shall not be required to
determine (but may rely on a determination made by the Company with respect
to) the sufficiency of any such certifications, legal opinions or other
information.
(ii) The Warrant Agent shall retain copies of all letters, notices and
other written communications received pursuant to this Section 7.2. The
Company shall have the right to inspect and make copies of all such
letters,
29
notices or other written communications at any reasonable time upon
the giving of reasonable written notice to the Warrant Agent.
Section 7.3. Surrender of Warrant Certificates. Any Warrant
---------------------------------
Certificate surrendered for registration of transfer, exchange or exercise of
the Warrants represented thereby shall, if surrendered to the Company, be
delivered to the Warrant Agent, and all Warrant Certificates surrendered or so
delivered to the Warrant Agent shall be promptly cancelled by the Warrant Agent
and shall not be reissued by the Company and, except as provided in this Article
VII in case of an exchange, Article III hereof in case of the exercise of less
than all the Warrants represented thereby or Article V in case of a mutilated
Warrant Certificate, no Warrant Certificate shall be issued hereunder in lieu
thereof. The Warrant Agent shall in accordance with its customary procedures
dispose of such cancelled Warrant Certificates.
ARTICLE VIII
WARRANT HOLDERS
Section 8.1. Warrant Holder Deemed Not a Stockholder. The Company
---------------------------------------
and the Warrant Agent may deem and treat the registered Holder(s) of the
Warrant Certificates as the absolute owner(s) thereof (notwithstanding any
notation of ownership or other writing thereon made by anyone), for the purpose
of any exercise thereof and for all other purposes, and neither the Company nor
the Warrant Agent shall be affected by any notice to the contrary. Accordingly,
the Company and/or the Warrant Agent shall not, except as ordered by a court of
competent jurisdiction as required by law, be bound to recognize any equitable
or other claim to or interest in the Warrants on the part of any person other
than such registered Holder, whether or not it shall have express or other
notice thereof. Prior to the valid exercise of the Warrants, no Holder of a
Warrant Certificate, as such, shall be entitled to any rights of a stockholder
of the Company, including, without limitation, the right to vote or to consent
to any action of the stockholders, to receive dividends or other distributions,
to exercise any preemptive right or to receive any notice of meetings of
stockholders and, except as otherwise provided in this Agreement, shall not be
entitled to receive any notice of any proceedings of the Company.
Section 8.2. Right of Action. All rights of action with respect to
---------------
this Agreement are vested in the Holders of the Warrants, and any Holder of
any Warrant, without the consent of the Warrant Agent or the Holders of any
other Warrant, may, on such Holder's own behalf and for such Holder's own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company suitable to enforce, or otherwise in respect of, such
Holder's right to exercise such Warrants in the manner provided in the Warrant
Certificate representing such Warrants and in this Agreement.
30
ARTICLE IX
REMEDIES
Section 9.1. Defaults. It shall be deemed to be a "Default" with
--------
respect to the Company's (or its successor's) obligations under this Agreement
if:
(a) a Repurchase Event occurs and the Company (or its successor)
shall fail to make a Repurchase Offer pursuant to Section 3.4 hereof; or
(b) the Company (or its successor) shall fail to purchase the
Warrants pursuant to the Repurchase Offer in accordance with the provisions
of Section 3.4 hereof.
Section 9.2. Payment Obligations. Upon the happening of a Default
-------------------
under this Agreement, the Company shall be obligated to increase the amount
otherwise payable pursuant to Section 3.4(d) hereof in respect of the Repurchase
Offer to which such Default relates by an amount equal to interest thereon at a
rate per annum equal to 2% above the interest rate then applicable to Tranche B
Term Loans bearing interest at a rate determined by reference to the Base Rate
(as defined in the Credit Agreement) from the date of the Default to the date of
payment, which interest shall compound quarterly (all such payment obligations
in respect of such Repurchase Offer, together with all such increased amounts,
being the "Repurchase Obligation").
Section 9.3. Remedies; No Waiver. Notwithstanding any other provision
-------------------
of this Agreement, if a Default occurs and is continuing, the Holders of the
Warrants may pursue any available remedy to collect the Repurchase Obligation or
to enforce the performance of any provision of this Agreement.
A delay or omission by any Holder of a Warrant in exercising, or a
failure to exercise, any right or remedy arising out of a Default shall not
impair the right or remedy or constitute a waiver of or acquiescence in the
Default. All remedies are cumulative to the extent permitted by law.
ARTICLE X
THE WARRANT AGENT
Section 10.1. Duties and Liabilities. The Warrant Agent hereby accepts
----------------------
the agency established by this Agreement and agrees to perform the same upon the
terms and conditions herein set forth, by all of which the Company and the
Holders of Warrants, by their acceptance thereof, shall be bound. The Warrant
Agent shall not, by countersigning Warrant Certificates or by any other act
hereunder, be deemed to make
31
any representations as to the validity or authorization of the Warrants or the
Warrant Certificates (except as to its countersignature thereon) or of any
Common Shares issued upon exercise of any Warrant, or as to the accuracy of the
computation of the Exercise Price or the number or kind or amount of Common
Shares deliverable upon exercise of any Warrant or the correctness of the
representations of the Company made in the certificates that the Warrant Agent
receives. The Warrant Agent shall not be accountable for the use or application
by the Company of the proceeds of the exercise of any Warrant. The Warrant Agent
shall not have any duty to calculate or determine any adjustments with respect
to either the Exercise Price or the kind and amount of Common Shares receivable
by Holders upon the exercise of Warrants required from time to time and the
Warrant Agent shall have no duty or responsibility in determining the accuracy
or correctness of such calculation. The Warrant Agent shall not be (a) liable
for any recital or statement of fact contained herein or in the Warrant
Certificates or for any action taken, suffered or omitted by it in good faith
without gross negligence in the belief that any Warrant Certificate or any other
documents or any signatures are genuine or properly authorized, (b) responsible
for any failure on the part of the Company to comply with any of its covenants
and obligations contained in this Agreement or in the Warrant Certificates to be
complied with by the Company or (c) liable for any act or omission in connection
with this Agreement except for its own gross negligence, bad faith or willful
misconduct. The Warrant Agent is hereby authorized to accept written
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, Chief Executive Officer, any Vice President or other
executive officer of the Company and to apply to any such officer for such
written instructions and the Warrant Agent shall not be liable for any action
taken or suffered to be taken by it in good faith without gross negligence in
accordance with the instructions of any such officer; provided, however, that,
in its discretion, the Warrant Agent may, in lieu thereof, accept other evidence
of such or may require such further or additional evidence as it may deem
reasonable. The Warrant Agent shall not be liable for any action taken with
respect to any matter in the event it requests instructions from the Company as
to that matter and does not receive such instructions within a reasonable period
of time after the request therefor.
