XXXXXX BROTHERS HOLDINGS INC.
and
CITIBANK, N.A., Warrant Agent
and
XXXXXX BROTHERS INC., Calculation Agent
---------------
WARRANT AGREEMENT
dated as of May 11, 2005
---------------
2,000,000 Warrants
Nikkei 225(SM) Index Call Warrants
Expiring May 8, 2007
TABLE OF CONTENTS
PAGE
ARTICLE I ISSUANCE OF WARRANTS AND FORM, EXECUTION, DELIVERY AND REGISTRATION OF WARRANTS.........................1
SECTION 1.01. Issuance of Warrants.....................................................................1
SECTION 1.02. Form, Execution and Delivery of Warrant Certificates.....................................1
SECTION 1.03. Mutilated or Missing Warrant Certificates................................................3
ARTICLE II DURATION AND EXERCISE OF WARRANTS......................................................................4
SECTION 2.01. Duration of Warrants; Exercise Notice....................................................4
SECTION 2.02. Exercise and Delivery of Warrants........................................................5
SECTION 2.03. Discontinuance of a Relevant Index; Alteration of Method of
Calculating a Relevant Index..........................................................8
SECTION 2.04. Limit Option.............................................................................9
SECTION 2.05. Market Disruption Events................................................................10
SECTION 2.06. Delisting of Warrants...................................................................11
SECTION 2.07. Automatic Exercise of Warrants..........................................................11
SECTION 2.08. Denominations; Maximum Number of Exercisable Warrants; Minimum
Number of Exercisable Warrants.......................................................12
SECTION 2.09. Covenant of the Company.................................................................13
SECTION 2.10. Return of Money Held Unclaimed for Two Years............................................13
SECTION 2.11. Return of Global Warrant Certificate....................................................13
ARTICLE III OTHER PROVISIONS RELATING TO RIGHTS OF WARRANTHOLDERS................................................13
SECTION 3.01. Warrantholder May Enforce Rights........................................................13
SECTION 3.02. Merger, Consolidation, Sale, Transfer or Conveyance.....................................13
ARTICLE IV WARRANTS ACQUIRED BY THE COMPANY; PAYMENT OF TAXES; TAXATION OF WARRANTS..............................14
SECTION 4.01. Warrants Acquired by the Company........................................................14
SECTION 4.02. Payment of Taxes........................................................................14
SECTION 4.03. Taxation of Warrants....................................................................14
ARTICLE V CONCERNING THE WARRANT AGENT...........................................................................15
SECTION 5.01. Warrant Agent...........................................................................15
SECTION 5.02. Conditions of Warrant Agent's Obligations...............................................15
SECTION 5.03. Resignation and Appointment of Successor................................................17
ARTICLE VI CONCERNING THE CALCULATION AGENT......................................................................18
i
SECTION 6.01. Calculation Agent.......................................................................18
SECTION 6.02. Calculations and Information Provided...................................................18
SECTION 6.03. Conditions of Calcuation Agent's Obligations............................................19
SECTION 6.04. Resignation and Appointment of Successor................................................19
SECTION 6.05. Compensation; Indemnification...........................................................20
ARTICLE VII MISCELLANEOUS........................................................................................20
SECTION 7.01. Definitions.............................................................................20
SECTION 7.02. Amendment...............................................................................23
SECTION 7.03. Notices and Demands to the Company, the Warrant Agent and the
Calculation Agent.....................................................................23
SECTION 7.04. Addresses for Notices...................................................................23
SECTION 7.05. Notices to Holders......................................................................24
SECTION 7.06. Obtaining of Approvals..................................................................24
SECTION 7.07. Persons Having Rights Under This Agreement..............................................24
SECTION 7.08. Inspection of Agreement.................................................................24
SECTION 7.09. Headings................................................................................24
SECTION 7.10. Counterparts............................................................................24
SECTION 7.11. GOVERNING LAW...........................................................................25
TESTIMONIUM
SIGNATURES
EXHIBIT A - Form of Global Warrant Certificate
EXHIBIT B - Exercise Notice
EXHIBIT C - Confirmation of Exercise/Notice of Rejection
EXHIBIT D - Notice of Rejection Relating to Limit Option
ii
WARRANT AGREEMENT, dated as of May 11, 2005, among XXXXXX
BROTHERS HOLDINGS INC., a Delaware corporation (the "Company"), CITIBANK, N.A.,
a national banking association (the "Warrant Agent"), and XXXXXX BROTHERS INC.,
a Delaware corporation (the "Calculation Agent").
WHEREAS the Company proposes to sell warrants (the "Warrants"
or, individually, a "Warrant") representing the right to receive from the
Company an amount, if any, in U.S. dollars determined by reference to any
increase in the value of the Relevant Index on the terms and conditions set
forth in this Agreement; and
WHEREAS the Company desires the Warrant Agent to act on behalf
of the Company, and the Warrant Agent is willing so to act, in connection with
the issuance, transfer and exercise of the Warrants, and the Company desires to
set forth herein, among other things, the provisions of the Warrants and the
terms and conditions on which they may be issued, transferred and exercised.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
ISSUANCE OF WARRANTS AND FORM,
EXECUTION, DELIVERY AND REGISTRATION
OF WARRANTS
SECTION 1.01. Issuance of Warrants. (a) The Warrants will
constitute direct, unconditional and unsecured obligations of the Company and
will rank equally with the Company's other unsecured contractual obligations and
with the Company's unsecured and unsubordinated debt.
(b) The Warrants will be issued in book-entry form and
represented by one or more global certificates (each a "Global Warrant
Certificate"). Each Warrant shall represent the right, subject to the provisions
contained herein, to receive the Cash Settlement Value of such Warrant upon
exercise. In no event shall a registered or beneficial holder of a Warrant (each
a "Warrantholder") be entitled to receive any interest on any Cash Settlement
Value. A Warrant will not require or entitle a Warrantholder to receive any of
the underlying stocks comprising the Relevant Index (the "Underlying Shares")
from the Company. The Company shall not be under any obligation to, nor will it,
sell the Underlying Shares to, or purchase or take delivery of any such
Underlying Share from, Warrantholders in connection with the exercise of any
Warrants.
(c) Warrantholders shall not be entitled to hold Warrants in
certificated form through Clearstream Banking, societe anonyme ("Clearstream"),
or the Euroclear System operated by Xxxxxx Guaranty Trust's Brussels Office
("Euroclear").
SECTION 1.02. Form, Execution and Delivery of Warrant
Certificates. (a) Each Global Warrant Certificate shall be evidenced by a
certificate in registered form substantially in the form set forth in Exhibit A
hereto, with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Agreement, and may represent any
number of whole Warrants. Each Global Warrant Certificate may have imprinted or
otherwise reproduced thereon such letters, numbers or other marks of
identification or designation and such legends or endorsements as the officers
of the Company executing the same may approve (execution thereof to be
conclusive evidence of such approval) and which 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 made pursuant thereto, or with any rule or
regulation of any stock exchange on which the Warrants may be listed, or of the
Depository, or to conform to usage.
(b) The Warrant Agent is authorized, upon receipt of a Global
Warrant Certificate from the Company, duly executed on behalf of the Company,
and a written order from the Company, to countersign such Global Warrant
Certificate. The Global Warrant Certificate shall be manually countersigned and
dated the date of its countersignature by the Warrant Agent and shall not be
valid for any purpose unless so countersigned. The Warrant Agent shall deliver
the Global Warrant Certificate to or upon the order of the Company. One or more
Global Warrant Certificates may be executed by the Company and delivered to the
Warrant Agent on or after the date of execution of this Agreement; provided that
only one Global Warrant Certificate shall be outstanding at any one time.
The Company reserves the right to issue, from time to time
after the date of execution of this Agreement, additional Warrants, and in
connection therewith the Global Warrant Certificate may be exchanged for a new
Global Warrant Certificate to reflect the issuance by the Company of such
additional Warrants. To effect such an exchange the Company shall deliver to the
Warrant Agent a new Global Warrant Certificate duly executed on behalf of the
Company and a written instruction as provided in this Section 1.02. The Warrant
Agent shall authenticate the new Global Warrant Certificate as provided in this
Section and shall deliver the new Global Warrant Certificate to the Depository
in exchange for, and upon receipt of, the Global Warrant Certificate then held
by the Depository. The Warrant Agent shall cancel the Global Warrant Certificate
delivered to it by the Depository, destroy such Global Warrant Certificate and
provide a certificate of destruction to the Company.
(c) In case any officer of the Company who shall have signed a
Global Warrant Certificate, either manually or by facsimile signature, shall
cease to be such officer before such Global Warrant Certificate shall have been
countersigned and delivered by the Warrant Agent to the Company or delivered by
the Company, such Global Warrant Certificate nevertheless may be countersigned
and delivered as though the person who signed such Global Warrant Certificate
had not ceased to be such officer of the Company; and the Global Warrant
Certificate may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Global Warrant Certificate, shall be a
proper officer of the Company to sign such Global Warrant Certificate, although
at the date of the execution of this Warrant Agreement any such person was not
such officer.
(d) The Global Warrant Certificate will initially be
registered in the name of a nominee of The Depository Trust Company (the
"Depository", which term, as used herein, includes any successor securities
depository selected by the Company). The Warrant holdings of the Depository
participants (the "Participants") will be recorded on the books of the
Depository. The holdings of customers of the Participants and the identity of
the Warrantholders will be reflected on the books and records of such
Participants and will not be known to the Warrant
2
Agent, the Company, the Calculation Agent or the Depository. The Global Warrant
Certificate will be held by the Depository or its agent.
The Company may from time to time select a new entity to act
as Depository with respect to the Warrants and, if such selection is made, the
Company shall promptly give the Warrant Agent written notice to such effect
identifying the new Depository, and the Global Warrant Certificate shall be
delivered to the Warrant Agent and shall be transferred to the new Depository as
provided below as promptly as possible. Appropriate changes may be made in the
forms of the Global Warrant Certificate, the Exercise Notice and the related
notices to be delivered in connection with an exercise to reflect the selection
of the new Depository.
(e) Except as otherwise provided herein or in the Global
Warrant Certificate, the Warrant Agent shall from time to time register the
transfer of the Global Warrant Certificate in its records (which may be
maintained electronically), subject to such reasonable regulations as the
Company or the Warrant Agent may prescribe, only to the Depository, to another
nominee of the Depository, to a successor Depository or to a nominee of a
successor Depository, upon surrender of such Global Warrant Certificate, duly
endorsed, or accompanied by a written instrument or instruments of transfer in
form satisfactory to the Warrant Agent and the Company, duly executed by the
registered holder thereof or by the duly appointed legal representative thereof,
or by its duly authorized attorney, such signature to be guaranteed by a bank or
trust company with a correspondent office in New York City or by a member of a
national securities exchange. Upon any such registration of transfer, a new
Global Warrant Certificate shall be issued to the transferee and the surrendered
Global Warrant Certificate shall be canceled by the Warrant Agent.
