WARRANT AGREEMENT dated as of June 18, 1999, between THE
XXXXXXX-XXXXXXXXXX CORPORATION, a Delaware corporation (the "Company"), and
THE XXXXXXX-XXXXXXXXXX CORPORATION, in its capacity as Warrant Agent (the
"Warrant Agent").
WITNESSETH:
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WHEREAS, the Company proposes to issue up to 1,400,000
Common Stock Purchase Warrants (the "WARRANTS") to purchase Common Stock, par
value $0.01 per share (the "COMMON STOCK"), as part of the purchase price for
certain stock of the MARC Analysis Research Corporation to be acquired by the
Company, each Warrant entitling the registered owner thereof to purchase one
share of Common Stock (each share of Common Stock purchasable upon the
exercise of a Warrant being referred to herein as a "WARRANT SHARE"); and
WHEREAS, the Company wishes the Warrant Agent to act on
behalf of the Company, and the Warrant Agent is willing to act, in connection
with the issuance, transfer, exchange and exercise of the Warrants.
NOW, THEREFORE, in consideration of the foregoing and for
the purpose of defining the terms and provisions of the Warrants and the
respective rights and obligations thereunder of the Company and the
registered owners of the Warrants (the "HOLDERS"), the Company and the
Warrant Agent hereby agree as follows:
SECTION 1. APPOINTMENT OF WARRANT AGENT.
The Company hereby appoints the Warrant Agent to act as agent
for the Company in accordance with the terms and conditions hereinafter set
forth, and the Warrant Agent hereby accepts such appointment.
SECTION 2. FORM OF WARRANTS.
2.1 FORM OF WARRANT CERTIFICATES. The text of the Warrant
certificate and of the form of election to purchase Warrant Shares shall be
substantially as set forth in Exhibit A attached hereto. The Warrant
certificates shall be appropriately printed, lithographed or engraved and may
have such letters, numbers, other marks of identification, or legends as the
Company may deem appropriate and as are not inconsistent with the provisions
of this Agreement, or as may be required to comply with any rule or
regulation of any stock exchange on which the Warrants may be listed, or to
conform to usage. The price per Warrant Share and the number of Warrant
Shares issuable upon exercise of each Warrant are subject to adjustment upon
the occurrence of certain events, all as hereinafter provided. The Warrant
certificates shall be executed on behalf of the Company by its Chairman of
the Board, its President or one of its Vice Presidents under its corporate
seal reproduced thereon and attested by its Secretary or an Assistant
Secretary. The signature of any of such officers on the Warrant certificates
may be manual or facsimile.
Warrant certificates bearing the manual or facsimile
signatures of individuals who were at any time the proper officers of the
Company shall bind the Company, notwithstanding
that such individuals or any one of them shall have ceased to hold such
offices prior to the delivery of such Warrant certificates or did not hold
such office on the date of this Agreement.
Warrant certificates shall be dated as of the date of
countersignature thereof by the Warrant Agent either upon initial issuance or
upon exchange, substitution or transfer.
2.2 COUNTERSIGNATURE OF WARRANT CERTIFICATES. The Warrant
certificates shall be manually countersigned by the Warrant Agent (or any
successor to the Warrant Agent then acting as warrant agent under this
Agreement) and shall not be valid for any purpose unless so countersigned.
Warrant certificates may be countersigned by the Warrant Agent (or by its
successor as warrant agent hereunder) and may be delivered by the Warrant
Agent notwithstanding that the persons whose manual or facsimile signatures
appear thereon as proper officers of the Company shall have ceased to be such
officers at the time of such countersignature, issuance or delivery. The
Warrant Agent shall, upon written instructions of the Chairman of the Board,
the President, any Vice President or the Secretary of the Company,
countersign, issue and deliver Warrant certificates entitling the Holders
thereof to purchase in the aggregate Warrant Shares (subject to adjustment
pursuant to Section 11 hereof) and shall countersign and deliver Warrant
certificates as otherwise provided in this Agreement.
2.3 REGISTRATION. The Warrant certificates shall be
numbered and shall be registered in a register (the "WARRANT REGISTER") as
they are issued. The Company and the Warrant Agent shall be entitled to treat
the registered holder of any Warrant as the owner in fact thereof for all
purposes and shall not be bound to recognize any equitable or other claim to,
or interest in, such Warrant on the part of any other person, notwithstanding
any notice to the Company or the Warrant Agent to the contrary.
SECTION 3. TRANSFER OR EXCHANGE OF WARRANTS.
3.1 TRANSFER. The Warrants shall be transferable only in
the books of the Company maintained at the office or agency of the Warrant
Agent designated for such purpose in the City of Los Angeles upon delivery
thereof duly endorsed by the Holder or by his or her duly authorized attorney
or legal representative, or accompanied by proper evidence of succession,
assignment or authority to transfer, which endorsement shall be guaranteed by
a bank or trust company located in the United States or a broker or dealer
that is a member of a national securities exchange. In all cases of transfer
by an attorney, the original power of attorney, duly approved, or an official
copy thereof, duly certified, shall be deposited and remain with the Warrant
Agent. In case of transfer by executors, administrators, guardians or other
legal representatives, duly authenticated evidence of their authority shall
be produced, and required to be deposited and remain with the Warrant Agent.
Upon any registration of transfer, the Warrant Agent shall countersign and
deliver a new Warrant certificate to the person entitled thereto.