The Warrant Agent may execute and exercise any of the rights and
powers hereby vested in it or perform any duty hereunder either itself or by or
through attorneys, agents or employees of its selection, and the Warrant Agent
shall not be answerable or accountable for any act, default, neglect or
misconduct of any such attorneys, agents or employees; provided that reasonable
care has been exercised with respect to the selection of any such attorney,
agent or employee. The Warrant Agent shall not be under any obligation or duty
to institute, appear in or defend any action, suit or legal proceeding in
respect hereof, unless the Company or one or more registered holders of Warrant
Certificates shall furnish the Warrant Agent with security and indemnity
satisfactory to it for any costs and expenses which may be incurred, but this
provision shall not affect the power of the Warrant Agent to take such action as
it may consider proper, whether with
32
or without any such security or indemnity. The Warrant Agent shall promptly
notify the Company in writing of any claim made or action, suit or proceeding
instituted against it arising out of or in connection with this Agreement.
The Company will perform, execute, acknowledge and deliver or cause to
be delivered all such further acts, instruments and assurances as are consistent
with this Agreement and as may reasonably be required by the Warrant Agent in
order to enable it to carry out or perform its duties under this Agreement.
The Warrant Agent shall act solely as agent of the Company hereunder.
The Warrant Agent shall not be liable except for the failure to perform such
duties as are specifically set forth herein, and no implied covenants or
obligations shall be read into this Agreement against the Warrant Agent, whose
duties and obligations shall be determined solely by the express provisions
hereof.
Notwithstanding anything in this Agreement to the contrary, the
Warrant Agent shall not have any liability to any holder of a Warrant
Certificate or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority prohibiting or otherwise restraining
performance of such obligation; provided that the Company must use its
reasonable best efforts to have any such order, decree or ruling lifted or
otherwise overturned as soon as possible.
No provision of this Agreement shall require the Warrant Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
Section 10.2. Right to Consult Counsel. The Warrant Agent may at any
------------------------
time consult with legal counsel of its selection (who may be legal counsel for
the Company), and the opinion or advice of such counsel shall be full and
complete authorization and protection to the Warrant Agent and the Warrant Agent
shall incur no liability or responsibility to the Company or to any Holder for
any action taken, suffered or omitted by it in good faith without gross
negligence in accordance with the opinion or advice of such counsel.
Section 10.3. Compensation; Indemnification. The Company agrees
-----------------------------
promptly to pay the Warrant Agent from time to time and in any case within 30
days of receipt of an invoice, compensation for its services hereunder as the
Company and the Warrant Agent may agree from time to time, and to reimburse it
upon its request upon
33
furnishing reasonable supporting documentation for fees or expenses and
reasonable counsel fees and expenses incurred in connection with the execution
and administration of this Agreement, and further agrees to indemnify each of
the Warrant Agent and any predecessor Warrant Agent and save it harmless against
any and all losses, claims, damages, liabilities or reasonable expenses arising
out of or in connection with the acceptance and administration of this
Agreement, including, without limitation, the reasonable costs and expenses of
investigating or defending any claim (whether asserted by the Company or any
Holder or any other Person) of such liability, except that the Company shall
have no liability hereunder to the extent that any such loss, liability or
expense results from the Warrant Agent's own gross negligence, bad faith or
willful misconduct. The obligations of the Company under this Section 10.3 shall
survive the exercise and the expiration of the Warrants, the termination of this
Agreement and the resignation or removal of the Warrant Agent in respect of
services or expenses incurred in connection with the Warrants or this Agreement.
Section 10.4. No Restrictions on Actions. Nothing in this Agreement
--------------------------
shall be deemed to prevent the Warrant Agent and any stockholder, director,
officer or employee of the Warrant Agent from buying, selling or dealing in any
of the Warrants or other securities of the Company or becoming pecuniarily
interested in transactions in which the Company may be interested, or
contracting with or lending money to the Company or otherwise acting as fully
and freely as though it were not the Warrant Agent under this Agreement. Nothing
herein shall preclude the Warrant Agent from acting in any other capacity for
the Company or for any other legal entity.
Section 10.5. Discharge or Removal; Replacement Warrant Agent. The
-----------------------------------------------
Warrant Agent may resign from its position as such and be discharged from all
further duties and liabilities hereunder (except liability arising as a result
of the Warrant Agent's own gross negligence, bad faith or willful misconduct),
after giving one month's prior written notice to the Company. The Company may at
any time remove the Warrant Agent upon one month's written notice specifying the
date when such discharge shall take effect, and the Warrant Agent shall
thereupon in like manner be discharged from all further duties and liabilities
hereunder, except as aforesaid. The Warrant Agent shall mail to each Holder of a
Warrant, at the Company's expense, a copy of said notice of resignation or
notice of removal, as the case may be. Upon such resignation or removal the
Company shall appoint in writing a new warrant agent. If the Company shall fail
to make such appointment within a period of 30 days after it has been notified
in writing of such resignation by the resigning Warrant Agent or after such
removal, then the resigning or removed Warrant Agent or the Holder of any
Warrant may, at the expense of the Company, apply to any court of competent
jurisdiction for the appointment of a new warrant agent. After 30 days from
receipt of, or giving, notice, as the case may be, and pending appointment of a
successor to the original Warrant Agent, either by the Company or by such a
court, the duties of the Warrant Agent shall be carried out by the Company.