The Global Warrant Certificate may be transferred as provided
above at the option of the holder thereof, when surrendered to the Warrant
Agent's Office, or at the office of any successor Warrant Agent (as provided in
Section 5.03 hereof), for another Global Warrant Certificate of like tenor and
representing an equal number of unexercised Warrants.
(f) Except as provided in Section 1.03 hereof, no service
charge shall be made for any registration of transfer or exchange of Global
Warrant Certificates, 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 or exchange of Global Warrant Certificates,
other than exchanges pursuant to this Section 1.02 not involving any transfer.
SECTION 1.03. Mutilated or Missing Warrant Certificates. (a)
If any Global Warrant Certificate is mutilated, lost, stolen or destroyed, the
Company may in its discretion execute, and the Warrant Agent may countersign and
deliver, in exchange and substitution for and upon cancellation of the mutilated
Global Warrant Certificate, or in lieu of the Global Warrant Certificate lost,
stolen or destroyed, a new Global Warrant Certificate of like tenor and
representing an equal number of unexercised Warrants, bearing an identification
number not contemporaneously outstanding, but only (in case of loss, theft or
destruction) upon receipt of evidence satisfactory to the Company and the
Warrant Agent of such loss, theft or destruction of such Global Warrant
Certificate, written direction from the Company, and security or indemnity, if
requested, also satisfactory to them. Applicants for such substitute Global
Warrant Certificates
3
shall also comply with such other reasonable regulations and pay such other
reasonable charges as the Company or the Warrant Agent may prescribe.
(b) In case all of the Warrants evidenced by any such
mutilated, lost, stolen or destroyed Global Warrant Certificate have been or are
about to be exercised, or deemed to be exercised, the Company in its absolute
discretion may, instead of issuing a new Global Warrant Certificate, direct the
Warrant Agent in writing to treat the same as if it had received an Exercise
Notice in proper form in respect thereof, as provided herein, or as being
subject to automatic exercise (pursuant to Section 2.07 hereof) , as the case
may be.
(c) Each new Global Warrant Certificate issued pursuant to
this Section 1.03 in lieu of any lost, stolen or destroyed Global Warrant
Certificate shall be an original, additional contractual obligation of the
Company, whether or not the lost, stolen or destroyed Global Warrant Certificate
shall at any time be enforceable by anyone, and shall be entitled to the same
benefits under this Agreement equally and proportionately with any and all other
Global Warrant Certificates duly issued hereunder.
(d) Upon the issuance of any new Global Warrant Certificate in
accordance with this Section 1.03, 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 any other expenses (including the fees and expenses of the
Warrant Agent and the reasonable fees of its counsel) connected therewith.
(e) The provisions of this Section 1.03 are exclusive and
shall preclude (to the extent lawful) any other rights and remedies with respect
to the replacement or payment of mutilated, lost, stolen or destroyed Global
Warrant Certificates.
ARTICLE II
DURATION AND EXERCISE OF WARRANTS
SECTION 2.01. Duration of Warrants; Exercise Notice. Subject
to the limitations set forth herein and in Sections 2.07 and 2.08(b) hereof,
each Warrant may be irrevocably exercised in whole but not in part on any
Business Day from July 10, 2005 until 3:00 p.m., New York City time, on the
earlier of (i) the Business Day immediately preceding May 8, 2007 (May 8, 2007
being referred to herein as the "Expiration Date") and (ii) the Business Day
immediately preceding the Delisting Date, if any. Except in the event of
automatic exercise, each Warrant shall be irrevocably exercised upon receipt by
the Warrant Agent of such Warrant delivered free on the records of the
Depository to the Warrant Agent's Depository Participant Account (entitled
Citibank, N.A. Corporate Trust Warrant Agent Account, No. [ ], or such other
account at the Depository as the Warrant Agent shall designate in writing to the
Company) (the "Warrant Account") pursuant to an Exercise Notice to the Warrant
Agent from a Participant, in the case of Warrants held through the facilities of
the Depository, a Clearstream participant, in the case of Warrants held through
Clearstream, or a Euroclear participant, in the case of Warrants held through
Euroclear, acting, directly or indirectly, on behalf of the Warrantholder;
provided, however, that Exercise Notices are subject to rejection by the Warrant
Agent as provided herein. Except with respect to the Limit Option (as described
in Section 2.04 hereof), an Exercise Notice
4
shall be unconditional. Except as provided in Section 2.02(b) hereof, the
Warrant Agent shall be entitled, with no duty of inquiry, to rely conclusively
on any Exercise Notice received by it. "Exercise Notice" means an irrevocable
exercise notice to the Warrant Agent at its address, which notice shall be
substantially in the form set forth in Exhibit B hereto or such other form as
the Company and the Warrant Agent may approve and may be given by facsimile
transmission.
SECTION 2.02. Exercise and Delivery of Warrants. (a) Except
for Warrants (x) subject to automatic exercise (as described in Section 2.07
hereof), (y) for which exercise is delayed pursuant to Section 2.08(b) hereof or
(z) held through the facilities of Clearstream or Euroclear, and subject to the
Limit Option, the "Exercise Date" for a Warrant will be (i) the Business Day on
which the Warrant Agent receives the Warrant and Exercise Notice in proper form
with respect to such Warrant, if received at or prior to 3:00 p.m., New York
City time, on such day, or (ii) if the Warrant Agent receives such Warrant and
Exercise Notice after 3:00 p.m., New York City time, on a Business Day, then the
Business Day following such Business Day.
In the case of Warrants held through the facilities of Clearstream or
Euroclear, except for Warrants subject to automatic exercise, and subject to the
Limit Option, the "Exercise Date" for a Warrant will be (i) the Business Day on
which the Warrant Agent receives the Exercise Notice in proper form with respect
to such Warrant if such Exercise Notice is received at or prior to 3:00 p.m.,
New York City time, on such day; provided that the Warrant is received by the
Warrant Agent by 3:00 p.m., New York City time, on the Valuation Date, or (ii)
if the Warrant Agent receives such Exercise Notice after 3:00 p.m., New York
City time, on a Business Day, then the Business Day following such Business Day;
provided that the Warrant is received by 3:00 p.m., New York City time, on the
Valuation Date relating to exercises of Warrants on the applicable Valuation
Day. In the event that a Warrant is received after 3:00 p.m., New York City
time, on the applicable Valuation Date, then the Exercise Date for such Warrant
will be the day on which such Warrant is received or, if such day is not a
Business Day, the following Business Day. In the case of Warrants held through
the facilities of Euroclear, (a) participants must also transmit, by facsimile,
to the Warrant Agent a copy of the Exercise Notice submitted to Euroclear by
3:00 p.m., New York City time, on the desired Exercise Date and (b) Euroclear
must confirm (a "Euroclear Confirmation") by telex to the Warrant Agent by 9:00
a.m., New York City time, on the applicable Valuation Date that the Warrants
will be received by the Warrant Agent on such date; provided that if such telex
communication is received after 9:00 a.m., New York City time, on the applicable
Valuation Date, the Company will be entitled to direct the Warrant Agent to
reject the related Exercise Notice or waive the requirement for timely delivery
of such telex communication.
(b) The Warrant Agent shall, in the case of Warrants other
than those held through Clearstream or Euroclear, following receipt of a
properly delivered Warrant in accordance with Section 2.02(a) hereof,
accompanied by an Exercise Notice, and, in the case of Warrants held through
Clearstream or Euroclear, following receipt of a properly delivered Exercise
Notice in accordance with Section 2.02(a) hereof:
(i) promptly (1) for Warrants not held through
Clearstream or Euroclear, determine whether such Exercise Notice has
been duly completed and is in proper form and (2) for Warrants held
through Clearstream or Euroclear, determine whether such Exercise
Notice has been duly completed and is in proper form duly executed by
5
Clearstream or the Euroclear participant tendering such Warrant, as
applicable; and, in either case, if the Warrant Agent determines that
the Exercise Notice has not been duly completed or is not in proper
form, the Warrant Agent promptly shall (X) reject such Exercise Notice
and shall send to the entity that executed such Exercise Notice a
notice of rejection substantially in the form set forth in Exhibit C
hereto and shall redeliver such Warrants (to the extent received in
the case of Warrants held through Clearstream or Euroclear) free
through the facilities of the Depository to the account from which
they were transferred to the Warrant Agent and (Y) shall not take the
actions required by clauses (ii)-(ix) below with respect to such
Exercise Notice or the related Warrants; provided, however, that the
Warrant Agent shall deliver a copy of the Exercise Notice relating to
such Warrants to the Company as required by clause (ix) below and the
Company may waive any defect in the form of such Exercise Notice;
(ii) with respect to each Warrant held through
Euroclear for which an Exercise Notice was received, promptly
telephone Euroclear to determine whether Euroclear anticipates that it
will be able to provide a Euroclear Confirmation as required by
Section 2.02(a) hereof;
(iii) notify the Company and the Calculation Agent
(and such other parties (not to exceed two) as the Company shall
designate in writing) by 5:00 p.m., New York City time, on the
Business Day that such Exercise Notice has been received (or shall be
deemed to have been received) of (A) the total number of Warrants
covered by such Exercise Notice, (B) the number of such Warrants
subject to the Limit Option, (C) the number of such Warrants not
subject to the Limit Option and (D) the number of such Warrants, if
any, as to which Euroclear has not advised the Warrant Agent that it
anticipates being able to provide a Euroclear Confirmation as required
by Section 2.02(a) hereof;
(iv) with respect to Warrants held through Euroclear,
determine whether the Warrant Agent has received by 9:00 a.m., New
York City time, on the Valuation Date relating to such Warrants,
Euroclear Confirmations with respect to such Warrants as required by
Section 2.02(a) hereof, and if the Warrant Agent has not received any
such Euroclear Confirmation by such time, notify the Company and the
Calculation Agent (and such other parties (not to exceed two) as the
Company shall designate in writing) by 10:00 a.m., New York City time,
on such Valuation Date of the number of such Warrants in respect of
which the Warrant Agent has not received such Euroclear Confirmations
and (except to the extent the Company has notified the Warrant Agent
that it has waived the requirement of timely delivery of such
Euroclear Confirmation) send to the Euroclear participant that
executed such Exercise Notice for which no related Euroclear
Confirmation was received (at the address specified in such notice) a
notice of rejection substantially in the form set forth in Exhibit C
hereto;
(v) if any of the Warrants covered by such Exercise
Notice constitute Warrants subject to the Limit Option, the Warrant
Agent shall, by 5:00 p.m., New York City time, on the applicable
Valuation Date for such Warrants, (A) obtain from the Calculation
Agent the Closing Index Level and the applicable Limit Option Index
Level for the Scheduled Trading Day that, but for the provisions of
Section 2.04 hereof, would
6
be the Valuation Date for such Warrants, (B) determine in accordance
with Section 2.04 hereof whether such Warrants will be subject to
exercise after giving effect to the Limit Option and, if such Warrants
will not be subject to exercise, send to the Participant that
submitted such Exercise Notice a notice of rejection substantially in
the form set forth in Exhibit D hereto with respect to such Warrants
and (to the extent received in the case of Warrants held through
Clearstream and Euroclear), redeliver the Warrants free through the
facilities of the Depository to the account of such Participant and
(C) notify the Company and the Calculation Agent as to whether such
Warrants will be subject to exercise;
(vi) by 5:00 p.m., New York City time, on the Exercise
Date for such Warrants, (A) determine the sum of (1) the number of
such Warrants not subject to the Limit Option (that is, the number of
Warrants determined pursuant to clause (iii)(C) above) plus (2) the
number of such Warrants with respect to which the Limit Option has
been elected but that, notwithstanding such election, will be subject
to exercise (that is, the number of Warrants so identified pursuant to
clause (v)(B) above) (all of such Warrants determined pursuant to (1)
and (2), the "Exercised Warrants") and (B) notify the Company and the
Calculation Agent of the total number of Exercised Warrants so
determined (if such number is zero, the Warrant Agent shall not take
the actions required by clauses (vii) and (viii) below with respect to
such Exercise Notice or the related Warrants);
(vii) obtain from the Calculation Agent the
calculation of the Cash Settlement Value of the Exercised Warrants
(excluding any Warrants held through Clearstream or Euroclear as to
which timely delivery of the related Warrant has not been made) as of
their Valuation Date in the manner set forth in Section 2.02(c) hereof
by no later than 5:00 p.m., New York City time, on the applicable
Valuation Date;
(viii) notify the Company (and such other parties (not
to exceed two) as the Company shall designate in writing) by 5:00
p.m., New York City time, on the applicable Valuation Date of the
aggregate Cash Settlement Value payable in respect of the Exercised
Warrants, and send notices of confirmation substantially in the form
included in Exhibit C to the appropriate Participant specifying
therein the reference number assigned by the Warrant Agent to each
accepted Exercise Notice; and
(ix) promptly deliver a copy of each Exercise Notice
to the Company and advise the Company of such other matters relating
to the Exercised Warrants as the Company shall reasonably request. Any
notice to be given to the Company by the Warrant Agent pursuant to
this Section 2.02 shall be by telephone (promptly confirmed in
writing) or telecopy.