3.2 EXCHANGE OF WARRANT CERTIFICATES. Warrant certificates
may be exchanged for another certificate or certificates entitling the Holder
thereof to purchase a like aggregate number of Warrant Shares as the
certificate or certificates surrendered then entitle such Holder to purchase.
Any Holder desiring to exchange a Warrant certificate shall make such request
in writing delivered to the Warrant Agent, and shall surrender, properly
endorsed in the manner
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described in subsection 3.1 hereof, the Warrant certificate or certificates
to be so exchanged. Thereupon, the Warrant Agent shall countersign and
deliver to the person entitled thereto a new Warrant certificate or
certificates, as the case may be, as so requested.
SECTION 4. [SECTION 4 INTENTIONALLY LEFT BLANK].
SECTION 5. MUTILATED OR MISSING WARRANTS.
In case any of the certificates evidencing the Warrants
shall be mutilated, lost, stolen or destroyed, the Company may, in its
discretion, issue and the Warrant Agent shall countersign and deliver in
exchange and substitution for and upon cancellation of the mutilated Warrant
certificate, or in lieu of and substitution for the Warrant certificate lost,
stolen or destroyed, a new Warrant certificate of like tenor and representing
an equivalent right or interest, but only, in case of any such loss, theft or
destruction, upon receipt of evidence satisfactory to the Company and the
Warrant Agent thereof and an indemnity also satisfactory to them. An
applicant for such substitute Warrant certificate shall also comply with such
other reasonable regulations and pay such other reasonable charges as the
Company or the Warrant Agent may prescribe.
SECTION 6. TERM OF WARRANTS; EXERCISE OF WARRANTS.
6.1 TERM OF WARRANTS. Subject to the terms of this
Agreement, each Holder shall have the right until 5:00 P.M., Los Angeles
time, on June 18, 2004 (the "Expiration Date"), to purchase from the Company
the number of fully paid and nonassessable Warrant Shares which the Holder
may at the time be entitled to purchase on exercise of such Warrants.
6.2 EXERCISE OF WARRANTS. Warrant Shares may be purchased
upon surrender to the Company at the office or agency of the Warrant Agent
designated for such purpose in the City of Los Angeles, of the certificate or
certificates evidencing the Warrants to be exercised, together with the form
of election to purchase on the reverse thereof duly filled in and signed,
which signature shall, if the Warrant Shares are to be issued in the name of
a person other than the Holder of the Warrant, be guaranteed by a bank or
trust company located in the United States or a broker or dealer that is a
member of a national securities exchange, and upon payment to the Warrant
Agent for the account of the Company of the Exercise Price (as defined in and
determined in accordance with the provisions of Sections 10 and 11 hereof)
for the number of Warrant Shares in respect of which such Warrants are then
being exercised.
Subject to Section 8 hereof, upon such surrender of
Warrants and payment of the Exercise Price as aforesaid, the Company shall
issue and cause to be delivered, with all reasonable dispatch, to or upon the
written order of the Holder and in such name or names as the Holder may
designate, a certificate or certificates for the number of full Warrant
Shares so purchased upon the exercise of such Warrants. Such certificate or
certificates shall be deemed to have been issued and any person so designated
to be named therein shall be deemed to have become a holder of record of such
Warrant Shares as of the date of the surrender of such Warrants and payment
of the Exercise Price, as aforesaid; PROVIDED, HOWEVER, that if such Warrants
are surrendered, and the Exercise Price is paid, on a Saturday, Sunday or
other day on
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which banking institutions in the City of Los Angeles are authorized or
obligated by law or executive order to close, or on a day when the Common
Stock transfer books of the Company are closed, the certificates for the
Warrant Shares in respect of which such Warrants are then exercised shall be
issuable as of the next succeeding Monday, Tuesday, Wednesday, Thursday or
Friday on which such banking institutions are not so authorized or obligated
to close (whether before or after the Expiration Date) and which is a day on
which the Common Stock transfer books of the Company are open. The rights of
purchase represented by the Warrants shall be exercisable, at the election of
the Holders thereof, either in full or from time to time in part and, in the
event that a certificate evidencing Warrants is exercised in respect of less
than all of the Warrant Shares specified therein at any time prior to the
expiration of such Warrants, a new certificate evidencing the remaining
Warrant or Warrants will be issued, and the Warrant Agent is hereby
irrevocably authorized to countersign and to deliver the required new Warrant
certificates pursuant to the provisions of this subsection and of subsection
2.2 hereof and the Company, whenever required by the Warrant Agent, will
supply the Warrant Agent with Warrant certificates duly executed on behalf of
the Company for such purpose.
6.3 PAYMENT OF EXERCISE PRICE. Payment of the aggregate
Exercise Price shall be made by certified or cashier's check, by presentment
of any of the notes described below, or by any combination thereof. Holders
may present, as payment of the aggregate Exercise Price, any note from those
series of notes issued by the Company pursuant to the Indenture dated as of
June 17, 1999 among the Company and Chase Manhattan Bank & Trust Company
N.A., as trustee, known as 8% Subordinated Promissory Notes due 2001 and 8%
Subordinated Promissory Notes due 2009. Holders surrendering such notes in
payment of the Exercise Price shall be fully credited for the unpaid
principal value and accrued but unpaid interest thereon toward the subject
Exercise Price, or portion thereof, as the case may be.
SECTION 7. DISPOSITION OF PROCEEDS ON EXERCISE OF
WARRANTS.