34
Any new warrant agent, whether appointed by the Company or by such a court,
shall be a bank or trust company doing business under the laws of the United
States or any state thereof, in good standing and having a combined capital and
surplus of not less than $50,000,000. The combined capital and surplus of any
such new warrant agent shall be deemed to be the combined capital and surplus as
set forth in the most recent annual report of its condition published by such
warrant agent prior to its appointment, provided that such reports are published
at least annually pursuant to law or to the requirements of a federal or state
supervising or examining authority. After acceptance in writing of such
appointment by the new warrant agent, it shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named herein as
the Warrant Agent, without any further assurance, conveyance, act or deed;
however, the original Warrant Agent shall in all events deliver and transfer to
the successor Warrant Agent all property (including, without limitation,
documents and recorded information), if any, at the time held hereunder by the
original Warrant Agent and if for any reason it shall be necessary or expedient
to execute and deliver any further assurance, conveyance, act or deed, the same
shall be done at the expense of the Company and shall be legally and validly
executed and delivered by the resigning or removed Warrant Agent. Not later than
the effective date of any such appointment, the Company shall file notice
thereof with the resigning or removed Warrant Agent and shall forthwith cause a
copy of such notice to be mailed by the successor Warrant Agent to each Holder
of a Warrant. Failure to give any notice provided for in this Section 10.5,
however, or any defect therein, shall not affect the legality or validity of the
resignation of the Warrant Agent or the appointment of a new warrant agent, as
the case may be. No Warrant Agent hereunder shall be liable for any acts or
omissions of any successor Warrant Agent.
Section 10.6. Successor Warrant Agent. Any corporation into which the
-----------------------
Warrant Agent or any new warrant agent may be merged or converted, or any
corporation resulting from any consolidation to which the Warrant Agent or any
new warrant agent shall be a party or any corporation succeeding to all or
substantially all the corporate trust or agency business of the Warrant Agent,
shall be a successor Warrant Agent under this Agreement without any further act,
provided that such corporation would be eligible for appointment as successor to
the Warrant Agent under the provisions of Section 10.5 hereof. Any such
successor Warrant Agent shall promptly cause notice of its succession as Warrant
Agent to be mailed to each Holder of a Warrant.
ARTICLE XI
MISCELLANEOUS
Section 11.1. Monies Deposited with the Warrant Agent. The Warrant
---------------------------------------
Agent shall not be required to pay interest on any monies deposited pursuant to
the provisions of this Agreement except such as it shall agree in writing with
the Company to
35
pay thereon. Any monies, securities or other property which at any time shall be
deposited by the Company or on its behalf with the Warrant Agent pursuant to
this Agreement shall be and are hereby assigned, transferred and set over to the
Warrant Agent in trust for the purpose for which such monies, securities or
other property shall have been deposited; but such monies, securities or other
property need not be segregated from other funds, securities or other property
except to the extent required by law. Any monies, securities or other property
deposited with the Warrant Agent for payment or distribution to the Holders that
remains unclaimed for one year after the date the monies, securities or other
property was deposited with the Warrant Agent shall be delivered to the Company
upon its written request therefor.
Section 11.2. Payment of Taxes. Subject to Article V hereof, all
----------------
Common Shares issuable upon the exercise of Warrants shall be duly authorized,
validly issued, fully paid, non-assessable and not subject to any calls for
funds, and the Company shall pay any taxes and other governmental charges that
may be imposed under the laws of the United States of America or any other
jurisdiction, or any political subdivision or taxing authority thereof or
therein, in respect of the issue or delivery thereof upon exercise of Warrants
(other than income taxes imposed on the Holders). The Company shall not be
required, however, to pay any tax or other charge imposed in connection with any
transfer involved in the issue of any certificate for Common Shares (including
other securities or property issuable upon the exercise of the Warrants) or
payment of cash to any Person other than the Holder of a Warrant Certificate
surrendered upon the exercise of a Warrant and in case of such transfer or
payment, the Warrant Agent and the Company shall not be required to issue any
share certificate or pay any cash until such tax or charge has been paid or it
has been established to the Warrant Agent's and the Company's satisfaction that
no such tax or charge is due.
Section 11.3. No Merger, Consolidation or Sale of Assets of the
-------------------------------------------------
Company. Except as otherwise provided herein, the Company will not merge into or
-------
consolidate with, or sell or otherwise transfer all or substantially all of its
property and assets to, any other Person, unless the Person resulting from such
merger or consolidation, or that is the transferee of such property and assets,
shall expressly assume, by supplemental agreement satisfactory in form to the
Warrant Agent and executed and delivered to the Warrant Agent, the due and
punctual performance and observance of each and every covenant and condition of
this Agreement or contained in the Warrants to be performed and observed by the
Company.
Section 11.4. Reports to Holders. At all times, whether or not the
------------------
Company is then required to file reports with the Commission, the Company shall
file with the Commission all such reports and other information it would be
required to file with the Commission by Section 13(a) or 15(d) under the
Exchange Act if it were subject thereto, including information required by
annual, quarterly or current reports whether or
36
not required to be so filed. The Company shall supply the Warrant Agent and each
Holder or shall supply to the Warrant Agent for forwarding to each such Holder,
without cost to such Holder, copies of such reports and other information. The
Warrant Agent's receipt of such reports and other information shall not
constitute constructive notice of any information contained therein or
determinable from information (including mathematical calculations) contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Warrant Agent is entitled to rely exclusively on Officers'
Certificates).