Except in the case of Warrants subject to automatic exercise
(as described in Section 2.07 hereof), if on any applicable Valuation Date the
Cash Settlement Value for any Warrants then exercised would be zero, then the
attempted exercise of such Warrants shall be void and of no effect and such
Warrants shall be transferred by the Warrant Agent back to the Participant
(including Clearstream and Euroclear) that submitted them free to the Warrant
Agent on the records of the Depository (to the extent received in the case of
Warrants held through
7
Clearstream or Euroclear) and, in any such case, the Warrants in question shall
remain outstanding and exercisable thereafter.
(c) The Company shall make available to the Warrant Agent, not
later than 3:00 p.m., New York City time, on the third Business Day following
the Valuation Date (the "Settlement Payment Date"), funds in an amount
sufficient to pay the aggregate Cash Settlement Value of the Exercised Warrants.
If the Company has made such funds available as provided in the preceding
sentence, the Warrant Agent will be responsible for making funds available to
the Depository in accordance with procedures agreed upon between the Depository
and the Warrant Agent, against receipt of the Global Warrant Certificate, after
3:00 p.m., New York City time, but prior to the close of business, on the
Settlement Payment Date, such funds to be in an amount equal to the aggregate
Cash Settlement Value of the Warrants that were delivered to the Warrant Agent
(together with the related Exercise Notice) as provided in Sections 2.01 and
2.02(a) and (b) hereof. The Depository will be responsible for disbursing such
funds to each appropriate Participant, and such Participant will be responsible
for disbursing such funds to the Warrantholders it represents and to each
brokerage firm for which it acts as agent. Each such brokerage firm will be
responsible for disbursing funds to the Warrantholders it represents.
(d) The Warrant Agent shall cause its records, which may be
kept electronically, to be marked to reflect the reduction in the number of
Warrants represented by the Global Warrant Certificate by the number of Warrants
that were delivered to the Warrant Agent and for which payment has been made as
provided in Section 2.02(c) hereof promptly after such delivery and payment.
Absent manifest error, the Warrant Agent's records shall be conclusive evidence
of such matters.
SECTION 2.03. Discontinuance of a Relevant Index; Alteration
of Method of Calculating a Relevant Index. (a) If the publisher of a Relevant
Index discontinues publication of such index and such publisher or another
entity publishes a successor or substitute index that the Calculation Agent
determines, in its sole discretion exercised in good faith, to be comparable to
the discontinued Relevant Index, then that successor or substitute index shall
be deemed to be the Relevant Index and the Calculation Agent shall determine the
Final Index Level to be used for purposes of computing the Cash Settlement Value
by reference to the Final Index Level of such successor or substitute index on
the date that the Final Index Level of the Relevant Index is to be determined.
If the publisher of a Relevant Index discontinues publication
of such index and the Calculation Agent determines that no successor or
substitute index is available at such time, or if the publisher of such Relevant
Index fails to calculate and publish the closing level for the Relevant Index on
the Valuation Date in accordance with customary practice, then, on such date,
the Calculation Agent shall determine the Final Index Level of the Relevant
Index to be used. In such circumstances, the Final Index Level of the Relevant
Index shall be computed by the Calculation Agent in accordance with the formula
for and method of calculating the Relevant Index last in effect prior to such
discontinuance or failure to publish, using the Closing Price (or, if trading in
the relevant securities has been materially suspended or materially limited, its
good faith estimate of the Closing Price that would have prevailed but for such
suspension or limitation) on such date of each security most recently comprising
the Relevant Index on the Relevant Exchange on which such security trades.
8
(b) If at any time the Calculation Agent determines that the
method of calculating a Relevant Index, or the Closing Index Level thereof on
any particular day, is changed in a material respect, or if the Relevant Index
is in any other way modified so that such Relevant Index does not, in the
opinion of the Calculation Agent, fairly represent the value of the Relevant
Index had such changes or modifications not been made, then, from and after such
time, the Calculation Agent will, at the Close of Trading of the Relevant
Exchanges on which the securities comprising the Relevant Index are traded, on
any date that the Final Index Level is to be determined, make such calculations
and adjustments as, in its good faith judgment, may be necessary in order to
arrive at a level of a stock index comparable to the Relevant Index as if such
changes or modifications had not been made, and calculate the Final Index Level
on any particular day and the Cash Settlement Value with reference to the
Relevant Index, as adjusted. Accordingly, if the method of calculating the
Relevant Index is modified so that the level of such index is a fraction of what
it would have been if it had not been modified, then the Calculation Agent shall
adjust such index in order to arrive at a level of the Relevant Index as if it
had not been modified.
SECTION 2.04. Limit Option. Except in the event of an
automatic exercise (as described in Section 2.07 hereof), in connection with any
exercise of Warrants, the related Exercise Notice may specify that such exercise
is subject to the condition that the Final Index Level that would otherwise be
used to determine the Cash Settlement Value of such Warrants shall not have
declined by five percent (5%) or more from the Limit Option Index Level for such
Warrants. "Limit Option Index Level", with respect to any Warrants subject to
the Limit Option, means the last available Closing Index Level as of the
applicable Exercise Date. The option of a Warrantholder to condition an exercise
of Warrants as provided in this Section 2.04 is herein referred to as the "Limit
Option". If a Warrantholder elects the Limit Option in connection with any
exercise of Warrants, the following provisions shall apply:
(i) to be valid, such election must be specified in
the related Exercise Notice. Each of the Warrant Agent and the Company
shall be entitled to rely conclusively on such Exercise Notice, as
received by the Warrant Agent, in determining whether such election
has been validly made;
(ii) the Limit Option Index Level shall be determined
by the Calculation Agent, which determination shall be conclusive and
binding for all purposes relating to such exercise;
(iii) in the event that the Closing Index Level for
the first Scheduled Trading Day following the applicable Exercise Date
(that is, for the day that, but for the provisions of this Section
2.04, would be the Valuation Date for such Warrants) has declined by
five percent (5%) or more from the Limit Option Index Level for such
Warrants, the Warrant Agent shall determine that such Warrants (A)
shall not be subject to exercise and shall be treated for all purposes
of this Agreement and each Global Warrant Certificate as if the
related Exercise Notice had never been received by the Warrant Agent,
and (B) shall not constitute "Exercised Warrants" for purposes of
Section 2.02(b) hereof. If such Closing Index Level has not declined
by five percent (5%) or more from such Limit Option Index Level, the
Warrant Agent shall determine that such Warrants shall be subject to
exercise as provided in Section 2.02 hereof and shall be
9
deemed to be "Exercised Warrants" for such purposes. The Warrant
Agent's determination shall be conclusive and binding for all purposes
relating to such Warrants; and
(iv) once elected by a Warrantholder in connection an
exercise of Warrants, the Limit Option will continue to apply, on the
basis of the Limit Option Index Level as initially determined for such
Warrants, even if the Valuation Date for such Warrants is postponed,
except when such Valuation Date is postponed to a date of automatic
exercise of Warrants. Pursuant to the Limit Option, such Warrants will
either (a) be exercised on a delayed basis if the Closing Index Level
on any applicable postponed Valuation Date is not less than the Limit
Option Index Level by five percent (5%) or more or (b) not be
exercised if, on any applicable postponed Valuation Date, the Closing
Index Level is less than the Limit Option Index Level by five percent
(5%) or more.
SECTION 2.05. Market Disruption Events. If the Calculation
Agent determines that on a Scheduled Trading Day that would otherwise be a
Valuation Date a Market Disruption Event has occurred and is continuing, then
the Final Index Level to be used in the calculation of the Cash Settlement Value
in respect of an exercise of Warrants shall be calculated using as the Valuation
Date the next Scheduled Trading Day on which there is not a Market Disruption
Event; provided, however, if a Market Disruption Event occurs on each of the
eight Scheduled Trading Days following the originally scheduled Valuation Date,
then (a) that eighth Scheduled Trading Day shall be deemed the Valuation Date
and (b) the Calculation Agent shall determine the Final Index Level based upon
its good faith estimate of the level of the Relevant Index on that eighth
Scheduled Trading Day.