The Warrant Agent will promptly provide information to the
Company with respect to the Warrants exercised including the name of the
holder of Warrants exercised, the number of Warrants exercised and the date
of exercise, and concurrently pay to the Company all moneys (or notes
referred to in Section 6.3) received by the Warrant Agent for the purchase of
the Warrant Shares through the exercise of such Warrants. Any such notes
shall be promptly delivered to the Company by the Warrant Agent.
SECTION 8. PAYMENT OF TAXES.
The Company will pay all documentary stamp taxes, if any,
attributable to the issuance of any Warrant certificates or certificates for
Warrant Shares issuable upon the exercise of Warrants; PROVIDED, HOWEVER,
that the Company shall not be required to pay, and the Holder shall pay, any
tax or taxes that may be payable in respect of any transfer involved in the
issue or delivery of any Warrant certificates or certificates for Warrant
Shares in a name other than that of the registered Holder of the Warrants
that were surrendered and the Company shall not be required to issue or
deliver such Warrant certificates or certificates for Warrant Shares unless
or until the persons requesting the issuance thereof shall have paid to the
Company the amount of such tax or shall have established to the satisfaction
of the Company that such tax has been paid.
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SECTION 9. RESERVATION OF WARRANT SHARES; PURCHASE
AND CANCELLATION OF WARRANTS.
9.1 RESERVATION OF WARRANT SHARES. There have been
reserved, and the Company shall at all times keep reserved out of its
authorized Common Stock, a number of shares of Common Stock sufficient to
provide for the exercise of the right of purchase represented by the
outstanding Warrants. The Company covenants that all Warrant Shares will,
upon issuance, be duly authorized, validly issued, fully paid and
nonassessable. The transfer agent for the Company's Common Stock (the
"Transfer Agent") and every subsequent transfer agent for any shares of the
Company's capital stock issuable upon the exercise of any of the rights of
purchase aforesaid will be irrevocably authorized and directed at all times
to reserve such number of authorized shares required for such purpose. The
Company will keep a copy of this Agreement on file with the Transfer Agent
for the Common Stock and with every subsequent transfer agent for any shares
of the Company's capital stock issuable upon the exercise of the rights of
purchase represented by the Warrants. The Warrant Agent is hereby irrevocably
authorized to requisition from time to time from such Transfer Agent stock
certificates required to honor outstanding Warrants upon exercise thereof in
accordance with the terms of this Agreement. The Company will supply such
Transfer Agent with duly executed stock certificates for such purpose.
Promptly after the Expiration Date, the Warrant Agent shall, upon the written
request of the Company, certify to the Company the aggregate number of
Warrants then outstanding and thereafter no shares shall be subject to
reservation in respect of such Warrants.
9.2 GOVERNMENTAL APPROVALS AND LISTINGS. The Company will
as promptly as practicable take all action which may be necessary to obtain
and keep effective any and all permits, consents and approvals of
governmental agencies and authorities, and will make any and all filings
under federal and state securities laws, necessary in connection with the
issuance, distribution and transfer of Warrant certificates, the exercise of
the Warrants, and the issuance, sale, transfer and delivery of Warrant Shares.
9.3 PURCHASE OF WARRANTS BY THE COMPANY. The Company shall
have the right, except as limited by law, other agreement or herein, to
purchase or otherwise acquire Warrants at such times, in such manner and for
such consideration as it may deem appropriate.
9.4 CANCELLATION OF WARRANTS. In the event the Company
shall purchase or otherwise acquire Warrants, the related Warrant
certificates shall thereupon be delivered by the Company to the Warrant Agent
together with instructions that such certificates be cancelled by it and
retired. The Warrant Agent shall cancel any Warrant certificate surrendered
for exchange, substitution, transfer or exercise in whole or in part. Warrant
certificates cancelled by the Warrant Agent pursuant to any provision of this
Agreement shall be delivered to the Company or, upon the request of the
Warrant Agent and with the consent of the Company, destroyed by the Warrant
Agent. Upon the Company's request, the Warrant Agent shall furnish to the
Company written confirmation of the destruction of the Warrant certificates
so cancelled.
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SECTION 10. EXERCISE PRICE.
The price per share at which Warrant Shares shall be
purchasable upon exercise of each Warrant (the "EXERCISE PRICE") shall be
$10.00, subject to adjustment pursuant to Section 11 hereof.
SECTION 11. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF
WARRANT SHARES.
11.1 ADJUSTMENTS. The number and kind of securities
purchasable upon the exercise of each Warrant and the Exercise Price shall be
subject to adjustment as follows:
(a) STOCK DIVIDENDS, SPLITS, ETC. In case the Company shall at
any time after the date of this Agreement (w) pay a dividend or make a
distribution on its Common Stock which is paid or made (A) in Common
Stock or other shares of the Company's capital stock or (B) in rights
or warrants to purchase Common Stock or other capital stock of the
Company if such rights or warrants are not exercisable or separable
from the Common Stock except upon the occurrence of a contingency, (x)
subdivide its outstanding Common Stock into a greater number of shares
of Common Stock, (y) combine its outstanding shares into a smaller
number of shares of Common Stock or (z) issue by reclassification of
its Common Stock other securities of the Company, then, in any such
event the number of Warrant Shares purchasable upon exercise of each
Warrant immediately prior thereto shall be adjusted so that the Holder
of each Warrant shall be entitled to receive upon exercise of such
Warrant the kind and number of shares of the Company and rights to
purchase Common Stock or other securities of the Company (or, in the
event of the redemption of any such rights, any cash paid in respect of
such redemption) that he, she or it would have owned or been entitled
to receive after the happening of any of the events described above had
such Warrant been exercised immediately prior to the happening of such
event or any record date with respect thereto. An adjustment made
pursuant to this paragraph (a) shall become effective immediately after
the opening of business on the next business day following the record
date in the case of dividends or other distributions and shall become
effective immediately after the opening of business on the next
business day following the effective date in the case of a subdivision
or combination.