Section 11.5. Notices; Payment.
----------------
(a) Except as otherwise provided in Section 11.5(c) hereof, any
notice, demand or delivery authorized by this Agreement shall be sufficiently
given or made when mailed, if sent by first class mail, postage prepaid,
addressed to any Holder of a Warrant at such Holder's last known address
appearing on the register of the Company maintained by the Warrant Agent and to
the Company or the Warrant Agent as follows:
To the Company:
Exide Corporation
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: Chief Financial Officer
To the Warrant Agent:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Trustee Administration
or such other address as shall have been furnished to the party giving or making
such notice, demand or delivery. Any notice that is mailed in the manner herein
provided shall be conclusively presumed to have been duly given when mailed,
whether or not the Holder receives the notice.
(b) Payment of the Exercise Price shall be made in accordance with
the provisions of this Agreement at the office of the Warrant Agent set forth
above, unless otherwise directed by the Warrant Agent and the Company.
37
(c) Any notice required to be given by the Company to the Holders
shall be made by mailing by registered mail, return receipt requested, to the
Holders at their last known addresses appearing on the register maintained by
the Warrant Agent. The Company hereby irrevocably authorizes the Warrant Agent,
in the name and at the expense of the Company, to mail any such notice upon
receipt thereof from the Company. Any notice that is mailed in the manner herein
provided shall be conclusively presumed to have been duly given when mailed,
whether or not the Holder receives the notice.
Section 11.6. Binding Effect. This Agreement shall be binding upon and
--------------
inure to the benefit of the Company and the Warrant Agent and their respective
successors and assigns, and the Holders from time to time. Nothing in this
Agreement is intended or shall be construed to confer upon any Person, other
than the Company, the Warrant Agent and the Holders, any right, remedy or claim
under or by reason of this Agreement or any part hereof.
Section 11.7. Counterparts. This Agreement may be executed manually or
------------
by facsimile in any number of counterparts, each of which shall be deemed an
original, but all of which together constitute one and the same instrument.
Section 11.8. Amendments. The Warrant Agent may, without the consent
----------
or concurrence of the Holders of the Warrants, by supplemental agreement or
otherwise, join with the Company in making any changes or corrections in this
Agreement that (a) are required to cure any ambiguity or to correct any
defective or inconsistent provision or clerical omission or mistake or manifest
error herein contained or (b) add to the covenants and agreements of the Company
in this Agreement further covenants and agreements of the Company thereafter to
be observed, or surrender any rights or power reserved to or conferred upon the
Company in this Agreement; provided that in either case such changes or
corrections do not and will not adversely affect, alter or change the rights,
privileges or immunities of the Holders. Notwithstanding anything in this
Agreement to the contrary, the prior written consent of the Warrant Agent must
be obtained in connection with any supplement or amendment which alters the
rights or duties of the Warrant Agent. The Company shall, prior to the execution
of such amendment, promptly provide the Warrant Agent with an Officers'
Certificate and Opinion of Counsel which provide that all conditions precedent
to adoption of an amendment have been satisfied.
Section 11.9. Headings. The descriptive headings of the several
--------
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 11.10. Common Shares Legend. Unless and until the Common
--------------------
Shares issuable upon the exercise of the Warrants are registered under the
Securities Act, or unless otherwise agreed by the Company and the Holder
thereof, such Common Shares will bear a legend substantially to the following
effect:
38
THE COMMON SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED
OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE
SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR") OR (B) IT IS
NOT A U.S. PERSON AND IS ACQUIRING THE COMMON SHARES REPRESENTED BY
THIS CERTIFICATE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT, OR (C) IT IS A PERSON OTHERWISE
ELIGIBLE TO ACQUIRE THE COMMON SHARES IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, (2) AGREES THAT IT
WILL NOT, WITHIN THE TIME PERIOD REFERRED TO UNDER RULE 144(k), UNDER
THE SECURITIES ACT AS IN EFFECT WITH RESPECT TO SUCH TRANSFER, RESELL
OR OTHERWISE TRANSFER THE COMMON SHARES REPRESENTED BY THIS CERTIFICATE
EXCEPT (A) TO EXIDE CORPORATION (THE "COMPANY") OR ANY SUBSIDIARY
THEREOF, (B) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO
SUCH TRANSFER, FURNISHES TO THE TRANSFER AGENT AND REGISTRAR A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO
THE RESTRICTIONS ON TRANSFER OF THE COMMON SHARES REPRESENTED BY THIS
CERTIFICATE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRANSFER
AGENT AND REGISTRAR), (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (D)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE) (E) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (F) IN ANOTHER
TRANSACTION EXEMPT FROM OR NOT SUBJECT TO THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND (3) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THE COMMON SHARES REPRESENTED BY THIS CERTIFICATE ARE
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THE COMMON SHARES REPRESENTED BY THIS
CERTIFICATE WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE
39
HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF
RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE
TRANSFER AGENT AND REGISTRAR. IF THE PROPOSED TRANSFER IS PURSUANT TO
CLAUSE (B) OR (F) OF THE PRECEDING SENTENCE, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO EACH OF THE TRANSFER AGENT AND REGISTRAR AND THE
COMPANY SUCH CERTIFICATIONS OR OTHER INFORMATION AS EITHER OF THEM MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO
AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE COMPANY HAS INSTRUCTED THE TRANSFER
AGENT AND REGISTRAR TO REFUSE TO REGISTER ANY TRANSFER OF THE SHARES OF
COMMON STOCK REPRESENTED BY THIS CERTIFICATE IN VIOLATION OF THE FOREGOING
RESTRICTIONS.