A "Market Disruption Event" with respect to the Relevant Index
will occur on any day if the Calculation Agent determines in its sole discretion
that any of the following have occurred:
(i) A material suspension of or limitation imposed on
trading relating to the securities that then comprise 20% or more of
the Relevant Index, by the Relevant Exchanges on which those
securities are traded, at any time during the one-hour period that
ends at the Close of Trading on such day, whether by reason of
movements in price exceeding limits permitted by that Relevant
Exchange or otherwise. Limitations on trading during significant
market fluctuations imposed pursuant to New York Stock Exchange Rule
80B or any applicable rule or regulation enacted or promulgated by the
New York Stock Exchange, any other exchange, quotation system or
market, any other self regulatory organization or the Securities and
Exchange Commission of similar scope or as a replacement for Rule 80B
may be considered material;
(ii) A material suspension of, or limitation imposed
on, trading in futures or options contracts relating to the Relevant
Index by the primary exchange or quotation system on which those
futures or options contracts are traded, at any time during the
one-hour period that ends at the Close of Trading on such day, whether
by reason of movements in price exceeding limits permitted by the
exchanges or otherwise;
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(iii) Any event, other than an early closure, that
disrupts or impairs the ability of market participants in general to
effect transactions in, or obtain market values for the securities
that then comprise 20% or more of the Relevant Index on the Relevant
Exchanges on which those securities are traded, at any time during the
one-hour period that ends at the Close of Trading on such day;
(iv) Any event, other than an early closure, that
disrupts or impairs the ability of market participants in general to
effect transactions in, or obtain market values for, the futures or
options contracts relating to the Relevant Index on the primary
exchange or quotation system on which those futures or options
contracts are traded at any time during the one-hour period that ends
at the Close of Trading on such day; or
(v) The closure of the Relevant Exchanges on which the
securities that then comprise 20% or more of the Relevant Index are
traded or on which futures or options contracts relating to the
Relevant Index are traded prior to its scheduled closing time unless
the earlier closing time is announced by the Relevant Exchanges at
least one hour prior to the earlier of (1) the actual closing time for
the regular trading session on the Relevant Exchanges and (2) the
submission deadline for orders to be entered into the Relevant
Exchanges for execution at the Close of Trading on such day.
For purposes of determining whether a Market Disruption Event
has occurred, the relevant percentage contribution of a security to the level of
the Relevant Index will be based on a comparison of (x) the portion of the level
of the Relevant Index attributable to that security and (y) the overall level of
the Relevant Index, in each case immediately before the occurrence of the Market
Disruption Event.
SECTION 2.06. Delisting of Warrants. In the event the Warrants
are delisted from, or permanently suspended from trading on (within the meaning
of the Securities Exchange Act of 1934, as amended), the AMEX and not accepted
at the same time for listing on another United States national securities
exchange, Warrants not previously exercised will be deemed automatically
exercised on the Delisting Date, and the Cash Settlement Value shall be
calculated and settled as provided in Section 2.02 hereof. The Company will
notify the Warrant Agent in writing, who will notify the Warrantholders as soon
as practicable of such delisting or trading suspension. However, if the Company
first receives notice of the delisting or suspension on the same day on which
the Warrants are delisted or suspended, such day will be deemed the Delisting
Date.
SECTION 2.07. Automatic Exercise of Warrants. (a) All Warrants
for which the Warrant Agent has not received an Exercise Notice in proper form
at or prior to 3:00 p.m., New York City time, on the earlier of (i) the Business
Day immediately preceding the Expiration Date or (ii) the Business Day
immediately preceding the Delisting Date, if any, or for which the Warrant Agent
has received an Exercise Notice in proper form but with respect to which timely
delivery of the relevant Warrants has not been made, will be deemed
automatically exercised on such date without any requirement of an Exercise
Notice to the Warrant Agent. The Exercise Date for such Warrants shall be the
Expiration Date or the Delisting Date, as the case may be, or if such date is
not a Business Day, the following Business Day. The Valuation Date for such
Warrants shall be the Scheduled Trading Day immediately following the date of
automatic
11
exercise, subject to postponement in the event of a Market Disruption Event, as
described in Section 2.05 hereof.
(b) The Warrant Agent shall by 5:00 p.m., New York City time,
on the Expiration Date or the Delisting Date, as the case may be, notify the
Company and the Calculation Agent (and such other parties (not to exceed two) as
the Company shall designate in writing) of the number of Warrants to be
automatically exercised on such day. The Warrant Agent shall (i) by 5:00 p.m.,
New York City time, on the applicable Valuation Date, obtain from the
Calculation Agent the calculation of the Cash Settlement Value (as determined by
the Calculation Agent in the manner provided in Section 2.02(c) hereof) of the
Warrants to be automatically exercised, (ii) by 5:00 p.m., New York City time,
on the applicable Valuation Date, notify the Company (and such other parties
(not to exceed two) as the Company shall designate in writing) of the aggregate
Cash Settlement Value payable in respect of such automatically exercised
Warrants and (iii) advise the Company of such other matters relating to the
automatically exercised Warrants as the Company shall reasonably request.
(c) The Company shall make available to the Warrant Agent, not
later than 3:00 p.m., New York City time, on the third Business Day after the
applicable Valuation Date for automatically exercised Warrants (the "Automatic
Settlement Payment Date"), funds in an amount sufficient to pay the aggregate
Cash Settlement Value of such Warrants. If the Company has made such funds
available as provided in the preceding sentence, the Warrant Agent will be
responsible for making funds available to the Depository in accordance with
procedures agreed upon between the Depository and the Warrant Agent, against
receipt of the Global Warrant Certificate, after 3:00 p.m., New York City time,
but prior to the close of business, on the Automatic Settlement Payment Date,
such funds to be in an amount equal to the aggregate Cash Settlement Value of
the Warrants subject to such automatic exercise. The Depository will be
responsible for disbursing such funds to each appropriate Participant, and such
Participant will be responsible for disbursing such funds to the Warrantholders
it represents and to each brokerage firm for which it acts as agent. Each such
brokerage firm will be responsible for disbursing funds to the Warrantholders it
represents.
SECTION 2.08. Denominations; Maximum Number of Exercisable
Warrants; Minimum Number of Exercisable Warrants. (a) The Warrants will be
issued in denominations of 100 Warrants and whole multiples of 100.
(b) All exercises of Warrants (except in the case of automatic
exercise of Warrants as described in Section 2.07 hereof) shall be subject, at
the Calculation Agent's option, to the limitation that not more than 400,000
Warrants in total may be exercised on any Exercise Date. If any Business Day
would otherwise, under the terms of this Agreement, be the Exercise Date in
respect of more than 400,000 Warrants, then at the Calculation Agent's option
(by giving notice thereof to the Warrant Agent not later than 5:00 p.m., New
York City time, on the Business Day immediately following such Exercise Date),
400,000 of such Warrants (selected by the Warrant Agent on a pro rata basis)
shall be deemed exercised on such Exercise Date, and the remainder of such
Warrants (the "Remaining Warrants") shall be deemed exercised on the following
Business Day (subject to successive applications of this Section 2.08).
Remaining Warrants shall be deemed exercised in the order of their respective
initial Exercise Dates, and Remaining Warrants shall be deemed exercised before
any other Warrants initially exercised
12
after such Remaining Warrants. The date on which any Warrant is deemed exercised
under this Section 2.08(b) shall for all purposes of this Agreement be the
"Exercise Date" in respect of such Warrant.
(c) No fewer than 500 Warrants may be exercised by a
Warrantholder at any one time, except in the case of automatic exercise of
Warrants.
SECTION 2.09. Covenant of the Company. The Company covenants,
for the benefit of the Warrantholders, that (a) it will not seek the delisting
of the Warrants from, or suspension of their trading on, the AMEX unless the
Company has, at the same time, arranged for listing of the Warrants on another
United States national securities exchange and (b) upon written request, it will
furnish any Warrantholder with a list of the then-current Underlying Shares.
SECTION 2.10. Return of Money Held Unclaimed for Two Years.
Except as otherwise provided herein, any money deposited with or paid to the
Warrant Agent for the payment of the Cash Settlement Value of any Warrants and
not applied but remaining unclaimed for two years after the date upon which such
Cash Settlement Value shall have become due and payable shall be repaid by the
Warrant Agent to the Company and the holders of such Warrants shall thereafter
look only to the Company for any payment which such holders may be entitled to
collect and all liability of the Warrant Agent with respect to such money shall
thereupon cease; provided, however, that the Warrant Agent, before making any
such repayment, may at the expense of the Company notify the Participants
concerned, that said money has not been so applied and remains unclaimed and
that after a date named in the notification any unclaimed balance of said money
then remaining will be returned to the Company.
SECTION 2.11. Return of Global Warrant Certificate. At such
time as all of the Warrants evidenced by a Global Warrant Certificate have been
exercised (including pursuant to an automatic exercise) and all payments to the
Participants made as provided herein, the Warrant Agent shall, upon written
direction from the Company, destroy the canceled Global Warrant Certificate
(unless instructed by the Company in writing to deliver the Global Warrant
Certificate to the Company) and shall provide a certificate of destruction to
the Company.
ARTICLE III
OTHER PROVISIONS RELATING TO
RIGHTS OF WARRANTHOLDERS
SECTION 3.01. Warrantholder May Enforce Rights.
Notwithstanding any of the provisions of this Agreement, any Warrantholder,
without the consent of the Warrant Agent, may, in and for its own behalf,
enforce, and may institute and maintain, any suit, action or proceeding against
the Company suitable to enforce, or otherwise in respect of, its right to
exercise, and to receive payment for, its Warrants as provided in this
Agreement.
SECTION 3.02. Merger, Consolidation, Sale, Transfer or
Conveyance. If at any time there shall be a merger or consolidation involving
the Company or a sale, transfer, conveyance (other than by way of lease) or
other disposition of substantially all of the assets of
13
the Company, then the successor or assuming corporation shall succeed to and be
substituted for the Company under this Agreement and the Warrants, with the same
effect as if it had been named herein and in any Global Warrant Certificate as
the Company. The Company shall thereupon be relieved of any further obligation
hereunder or under the Warrants and may at any time thereafter be dissolved,
wound up or liquidated. In any case of any such consolidation or merger
involving the Company or sale, transfer, conveyance or other disposition of
substantially all of the assets of the Company, any changes in phraseology and
form (but not in substance) that may be appropriate may be made in the Global
Warrant Certificates delivered thereafter.
The Warrant Agent may rely on a written opinion of counsel as
conclusive evidence that any such consolidation or merger involving the Company
or sale, transfer, conveyance (other than by way of lease) or other disposition
of substantially all of the assets of the Company complies with the provisions
of this Section 3.02.
ARTICLE IV
WARRANTS ACQUIRED BY THE COMPANY;
PAYMENT OF TAXES; TAXATION OF WARRANTS
SECTION 4.01. Warrants Acquired by the Company. In the event
the Company shall purchase or otherwise acquire Warrants, such Warrants may, at
the option of the Company, be surrendered free through a Participant to the
Depository for credit to the account of the Warrant Agent maintained at the
Depository, and if so credited, the Warrant Agent shall promptly note the
cancellation of such Warrants by notation on the records of the Warrant Agent.
Such Warrants may also, at the option of the Company, be resold by the Company
directly or to or through any of its affiliates in lieu of being surrendered to
the Depository.
Any canceled Global Warrant Certificate held by the Warrant
Agent under this Agreement shall be destroyed by the Warrant Agent unless
otherwise directed in writing by the Company, and the Warrant Agent shall
deliver a certificate of destruction to the Company evidencing the same.
SECTION 4.02. Payment of Taxes. The Company will pay all
stamp, withholding and other duties, if any, attributable to the initial
issuance of Warrants; provided, however, that, anything in this Agreement to the
contrary notwithstanding, the Company shall not be required to pay any tax or
other governmental charge which may be payable in respect of any transfer
involving any beneficial or record interest in, or ownership interest of, any
Warrants, which tax or other governmental charge shall be paid by the
appropriate Warrantholder.
