EXHIBIT 4.1
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SILKWORM ACQUISITION CORPORATION
Warrants to Purchase
44,850 Shares of Common Stock
WARRANT AGREEMENT
Dated as of August 17, 1998
NATIONAL CITY BANK
Warrant Agent
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WARRANT AGREEMENT dated as of August 17, 1998 between Silkworm
Acquisition Corporation, a Delaware corporation ("Silkworm"), and National City
Bank, as warrant agent (the "Warrant Agent").
WHEREAS, Silkworm proposes to issue warrants (the "Warrants") to
initially purchase up to an aggregate of 44,850 shares of Common Stock, par
value $.01 per share (the "Silkworm Common Stock"), of Silkworm (the Silkworm
Common Stock issuable on exercise of the Warrants being referred to herein as
the "Silkworm Warrant Shares"), in connection with the offering (the
"Offering") by Silkworm of 138,000 Units (the "Units"), each consisting of
$1,000 principal amount at maturity of Silkworm's 14% Senior Discount Notes due
2008 (the "Notes") and one Warrant, each Warrant initially representing the
right to purchase 0.325 of a Silkworm Warrant Share.
WHEREAS, the Units are being issued and sold in connection with the
merger (the "Merger") of Silkworm with and into Insilco Holding Co., a Delaware
corporation ("Holdings") pursuant to an Agreement and Plan of Merger, as
amended (the "Merger Agreement"), dated as of March 24, 1998, as amended as of
June 8, 1998 and August 12, 1998, by and among Insilco Corporation, Holdings
and Silkworm.
WHEREAS, at the effective time of the Merger (the "Effective Time"),
each share of Silkworm Common Stock will become one share of common stock of
Holdings, par value $.01 per share ("Holdings Common Stock"), each Warrant will
by its terms become exercisable to initially purchase 0.325 of a share of
Holdings Common Stock (the "Holdings Warrant Shares") and Holdings will succeed
to the obligations of Silkworm hereunder and with respect to the indenture
relating to the Notes (the "Indenture"), the Notes and the Warrants.
WHEREAS, concurrently with the Effective Time, Holdings will
authorize, execute and deliver an assumption agreement pursuant to which
Holdings will assume all of the obligations of Silkworm under the Warrants and
the Warrant Agreement.
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 of Warrant Certificates (as defined) and other matters as provided
herein.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
As used herein, the "Company" shall refer to Silkworm prior to the
Merger and to Holdings from and after the Effective Time. As used herein,
"Common Stock" shall refer to Silkworm Common Stock prior to the Merger and to
Holdings Common Stock from and after the Effective Time. As used herein, the
term "Warrant Shares" shall refer to the Silkworm Warrant Shares prior to the
Merger and the Holdings Warrant Shares from and after the Effective Time. As
used herein, the "Initial Purchaser" shall refer to Xxxxxxxxx, Xxxxxx &
Xxxxxxxx Securities Corporation.
SECTION 1. Appointment of Warrant Agent. The Company hereby appoints
the Warrant Agent to act as agent for the Company in accordance with the
instructions set forth hereinafter in this Agreement, and the Warrant Agent
hereby accepts such appointment.
SECTION 2. Warrant Certificates. The certificates evidencing the
Warrants (the "Warrant Certificates") to be delivered pursuant to this
Agreement shall be in registered form only and shall be substantially in the
form set forth in Exhibit A attached hereto. The Warrants shall be issued in
the form of definitive warrants; provided that any holder of Warrants or
Warrant Shares which are not required to have the legend described in the
immediately following paragraph may exchange such Warrants or Warrant Shares
for a beneficial interest in a global warrant pursuant to procedures to be
established by the Warrant Agent and in conformity with the customary
requirements of The Depository Trust Company or such other depository
institution as the Company may appoint to act as depositary for the Warrants
and the Warrant Shares, and the Warrant Agent is authorized to enter into such
amendments to this Agreement as are necessary to comply with such procedures.
Each person purchasing a Warrant from the Initial Purchaser shall
execute and deliver to the Company and the Initial Purchaser a purchaser letter
substantially in the form attached as Exhibit A to the Offering Memorandum
relating to the Units. Except as permitted by the following paragraph, each
Warrant Certificate issued hereunder and each certificate representing a
Warrant Share issued upon exercise of a Warrant (and all securities issued in
exchange therefor, in substitution thereof or upon conversion thereof) shall
bear a legend (a "Private Placement Legend") substantially in the following
form:
"THIS WARRANT (OR ITS PREDECESSOR) AND THE SHARES OF COMMON STOCK
ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY,
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET
FORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL
INTEREST HEREIN, THE HOLDER:
(1) REPRESENTS THAT (A) IT HAS ACQUIRED THIS WARRANT
IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S
UNDER THE SECURITIES ACT OR (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A) (1), (2),
(3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT (AN
"IAI")),
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE
TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER OR ANY OF ITS
SUBSIDIARIES, (B) IN AN OFFSHORE TRANSACTION MEETING THE
REQUIREMENTS OF RULE 903 OR 904 OF THE SECURITIES ACT, (C) IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (D) TO AN IAI THAT, PRIOR TO SUCH TRANSFER,
FURNISHES THE WARRANT AGENT A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
TRANSFER OF THIS WARRANT (THE FORM OF WHICH CAN BE OBTAINED
FROM THE WARRANT AGENT) AND AN OPINION OF COUNSEL ACCEPTABLE
TO THE ISSUER THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY)
OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND,
IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THIS WARRANT OR AN INTEREST HEREIN IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES"
HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE
SECURITIES ACT. THE WARRANT AGREEMENT CONTAINS A PROVISION REQUIRING THE
WARRANT AGENT TO REFUSE TO REGISTER ANY TRANSFER OF THIS SECURITY IN VIOLATION
OF THE FOREGOING."