(b) DISTRIBUTIONS OF ASSETS. In case the Company shall at any
time after the date of this Agreement distribute to all holders of its
Common Stock evidences of indebtedness of the Company or assets of the
Company (including cash dividends or distributions out of retained
earnings other than cash dividends or distributions made on a quarterly
or other periodic basis) or warrants to subscribe for securities of the
Company (excluding those referred to in paragraph (a) above), then in
each case the Exercise Price shall be adjusted to a price determined by
multiplying the Exercise Price in effect immediately prior to such
distribution by a fraction, of which the numerator shall be the then
current Market Price (as defined in paragraph (c) below) per share of
Common Stock on the record date for determination of shareholders
entitled to receive such distribution, less the then fair value (as
determined in good faith by the Board of
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Directors of the Company, whose determination shall be conclusive
and notice of which shall be provided to Warrant Agent) of the
portion of the assets or evidences of indebtedness so distributed or
of such subscription rights or warrants which are applicable to one
share of Common Stock, and of which the denominator shall be such
Market Price per share of Common Stock; PROVIDED, HOWEVER, that if
the then current Market Price per share of Common Stock on the
record date for determination of shareholders entitled to receive
such distribution is less than the then fair value of the portion of
the assets or evidences of indebtedness so distributed or of such
subscription rights or warrants which are applicable to one share of
Common Stock, the foregoing adjustment of the Exercise Price shall
not be made and in lieu thereof the Holder of each Warrant shall be
entitled to receive upon exercise of such Warrant in addition to the
Common Stock the kind and number of assets, evidences of
indebtedness, subscription rights and warrants (or, in the event of
the redemption of any such evidences of indebtedness, subscription
rights and warrants, any cash paid in respect of such redemption)
that he or she would have owned or have been entitled to receive
after the happening of such distribution had such Warrant been
exercised immediately prior to the record date for such
distribution. Such adjustment shall be made successively whenever
such a record date is fixed, and in the event that such distribution
is not so made, the Exercise Price shall again be adjusted to be the
Exercise Price which would then be in effect if such record date had
not been fixed.
(c) COMPUTATION OF MARKET PRICE. For the purpose of any
computation under this Agreement, the current Market Price per share of
Common Stock at any date shall be deemed to be the average of the daily
closing price per share for the 15 consecutive Trading Days (as defined
below) commencing 30 Trading Days before the date in question. "MARKET
PRICE" is defined as the closing price for the Common Stock on the New
York Stock Exchange. If Market Price cannot be established as described
above, Market Price shall be the fair market value of the Common Stock
as determined in good faith by the Board of Directors. "TRADING DAY"
shall mean a day on which the principal national securities exchange on
which the Common Stock is listed or admitted to trading is open for the
transaction of business.
(d) MINIMUM ADJUSTMENT. No adjustment in the number of Warrant
Shares purchasable hereunder or the Exercise Price shall be required
unless such adjustment would require an increase or decrease of at
least 1.0% in the number of Warrant Shares purchasable upon the
exercise of each Warrant, or the Exercise Price, as the case may be;
PROVIDED, HOWEVER, that any adjustments which by reason of this
paragraph (d) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or the nearest
ten-thousandth of a share, as the case may be.
(e) WARRANT SHARE ADJUSTMENT. Upon each adjustment of the
Exercise Price as a result of the calculations made in paragraph (a) or
(b) above, each Warrant outstanding immediately prior to the making of
such adjustment shall thereafter evidence the right to purchase, at the
adjusted Exercise Price, that number of shares (calculated to the
nearest ten-thousandth) obtained by (A) multiplying (x) the number of
shares covered
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by a Warrant immediately prior to such adjustment of the Exercise
Price by (y) the Exercise Price in effect immediately prior to such
adjustment of the Exercise Price and (ii) dividing the product so
obtained by the Exercise Price in effect immediately after such
adjustment of the Exercise Price.
(f) NOTICE OF ADJUSTMENT. Whenever the number of Warrant
Shares purchasable upon the exercise of Warrants or the Exercise Price
of such Warrant Shares is adjusted, as herein provided, the Company
shall cause the Warrant Agent promptly to mail by first class mail,
postage prepaid, to each Holder of a Warrant or Warrants notice of such
adjustment or adjustments and shall deliver to the Warrant Agent a
certificate of a firm of independent public accountants selected by the
Board of Directors of the Company (who may be the regular accountants
employed by the Company) setting forth (A) the number of Warrant Shares
purchasable upon the exercise of each Warrant and the Exercise Price of
such Warrant Shares after such adjustment, (B) a brief statement of the
facts requiring such adjustment and (C) the computation by which such
adjustment was made. Such certificate shall be conclusive evidence of
the correctness of such adjustment. The Warrant Agent shall be entitled
to rely on such certificate and shall be under no duty or
responsibility with respect to any such certificate, except to exhibit
the same, from time to time, to any Holder desiring an inspection
thereof during reasonable business hours. The Warrant Agent shall not
at any time be under any duty or responsibility to any Holders to
determine whether any facts exist that may require any adjustment of
the Exercise Price or the number of Warrant Shares or other stock or
property purchasable upon exercise thereof or with respect to the
nature or extent of any such adjustment when made, or with respect to
the method employed in making such adjustment.