SECTION 4.03. Taxation of Warrants. The Company intends to
treat and, by purchasing a Warrant, the Warrantholder agrees to treat, for all
tax purposes, a Warrant as a cash settlement option within the meaning of
section 1234(c) of the Internal Revenue Code of 1986, as amended.
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ARTICLE V
CONCERNING THE WARRANT AGENT
SECTION 5.01. Warrant Agent. (a) The Company hereby appoints
Citibank, N.A. ("Citibank") as Warrant Agent of the Company in respect of the
Warrants upon the terms and subject to the conditions set forth herein; and
Citibank hereby accepts such appointment.
The Warrant Agent shall have the powers and authority granted
to and conferred upon it in this Agreement and such further powers and authority
to act on behalf of the Company as the Company may hereafter grant to or confer
upon it. All of the terms and provisions with respect to such powers and
authority contained in any Global Warrant Certificate are subject to and
governed by the terms and provisions hereof.
(b) Citibank covenants and agrees to maintain an office,
staffed by qualified personnel, with adequate facilities for the discharge of
its responsibilities under this Agreement, including, without limitation, the
payment of the Cash Settlement Value, as calculated by the Calculation Agent,
and the timely settlement of the Warrants upon exercise thereof.
SECTION 5.02. Conditions of Warrant Agent's Obligations. The
Warrant Agent accepts its obligations herein set forth upon the terms and
conditions hereof, including the following, to all of which the Company agrees
and to all of which the rights hereunder of the Warrantholders shall be subject:
(a) The Company agrees promptly to pay the Warrant Agent the
compensation to be agreed upon with the Company for all services rendered by the
Warrant Agent and to reimburse the Warrant Agent for its reasonable
out-of-pocket expenses (including reasonable attorneys' fees and expenses)
incurred by the Warrant Agent without negligence, bad faith or breach of this
Agreement on its part in connection with the services rendered by it hereunder.
The Company also agrees to indemnify the Warrant Agent and its officers,
directors, agents and employees for, and to hold it and them harmless against,
any loss, liability or expense (including reasonable attorneys' fees and
expenses) incurred without negligence, bad faith or breach of this Agreement on
the part of the Warrant Agent, arising out of or in connection with its acting
as such Warrant Agent hereunder, as well as the reasonable costs and expenses of
defending against any claim of liability in the premises. This section shall
survive the termination of this Agreement and the earlier removal or resignation
of the Warrant Agent.
(b) In acting under this Agreement, the Warrant Agent is
acting solely as agent of the Company and does not assume any obligation or
relationship of agency or trust for or with any of the owners or holders of the
Warrants.
(c) The Warrant Agent may consult with counsel satisfactory to
it, and the opinion of such counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in accordance with the opinion of such counsel.
(d) The Warrant Agent shall be fully protected and shall incur
no liability for or in respect of any action taken or thing suffered by it in
reliance upon any notice, direction,
15
consent, certificate, affidavit, statement or other paper or document believed
by it to be genuine and to have been presented or signed by the proper parties,
and the Warrant Agent may, if it shall deem it necessary or desirable, request
such papers or documents prior to taking any action hereunder.
(e) The Warrant Agent, and its officers, directors, agents and
employees, may become the owner of, or acquire any interest in, any Warrants or
other obligations of the Company, with the same rights that it or they would
have if it were not the Warrant Agent hereunder and, to the extent permitted by
applicable law, it or they may engage or be interested in any financial or other
transaction with the Company and may act on, or as depository, trustee or agent
for, any committee or body of holders of Warrants or other obligations of the
Company as freely as if it were not the Warrant Agent hereunder.
(f) The Warrant Agent shall not be under any liability for
interest on any monies at any time received by it pursuant to any of the
provisions of this Agreement nor shall it be obligated to segregate such monies
from other monies held by it, except as required by law. The Warrant Agent shall
not be responsible for advancing funds on behalf of the Company.
(g) The Warrant Agent shall not be under any responsibility
with respect to the validity or sufficiency of this Agreement or the execution
and delivery hereof (except the due execution and delivery hereof by the Warrant
Agent) or with respect to the validity or execution of the Global Warrant
Certificates (except its countersignature thereof).
(h) The recitals contained herein and in the Global Warrant
Certificates (except as to the Warrant Agent's countersignature thereon) shall
be taken as the statements of the Company, and the Warrant Agent assumes no
responsibility for the correctness of the same.
(i) The Warrant Agent shall be obligated to perform such
duties as are herein specifically set forth, and no implied duties or
obligations shall be read into this Agreement against the Warrant Agent. The
Warrant Agent shall not be under any obligation to take any action hereunder
likely to involve it in any expense or liability, the payment of which is not,
in its reasonable opinion, assured to it. The Warrant Agent shall not be
accountable or under any duty or responsibility for the application by the
Company of any proceeds. The Warrant Agent shall have no duty or responsibility
in case of any default by the Company in the performance of its covenants or
agreements contained in any Global Warrant Certificate or in the case of the
receipt of any written demand from a holder of a Warrant with respect to such
default, including, without limiting the generality of the foregoing, any duty
or responsibility to initiate or attempt to initiate any proceedings at law or
otherwise or, except as provided in Section 7.03 hereof, to make any demand upon
the Company.
(j) The Warrant Agent shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, entitlement
order, approval or other paper or document.
(k) The Warrant Agent may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents, attorneys, custodians or
16
nominees appointed with due care, and shall not be responsible for any
misconduct or negligence on the part of any agent, attorney, custodian or
nominee so appointed.
SECTION 5.03. Resignation and Appointment of Successor. (a)
The Company agrees, for the benefit of the Warrantholders, that there shall at
all times be a Warrant Agent hereunder until all the Warrants are no longer
outstanding or until monies for the payment of all outstanding Warrants, if any,
shall have been paid to the Warrant Agent and shall have been returned to the
Company as provided in Section 2.10 hereof, whichever occurs earlier.
(b) The Warrant Agent may at any time resign as such agent by
giving written notice to the Company of such intention on its part, specifying
the date on which its desired resignation shall become effective, subject to the
appointment of a successor Warrant Agent and acceptance of such appointment by
such successor Warrant Agent as hereinafter provided. The Warrant Agent
hereunder may be removed at any time by the filing with it of an instrument in
writing signed by or on behalf of the Company and specifying such removal and
the date when it shall become effective. Such resignation or removal shall take
effect upon the appointment by the Company, as hereinafter provided, of a
successor Warrant Agent (which shall be a banking institution organized under
the laws of the United States of America or one of the states thereof and having
an office in the Borough of Manhattan, New York City) and the acceptance of such
appointment by such successor Warrant Agent. In the event a successor Warrant
Agent has not been appointed and accepted its duties within 90 days of the
Warrant Agent's notice of resignation or its removal, the Warrant Agent may
apply to any court of competent jurisdiction for the designation of a successor
Warrant Agent. The obligation of the Company under Section 5.02(a) hereof shall
continue to the extent set forth therein notwithstanding the resignation or
removal of the Warrant Agent.
(c) In case at any time the Warrant Agent shall give notice of
its intent to resign, or shall be removed, or shall become incapable of acting,
or shall be adjudged a bankrupt or insolvent, or make an assignment for the
benefit of its creditors, or consent to the appointment of a receiver or
custodian of all or any substantial part of its property, or shall admit in
writing its inability to pay or meet its debts as they mature, or if a receiver
or custodian of it or of all or any substantial part of its property shall be
appointed, or if any public officer shall have taken charge or control of the
Warrant Agent or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, a successor Warrant Agent, qualified as aforesaid,
shall be promptly appointed by the Company by an instrument in writing, filed
with the successor Warrant Agent. Upon the appointment as aforesaid of a
successor Warrant Agent and acceptance by the latter of such appointment, the
Warrant Agent so superseded shall cease to be Warrant Agent hereunder.
(d) Any successor Warrant Agent appointed hereunder shall
execute, acknowledge and deliver to its predecessor and to the Company an
instrument accepting such appointment hereunder, and thereupon such successor
Warrant Agent, without any further act, deed or conveyance, shall become vested
with all the authority, rights, powers, trust, immunities, duties and
obligations of such predecessor with like effect as if originally named as
Warrant Agent hereunder, and such predecessor, upon payment of its charges and
disbursements then due and unpaid, shall thereupon become obligated to transfer,
deliver and pay over, and such successor Warrant Agent shall be entitled to
receive, all monies, securities and other property on deposit with or held by
such predecessor, as Warrant Agent hereunder.
17
(e) Any corporation into which the Warrant Agent hereunder may
be merged or converted or any corporation with which the Warrant Agent may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Warrant Agent shall be a party, or any corporation to
which the Warrant Agent shall sell or otherwise transfer all or substantially
all the corporate trust assets and business of the Warrant Agent, provided that
it shall be qualified as aforesaid, shall be the successor Warrant Agent under
this Agreement without the execution or filing of any paper or any further act
on the part of any of the parties hereto.
ARTICLE VI
CONCERNING THE CALCULATION AGENT
SECTION 6.01. Calculation Agent. The Company hereby appoints
Xxxxxx Brothers Inc. to be the Company's Calculation Agent for the purpose of
performing the services described herein upon the terms and subject to the
conditions set forth herein; and Xxxxxx Brothers Inc. hereby accepts such
appointment.
SECTION 6.02. Calculations and Information Provided. (a) The
Calculation Agent will determine the Cash Settlement Value in respect of an
exercise of Warrants and will be responsible for determining each of the
following items:
(i) the Final Index Level, including any adjustments
thereto, and the Initial Index Level;
(ii) whether and what adjustments to any Relevant
Index should be made;
(iii) any successor or substitute index if publication
of a Relevant Index is discontinued;
(iv) the Final Index Level of the Relevant Index if
(1) the publisher of the Relevant Index discontinues publication of
such index and the Calculation Agent determines that no successor or
substitute index is available at such time, (2) the publisher of such
Relevant Index fails to calculate and publish a closing level for the
Relevant Index on the Valuation Date in accordance with customary
practice or (3) the circumstances described in the proviso of the
first paragraph of Section 2.05 hereof occur;
(v) whether a particular day is a Scheduled Trading
Day;
(vi) whether a Market Disruption Event has occurred
and the applicable Valuation Date;
(vii) whether to limit the number of Warrants
exercisable on any date, other than automatic exercises, to an
aggregate of 400,000 as described in Section 2.08 hereof;
(viii) any Limit Option Index Level; and
18
(ix) any other calculation, determination or
adjustment specified as being made by the Calculation Agent in this
Agreement or the relevant Warrants.
The Calculation Agent shall timely notify the Warrant Agent of
all such calculations, determinations and adjustment or if a Market Disruption
Event with respect to the Warrants has occurred.
(b) Any calculation or determination by the Calculation Agent
under this Agreement shall be made at the sole discretion of the Calculation
Agent and shall (in the absence of manifest error) be final and binding on the
Company, the Warrant Agent, the Warrantholders and any Participant. Any such
calculations will be made available to a Warrantholder for inspection at the
Warrant Agent's Office.