Section 11.11. Third Party Beneficiaries. The Holders shall be third
-------------------------
party beneficiaries to the agreements made hereunder between the Company, on the
one hand, and the Warrant Agent, on the other hand, and each Holder shall have
the right to enforce such agreements directly to the extent it deems such
enforcement necessary or advisable to protect its rights or the rights of
Holders hereunder. By acquiring Warrants, each Holder agrees to be bound by the
obligations of Holders generally as set forth herein and as such obligations may
be applicable to such Holder.
Section 11.12. Termination. Except as otherwise specified herein, this
-----------
Agreement shall terminate at 5:00 p.m. (New York City time) on the tenth
anniversary of the Closing Date. Notwithstanding the foregoing, this Agreement
shall terminate on any earlier date as of which all Warrants have been
exercised.
Section 11.13. Governing Law. This Agreement and each Warrant
-------------
Certificate issued hereunder shall be governed by the laws of the State of New
York. The Warrant Agent, the Company and the Holders agree to submit to the
jurisdiction of the courts of the State of New York in any action or proceeding
arising out of or relating to this Agreement or the Warrants.
40
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed, as of the day and year first above written.
EXIDE CORPORATION
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Vice President and Treasurer
THE BANK OF NEW YORK, as Warrant
Agent
By: /s/ Xxxxxxxx Xxxxxxx
Name: Xxxxxxxx Xxxxxxx
Title: Assistant Vice President
41
FORM OF WARRANT CERTIFICATE
EXIDE CORPORATION
CUSIP No. 302051 11 5
No. _____
WARRANTS TO PURCHASE COMMON SHARES
This certifies that ______________, or its registered assigns, is the
owner of ___________ Warrants, each of which represents the right to purchase
from EXIDE CORPORATION, a Delaware corporation (the "Company"), at any time, one
(1) share of the common stock, par value $0.01 per share, of the Company (the
"Common Shares") at an exercise price (the "Exercise Price") of $8.99 per Common
Share (subject to adjustment as provided in the Warrant Agreement hereinafter
referred to below), upon surrender hereof at the principal corporate trust
office of The Bank of New York, or to its successor, as the warrant agent under
the Warrant Agreement (any such warrant agent being herein called the "Warrant
Agent"), or such other location contemplated by Section 11.5(b) of the Warrant
Agreement, with the Subscription Form on the reverse hereof duly executed, with
signature guaranteed as therein specified and simultaneous payment in full in
cash or by certified or official bank or bank cashier's check payable to the
order of the Company. Notwithstanding the foregoing, the Exercise Price may be
paid by surrendering additional Warrants to the Warrant Agent having an
aggregate Spread equal to the aggregate Exercise Price of the Warrants being
exercised. At any time after the Closing Date and on or before the Expiration
Date, any outstanding Warrants may be exercised on any Business Day; provided
that (a) a registration statement with the Commission relating to the Common
Shares for which such Warrants are being exercised is, at the time of exercise,
in effect or (b) the exercise of such Warrants is exempt from the registration
requirements of the Securities Act.
This Warrant Certificate is issued under and in accordance with a
Warrant Agreement dated as of September29, 2000 (the "Warrant Agreement"),
between the Company and The Bank of New York, as Warrant Agent, and a
Registration Rights Agreement dated as of September 29, 2000 (the "Warrant
Registration Rights Agreement"), between the Company and the initial investors
party thereto, and is subject to the Certificate of Incorporation of the Company
and to the terms and provisions contained therein, to all of which terms and
provisions the Holder of this Warrant Certificate consents by acceptance hereof.
The terms of the Warrant Agreement and the Warrant Registration Rights Agreement
are hereby incorporated herein by reference and made a part hereof. Reference is
hereby made to the Warrant Agreement and the Warrant Registration Rights
Agreement for a full description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Company and the Holders of
the
A-1
Warrants. The summary of the terms of the Warrant Agreement and the Warrant
Registration Rights Agreement contained in this Warrant Certificate is qualified
in its entirety by express reference to the Warrant Agreement and the Warrant
Registration Rights Agreement. All terms used in this Warrant Certificate that
are defined in the Warrant Agreement and the Warrant Registration Rights
Agreement shall have the meanings assigned to them in such agreements.
Copies of the Warrant Agreement and the Warrant Registration Rights
Agreement are on file at the office of the Warrant Agent and may be obtained by
writing to the Warrant Agent at the following address:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Trustee Administration
A "Repurchase Event", as defined in the Warrant Agreement, shall be
deemed to occur on any date when the Company (i) consolidates with or merges
into or with another person (but only where the holders of Common Stock receive
consideration in exchange for all or part of such Common Stock), if the Common
Stock (or other securities) thereafter issuable upon exercise of the Warrants is
not registered under the Exchange Act, or (ii) sells all or substantially all of
its assets to another person, if the Common Stock (or other securities)
thereafter issuable upon exercise of the Warrants is not registered under the
Exchange Act, provided that, in the case of this clause (ii), a "Repurchase
Event" shall not be deemed to have occurred if the consideration for such
transaction consists solely of cash, or (iii) purchases Common Shares pursuant
to a tender offer or an exchange offer for a price per Common Share that is
greater than the then Current Market Value per Common Share in effect at the end
of the trading day immediately following the day on which such tender offer or
exchange offer expires.
Following a Repurchase Event, the Company must make an offer to
repurchase for cash or, in the case of a Repurchase Event that is an exchange
offer, at the option of the Holders for the relevant exchange securities, all
outstanding Warrants (a "Repurchase Offer"). If the Company makes a Repurchase
Offer, Holders may, until the expiration date of such offer, surrender all or
part of their Warrants for repurchase by the Company.