(g) DEFINITION OF COMMON STOCK. For the purpose of this
subsection 11.1, the term "Common Stock" shall mean (A) the class of
stock designated as the Common Stock of the Company at the date of this
Agreement or (B) any other class of stock resulting from successive
changes or reclassifications of such shares consisting solely of
changes in par value, or from par value to no par value or from no par
value to par value. In the event that at any time, as a result of an
adjustment made pursuant to paragraph (a) above, the Holders of a
Warrant or Warrants shall become entitled to purchase any securities of
the Company other than Common Stock, thereafter the number of such
other securities so purchasable upon exercise of each Warrant and the
Exercise Price of such securities shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Warrant Shares
contained in this subsection 11.1 and the provisions of Section 6 and
subsections 11.2 and 11.3, inclusive, with respect to the Warrant
Shares, shall apply on like terms to any such other securities.
(h) COMPANY MAY REDUCE EXERCISE PRICE OR INCREASE NUMBER OF
WARRANT SHARES PURCHASABLE. The Company may, at its option, at any time
during the term of the Warrants, reduce the then current Exercise
Price, or increase the number of Common Shares purchasable upon
exercise of each Warrant, to any amount deemed appropriate by the Board
of Directors of the Company.
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(i) SUBSEQUENTLY ISSUED WARRANTS. All Warrants originally
issued by the Company subsequent to any adjustment made to the Exercise
Price hereunder shall evidence the right to purchase, at the adjusted
Exercise Price, the number of shares of Common Stock purchasable from
time to time hereunder upon exercise of the Warrants, all subject to
further adjustment as provided herein.
(j) NUMBER OF WARRANT SHARES ON WARRANT CERTIFICATES.
Irrespective of any adjustment or change in the Exercise Price or the
number of shares of Common Stock issuable upon the exercise of the
Warrants, the Warrant certificates theretofore and thereafter issued
may continue to express the Exercise Price per share and the number of
shares which were expressed upon the initial Warrant certificates
issued hereunder.
11.2 NO ADJUSTMENT FOR DIVIDENDS. Except as provided in
subsection 11.1, no adjustment in respect of any dividends made on a quarterly
or other periodic basis out of retained earnings shall be made during the term
of a Warrant or upon the exercise of a Warrant.
11.3 PRESERVATION OF PURCHASE RIGHTS AND ADJUSTMENT OF
EXERCISE PRICE UPON MERGER, CONSOLIDATION, ETC. In case the Company shall
consolidate or merge with or into any other corporation (other than a
consolidation or merger in which the Company is the surviving corporation and
each share of Common Stock outstanding immediately prior to such consolidation
or merger is to remain outstanding immediately after such consolidation or
merger and no cash, securities or other property is distributed with respect to
such shares) or shall sell or transfer all or substantially all of its assets to
any person or entity, the Company or such successor or purchasing person or
entity, as the case may be (collectively, the "ACQUIRING PERSON"), shall execute
with the Warrant Agent an agreement (so long as such agreement does not affect
the Warrant Agent's duties, rights and responsibilities set forth in this
Agreement) that each Holder of a Warrant shall have the right thereafter upon
payment of the Exercise Price in effect immediately prior to such action to
purchase upon exercise of each Warrant the kind and amount of shares and other
securities, cash and other property that he or she or it would have owned or
have been entitled to receive after the happening of such consolidation, merger
or sale had such Warrant been exercised immediately prior to such action
(assuming that such Holder, as a holder of Common Stock prior to such action,
would not have exercised any rights of election as a holder of Common Stock as
to the kind or amount of securities, cash or other property receivable upon such
consolidation, merger or sale; provided, that if the kind or amount of
securities, cash or other property receivable upon such consolidation, merger or
sale is not the same for each non-electing share of Common Stock, then the kind
and amount of securities, cash or other property receivable shall be deemed to
be the kind and amount so receivable by a plurality of the non-electing shares).
The Company shall mail by first-class mail, postage prepaid, to each Holder,
notice of the execution of any agreement with an acquiring person as provided in
the first sentence of this subsection 11.3 with a copy thereof to the Warrant
Agent. In addition to any adjustments required by this subsection 11.3, such
agreement shall provide for adjustments which shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Section 11. The
Company shall not effect any such consolidation, merger or sale unless prior to
or simultaneously with the consummation thereof the acquiring person (if other
than the Company) resulting from such consolidation or merger or the acquiring
person purchasing such assets or other appropriate corporation or entity shall
assume, by written
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instrument executed and delivered to the Warrant Agent, the obligation to
deliver to each Holder such shares of stock, securities or assets as, in
accordance with the foregoing provisions, such Holder may be entitled to
receive and the other obligations of the Company under this Agreement. The
provisions of this subsection 11.3 shall similarly apply to successive
consolidations, mergers, sales or conveyances. The Warrant Agent shall be
under no duty or responsibility to determine the correctness of any
provisions contained in any such agreement relating either to the kind or
amount of shares of stock or other securities, cash or property receivable
upon exercise of Warrants or with respect to the method employed and provided
therein for any adjustments.
SECTION 12. NO RIGHTS AS STOCKHOLDERS.