(c) Upon any sale or transfer of any Warrant Certificate or Warrant
Shares pursuant to an effective registration statement under the Securities Act
or satisfying the condition set forth in subclause (1)(C) of the Private
Placement Legend, the Warrant Agent shall permit the holder thereof to exchange
such Warrant Certificate or such Warrant Shares for another Warrant Certificate
or certificate evidencing Warrant Shares, as applicable, that does not bear the
legend set forth above and rescind any restriction on the transfer of such
Warrant Certificate or such Warrant Shares.
SECTION 3. Execution of Warrant Certificates. (a) Warrant Certificates
shall be signed on behalf of the Company by an Officer of the Company (as
defined below). Such signature upon the Warrant Certificates may be in the form
of a facsimile signature and may be imprinted or otherwise reproduced on the
Warrant Certificates and for that purpose the Company may adopt and use the
facsimile signature of any person who shall have been an Officer,
notwithstanding the fact that at the time the Warrant Certificates shall be
countersigned and delivered or disposed of he shall have ceased to hold such
office. The seal of the Company may be in the form of a facsimile thereof and
may be impressed, affixed, imprinted or otherwise reproduced on the Warrant
Certificates. For purposes hereof, an "Officer" shall mean the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary or any Vice-President.
(b) In case any Officer of the Company who shall have signed any of
the Warrant Certificates shall cease to be such Officer before the Warrant
Certificates so signed shall have been countersigned by the Warrant Agent, or
disposed of by the Company, such Warrant Certificates nevertheless may be
countersigned and delivered or disposed of as though such person had not ceased
to be such Officer of the Company; and any Warrant Certificate may be signed on
behalf of the Company by any person who, at the actual date of the execution of
such Warrant Certificate, shall be an Officer of the Company to sign such
Warrant Certificate, although at the date of the execution of this Warrant
Agreement any such person was not such Officer.
(c) Warrant Certificates shall be dated the date of countersignature
by the Warrant Agent.
SECTION 4. Registration and Countersignature. (a) The Warrant Agent,
on behalf of the Company, shall number and register the Warrant Certificates in
a register as they are issued by the Company.
(b) Warrant Certificates shall be manually countersigned by the
Warrant Agent and shall not be valid for any purpose unless so countersigned.
The Warrant Agent shall, upon written instructions of the Chairman of the
Board, the Chief Executive Officer, the President, a Vice President, the
Treasurer or the Controller of the Company, initially countersign, issue and
deliver Warrant Certificates entitling the holders thereof to purchase not more
than the number of Warrant Shares referred to above in the first recital hereof
and shall countersign and deliver Warrant Certificates as otherwise provided in
this Agreement.
(c) The Company and the Warrant Agent may deem and treat the
registered holder(s) of the Warrant Certificates as the absolute owner(s)
thereof (notwithstanding any notation of ownership or other writing thereon
made by anyone) for all purposes, and neither the Company nor the Warrant Agent
shall be affected by any notice to the contrary.
SECTION 5. Registration of Transfers and Exchanges. (a) The Warrant
Certificates shall be issued in registered form only. The Company shall cause
to be kept at the office of the Warrant Agent a register in which, subject to
such reasonable regulations as it may prescribe, the Company shall provide for
the registration of Warrant Certificates and transfers or exchanges of Warrant
Certificates as provided in this Agreement. All Warrant Certificates issued
upon any registration of transfer or exchange of Warrant Certificates shall be
the valid obligations of the Company, evidencing the same obligations, and
entitled to the same benefits under this Agreement, as the Warrant Certificates
surrendered for such registration of transfer or exchange.
A holder may transfer its Warrants only by written application to the
Warrant Agent stating the name of the proposed transferee and otherwise
complying with the terms of this Agreement. The Warrant Agent shall not be
required to register the transfer of any Warrant bearing the Private Placement
Legend that does not comply with the provisions of the Private Placement
Legend. No such transfer shall be effected until, and such transferee shall
succeed to the rights of a holder only upon, final acceptance and registration
of the transfer by the Warrant Agent in the register. Prior to the registration
of any transfer of Warrants by a holder as provided herein, the Company, the
Warrant Agent, and any agent of the Company may treat the person in whose name
the Warrants are registered as the owner thereof for all purposes and as the
person entitled to exercise the rights represented thereby, any notice to the
contrary notwithstanding. When Warrant Certificates are presented to the
Warrant Agent with a request to register the transfer or to exchange them for
an equal amount of Warrants of other authorized denominations, the Warrant
Agent shall register such transfer or make such exchange as requested if its
requirements for such transactions are met. To permit registrations of
transfers and exchanges, the Company shall execute Warrant Certificates at the
Warrant Agent's request. No service charge shall be made for any registration
of transfer or exchange of Warrants, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer of Warrants.
(b) The Warrant Agent shall retain copies of all letters, notices and
other written communications received pursuant to this Section 5. The Company
shall have the right to inspect and make copies of all such letters, notices or
other written communications at any reasonable time upon the giving of
reasonable written notice to the Warrant Agent.
(c) Any Warrant Certificate surrendered for registration of transfer,
exchange or exercise of the Warrants represented thereby shall, if surrendered
to the Company, be delivered to the Warrant Agent, and all Warrant Certificates
surrendered or so delivered to the Warrant Agent shall be promptly cancelled by
the Warrant Agent and shall not be reissued by the Company and, except as
provided in this Section 5 in case of an exchange, Section 6 hereof in case of
the exercise of less than all the Warrants represented thereby or Section 8
hereof in case of a mutilated Warrant Certificate, no Warrant Certificate shall
be issued hereunder in lieu thereof. The Warrant Agent shall deliver to the
Company from time to time or otherwise dispose of such cancelled Warrant
Certificates as the Company may direct.