Warrants received by the Warrant Agent in proper form during a
Repurchase Offer will, except as otherwise provided in the Warrant Agreement, be
repurchased by the Company at a price in cash (the "Repurchase Price") equal
(except in the case of a Repurchase Event within the meaning of clause (iii) of
the definition thereof) to the value on the Valuation Date relating thereto of
the Common Shares
A-2
issuable, and other securities or property of the Company which would have been
delivered upon exercise of the Warrants had the Warrants been exercised (whether
or not the Warrants are then exercisable), less the Exercise Price in effect on
the Notice Date for such Repurchase Offer. The value of such Common Shares and
other securities will be (i) if the Common Shares (or other securities) are
registered under the Exchange Act, determined based upon the average of the
daily market prices (as determined pursuant to Section 3.4(d)(ii)(1) of the
Warrant Agreement) of the Common Shares (or other securities) for the 20
consecutive trading days immediately preceding such Valuation Date or (ii) if
the Common Shares (or other securities) are not registered under the Exchange
Act or if the value cannot be computed under clause (i) above, determined by the
Independent Financial Expert (as defined in the Warrant Agreement), in each case
as set forth in the Warrant Agreement.
The "Valuation Date" as defined in the Warrant Agreement shall be
deemed to occur on the date five Business Days prior to the date notice of the
Repurchase Offer is first given.
The Repurchase Price for each Warrant properly tendered to the Warrant
Agent pursuant to a Repurchase Offer with respect to a Repurchase Event within
the meaning of clause (iii) of the definition thereof shall be equal to the
price that would have been paid for the Common Shares represented by such
Warrant had such Warrant been exercised and such Common Shares tendered or
exchanged in the relevant tender offer or exchange offer.
If the Company fails to make or complete a Repurchase Offer (a
"Default") as required by the Warrant Agreement, it shall be obligated to
increase the amount otherwise payable pursuant to the Warrant Agreement in
respect of the Repurchase Offer by an amount equal to interest thereon at a rate
per annum that is 2% above the rate then applicable to Tranche B Term Loans
bearing interest at a rate determined by reference to the Base Rate (as defined
in the Credit Agreement) from the date of the Default to the date of payment,
which interest shall compound quarterly.
If the Company merges or consolidates with or into, or sells all or
substantially all of its property and assets to, another Person and the
consideration received by holders of Common Shares consists solely of cash, the
Holders of Warrants shall be entitled to receive distributions on the date of
such event on an equal basis with, and on the same day as, holders of Common
Shares (or other securities issuable upon exercise of the Warrants) as if the
Warrants had been exercised immediately prior to such event (less the Exercise
Price). Upon receipt of such payment, if any, the rights of a Holder shall
terminate and cease and such Holder's Warrants shall expire.
The number of Common Shares purchasable upon the exercise of each
Warrant and the price per share are subject to adjustment as provided in the
Warrant Agreement. Except as stated in the immediately preceding paragraph and
in the Warrant Agreement, in the event the Company merges or consolidates with,
or sells all or
A-3
substantially all of its assets to, another Person, each Warrant will, upon
exercise, entitle the Holder thereof to receive the number of shares of capital
stock or other securities or the amount of money and other property which the
holder of a Common Share (or other securities or property issuable upon exercise
of a Warrant) is entitled to receive upon completion of such merger,
consolidation or sale.
As to any final fraction of a share which the same Holder of one or
more Warrant Certificates would otherwise be entitled to purchase upon exercise
thereof in the same transaction, the Company may pay the cash value thereof
determined as provided in the Warrant Agreement.
All Common Shares issuable by the Company upon the exercise of
Warrants shall be duly authorized, validly issued, fully paid, non-assessable
and not subject to any calls for funds, and the Company shall pay any taxes and
other governmental charges that may be imposed under the laws of the United
States of America or any other jurisdiction, or any political subdivision or
taxing authority thereof or therein in respect of the issue or delivery thereof
upon exercise of Warrants (other than income taxes imposed on the Holders). The
Company shall not be required, however, to pay any tax or other charge imposed
in connection with any transfer involved in the issue of any certificate for
Common Shares (including other securities or property issuable upon the exercise
of the Warrants) or payment of cash to any Person other than the Holder of a
Warrant Certificate surrendered upon the exercise of a Warrant and in case of
such transfer or payment, the Warrant Agent and the Company shall not be
required to issue any share certificate or pay any cash until such tax or charge
has been paid or it has been established to the Warrant Agent's and the
Company's satisfaction that no such tax or charge is due.
Subject to the restrictions on and conditions to transfer set forth in
Articles II and VII of the Warrant Agreement, this Warrant Certificate and all
rights hereunder are transferable by the registered Holder hereof, in whole or
in part, on the register of the Company maintained by the Warrant Agent for such
purpose at the Warrant Agent's office in New York, New York upon surrender of
this Warrant Certificate duly endorsed, or accompanied by a written instrument
of transfer in form satisfactory to the Company and the Warrant Agent duly
executed, with signatures guaranteed as specified in the attached Form of
Assignment, by the registered Holder hereof or his attorney duly authorized in
writing and by such other documentation required pursuant to the Warrant
Agreement and upon payment of any necessary transfer tax or other governmental
charge imposed upon such transfer. Upon any partial transfer, the Company will
sign and issue and the Warrant Agent will countersign and deliver to such Holder
a new Warrant Certificate or Certificates with respect to any portion not so
transferred. Each taker and Holder of this Warrant Certificate, by taking and
holding the same, consents and agrees that prior to the registration of transfer
as provided in the Warrant Agreement, the Company and the Warrant Agent may
treat the person in whose name the Warrants are registered as the absolute owner
hereof for any purpose and as the Person entitled to exercise the rights
represented hereby, any notice to the contrary
A-4
notwithstanding. Accordingly, the Company and/or the Warrant Agent shall not,
except as ordered by a court of competent jurisdiction as required by law, be
bound to recognize any equitable or other claim to or interest in the Warrants
on the part of any person other than such registered Holder, whether or not it
shall have express or other notice thereof.