Nothing contained in this Agreement or in any of the Warrants shall be construed
as conferring upon the Holders or their transferees the right to vote or to
receive dividends or to consent or to receive notice as shareholders in respect
of any meeting of shareholders for the election of directors of the Company or
any other matter, or any rights whatsoever as shareholders of the Company.
SECTION 13. FRACTIONAL SHARES OF COMMON STOCK.
The Company will not issue fractions of Warrants or distribute
Warrant certificates which evidence fractional Warrants. In lieu of such
fractional Warrants, there shall be paid to the Holders to whom Warrant
certificates representing such fractional Warrants would otherwise be issuable
an amount in cash equal to the product of such fraction of a Warrant multiplied
by the current Market Price per share of Common Stock issuable with respect to
such fraction of a Warrant.
SECTION 14. RIGHT OF ACTION.
All rights of action in respect of this Agreement are vested
in the respective Holders of the Warrant certificates, and any Holder of any
Warrant certificate, without the consent of the Warrant Agent or of the Holder
of any other Warrant certificate, may, on such Holder's own behalf and for such
Holder's own benefit, enforce, and may institute and maintain any suit, action
or proceeding against the Company to enforce, or otherwise act in respect of,
such Holder's right to exercise the Warrants evidenced by such Warrant
certificate in the manner provided in such Warrant certificate and in this
Agreement.
SECTION 15. INSPECTION OF WARRANT AGREEMENT.
The Warrant Agent shall keep copies of this Agreement and any
notices given or received by it hereunder available for inspection by the
Holders during normal business hours at its office in the City of Los Angeles
for that purpose. The Company shall supply the Warrant Agent from time to time
with such numbers of copies of this Agreement as the Warrant Agent may request.
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SECTION 16. MERGER OR CONSOLIDATION OR CHANGE OF NAME
OF WARRANT AGENT.
Any corporation or entity into which the Warrant Agent may
be merged or with which it may be consolidated, or any corporation or entity
resulting from any merger or consolidation to which the Warrant Agent shall
be a party, or any corporation or entity succeeding to the shareholder
services business of the Warrant Agent, shall be the successor to the Warrant
Agent hereunder without the execution or filing of any paper or any further
act on the part of any of the parties hereto, provided that such corporation
or entity would be eligible for appointment as successor Warrant Agent under
the provisions of Section 18 hereof. In case at the time such successor to
the Warrant Agent shall succeed to the agency created by this Agreement any
of the Warrants shall have been countersigned but not delivered, any such
successor to the Warrant Agent may adopt the countersignature of the original
Warrant Agent and deliver such Warrants so countersigned; and in case at that
time any of the Warrants shall not have been countersigned, any successor to
the Warrant Agent may countersign such Warrants either in the name of the
predecessor Warrant Agent or in the name of the successor Warrant Agent, and
in all such cases such Warrants shall have the full force provided in the
Warrants and in this Agreement.
In case at any time the name of the Warrant Agent shall be
changed and at such time any of the Warrants shall have been countersigned
but not delivered, the Warrant Agent may adopt the countersignatures under
its prior name and deliver Warrants so countersigned; and in case at that
time any of the Warrants shall not have been countersigned, the Warrant Agent
may countersign such Warrants either in its prior name or in its changed
name; and in all such cases such Warrants shall have the full force provided
in the Warrants and in this Agreement.
SECTION 17. CONCERNING THE WARRANT AGENT.
The Warrant Agent undertakes the duties and obligations
expressly imposed by this Agreement upon the following terms and conditions,
by all of which the Company and the Holders of Warrants, by their acceptance
thereof, shall be bound:
17.1 DISCLAIMER OF REPRESENTATIONS. The statements
contained herein and in the Warrants shall be taken as statements of the
Company, and the Warrant Agent assumes no responsibility for the correctness
of any of the same except such as describe the Warrant Agent or action taken
by it. The Warrant Agent assumes no responsibility with respect to the
distribution of the Warrants except as herein otherwise provided.
17.2 NO RESPONSIBILITY FOR FAILURE OF COMPANY'S COVENANTS.
The Warrant Agent shall not be responsible for any failure of the Company to
comply with any of the covenants or provisions contained in this Agreement or
in the Warrants.
17.3 DELEGATION. The Warrant Agent may execute and exercise
any of the rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the Warrant Agent
shall not be answerable or accountable for any act, neglect or misconduct of
any such attorneys or agents or for any loss to the Company resulting
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from such neglect or misconduct provided reasonable care shall have been
exercised in the selection and continued retention thereof.
17.4 OPINION OF COUNSEL. The Warrant Agent may consult at
any time with legal counsel satisfactory to it, and the Warrant Agent shall
incur no liability or responsibility to the Company or to any Holder in
respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with the opinion or the advice of such counsel.