(d) The Warrant Agent is hereby authorized to countersign, in
accordance with the provisions of this Section 5 and of Section 4 hereof, the
new Warrant Certificates required pursuant to the provisions of this Section 5.
(e) No service charge shall be made for registration of transfer or
exchange upon surrender of any Warrant Certificate at the office of the Warrant
Agent maintained for that purpose. 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, transfer or exchange of Warrant Certificates.
SECTION 6. Separation of Warrants; Terms of Warrants; Exercise of
Warrants. (a) The Notes and Warrants will be separately transferable
immediately upon issuance. Subject to the terms of this Agreement, each Warrant
holder shall have the right, which may be exercised during the period
commencing at the opening of business on August 17, 1998 and until 5:00 p.m.,
New York City time on August 15, 2008 (the "Exercise Period"), to receive from
the Company the number of fully paid and nonassessable Warrant Shares which the
holder may at the time be entitled to receive on exercise of such Warrants and
payment of the exercise price (the "Exercise Price") then in effect for such
Warrant Shares; provided that holders shall be able to exercise their Warrants
only if a registration statement relating to the Warrant Shares is then in
effect, or the exercise of such Warrants is exempt from the registration
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
and such securities are qualified for sale or exempt from qualification under
the applicable securities laws of the states in which the various holders of
the Warrants or other persons to whom it is proposed that the Warrant Shares be
issued on exercise of the Warrants reside. Each holder may exercise its right,
during the Exercise Period, to receive Warrant Shares on a net basis, such
that, without the exchange of any funds, the holder will receive such number of
Warrant Shares equal to the product of (A) the number of Warrant Shares for
which such Warrant is exercisable as of the date of exercise (if the Exercise
Price were being paid in cash) and (B) the Cashless Exercise Ratio. The
Cashless Exercise Ratio shall equal a fraction the numerator of which is the
Market Value (as defined below) per share of Common Stock minus the Exercise
Price per share as of the date of exercise and the denominator of which is the
Market Value per share on the date of exercise. Each Warrant not exercised
prior to 5:00 p.m., New York City time, on August 15, 2008 (the "Expiration
Date") shall become void and all rights thereunder and all rights in respect
thereof under this agreement shall cease as of such time. No adjustments as to
dividends will be made upon exercise of the Warrants.
The "Market Value" per share of Common Stock as of any date shall
equal (i) if Common Stock is primarily traded on a securities exchange, the
last sale price on such securities exchange on the trading day immediately
prior to the date of determination, or if no sales occurred on such day, the
mean between the closing "bid" and "asked" prices on such day, (ii) if the
principal market for Common Stock is in the over-the-counter market, the
closing sale price on the trading day immediately prior to the date of the
determination, as published by the National Association of Securities Dealers
Automated Quotation System or similar organization, or if such price is not so
published on such day, the mean between the closing "bid" and "asked" prices,
if available, on such day, which prices may be obtained from any reputable
pricing service, broker or dealer, and (iii) if neither clause (i) nor clause
(ii) is applicable, the fair market value on the date of determination of
Common Stock as determined in good faith by the Board of Directors of the
Company.
(b) In order to exercise all or any of the Warrants represented by a
Warrant Certificate, the holder thereof must deliver to the Warrant Agent at
its Cleveland, Ohio corporate trust office set forth in Section 19 hereof the
Warrant Certificate and the form of election to purchase on the reverse thereof
duly filled in and signed, which signature shall be medallion guaranteed by an
institution which is a member of a Securities Transfer Association recognized
signature guarantee program, and upon payment to the Warrant Agent for the
account of the Company of the Exercise Price, which is set forth in the form of
Warrant Certificate attached hereto as Exhibit A, as adjusted as herein
provided, for the number of Warrant Shares in respect of which such Warrants
are then exercised. Payment of the aggregate Exercise Price shall be made (i)
in cash, by wire transfer or by certified or official bank check payable to the
order of the Company or (ii) on a net basis in the manner provided in Section
6(a) hereof.
(c) Subject to the provisions of Section 7 hereof, upon compliance
with clause (b) above, the Warrant Agent shall deliver or cause to be delivered
with all reasonable dispatch, to or upon the written order of the holder and in
such name or names as the Warrant holder may designate, a certificate or
certificates for the number of whole Warrant Shares issuable upon the exercise
of such Warrants or other securities or property to which such holder is
entitled hereunder, together with cash as provided in Section 12 hereof;
provided that if any consolidation, merger or lease or sale of assets is
proposed to be effected by the Company as described in Section 11(m) hereof, or
a tender offer or an exchange offer for shares of Common Stock shall be made,
upon such surrender of Warrants and payment of the Exercise Price as aforesaid,
the Warrant Agent shall, as soon as possible, but in any event not later than
two business days thereafter, deliver or cause to be delivered the full number
of Warrant Shares issuable upon the exercise of such Warrants in the manner
described in this sentence or other securities or property to which such holder
is entitled hereunder, together with cash as provided in Section 12 hereof.
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.
(d) The Warrants shall be exercisable, at the election of the holders
thereof, either in full or from time to time in part. If less than all the
Warrants represented by a Warrant Certificate are exercised, such Warrant
Certificate shall be surrendered and a new Warrant Certificate of the same
tenor and for the number of Warrants which were not exercised shall be executed
by the Company and delivered to the Warrant Agent and the Warrant Agent shall
countersign the new Warrant Certificate, registered in such name or names as
may be directed in writing by the holder, and shall deliver the new Warrant
Certificate to the Person or Persons entitled to receive the same.
(e) All Warrant Certificates surrendered upon exercise of Warrants
shall be cancelled by the Warrant Agent. Such cancelled Warrant Certificates
shall then be disposed of by the Warrant Agent in a manner satisfactory to the
Company. The Warrant Agent shall account promptly to the Company with respect
to Warrants exercised and concurrently pay to the Company all monies received
by the Warrant Agent for the purchase of the Warrant Shares through the
exercise of such Warrants.