SECTION 6.03. Conditions of Calcuation Agent's Obligations.
The Calculation Agent accepts its obligations herein set forth upon the terms
and conditions hereof, including the following, to all of which the Company
agrees and to all of which the rights hereunder of the Warrantholders shall be
subject:
(a) The Calculation Agent shall act as an independent expert
and not as an agent of the Company and does not assume any obligation toward, or
any relationship of agency or trust for or with, any Warrantholders.
(b) Unless otherwise specifically provided herein, any order,
certificate, notice, request, direction or other communication from the Company
or the Warrant Agent made or given under any provision of this Agreement shall
be sufficient if signed by any person who the Calculation Agent reasonably
believes to be a duly authorized officer or attorney-in-fact of the Company or
the Warrant Agent, as the case may be.
(c) The Calculation Agent shall be obliged to perform only
such duties as are set out specifically herein and any duties necessarily
incidental thereto.
(d) The Calculation Agent, whether acting for itself or in any
other capacity, may become the owner or pledgee of Warrants with the same rights
as it would have had if it were not acting hereunder as Calculation Agent.
(e) The Calculation Agent shall incur no liability hereunder
except for loss sustained by reason of its gross negligence or willful
misconduct.
SECTION 6.04. Resignation and Appointment of Successor(a) .
(a) The Company agrees, for the benefit of the Warrantholders from time to time,
that there shall at all times be a Calculation Agent hereunder until all the
Warrants are no longer outstanding or until monies for the payment of all
outstanding Warrants, if any, shall have been paid to the Warrant Agent and
shall have been returned to the Company as provided in Section 2.10 hereof,
whichever occurs earlier.
(b) Resignation, removal and appointment of the Calculation
Agent shall be in accordance with the procedures set forth for the resignation,
removal and appointment of the Warrant Agent, as provided in Section 5.03
hereof, except that a successor Calculation Agent
19
need not be a banking institution with offices in the Borough of Manhattan,
New York City, and may only be appointed if such successor has been nominated by
the Company.
SECTION 6.05. Compensation; Indemnification The Company agrees
promptly to pay the Calculation Agent the compensation to be agreed upon with
the Company for all services rendered by the Calculation Agent hereunder. The
Company also agrees to indemnify the Calculation Agent for, and to hold it
harmless against, any loss, liability, cost or expense (including reasonable
attorneys' fees and expenses) incurred by the Calculation Agent by reason of its
being made a party to a suit or claim arising out of this Agreement; provided,
however, that such indemnity shall in no event apply to the extent that any such
loss, liability, cost or expense is a result of the gross negligence or willful
misconduct of the Calculation Agent or any of its agents or employees. The
Calculation Agent shall incur no liability and shall be indemnified and held
harmless by the Company for or in respect of any action taken or suffered to be
taken in good faith by the Calculation Agent in reliance upon written
instructions from the Company. The indemnity obligation of the Company shall
continue notwithstanding the termination of this Agreement or the resignation or
removal of the Calculation Agent.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Definitions. Set forth below are certain defined
terms used in this agreement.
"AMEX" shall mean the American Stock Exchange LLC.
"Automatic Settlement Payment Date" shall have the meaning set
forth in Section 2.07(c) hereof.
"Average Execution Price" means, for a security or other
property, the average per unit execution price that an affiliate of the Company
receives or pays for such security or property, as the case may be, to hedge the
Company's obligations under the Warrants.
"Business Day" shall mean any day that is not a Saturday,
Sunday or a day on which The New York Stock Exchange, Inc., The Nasdaq Stock
Market, Inc. or the AMEX is not open for trading or banking institutions or
trust companies in New York City are authorized or obligated by law or executive
order to close.
"Calculation Agent" shall have the meaning set forth in the
preamble hereto.
"Cash Settlement Value" of a Warrant shall equal an amount in
U.S. dollars (rounded down to the nearest one-hundredth of a cent) that is the
greater of (A) zero and (B) the product of (i) the quotient obtained by dividing
(x) the amount, if any, by which the Final Index Level for the applicable
Valuation Date exceeds the Strike Price by (y) the Initial Index Level and (ii)
the Notional Amount.
20
"Citibank" shall have the meaning set forth in Section 5.01(a)
hereof.
"Clearstream" shall have the meaning set forth in Section
1.01(c) hereof.
"Close of Trading" shall mean, in respect of any Relevant
Exchange or other exchange or quotation system, the scheduled weekday closing
time on a day on which the Relevant Exchange or other exchange or quotation
system is scheduled to be open for trading for its respective regular trading
session, without regard to after hours or any other trading outside of the
regular trading session hours.
"Closing Index Level" shall mean, with respect to any Relevant
Index on any particular day, (a) the closing level of the Relevant Index as
reported by the publisher of the Relevant Index on such day, as determined and
adjusted by the Calculation Agent pursuant to this Agreement, or (b) as
otherwise determined by the Calculation Agent pursuant to this Agreement if the
Relevant Index has been discontinued or in the circumstances described in the
proviso of the first paragraph of Section 2.05 hereof.
"Closing Price" shall mean, for any security underlying a
Relevant Index, as determined by the Calculation Agent on any particular day,
based on information reasonably available to it: (1) if the security is listed
on a Relevant Exchange, the last reported sale price per share at the Close of
Trading on such day on the Relevant Exchange; (2) if the security is not listed
on a Relevant Exchange, and is listed or traded on a bulletin board, the Average
Execution Price per share of the security; or (3) as otherwise determined by the
Calculation Agent pursuant to this Agreement in the circumstances described in
the proviso of the first paragraph of Section 2.05 hereof.
"Company" shall have the meaning set forth in the preamble
hereto.
"Delisting Date" shall mean, if the Warrants are delisted, the
effective date of their delisting from, or permanent suspension from trading on,
the AMEX or another United States national securities exchange and failure to
list the Warrants on another United States national securities exchange.
"Depository" shall have the meaning set forth in Section
1.02(d) hereof.
"Euroclear" shall have the meaning set forth in Section
1.01(b) hereof.
"Euroclear Confirmation" shall have the meaning set forth in
Section 2.02(a) hereof.
"Exercise Date" shall have the meaning set forth in Section
2.02(a) hereof.
"Exercise Notice" shall have the meaning set forth in Section
2.01 hereof.
"Exercised Warrants" shall have the meaning set forth in
Section 2.02(b)(vi) hereof.
"Expiration Date" shall have the meaning set forth in Section
2.01 hereof.
21
"Final Index Level" shall mean the Closing Index Level on the
applicable Valuation Date, subject to postponement if a Market Disruption Event
occurs as described in Section 2.05 hereof.
"Global Warrant Certificate" shall have the meaning set forth
in Section 1.01(b) hereof.
"Initial Index Level" shall mean 11192.17, the Closing Index
Level on May 6, 2005.
"Limit Option" shall have the meaning set forth in Section
2.04 hereof.
"Limit Option Index Level" shall have the meaning set forth in
Section 2.04 hereof.
"Market Disruption Event" shall have the meaning set forth in
Section 2.05 hereof.
"Notional Amount" shall equal $66.
"Participants" shall have the meaning set forth in Section
1.02(d) hereof.
"Relevant Exchange" shall mean, for each security included in
a Relevant Index, the primary exchange, quotation system (which includes
bulletin board services) or other market of trading for such security.
"Relevant Index" shall mean any stock index designated as such
by the Calculation Agent in accordance with this Agreement, including any
successor or substitute index selected by the Calculation Agent in accordance
with this Agreement upon discontinuance of an index. The Relevant Index shall
initially be the Nikkei 225(SM) Index.
"Remaining Warrants" shall have the meaning set forth in
Section 2.08(b) hereof.
"Scheduled Trading Day" shall mean any day on which a Relevant
Index is published by its publisher or otherwise determined by the Calculation
Agent pursuant to this Agreement.
"Settlement Payment Date" shall have the meaning set forth in
Section 2.02(c) hereof.
"Strike Price" shall equal the Initial Index Value.
"Underlying Shares" shall have the meaning set forth in
Section 1.01(b) hereof.
"Valuation Date" for a Warrant shall mean the first Scheduled
Trading Day following the Exercise Date, subject to postponement as a result of
a Market Disruption Event as described in Section 2.05 hereof.
"Warrant" shall have the meaning set forth in the recitals
hereto. The term "Warrants" has a corresponding meaning.
22
"Warrant Account" shall have the meaning set forth in Section
2.01 hereof.
"Warrant Agent" shall have the meaning set forth in the
preamble hereto.
"Warrant Agent's Office" shall mean 000 Xxxx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other address as shall be specified in
writing by the Warrant Agent.
"Warrantholder" shall have the meaning set forth in Section
1.01(b) hereof.
SECTION 7.02. Amendment. (a) This Agreement and the terms of
the Warrants may be amended by the Company, the Warrant Agent and the
Calculation Agent, without the consent of the Warrantholders, for the purpose of
curing any ambiguity, or of curing, correcting or supplementing any defective or
inconsistent provision contained herein or therein, to maintain the Warrants'
listing on the AMEX or any other national securities exchange or securities
association on which they are then listed, to reflect the issuance by the
Company of additional warrants or in any other manner which the Company may deem
necessary or desirable and which, as determined by the Company in its sole
discretion, will not adversely affect the interests of the holders of the
Warrants.
(b) The Company, the Warrant Agent and the Calculation Agent
may modify or amend this Agreement, with the consent of Warrantholders holding
not less than a majority in number of the then outstanding Warrants affected by
such modification or amendment, for any purpose; provided, however, that no such
modification or amendment that changes the determination of the Cash Settlement
Value of a Warrant (or any aspects of such determination) so as to reduce the
amount receivable upon exercise of a Warrant, shortens the period of time during
which the Warrants may be exercised, or otherwise materially and adversely
affects the exercise rights of the Warrantholders or reduces the percentage of
the number of outstanding Warrants, the consent of whose holders is required for
modification or amendment of this Agreement, may be made without the consent of
each Warrantholder affected thereby. The Warrant Agent may, but shall not be
obligated to, enter into any amendment of this Agreement that affects its
rights, duties, immunities or indemnities hereunder.
SECTION 7.03. Notices and Demands to the Company, the Warrant
Agent and the Calculation Agent. If the Warrant Agent or the Calculation Agent
shall receive any notice or demand addressed to the Company by any Warrantholder
pursuant to the provisions of this Agreement, the Warrant Agent or the
Calculation Agent, as the case may be, shall promptly forward such notice or
demand to the Company.
SECTION 7.04. Addresses for Notices. (a) Any communications to
the Warrant Agent with respect to this Agreement shall be addressed to Citibank,
N.A., 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx
Xxxxxxx (telephone: (000) 000-0000; facsimile: (212) - ), (b) any communications
to the Company with respect to this Agreement shall be addressed to Xxxxxx
Brothers Holdings Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Treasurer (telephone: (000) 000-0000; facsimile: (000) 000-0000), with a copy to
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Secretary
(telephone: (000) 000-0000; facsimile: (000) 000-0000), and (c) any
communications to the Calculation Agent with respect to this Agreement shall be
addressed to Xxxxxx Brothers Inc.,
23
000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Equity Derivatives
Trading (telephone: (000) 000-0000; facsimile: (000) 000-0000) (or such other
address as shall be specified in writing by the Warrant Agent, the Company or
the Calculation Agent, respectively).