17.5 OFFICER'S CERTIFICATE. Whenever in the performance of
its duties under this Agreement the Warrant Agent shall deem it necessary or
desirable that any fact or matter be proved or established by the Company
prior to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a certificate
signed by the Chairman of the Board, the President, any Vice President, the
Chief Financial Officer or the Secretary of the Company and delivered to the
Warrant Agent; and such certificate shall be full authorization to the
Warrant Agent and the Warrant Agent shall incur no liability for or in
respect of any action taken, suffered or omitted in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
17.6 COMPENSATION, REIMBURSEMENT AND INDEMNIFICATION. The
Company agrees to pay the Warrant Agent reasonable compensation for all
services rendered by the Warrant Agent in the performance of its duties under
this Agreement, to reimburse the Warrant Agent for all expenses, taxes and
governmental charges and other charges of any kind and nature reasonably
incurred by the Warrant Agent in the performance of its duties under this
Agreement including its reasonable expenses and counsel fees. The Company
also agrees to indemnify the Warrant Agent and save it harmless against any
and all losses, liabilities, including judgments, costs and reasonable
counsel fees, for any action taken, suffered or omitted by the Warrant Agent
in the performance of its duties under this Agreement except as a result of
the Warrant Agent's gross negligence or willful misconduct. The indemnity
provided herein shall survive the termination of this Agreement and the
termination and expiration of the Warrants. The costs and expenses incurred
in enforcing this right of indemnification shall be paid by the Company.
Anything to the contrary notwithstanding, in no event shall the Warrant Agent
be liable for special, punitive, indirect, consequential or incidental loss
or damage of any kind whatsoever (including lost profits), even if the
Warrant Agent has been advised of the likelihood of such loss or damage. Any
liability of the Warrant Agent under this Agreement, except in the event of
the Warrant Agent's gross negligence or willful misconduct, will be limited
to the amount of fees paid by the Company to the Warrant Agent.
17.7 NO ACTION WITHOUT ASSURANCE OF REIMBURSEMENT. The
Warrant Agent may, but shall be under no obligation to institute any action,
suit or legal proceeding or to take any other action likely to involve
expense unless the Company or one or more Holders shall furnish the Warrant
Agent with reasonable security and indemnity for any costs and expenses which
may be incurred. All rights or action under this Agreement or under any of
the Warrants may be enforced by the Warrant Agent without the possession of
any of the Warrants or the production thereof at any trial or other
proceeding relative thereto, and any such action, suit or proceeding
instituted by the Warrant Agent shall be brought in its name as Warrant
Agent, and
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any recovery of judgment shall be for the ratable benefit of the Holders, as
their respective rights or interests may appear.
17.8 CONFLICTS OF INTEREST. The Warrant Agent and any
stockholder, director, officer or employee of the Warrant Agent may buy, sell
or deal in any of the Warrants or other securities of the Company or become
pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or otherwise act as
fully and freely as though it were not Warrant Agent under this Agreement.
Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.
17.9 SOLELY AS AGENT. The Warrant Agent shall act hereunder
solely as agent, and its duties shall be determined solely by the provisions
hereof. The Warrant Agent shall not be liable for anything that it may do or
refrain from doing in connection with this Agreement except for its own gross
negligence or willful misconduct.
17.10 RELIANCE ON DOCUMENTS. The Warrant Agent will not
incur any liability or responsibility to the Company or to any Holder of any
Warrant for any action taken in reliance on any notice, resolution, waiver,
consent, order, certificate, or other paper, document or instrument
reasonably believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties.
17.11 NO REPRESENTATION REGARDING VALIDITY, ETC. The
Warrant Agent shall not be under any responsibility in respect of the
validity of this Agreement or the execution and delivery hereof (except the
due execution and delivery hereof by the Warrant Agent) or in respect of the
validity or execution of any Warrant (except its countersignature thereof);
nor shall the Warrant Agent by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
Warrant Shares (or other stock) to be issued pursuant to this Agreement or
any Warrant, or as to whether any Warrant Shares (or other stock) will when
issued be validly issued, fully paid and nonassessable, or as to the Exercise
Price or the number or amount of Warrant Shares or other securities or other
property issuable upon exercise of any Warrant.
17.12 INSTRUCTIONS FROM COMPANY. The Warrant Agent is
hereby authorized and directed to accept instructions with respect to the
performance of its duties hereunder from the Chairman of the Board, the
President, any Vice President, the Chief Financial Officer or the Secretary
of the Company, and to apply to such officers for advice or instructions in
connection with its duties, and shall not be liable for any action taken,
suffered or omitted to be taken by it in good faith in accordance with
instructions of any such Officers.
17.13 WARRANT AGENT NOT REQUIRED TO EXPEND FUNDS. No
provision of this Agreement shall require the Warrant Agent to expend or risk
its own funds or otherwise incur any financial liability in the performance
of its duties hereunder or in the exercise of its rights if it believes that
repayment of such funds or adequate indemnification against such risk or
liability is not reasonably assured to it.
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SECTION 18. CHANGE OF WARRANT AGENT.
The Warrant Agent may resign and be discharged from its
duties under this Agreement by giving to the Company 60 days' notice in
writing. The Warrant Agent may be removed by like notice to the Warrant Agent
from the Company. If the Warrant Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor
to the Warrant Agent. If the Company shall fail to make such appointment
within a period of 50 days after such notice of removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Warrant Agent or by any Holder (who shall with such notice
submit his Warrant for inspection by the Company), then the resigning,
discharged or removed Warrant Agent or any Holder may apply to any court of
competent jurisdiction for the appointment of a successor to the Warrant
Agent. Any successor warrant agent, whether appointed by the Company or such
court, shall be (a) an entity, in good standing, organized and doing business
under the laws of the United States of America or any state thereof and
having at the time of its appointment as warrant agent a combined capital and
surplus of at least $50,000,000, as set forth in its most recent published
annual report of condition or (b) an affiliate of an entity described in
clause (a) above. After appointment, the successor warrant agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Warrant Agent hereunder without further act or deed;
but the former Warrant Agent shall deliver and transfer to the successor
warrant agent any property at the time held by it hereunder, and shall
execute and deliver any further assurance, conveyance, act or deed reasonably
requested and necessary for such purpose. In the event of such resignation or
removal, the successor warrant agent shall mail, by first-class mail, postage
prepaid, to each Holder, written notice of such removal or resignation and
the name and address of such successor warrant agent. Failure to file any
notice provided for in this Section 18, however, or any defect therein, shall
not affect the legality or validity of the resignation or removal of the
Warrant Agent or the appointment of the successor warrant agent, as the case
may be.