(f) The Warrant Agent shall keep copies of this Agreement and any
notices given or received hereunder available for inspection by the holders
during normal business hours at its office. The Company shall supply the
Warrant Agent from time to time with such numbers of copies of this Agreement
as the Warrant Agent may request.
SECTION 7. Payment of Taxes. The Company will pay all documentary
stamp taxes attributable to the initial issuance of Warrant Shares upon the
exercise of Warrants; provided that the Company shall not be required to pay
any tax or taxes which may be payable in respect of any transfer involved in
the issue of any Warrant Certificates or any certificates for Warrant Shares in
a name other than that of the registered holder of a Warrant Certificate
surrendered upon the exercise of a Warrant, and the Company shall not be
required to issue or deliver such Warrant Certificates unless or until the
person or persons requesting the issuance thereof shall have paid to the
Company the amount of such tax or shall have established to the satisfaction of
the Company that such tax has been paid.
SECTION 8. Mutilated or Missing Warrant Certificates. In case any of
the Warrant Certificates shall be mutilated, lost, stolen or destroyed, the
Company may in its discretion issue and the Warrant Agent may countersign, in
exchange and substitution for and upon cancellation of the mutilated Warrant
Certificate, or in lieu of and substitution for the Warrant Certificate lost,
stolen or destroyed, a new Warrant Certificate of like tenor and representing
an equivalent number of Warrants, but only upon receipt of evidence
satisfactory to the Company and the Warrant Agent of such loss, theft or
destruction of such Warrant Certificate and indemnity, if requested, also
satisfactory to them. Applicants for such substitute Warrant Certificates shall
also comply with such other reasonable regulations and pay such other
reasonable charges as the Company or the Warrant Agent may prescribe.
SECTION 9. Reservation of Warrant Shares. (a) The Company will at all
times reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued Common Stock or its authorized and
issued Common Stock held in its treasury, for the purpose of enabling it to
satisfy any obligation to issue Warrant Shares upon exercise of Warrants, the
maximum number of shares of Common Stock which may then be deliverable upon the
exercise of all outstanding Warrants.
(b) The Company or, if appointed, the transfer agent for the 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 as shall be required for such
purpose. The Company will keep a copy of this Agreement on file with the
Transfer Agent and with every subsequent transfer agent for any shares of the
Company's capital stock issuable upon the exercise of the rights of purchase
represented by the Warrants. The Warrant Agent is hereby irrevocably authorized
to requisition from time to time from such Transfer Agent the stock
certificates required to honor outstanding Warrants upon exercise thereof in
accordance with the terms of this Agreement. The Company will supply such
Transfer Agent with duly executed certificates for such purposes and will
provide or otherwise make available any cash which may be payable as provided
in Section 12 hereof. The Company will furnish such Transfer Agent a copy of
all notices of adjustments, and certificates related thereto, transmitted to
each holder pursuant to Section 14 hereof.
(c) Before taking any action which would cause an adjustment pursuant
to Section 11 hereof to reduce the Exercise Price below the then par value (if
any) of the Warrant Shares, the Company will take any corporate action which
may, in the opinion of its counsel (which may be counsel employed by the
Company), be necessary in order that the Company may validly and legally issue
fully paid and nonassessable Warrant Shares at the Exercise Price as so
adjusted.
(d) The Company covenants that all Warrant Shares which may be issued
upon exercise of Warrants will, upon issue, be fully paid, nonassessable, free
of preemptive rights and free from all taxes, liens, charges and security
interests with respect to the issuance thereof.
SECTION 10. Obtaining Stock Exchange Listings. The Company will from
time to time take all action which may be necessary so that the Warrant Shares,
immediately upon their issuance upon the exercise of Warrants, will be listed
on the principal securities exchanges, automated quotation systems or other
markets within the United States of America, if any, on which other shares of
Common Stock are then listed, if any.
SECTION 11. Adjustment of Exercise Price and Number of Warrant Shares
Issuable. The Exercise Price and the number of Warrant Shares issuable upon
the exercise of each Warrant are subject to adjustment from time to time upon
the occurrence of the events enumerated in this Section 11. For purposes of
this Section 11, "Common Stock" means shares now or hereafter authorized of any
class of common stock of the Company and any other stock of the Company,
however designated, that has the right (subject to any prior rights of any
class or series of preferred stock) to participate in any distribution of the
assets or earnings of the Company without limit as to per share amount.
Notwithstanding anything to the contrary contained herein, the
Exercise Price and the number of Warrant Shares issuable upon the exercise of
each Warrant, except as set forth in the immediately following sentence, shall
not be subject to adjustment under this Article 11 in connection with the
Merger. Instead, at the Effective Time, each Warrant shall be and shall become
the right initially to purchase 0.325 of a share of Holdings Common Stock at an
initial Exercise Price of $0.01 per share and, from and after the Effective
Time, such number of shares of Holdings Common Stock and such Exercise Price
shall be subject to adjustment pursuant to this Section 11.
(a) Adjustment for Change in Capital Stock. If the Company (i) pays a
dividend or makes a distribution on its Common Stock in shares of its Common
Stock, (ii) subdivides its outstanding shares of Common Stock into a greater
number of shares, (iii) combines its outstanding shares of Common Stock into a
smaller number of shares, (iv) makes a distribution on its Common Stock in
shares of its capital stock other than Common Stock or (v) issues by
reclassification of its Common Stock any shares of its capital stock; then the
Exercise Price in effect immediately prior to such action shall be
proportionately adjusted so that the holder of any Warrant thereafter exercised
may receive the aggregate number and kind of shares of capital stock of the
Company which he would have owned immediately following such action if such
Warrant had been exercised immediately prior to such action.