SECTION 7.05. Notices to Holders. The Company may cause to
have notice given to the Warrantholders by providing the Warrant Agent with a
form of notice to be distributed by the Depository to Participants in accordance
with the custom and practices of the Depository.
SECTION 7.06. Obtaining of Approvals. The Company will from
time to time take all action which may be necessary to obtain and keep effective
(a) any and all permits, consents and approvals of governmental agencies and
authorities and the AMEX or any successor United States national securities
exchange and (b) any and all filings or notices under United States Federal and
state securities laws, which may be or become required in connection with the
issuance, sale, trading, transfer or delivery of the Global Warrant Certificates
or the exercise of the Warrants.
SECTION 7.07. Persons Having Rights Under This Agreement.
Nothing in this Agreement expressed or implied and nothing that may be inferred
from any of the provisions hereof is intended, or shall be construed, to confer
upon, or give to, any person or corporation other than the Company, the Warrant
Agent, the Calculation Agent, the registered holder of the Global Warrant
Certificates and the Warrantholders any right, remedy or claim under or by
reason of this Agreement or of any covenant, condition, stipulation, promise or
agreement hereof; and all covenants, conditions, stipulations, promises and
agreements contained in this Agreement shall be for the sole and exclusive
benefit of the Company, the Warrant Agent, the Calculation Agent, and their
respective successors, the registered holder of the Global Warrant Certificates
and of the Warrantholders.
SECTION 7.08. Inspection of Agreement. A copy of this
Agreement shall be available during the Warrant Agent's normal business hours at
the Warrant Agent's Office, which is located at 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, for inspection by the Warrantholders, Participants or any
person certified by any Participant to be an indirect participant of the
Depository or any person certified by any Participant to be a Warrantholder, in
each case, on behalf of whom such Participant holds Warrants.
SECTION 7.09. Headings.The descriptive headings of the several
Articles and Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the provisions
hereof.
SECTION 7.10. Counterparts. This Agreement may be executed by
the parties hereto in any number of counterparts, each of which counterpart,
when so executed and delivered, shall be deemed to be an original, but all such
counterparts taken together shall constitute but one and the same instrument.
Delivery of an executed counterpart of a signature page of this Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart of this Agreement.
24
SECTION 7.11. GOVERNING LAW. THIS AGREEMENT AND EACH WARRANT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.
25
IN WITNESS WHEREOF, this Agreement has been duly executed by
the parties hereto as of the day and year first above written.
XXXXXX BROTHERS HOLDINGS INC.
By: ______________________________
Name:
Title:
CITIBANK, N.A., as Warrant Agent
By: ______________________________
Name:
Title:
XXXXXX BROTHERS INC., as Calculation Agent
By: ______________________________
Name:
Title:
26
EXHIBIT A
[FORM OF GLOBAL WARRANT CERTIFICATE]
No. 1 CUSIP No. 000000000
XXXXXX BROTHERS HOLDINGS INC.
2,000,000 Warrants
Nikkei 225(SM) Index Call Warrants
Expiring May 8, 2007
This certifies that CEDE & Co., or registered assigns, is the
registered holder of 2,000,000 Nikkei 225(SM) Index Call Warrants Expiring May
8, 2007 (the "Warrants"). Each Warrant entitles the beneficial owner thereof
(each a "Warrantholder") to receive, subject to the conditions set forth herein
and in the Warrant Agreement (as defined below), from Xxxxxx Brothers Holdings
Inc. (the "Company") an amount in U.S. dollars (rounded down to the nearest
one-hundredth of a cent) (the "Cash Settlement Value") that is the greater of
(A) zero and (B) the product of (i) the quotient obtained by dividing (x) the
amount, if any, by which the Final Index Level for the applicable Valuation Date
exceeds the Strike Price by (y) the Initial Index Level and (ii) the Notional
Amount. In no event shall a Warrantholder be entitled to any interest on any
Cash Settlement Value. Capitalized terms included herein but not defined herein
have the meanings assigned thereto in the Warrant Agreement.
The "Final Index Level" shall mean the Closing Index Level on
the applicable Valuation Date, subject to postponement if a Market Disruption
Event occurs. If the Calculation Agent determines that on a Scheduled Trading
Day that would otherwise be a Valuation Date a Market Disruption Event has
occurred and is continuing, then the Final Index Level to be used in the
calculation of the Cash Settlement Value in respect of an exercise of Warrants
shall be calculated using as the Valuation Date the next Scheduled Trading Day
on which there is not a Market Disruption Event; provided, however, if a Market
Disruption Event occurs on each of the eight Scheduled Trading Days following
the originally scheduled Valuation Date, then (a) that eighth Scheduled Trading
Day shall be deemed the Valuation Date and (b) the Calculation Agent shall
determine the Final Index Level based upon its good faith estimate of the level
of the Relevant Index on that eighth Scheduled Trading Day.
The "Valuation Date" for a Warrant will be the first Scheduled
Trading Day following the Exercise Date, subject to postponement as a result of
a Market Disruption Event as described in the Warrant Agreement.
A "Scheduled Trading Day" shall mean any day on which a
Relevant Index is published by its publisher or otherwise determined by the
Calculation Agent pursuant to this Agreement.
"Closing Index Level" shall mean, with respect to any Relevant
Index on any particular day, (a) the closing level of the Relevant Index as
reported by the publisher of the Relevant Index on such day, as determined and
adjusted by the Calculation Agent pursuant to the Warrant Agreement, or (b) as
otherwise determined by the Calculation Agent pursuant to the
A-1
Warrant Agreement if the Relevant Index has been discontinued or in the
circumstances described in the proviso in the definition of "Final Index Level"
above.
The "Strike Price" shall equal the Initial Index Value.
The "Initial Index Level" shall mean 11192.17, the Closing
Index Level on May 6, 2005.
"Notional Amount" shall equal $66.
Subject to the terms of the Warrant Agreement, each Warrant
may be irrevocably exercised in whole but not in part on any Business Day from
July 10, 2005 until 3:00 p.m., New York City time, on the earlier of (i) the
Business Day immediately preceding May 8, 2007 (May 8, 2007 being referred to
herein as the "Expiration Date") and (ii) the Business Day immediately preceding
the Delisting Date, if any. Except in the event of automatic exercise (as
described in the Warrant Agreement), each Warrant shall be irrevocably exercised
upon receipt by the Warrant Agent of such Warrant delivered free on the records
of the Depository to the Warrant Agent's Depository Participant Account
(entitled Citibank, N.A. Corporate Trust Warrant Agent Account, No. [ ], or such
other account at the Depository as the Warrant Agent shall designate in writing
to the Company) (the "Warrant Account") pursuant to an Exercise Notice to the
Warrant Agent from a Participant, in the case of Warrants held through the
facilities of the Depository, a Clearstream participant, in the case of Warrants
held through Clearstream, or a Euroclear participant, in the case of Warrants
held through Euroclear, acting, directly or indirectly, on behalf of the
Warrantholder; provided, however, that Exercise Notices are subject to rejection
by the Warrant Agent as provided in the Warrant Agreement. Except with respect
to the Limit Option, an Exercise Notice shall be unconditional.
This Global Warrant Certificate shall not be valid unless
countersigned by the Warrant Agent.
The Warrants evidenced by this Global Warrant Certificate are
part of a duly authorized issue of Warrants issued by the Company pursuant to a
Warrant Agreement, dated as of May 11, 2005 (the "Warrant Agreement"), among the
Company, Citibank, N.A. (the "Warrant Agent") and Xxxxxx Brothers Inc. (the
"Calculation Agent"), and is subject to the terms and provisions contained in
the Warrant Agreement, to all of which terms and provisions the Warrantholders,
the entities through which such Warrantholders hold their beneficial interests
in the Warrants and the registered holder of this Global Warrant Certificate
consent by acceptance of this Global Warrant Certificate by the Depository and
which Warrant Agreement is hereby incorporated by reference in and made a part
of this Global Warrant Certificate. A copy of the Warrant Agreement is on file
at the Warrant Agent's Office, which is located at 000 Xxxx Xxxxxx, 00xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
The Warrants constitute direct, unconditional and unsecured
obligations of the Company and rank equally with the Company's other unsecured
contractual obligations and with the Company's unsecured and unsubordinated
debt.
Subject to the terms of the Warrant Agreement and this Global
Warrant Certificate, and except for Warrants (x) subject to automatic exercise,
(y) for which exercise is
A-2
delayed pursuant to the Warrant Agreement or (z) which are held through the
facilities of Clearstream or Euroclear, and subject to the Limit Option, the
"Exercise Date" for a Warrant will be (i) the Business Day on which the Warrant
Agent receives the Warrant and Exercise Notice in proper form with respect to
such Warrant, if received at or prior to 3:00 p.m., New York City time, on such
day, or (ii) if the Warrant Agent receives such Warrant and Exercise Notice
after 3:00 p.m., New York City time, on a Business Day, then the Business Day
following such Business Day.
In the case of Warrants held through the facilities of
Clearstream or Euroclear, except for Warrants subject to automatic exercise, and
subject to the Limit Option, the "Exercise Date" for a Warrant will be (i) the
Business Day on which the Warrant Agent receives the Exercise Notice in proper
form with respect to such Warrant if such Exercise Notice is received at or
prior to 3:00 p.m., New York City time, on such day; provided that the Warrant
is received by the Warrant Agent by 3:00 p.m., New York City time, on the
Valuation Date, or (ii) if the Warrant Agent receives such Exercise Notice after
3:00 p.m., New York City time, on a Business Day, then the Business Day
following such Business Day; provided that the Warrant is received by 3:00 p.m.,
New York City time, on the Valuation Date relating to exercises of Warrants on
the applicable Valuation Day. In the event that a Warrant is received after 3:00
p.m., New York City time, on the applicable Valuation Date, then the Exercise
Date for such Warrant will be the day on which such Warrant is received or, if
such day is not a Business Day, the following Business Day. In the case of
Warrants held through the facilities of Euroclear, (a) participants must also
transmit, by facsimile, to the Warrant Agent a copy of the Exercise Notice
submitted to Euroclear by 3:00 p.m., New York City time, on the desired Exercise
Date and (b) Euroclear must confirm by telex to the Warrant Agent by 9:00 a.m.,
New York City time, on the applicable Valuation Date that the Warrants will be
received by the Warrant Agent on such date; provided that if such telex
communication is received after 9:00 a.m., New York City time, on the applicable
Valuation Date, the Company will be entitled to direct the Warrant Agent to
reject the related Exercise Notice or waive the requirement for timely delivery
of such telex communication.