This Warrant Certificate may be exchanged at the office of the Warrant
Agent maintained for such purpose in New York, New York, for Warrant
Certificates representing the same aggregate number of Warrants, each new
Warrant Certificate to represent such number of Warrants as the Holder hereof
shall designate at the time of such exchange.
Prior to the exercise of the Warrants represented hereby, the Holder
of this Warrant Certificate, as such, shall not be entitled to any rights of a
stockholder of the Company, including, without limitation, the right to vote or
to consent to any action of the stockholders, to receive any distributions, to
exercise any pre-emptive right or to receive any notice of meetings of
stockholders, and shall not be entitled to receive any notice of any proceedings
of the Company except as provided in the Warrant Agreement.
This Warrant Certificate shall be void and all rights evidenced hereby
shall cease on March 18, 2006, unless sooner terminated by the liquidation,
dissolution or winding-up of the Company or as otherwise provided in the Warrant
Agreement upon the consolidation or merger of the Company with, or sale of the
Company to, another Person or unless such date is extended as provided in the
Warrant Agreement.
The Warrant Agreement and the Warrants shall be governed by the laws
of the State of New York.
A-5
This Warrant Certificate shall not be valid for any purpose until it
shall have been countersigned by the Warrant Agent.
EXIDE CORPORATION
By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
Dated:
Countersigned:
THE BANK OF NEW YORK, as Warrant Agent
By:_
Authorized Signatory
A-6
FORM OF REVERSE OF WARRANT CERTIFICATE
SUBSCRIPTION FORM
(To be executed only upon exercise of Warrant)
To: The Bank of New York
as Warrant Agent
000 Xxxxxxx Xxxxxx, Xxxxx 00X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Trustee Administration
The undersigned irrevocably exercises ________ of the Warrants
represented by this Warrant Certificate and herewith makes payment of $ _______
(such payment being in cash or by certified or official bank or bank cashier's
check payable to the order or at the direction of Exide Corporation or the
exercise price may be paid by surrendering additional Warrants to the Warrant
Agent having an aggregate Spread equal to the aggregate exercise price of the
Warrants being exercised) all at the exercise price and on the terms and
conditions specified in this Warrant Certificate and in the Warrant Agreement
and the Warrant Registration Rights Agreement referred to herein and surrenders
this Warrant Certificate and all right, title and interest therein to and
directs that the common stock, par value $0.01 per share, of Exide Corporation
(the "Common Shares") deliverable upon the exercise of such Warrants be
registered or placed in the name and at the address specified below and
delivered thereto.
Dated:
____________________________________
(Signature of Owner)
____________________________________
(Xxxxxx Xxxxxxx)
____________________________________
(City) (State) (Zip Code)
Signature Guaranteed By:
____________________________________
A-7
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.
Securities and/or check or other property to be issued or delivered to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
A-8
FORM OF CERTIFICATE FOR REPURCHASE OFFER
(To be executed only upon repurchase
of Warrant by Exide Corporation)
To:
The undersigned, having received prior notice of the
consideration for which EXIDE CORPORATION will repurchase the Warrants
represented by the within Warrant Certificate, hereby surrenders this Warrant
Certificate for repurchase by EXIDE CORPORATION of the number of Warrants
specified below for the consideration set forth in such notice.
Dated:
_________________________________
(Number of Warrants)
_________________________________
(Signature of Owner)
________________________________
(Xxxxxx Xxxxxxx)
_________________________________
(City) (State) (Zip Code)
_________________________________
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,
A-9
all in accordance with the
Securities Exchange Act of 1934, as
amended.
Securities and/or check to be issued to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
A-10
FORM OF ASSIGNMENT
In consideration of monies or other valuable consideration
received from the Assignee(s) named below, the undersigned registered Holder of
this Warrant Certifi cate hereby sells, assigns, and transfers unto the
Assignee(s) named below (including the undersigned with respect to any Warrants
constituting a part of the Warrants evidenced by this Warrant Certificate not
being assigned hereby) all of the right of the undersigned under this Warrant
Certificate, with respect to the number of Warrants set forth below:
Name(s) of Assignee(s): _____________________________________
Address: __________________________________________________
No. of Warrants: ___________________________________________
Please insert social security or other identifying number of assignee(s):
and does hereby irrevocably constitute and appoint ________________________ the
undersigned's attorney to make such transfer on the books of __________________
maintained for the purposes, with full power of substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED ON ALL CERTIFICATES EXCEPT UN LEGENDED
CERTIFICATES]
In connection with any transfer of Warrants, the undersigned
confirms that without utilizing any general solicitation or general advertising
that:
Check One
[ ](a) documents are being furnished which comply with the conditions of
transfer set forth in this Warrant Certificate and the Warrant
Agreement. or
[ ](b) these Warrants are being transferred pursuant to an effective
registration statement under the U.S. Securities Act of 1933, as
amended.
If none of the foregoing boxes is checked, the Warrant Agent shall not
be obligated to register the Warrants in the name of any Person other
than the Holder hereof unless and until the conditions to any such
transfer of registration set forth herein and in Article VII of the
Warrant Agreement shall have been satisfied.
A-11
Dated:
____________________________
(Signature of Owner)
____________________________
(Xxxxxx Xxxxxxx)
____________________________
(City) (State) (Zip Code)
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.
Dated:
[NOTE: To be executed by an executive officer]
A-12
Form of Certificate to be Delivered
in Connection with
Transfers Pursuant to Regulation S
[Date]
Exide Corporation
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: Chief Financial Officer
The Bank of New York
Attention: Corporate Trust Administration
Re: Warrants (the "Warrants") to Purchase Common Shares of Exide Corporation
(the "Company")
Ladies and Gentlemen:
In connection with our proposed sale of _______________ Warrants,
we hereby certify that such sale has been effected pursuant to and in accordance
with Regulation S under the U.S. Securities Act of 1933, as amended (the
"Securities Act"), and, accordingly, we represent that:
(1) the offer of the Warrants was not made to a person in the
United States and not to a U.S. Person (as defined in Regulation S
under the Securities Act);
(2) at the time the buy order was originated, the transferee was
outside the United States or we and any person acting on our behalf
reasonably believed that the transferee was outside the United States;
(3) no directed selling efforts (as such term is defined in Rule
902(b) of Regulation S under the Securities Act) have been made by us,
any of our affiliates or any persons acting on our behalf in the United
States in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S under the Securities Act, as applicable; and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act.