The adjustment shall become effective immediately after the record
date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or reclassification.
If, after an adjustment, a holder of a Warrant upon exercise of it may receive
shares of two or more classes of capital stock of the Company, the Company
shall determine, in good faith, the allocation of the adjusted Exercise Price
between the classes of capital stock. After such allocation, the exercise
privilege and the Exercise Price of each class of capital stock shall
thereafter be subject to adjustment on terms comparable to those applicable to
Common Stock in this Section 11. Such adjustment shall be made successively
whenever any event listed above shall
occur.
(b) Adjustment for Rights Issue. If the Company distributes any rights,
options or warrants to all holders of its Common Stock entitling them for a
period expiring within 45 days after the record date mentioned below to purchase
shares of Common Stock at a price per share less than the Fair Value (as defined
herein) per share on that record date, the Exercise Price shall be adjusted in
accordance with the formula:
O + N x P
---------
E' = E x M
-------------------------
O + N
where:
E' = the adjusted Exercise Price.
E = the current Exercise Price.
O = the number of shares of Common Stock outstanding on the
record date.
N = the number of additional shares of Common Stock
offered.
P = the offering price per share of the additional shares.
M = the Fair Value per share of Common Stock on the record
date.
The adjustment shall be made successively whenever any such rights,
options or warrants are issued and shall become effective immediately after the
record date for the determination of stockholders entitled to receive the
rights, options or warrants. If at the end of the period during which such
rights, options or warrants are exercisable, not all rights, options or
warrants shall have been exercised, the Exercise Price shall be immediately
readjusted to what it would have been if "N" in the above formula had been the
number of shares actually issued.
(c) Adjustment for Other Distributions. If the Company distributes to
all holders of its Common Stock any of its assets or debt securities or any
rights or warrants to purchase debt securities, assets or other securities of
the Company, the Exercise Price shall be adjusted in accordance with the
formula:
M - F
E' = E x ----------------
M
where:
E' = the adjusted Exercise Price.
E = the current Exercise Price.
M = the Fair Value per share of Common Stock on the record
date mentioned below.
F = the fair market value on the record date of the assets,
securities, rights or warrants to be distributed in
respect of one share of Common Stock as determined in
good faith by the Board of Directors of the Company
(the "Board of Directors").
The adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of stockholders entitled to receive the
distribution.
This Section 11(c) does not apply to cash dividends or cash
distributions paid out of consolidated current or retained earnings as shown on
the books of the Company prepared in accordance with generally accepted
accounting principles. Also, this Section 11(c) does not apply to rights,
options or warrants referred to in Section 11(b) hereof.
(d) Adjustment for Common Stock Issue.
If the Company issues shares of Common Stock for a consideration per
share less than the Fair Value per share on the date the Company fixes the
offering price of such additional shares, the Exercise Price shall be adjusted
in accordance with the formula:
P
-----
E' = E x O + M
-------------------
A
where:
E' = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares outstanding immediately prior to
the issuance of such additional shares.
P = the aggregate consideration received for the issuance
of such additional shares.
M = the Fair Value per share on the date of issuance of
such additional shares.
A = the number of shares outstanding immediately after the
issuance of such additional shares.
The adjustment shall be made successively whenever any such issuance
is made, and shall become effective immediately after such issuance.
This subsection (d) does not apply to:
(1) any of the transactions described in
subsections (b) and (c) of this Section 11,
(2) the exercise of Warrants, or the
conversion or exchange of other securities convertible or
exchangeable for Common Stock the issuance of which caused an
adjustment to be made under Section 11(e),
(3) Common Stock issued to the Company's
employees under bona fide employee benefit plans adopted by
the Board of Directors and approved by the holders of Common
Stock when required by law, if such Common Stock would
otherwise be covered by this subsection (d) (but only to the
extent that the aggregate number of shares excluded hereby
and issued after the date of this Warrant Agreement shall not
exceed 5% of the Common Stock outstanding at the time of the
adoption of each such plan, exclusive of anti-dilution
adjustments thereunder),
(4) Common Stock issued to shareholders of
any person which merges into the Company, or with a
subsidiary of the Company, in proportion to their stock
holdings of such person immediately prior to such merger,
upon such merger, provided that if such person is an
Affiliate of the Company, the Board of Directors shall have
obtained a fairness opinion from a nationally recognized
investment banking, appraisal or valuation firm, which is not
an Affiliate of the Company, stating that the consideration
received in such merger is fair to the Company from a
financial point of view, or
(5) the issuance of shares of Common Stock
pursuant to rights, options or warrants which were originally
issued in a Non-Affiliate Sale (as defined below) together
with one or more other securities as part of a unit at a
price per unit.
(e) Adjustment for Convertible Securities Issue.
If the Company issues any securities convertible into or exchangeable
for Common Stock (other than securities issued in transactions described in
subsections (b) and (c) of this Section 11) for a consideration per share of
Common Stock initially deliverable upon conversion or exchange of such
securities less than the Fair Value per share on the date of issuance of such
securities, the Exercise Price shall be adjusted in accordance with this
formula:
P
-----
O + M
E' = E x ----------------
O + D
where:
E' = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares outstanding immediately prior to
the issuance of such securities.
P = the aggregate consideration received for the issuance
of such securities.
M = the Fair Value per share on the date of issuance of
such securities.
D = the maximum number of shares deliverable upon
conversion or in exchange for such securities at the
initial conversion or exchange rate.
The adjustment shall be made successively whenever any such
issuance is made, and shall become effective immediately after such
issuance.
If all of the Common Stock deliverable upon conversion or exchange of
such securities have not been issued when such securities are no longer
outstanding, then the Exercise Price shall promptly be readjusted to the
Exercise Price which would then be in effect had the adjustment upon the
issuance of such securities been made on the basis of the actual number of
shares of Common Stock issued upon conversion or exchange of such securities.