SECTION 19. IDENTITY OF TRANSFER AGENT.
Forthwith upon the appointment of any subsequent Transfer
Agent for the Company's shares of Common Stock, or any other shares of the
Company's capital stock issuable upon the exercise of the rights of purchase
represented by the Warrants, the Company will file with the Warrant Agent a
statement setting forth the name and address of such Transfer Agent.
SECTION 20. NOTICES.
Any notice pursuant to this Agreement by the Company or by
the Holder of any Warrant to the Warrant Agent, or by the Warrant Agent or by
the Holder of any Warrant to the Company, shall be in writing and shall be
deemed to have been duly given if delivered or mailed by certified mail,
return receipt requested, (a) if to the Company, to The XxxXxxx-Xxxxxxxxxx
Corporation, 000 Xxxxxxxx Xxxxxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000,
Attention: Xxxxx X. Xxxxx and, (b) if to the Warrant Agent, for so long as
The XxxXxxx-Xxxxxxxxxx Corporation is acting as Warrant Agent, to the address
provided above for the Company. Each party hereto may
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from time to time change the address to which notices to it are to be
delivered or mailed hereunder by notice in writing to the other party.
Any notice mailed pursuant to this Agreement by the Company
or the Warrant Agent to the Holders of Warrants shall be in writing and shall
be deemed to have been duly given if mailed by first-class mail, postage
prepaid, to such Holders at their respective addresses on the Warrant
Register of the Warrant Agent.
SECTION 21. SUPPLEMENTS AND AMENDMENTS.
The Company and the Warrant Agent may from time to time
supplement or amend this Agreement, without the approval of any Holder in
order to cure any ambiguity or to correct or supplement any provision
contained herein that may be defective or inconsistent with any other
provisions herein, or to make any other provisions with regard to matters or
questions arising hereunder that the Company and the Warrant Agent may deem
necessary or desirable and that shall not adversely affect the interests of
the Holders of Warrants.
In addition to the foregoing, with the consent of Holders
of Warrants entitled, upon exercise thereof, to receive not less than a
majority of the Warrant Shares issuable thereunder, the Company and the
Warrant Agent may modify this Agreement for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or modifying in any manner the rights of the Holders of the
Warrants; provided, however, that (a) no modification of the terms
(including, but not limited to the adjustments described in Section 11) upon
which the Warrants are exercisable or reducing the percentage required for
consent to modification of this Agreement, no acceleration of the Expiration
Date and no increase in the Exercise Price may, in each case, be made without
the consent of the Holder of each outstanding Warrant affected thereby, and
(b) notwithstanding anything to the contrary contained herein, the Warrant
Agent may, but shall not be required to, enter into a supplement or amendment
that affects the Warrant Agent's duties, obligations or immunities under this
Agreement.
SECTION 22. SUCCESSORS.
All the covenants and provisions of this Agreement by or
for the benefit of the Company or the Warrant Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.
SECTION 23. MERGER OR CONSOLIDATION OF THE COMPANY.
The Company will not merge or consolidate with or into any
other corporation unless the corporation resulting from such merger or
consolidation (if not the Company) shall expressly assume, by supplemental
agreement satisfactory in form to the Warrant Agent in the exercise of its
reasonable judgment and executed and delivered to the Warrant Agent, the due
and punctual performance and observance of each and every covenant and
condition of this Agreement to be performed and observed by the Company.
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SECTION 24. APPLICABLE LAW.
This Agreement and each Warrant issued hereunder shall be
deemed to be a contract made under the internal laws of the State of
California (without preference to conflicts of law principles) and for all
purposes shall be construed in accordance with the laws of said State; except
that all provisions regarding the rights, duties and obligations of the
Warrant Agent shall be governed and construed in accordance with the laws of
the State of New York applicable to contracts made and to be performed
entirely within such State.
SECTION 25. BENEFITS OF THIS AGREEMENT.
Nothing in this Agreement shall be construed to give to any
person or corporation other than the Company, the Warrant Agent and the
Holders of the Warrants any legal or equitable right, remedy or claim under
this Agreement; and this Agreement shall be for the sole and exclusive
benefit of the Company, the Warrant Agent, and their respective successors
and assigns hereunder, and the holders from time to time of the Warrants.
SECTION 26. COUNTERPARTS.
This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but
one and the same instrument.
SECTION 27. CAPTIONS.
The captions of the Sections and subsections of this
Agreement have been inserted for convenience only and shall have no
substantive effect.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
THE XXXXXXX-XXXXXXXXXX CORPORATION
By /s/ Xxxxx Xxxxx, Xx.
--------------------------------
Attest:
/s/ Xxxxx X. Xxxxx
-----------------------------
THE XXXXXXX-XXXXXXXXXX
CORPORATION, as Warrant Agent
By /s/ Xxxxx Xxxxx, Xx.
--------------------------------
Attest:
/s/ Xxxxx X. Xxxxx
-----------------------------