The Warrant Agent and the Company are entitled to rely upon this
letter and are irrevocably authorized to produce this letter or a copy hereof to
any interested party in any administrative or legal proceedings or official
inquiry with respect to the matters covered hereby. Terms used in this
certificate have the meanings set forth in Regulation S.
Very truly yours,
B-1
[Name of Transferor]
By:_____________________________
Authorized Signature
B-2
Form of
Certificate to be
Delivered by Transferor in Connection with
Transfers to Institutional Accredited Investors
[Date]
Exide Corporation
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: Chief Financial Officer
The Bank of New York
Attention: Corporate Trust Administration
Re: Warrants (the "Warrants") to Purchase Common Shares of Exide Corporation
(the "Company")
Ladies and Gentlemen:
We hereby certify that such transfer is being effected in compliance
with the transfer restrictions applicable to the Warrants or interests therein
transferred pursuant to and in accordance with the U.S. Securities Act of 1933,
as amended (the "Securities Act"), and accordingly we hereby further certify
that (check one):
(a) [ ] such transfer is being effected to the Company or a subsidiary
thereof; or
(b) [ ] such transfer is being effected pursuant to and in accordance
with Rule 144 under the Securities Act;
(c) [ ] such transfer is being effected pursuant to an effective
registration statement under the Securities Act; or
(d) [ ] such transfer is being effected pursuant to an exemption from
the registration requirements of the Securities Act other than Rule 144 or Rule
904 thereunder, and we hereby further certify that such transfer complies with
the transfer restrictions applicable to the Warrants or interests therein
transferred to Institutional Accredited Investors (or in another transaction
exempt from or not subject to the registration requirements of the Securities
Act) and in accordance with the requirements of the exemption claimed, which
certification is supported by (if the Company or the Warrant Agent reasonably
request) an Opinion of Counsel provided by us or the transferee (a copy of which
we have attached to this certification), to the effect that such transfer is in
compliance with the Securities Act. Upon consummation of the proposed transfer
in accordance with the terms of the Warrant Agreement, the transferred Warrants
or interests therein will be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the Warrant Certificated and in the
Warrant Agreement and the Securities Act. Very truly yours,
C-1-1
[Name of Transferor]
By:_________________________________
Authorized Signatory
C-1-2
Form of Certificate to be Delivered
By Transferees in Connection with
Transfers to Institutional Accredited Investors
[Date]
Exide Corporation
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: Chief Financial Officer
The Bank of New York
Attention: Corporate Trust Administration
Re: Warrants (the "Warrants") to Purchase Common Shares of Exide Corporation
(the "Company")
Dear Sirs:
In connection with our proposed purchase of ___________ aggregate
number of Warrants, we confirm that:
1. We understand that any subsequent transfer of the Warrants, any
interest therein or the Common Shares issuable upon exercise of any Warrant (the
"Warrant Shares") is subject to certain restrictions and conditions set forth in
the Warrant Agreement dated as of September 29, 2000, relating to the Warrants
(the "Warrant Agreement") and the Registration Rights Agreement dated as of
September 29, 2000, relating to the Warrants (the "Warrant Registration Rights
Agreement") and the undersigned agrees to be bound by, and not to resell, pledge
or otherwise transfer the Warrants or Warrant Shares except in compliance with,
such restrictions and conditions and the U.S. Securities Act of 1933, as amended
(the "Securities Act").
2. We understand that the Warrants represented by this Warrant
Certificate and, as of the date this Warrant Certificate was originally issued,
the Warrant Shares have not been registered under the Securities Act, and
accordingly may not be offered, sold, pledged or otherwise transferred within
the United States or to, or for the account or benefit of, U.S. Persons except
as set forth in the following sentence. We agree that we will not, within the
time period referred to under Rule 144(k) of the Securities Act (taking into
account the provisions of Rule 144(d) under the Securities Act, if applicable)
under the Securities Act as in effect on the date of the transfer of this
Warrant, resell or otherwise transfer the Warrants represented by this Warrant
Certificate except (a) to Exide Corporation, or any subsidiary thereof, (b)
outside the United States in an offshore transaction in compliance with Rule 904
under the Securities Act, (c) pursuant to the exemption from registration
provided by Rule 144 under the Securities Act (if available), (d) to an
institutional accredited investor that, prior to such transfer,
1
furnishes to you, to the Company and, in the case of the Warrant Shares, to the
transfer agent and registrar therefor, a signed letter containing certain
representations and agreements relating to the restrictions on transfer of the
Warrants represented by this Warrant Certificate (the form of which letter can
be obtained from the Warrant Agent), (e) pursuant to an effective registration
statement under the Securities Act and, in each case, in accordance with
applicable state securities laws or (f) in another transaction exempt from or
not subject to the registration requirements of the Securities Act.
3. We understand that, on any proposed resale of any Warrants, any
interest therein or Warrant Shares, we will be required to furnish to you and
the Company such certifications, legal opinions and other information as you and
the Company may reasonably require to confirm that the proposed sale complies
with the foregoing restrictions. We further understand that the Warrants
purchased by us will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and 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 Warrants, 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 of time.
5. We are acquiring the Warrants purchased by us for our own account
or for one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.
The Warrant Agent, the Company and, if applicable, the transfer agent
and registrar for the Warrant Shares are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Very truly yours,
[Name of Transferee]
By:________________________________
Authorized Signature
2