This subsection (e) does not apply to convertible securities issued to
shareholders of any person which merges into the Company, or with a subsidiary
of the Company, in proportion to their stock holdings of such person
immediately prior to such merger, upon such merger, provided that if such
person is an Affiliate of the Company, the Board of Directors shall have
obtained a fairness opinion from a nationally recognized investment banking,
appraisal or valuation firm, which is not an Affiliate of the Company, stating
that the consideration received in such merger is fair to the Company from a
financial point of view.
(f) Consideration Received.
For purposes of any computation respecting consideration received
pursuant to subsections (d), and (e) of this Section 11, the following shall
apply:
(1) in the case of the issuance of shares
of Common Stock for cash, the consideration shall be the
amount of such cash, provided that in no case shall any
deduction be made for any commissions, discounts or other
expenses incurred by the Company for any underwriting of the
issue or otherwise in connection therewith;
(2) in the case of the issuance of shares
of Common Stock for a consideration in whole or in part other
than cash, the consideration other than cash shall be deemed
to be the fair market value thereof as determined in good
faith by the Board of Directors (irrespective of the
accounting treatment thereof), whose determination shall be
conclusive, and described in a Board resolution which shall
be filed with the Warrant Agent;
(3) in the case of the issuance of
securities convertible into or exchangeable for shares, the
aggregate consideration received therefor shall be deemed to
be the consideration received by the Company for the issuance
of such securities plus the additional minimum consideration,
if any, to be received by the Company upon the conversion or
exchange thereof (the consideration in each case to be
determined in the same manner as provided in clauses (1) and
(2) of this subsection); and
(4) in the case of the issuance of shares
of Common Stock pursuant to rights, options or warrants which
rights, options or warrants were originally issued together
with one or more other securities as part of a unit at a
price per unit, the consideration shall be deemed to be the
fair value of such rights, options or warrants at the time of
issuance thereof as determined in good faith by the Board of
Directors whose determination shall be conclusive and
described in a Board resolution which shall be filed with the
Warrant Agent plus the additional minimum consideration, if
any, to be received by the Company upon the exercise,
conversion or exchange thereof (as determined in the same
manner as provided in clauses (1) and (2) of this
subsection).
(g) Fair Value. In Section 11(d) and (e) hereof, the "Fair Value" per
security at any date of determination shall be (1) in connection with a sale by
the Company to a party that is not an Affiliate of the Company in an
arm's-length transaction (a "Non-Affiliate Sale"), the price per security at
which such security is sold and (2) in connection with any sale by the Company
to an Affiliate of the Company, (a) the last price per security at which such
security was sold in a Non-Affiliate Sale within the three-month period
preceding such date of determination or (b) if clause (a) is not applicable,
the fair market value of such security determined in good faith by (i) a
majority of the Board of Directors, including a majority of the Disinterested
Directors, and approved in a Board resolution delivered to the Warrant Agent or
(ii) a nationally recognized investment banking, appraisal or valuation firm,
which is not an Affiliate of the Company, in each case, taking into account,
among all other factors deemed relevant by the Board of Directors or such
investment banking, appraisal or valuation firm, the trading price and volume
of such security on any national securities exchange or automated quotation
system on which such security is traded. Notwithstanding the foregoing, any
sale to Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation (or any successor
thereto) pursuant to an underwritten public offering registered under the
Securities Act shall be deemed to be and treated as a Non-Affiliate Sale.
In Sections 11(b) and (c) hereof, the "Fair Value" per security at any
date of determination shall be (a) the last price per security at which such
security was sold by the Company in a Non-Affiliate Sale within the three-month
period preceding such date of determination or (b) if clause (a) is not
applicable, the fair market value of such security determined in good faith by
(i) a majority of the Board of Directors, including a majority of the
Disinterested Directors, and approved in a Board resolution delivered to the
Warrant Agent or (ii) a nationally recognized investment banking, appraisal or
valuation firm, which is not an Affiliate of the Company, in each case, taking
into account, among all other factors deemed relevant by the Board of Directors
or such investment banking, appraisal or valuation firm, the trading price and
volume of such security on any national securities exchange or automated
quotation system on which such security is traded.
For purposes of this Section 11(g), "Disinterested Director" means, in
connection with any issuance of securities that gives rise to a determination
of the Fair Value thereof, each member of the Board of Directors who is not an
officer, employee, director or other Affiliate of the party to whom the Company
is proposing to issue the securities giving rise to such determination.
For purposes of this Section 11(g), "Affiliate" of any specified
Person means (A) any other Person directly or indirectly controlling or
controlled by or under direct or indirect common control with such specified
Person and (B) any director, officer or employee of such specified person. For
purposes of this definition "control" (including, with correlative meanings,
the terms "controlling," "controlled by" and "under common control with") as
used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise.
(h) When De Minimis Adjustment May Be Deferred. No adjustment in the
Exercise Price need be made unless the adjustment would require an increase or
decrease of at least 1% in the Exercise Price. Any adjustments that are not
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 to the nearest 1/100th of a share, as the case may be, it being
understood that no such rounding shall be made under subsection (p).
(i) When No Adjustment Required. No adjustment need be made for a
transaction referred to Section 11(a), (b), (c), (d), (e) or (f) hereof, if
Warrant holders are to participate (without being required to exercise their
Warrants) in the transaction on a basis and with notice that the Board of
Directors determines to be fair and appropriate in light of the basis and
notice on which holders of Common Stock participate in the transaction. No
adjustment need be made for (i) rights to purchase Common Stock pursuant to a
Company plan for reinvestment of dividends or interest, (ii) a change in the
par value or no par value of the Common Stock or (iii) the issuance by the
Company of the Warrants to DLJ Merchant Banking Partners II, L.P. and certain
of its Affiliates on August 17, 1998. To the extent the Warrants become
convertible into cash, no adjustment need be made thereafter as to the cash.