Subject to the terms of the Warrant Agreement and except in
the event of automatic exercise, in connection with any exercise of Warrants,
the related Exercise Notice may specify that such exercise is subject to the
condition that the Final Index Level that would otherwise be used to determine
the Cash Settlement Value of such Warrants shall not have declined by five
percent (5%) or more from the Limit Option Index Level for such Warrants. "Limit
Option Index Level", with respect to any Warrants subject to the Limit Option,
means the last available Closing Index Level as of the applicable Exercise Date.
The option of a Warrantholder to condition an exercise of Warrants as provided
in the Warrant Agreement is herein referred to as the "Limit Option". To be
valid, such election must be specified in the related Exercise Notice. Each of
the Warrant Agent and the Company shall be entitled to rely conclusively on such
Exercise Notice, as received by the Warrant Agent, in determining whether such
election has been validly made.
The valuation of and payment for any exercised Warrant may be
postponed as a result of a Market Disruption Event or as a result of the
exercise of a number of Warrants exceeding the maximum permissible amount as
described herein, in which case the Warrantholder will receive the Cash
Settlement Value determined as of a later date.
A-3
Subject to the terms of the Warrant Agreement, in the event
the Warrants are delisted from, or permanently suspended from trading on (within
the meaning of the Securities Exchange Act of 1934, as amended), the AMEX and
not accepted at the same time for listing on another United States national
securities exchange, Warrants not previously exercised will be deemed
automatically exercised on the Delisting Date, in which case the Warrantholder
will receive the Cash Settlement Value.
All Warrants for which the Warrant Agent has not received an
Exercise Notice in proper form at or prior to 3:00 p.m., New York City time, on
the earlier of (i) the Business Day immediately preceding the Expiration Date or
(ii) the Business Day immediately preceding the Delisting Date, if any, or for
which the Warrant Agent has received an Exercise Notice in proper form but with
respect to which timely delivery of the relevant Warrants has not been made,
will be deemed automatically exercised on such date without any requirement of
an Exercise Notice to the Warrant Agent.
The Warrants will be issued in denominations of 100 Warrants
and whole multiples of 100.
Subject to the terms of the Warrant Agreement, all exercises
of Warrants (except in the case of automatic exercise of Warrants) shall be
subject, at the Calculation Agent's option, to the limitation that not more than
400,000 Warrants in total may be exercised on any Exercise Date. No fewer than
500 Warrants may be exercised by a Warrantholder at any one time, except in the
case of automatic exercise of Warrants.
The Company intends to treat and, by purchasing a Warrant, the
Warrantholder agrees to treat, for all tax purposes, a Warrant as a cash
settlement option within the meaning of section 1234(c) of the Internal Revenue
Code of 1986, as amended.
Prior to due presentment for registration of transfer, the
Company, the Warrant Agent, and any agent of the Company or the Warrant Agent,
may deem and treat the registered owner hereof as the absolute owner of the
Warrants evidenced hereby (notwithstanding any notation of ownership or other
writing hereon) for any purpose whatsoever, and as the person entitled to
exercise the rights represented by the Warrants evidenced hereby, and neither
the Company nor the Warrant Agent, nor any agent of the Company or the Warrant
Agent, shall be affected by any notice to the contrary.
The Warrant Agent shall, in accordance with the Warrant
Agreement, from time to time register the transfer of this Global Warrant
Certificate in its records (which may be maintained electronically) to be
maintained by it for that purpose at the Warrant Agent's Office upon surrender
hereof, duly endorsed, or accompanied by a written instrument or instruments of
transfer in form satisfactory to the Warrant Agent, duly executed by the
registered holder hereof or by the duly appointed legal representative or duly
authorized attorney thereof, such signature to be guaranteed by a bank or trust
company with a correspondent office in New York City or by a member of a
national securities exchange. Upon any such registration of transfer, a new
Global Warrant Certificate shall be issued to the transferee.
A-4
The Warrant Agreement and the terms of the Warrants are
subject to amendment, as provided in the Warrant Agreement.
THIS GLOBAL WARRANT CERTIFICATE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
A-5
IN WITNESS WHEREOF, Xxxxxx Brothers Holdings Inc. has caused
this instrument to be duly executed.
Dated: XXXXXX BROTHERS HOLDINGS INC.
By: _____________________________
Name:
Title:
[Corporate Seal]
Attest:
-----------------------------
Assistant Secretary
Countersigned for authentication
purposes only as of the
date above written:
CITIBANK, N.A.
as Warrant Agent,
By: ____________________
Authorized Officer
A-6
EXHIBIT B
FORM OF EXERCISE NOTICE
For Warrants Represented by the Global Warrant Certificate
CUSIP No.: 000000000
Citibank, N.A.
000 Xxxx Xxxxxx, 00xx Xxxxx Xxxx 0
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxxx Xxxxxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention:
1. We refer to the Warrant Agreement dated as of May 11, 2005
(the "Warrant Agreement"), among Xxxxxx Brothers Holdings Inc. (the "Company"),
Citibank, N.A., as Warrant Agent (the "Warrant Agent"), and Xxxxxx Brothers
Inc., as Calculation Agent (the "Calculation Agent"). On behalf of certain
beneficial owners, each of whose Warrants have been, or will be, transferred to
the Warrant Agent in accordance with the provisions of the Representations
Letter relating to the Warrants, we hereby irrevocably exercise Warrants (the
"Tendered Warrants"). We hereby acknowledge that the Tendered Warrants and this
Exercise Notice must be received by you by 3:00 p.m., New York City time, on a
Business Day in order for the Valuation Date for the Tendered Warrants to be the
Scheduled Trading Day following such Business Day and that, if the Tendered
Warrants and this Exercise Notice are received by you after 3:00 p.m., New York
City time, on a Business Day (or, in the case of Warrants held through
Clearstream or Euroclear, if the Warrants are not received by 3:00 p.m., New
York City time, on the first Scheduled Trading Day following such Business Day),
the Valuation Date of the Tendered Warrants shall be the following Scheduled
Trading Day, in each case subject to certain provisions of the Warrant
Agreement.
2. If you determine that this Exercise Notice has not been
duly completed or is not in proper form, this Exercise Notice will be void and
of no effect and will be deemed not to have been delivered.
3. We hereby direct you to make payment to us of amounts
payable to our clients as a result of the exercise of the Warrants hereunder as
follows:
By cashier's check or an official bank check; By wire transfer
to the following U.S. Dollar bank account in the United
States:
(Minimum payments of $100,000 only)
Bank:
Account No.: ______________________________
B-1
ABA Routing No.: __________________________
Reference: _________________________________
4. The Tendered Warrants covered hereby [ARE/ARE NOT] subject
to the Limit Option.(1)
FOR DEPOSITORY PARTICIPANTS ONLY
5. We hereby certify that we are a Participant of The
Depository Trust Company (the "Depository") with the present right to use and
receive its services.
Capitalized terms used but not defined herein have the
meanings assigned thereto in the Warrant Agreement.
Dated:
NAME OF DEPOSITORY PARTICIPANT
Participant Number
NAME OF EUROCLEAR PARTICIPANT
Participant Number
NAME OF CLEARSTREAM PARTICIPANT
Participant Number
By:__________________________
Authorized Signature
Address:
Telephone: ( )
---------------
(1) Separate Exercise Notices shall be submitted with respect to Warrants
subject to the Limit Option and Warrants not subject to the Limit Option.
B-2
EXHIBIT C
CONFIRMATION OF EXERCISE
[Name of Depository Participant]
[Name of Euroclear Participant]
[Name of Clearstream Participant]
[Address]
We hereby confirm receipt of your Exercise Notice with respect
to _______________ Warrants (the "Tendered Warrants") which were transferred by
you to our Depository Participant Account No. ______________. We have found such
Notice to be duly completed and in proper form, and we have verified, in the
manner provided in the Warrant Agreement, dated as of May 11, 2005 (the "Warrant
Agreement"), among Xxxxxx Brothers Holdings Inc., Citibank, N.A. and Xxxxxx
Brothers Inc., that you are a Depository Participant. The Valuation Date of the
Tendered Warrants was on ____________ in New York City.
[As set forth in your Exercise Notice, none of the Warrants
covered thereby is subject to the Limit Option. Accordingly, for purposes
hereof, all such Warrants shall constitute Tendered Warrants, which number we
hereby confirm to be __________________.] [Your Exercise Notice stated that the
Warrants covered thereby are subject to the Limit Option. The Initial Index
Level for such Warrants is _______; the Strike Price is _______; and the Final
Index Level for the date that would otherwise be the Valuation Date for such
Warrants is ________________. Such Final Index Level is not less than the Limit
Option Index Level by five percent (5%) or more. Accordingly, for purposes
hereof, all such Warrants shall constitute Tendered Warrants. We hereby confirm
the number of such Tendered Warrants to be __________.]
We hereby confirm that the aggregate Cash Settlement Value of
the Tendered Warrants is $_____________ ($_____ per Warrant), which will be made
available to [you] as designated in your Exercise Notice.
Capitalized terms included herein but not defined have the
meanings assigned thereto in the Warrant Agreement.
Dated:
CITIBANK, N.A., as Warrant Agent,
By: ______________________________
Authorized Signature
C-1
NOTICE OF REJECTION
[Name of Depository Participant]
[Name of Euroclear Participant]
[Name of Clearstream Participant]
[Address]
Dated:
You are hereby notified that the Exercise Notice delivered by
you was determined by us not to have been [duly completed] [in proper form]]
[such Warrants were not transferred to our Depository Participant Account No.
___________ on a timely basis as provided in the Warrant Agreement] [we did not
receive from Euroclear a Euroclear Confirmation that proper delivery of the
Warrants to which the Exercise Notice delivered by you relates would be made on
a timely basis], as set forth in the Warrant Agreement, dated as of May 11, 2005
(the "Warrant Agreement"), among Xxxxxx Brothers Holdings Inc., Citibank, N.A.
and Xxxxxx Brothers Inc. Accordingly, we have rejected your Exercise Notice as
being unsatisfactory as to form.
Capitalized terms included herein but not defined have the
meanings assigned thereto in the Warrant Agreement.
CITIBANK, N.A., as Warrant Agent,
By: ___________________________
Authorized Signature
C-2
EXHIBIT D
NOTICE OF REJECTION
RELATING TO LIMIT OPTION
[Name of Depository Participant]
[Name of Euroclear Participant]
[Name of Clearstream Participant]
[Address]
We refer to your Exercise Notice dated ____________, _____,
with respect to __________ Warrants that were subject to the Limit Option. The
Initial Index Level and Strike Price for such Warrants are _____ and _____,
respectively, and the Final Index Level for the date that would otherwise be the
Valuation Date for such Warrants is ______. Such Final Index Level is less than
the Limit Option Index Level for such Warrants by five percent (5%) or more.
Accordingly, we have rejected such Exercise Notice pursuant to the Limit Option.
Capitalized terms included herein but not defined have the
meanings assigned thereto in the Warrant Agreement, dated as of May 11, 2005,
among Xxxxxx Brothers Holdings Inc, Citibank, N.A. and Xxxxxx Brothers Inc.
Dated:
CITIBANK, N.A., as Warrant Agent,
By: ___________________________
Authorized Signature
D-1