Interest will not accrue on the cash.
(j) Notice of Adjustment. Whenever the Exercise Price is adjusted, the
Company shall provide the notices required by Section 13 hereof.
(k) Notice of Certain Transactions. If (i) the Company takes any
action that would require an adjustment in the Exercise Price pursuant to
Section 11(a), (b), (c), (d), (e) or (f) hereof and if the Company does not
arrange for Warrant holders to participate pursuant to Section 11(i) hereof,
(ii) the Company takes any action that would require a supplemental Warrant
Agreement pursuant to Section 11(l) hereof or (iii) there is a liquidation or
dissolution of the Company, then the Company shall mail to Warrant holders a
notice stating the proposed record date for a dividend or distribution or the
proposed effective date of a subdivision, combination, reclassification,
consolidation, merger, transfer, lease, liquidation or dissolution. The Company
shall mail the notice at least 15 days before such date. Failure to mail the
notice or any defect in it shall not affect the validity of the transaction.
(l) Reorganization of Company. Immediately after the Effective Time,
if the Company consolidates or merges with or into, or transfers or leases all
or substantially all its assets to, any person, upon consummation of such
transaction the Warrants shall automatically become exercisable for the kind
and amount of securities, cash or other assets which the holder of a Warrant
would have owned immediately after the consolidation, merger, transfer or lease
if the holder had exercised the Warrant immediately before the effective date
of the transaction. Concurrently with the consummation of such transaction, the
corporation formed by or surviving any such consolidation or merger if other
than the Company, or the person to which such sale or conveyance shall have
been made, shall enter into (i) a supplemental Warrant Agreement so providing
and further providing for adjustments which shall be as nearly equivalent as
may be practical to the adjustments provided for in this Section 11(l) and (ii)
a supplement to the Warrant Registration Rights Agreement, dated as of the date
hereof, between the Company and the Initial Purchaser (the "Warrant
Registration Rights Agreement") providing for the assumption of the Company's
obligations thereunder. The successor Company shall mail to Warrant holders a
notice describing the supplemental Warrant Agreement and Warrant Registration
Rights Agreement. If the issuer of securities deliverable upon exercise of
Warrants under the supplemental Warrant Agreement is an affiliate of the
formed, surviving, transferee or lessee corporation, that issuer shall join in
the supplemental Warrant Agreement and Warrant Registration Rights Agreement.
If this Section 11(l) applies, Sections 11(a), (b), (c), (d), (e) and (f)
hereof do not apply.
(m) Company Determination Final. Any determination that the Company or
the Board of Directors must make pursuant to Section 11(a), (c), (d), (e), (f),
(g), (h) or (i) hereof is conclusive.
(n) Warrant Agent's Disclaimer. The Warrant Agent has no duty to
determine when an adjustment under this Section 11 should be made, how it
should be made or what it should be. The Warrant Agent has no duty to determine
whether any provisions of a supplemental Warrant Agreement under Section 11(l)
hereof are correct. The Warrant Agent makes no representation as to the
validity or value of any securities or assets issued upon exercise of Warrants.
The Warrant Agent shall not be responsible for the Company's failure to comply
with this Section 11.
(o) When Issuance or Payment May Be Deferred. In any case in which
this Section 11 shall require that an adjustment in the Exercise Price be made
effective as of a record date for a specified event, the Company may elect to
defer until the occurrence of such event (i) issuing to the holder of any
Warrant exercised after such record date the Warrant Shares and other capital
stock of the Company, if any, issuable upon such exercise over and above the
Warrant Shares and other capital stock of the Company, if any, issuable upon
such exercise on the basis of the Exercise Price and (ii) paying to such holder
any amount in cash in lieu of a fractional share pursuant to Section 12 hereof;
provided that the Company shall deliver to such holder a due xxxx or other
appropriate instrument evidencing such holder's right to receive such
additional Warrant Shares, other capital stock and cash upon the occurrence of
the event requiring such adjustment.
(p) Adjustment in Number of Shares. Upon each adjustment of the
Exercise Price pursuant to this Section 11, each Warrant outstanding prior to
the making of the adjustment in the Exercise Price shall thereafter evidence
the right to receive upon payment of the adjusted Exercise Price that number of
shares of Common Stock (calculated to the nearest hundredth) obtained from the
following formula:
N' = N x E
---
E'
where:
N' = the adjusted number of Warrant Shares issuable upon
exercise of a Warrant by payment of the adjusted
Exercise Price.
N = the number or Warrant Shares previously issuable upon
exercise of a Warrant by payment of the Exercise Price
prior to adjustment.
E' = the adjusted Exercise Price.
E = the Exercise Price prior to adjustment.
(q) Form of Warrants. Irrespective of any adjustments in the Exercise
Price or the number or kind of shares purchasable upon the exercise of the
Warrants, Warrants theretofore or thereafter issued may continue to express the
same price and number and kind of shares as are stated in the Warrants
initially issuable pursuant to this Agreement.
SECTION 12. Fractional Interests. The Company shall not be required to
issue fractional Warrant Shares on the exercise of Warrants. If more than one
Warrant shall be presented for exercise in full at the same time by the same
holder, the number of full Warrant Shares which shall be issuable upon the
exercise thereof shall be computed on the basis of the aggregate number of
Warrant Shares purchasable on exercise of the Warrants so presented. If any
fraction of a Warrant Share would, except for the provisions of this Section
12, be issuable on the exercise of any Warrants (or specified portion thereof),
the Company shall pay an amount in cash equal to the Fair Value per Warrant
Share, as determined on the day immediately preceding the date the Warrant is
presented for exercise, multiplied by such fraction, computed to the nearest
whole U.S. cent.
SECTION 13. Notices to Warrant Holders. (a) Upon any adjustment of the
Exercise Price pursuant to Section 11 hereof, the Company shall promptly
thereafter (i) cause to be filed with the Warrant Agent a certificate of a firm
of independent public accountants of recognized standing selected by the Board
of Directors of the Company (who may be the regular auditors of the Company)
setting forth the Exercise Price after such adjustment and setting forth in
reasonable detail the method of calculation and the facts upon which such
calculations are based and setting forth the number of Warrant Shares (or
portion thereof) issuable after such adjustment in the Exercise Price, upon
exercise of a Warrant and payment of the adjusted Exercise Price, which
certificate shall be conclusive evidence of the correctness of the matters set
forth therein, and (ii) cause to be given to each of the registered holders of
Warrants at the address appearing on the Warrant register for each such
registered holder written notice of such adjustments by first-class mail,
postage prepaid. Where appropriate, such notice may be given in advance and
included as a part of the notice required to be mailed under the other
provisions of this Section 13.
(b) In case:
(i) the Company shall authorize the
issuance to all holders of shares of Common Stock of rights,
options or warrants to subscribe for or purchase shares of
Common Stock or of any other subscription rights or warrants;
(ii) the Company shall authorize the
distribution to all holders of shares of Common Stock of
evidences of its indebtedness or assets (other than dividends
or cash distributions paid out of consolidated current or
retained earnings as shown on the books of the Company
prepared in accordance with generally accepted accounting
principles or dividends payable in shares of Common Stock or
distributions referred to in Section 11(a) hereof);
(iii) of any consolidation or merger to
which the Company is a party and for which approval of any
stockholders of the Company is required, or of the conveyance
or transfer of the properties and assets of the Company
substantially as an entirety, or of any reclassification or
change of Common Stock issuable upon exercise of the Warrants
(other than a change in par value, or from par value to no
par value, or from no par value to par value, or as a result
of a subdivision or combination), or a tender offer or
exchange offer for shares of Common Stock;
(iv) of the voluntary or involuntary
dissolution, liquidation or winding up of the Company; or
(v) the Company proposes to take any action
(other than actions of the character described in Section
11(a) hereof) which would require an adjustment of the
Exercise Price pursuant to Section 11 hereof;
then the Company shall cause to be filed with the Warrant Agent and
shall cause to be given to each of the registered holders of Warrants at his
address appearing on the Warrant register, at least 20 days (or 10 days in any
case specified in clauses (i) or (ii) above) prior to the applicable record
date hereinafter specified, or promptly in the case of events for which there
is no record date, by first-class mail, postage prepaid, a written notice
stating (x) the date as of which the holders of record of shares of Common
Stock to be entitled to receive any such rights, options, warrants or
distribution are to be determined, (y) the initial expiration date set forth in
any tender offer or exchange offer for shares of Common Stock, or (z) the date
on which any such consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding up is expected to become effective or consummated, and
the date as of which it is expected that holders of record of shares of Common
Stock shall be entitled to exchange such shares for securities or other
property, if any, deliverable upon such reclassification, consolidation,
merger, conveyance, transfer, dissolution, liquidation or winding up. The
failure to give the notice required by this Section 13 or any defect therein
shall not affect the legality or validity of any distribution, right, option,
warrant, consolidation, merger, conveyance, transfer, dissolution, liquidation
or winding up, or the vote upon any action.
(c) Nothing contained in this Agreement or in any of the Warrant
Certificates shall be construed as conferring upon the holders of Warrants the
right to vote or to consent or to receive notice as stockholders in respect of
the meetings of stockholders or the election of directors of the Company or any
other matter, or any rights whatsoever as stockholders of the Company.
SECTION 14. Merger, Consolidation or Change of Name of Warrant Agent.
(a) Any corporation into which the Warrant Agent may be merged or with which it
may be consolidated, or any corporation resulting from any merger or
consolidation to which the Warrant Agent shall be a party, or any corporation
succeeding to the 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 would be eligible for appointment as a successor warrant agent
under the provisions of Section 16 hereof. In case at the time such successor
to the Warrant Agent shall succeed to the agency created by this Agreement, and
in case at that time any of the Warrant Certificates shall have been
countersigned but not delivered, any such successor to the Warrant Agent may
adopt the countersignature of the original Warrant Agent; and in case at that
time any of the Warrant Certificates shall not have been countersigned, any
successor to the Warrant Agent may countersign such Warrant Certificates either
in the name of the predecessor Warrant Agent or in the name of the successor to
the Warrant Agent; and in all such cases such Warrant Certificates shall have
the full force and effect provided in the Warrant Certificates and in this
Agreement.
(b) In case at any time the name of the Warrant Agent shall be changed
and at such time any of the Warrant Certificates shall have been countersigned
but not delivered, the Warrant Agent whose name has been changed may adopt the
countersignature under its prior name, and in case at that time any of the
Warrant Certificates shall not have been countersigned, the Warrant Agent may
countersign such Warrant Certificates either in its prior name or in its
changed name, and in all such cases such Warrant Certificates shall have the
full force and effect provided in the Warrant Certificates and in this
Agreement.
SECTION 15. Warrant Agent. The Warrant Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions,
by all of which the Company and the holders of Warrants, by their acceptance
thereof, shall be bound:
(a) The statements contained herein and in the Warrant Certificates
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 or to be taken by it. The Warrant Agent
assumes no responsibility with respect to the distribution of the Warrant
Certificates except as herein otherwise provided.
(b) The Warrant Agent shall not be responsible for any failure of the
Company to comply with any of the covenants contained in this Agreement or in
the Warrant Certificates to be complied with by the Company.
(c) The Warrant Agent may consult at any time with counsel
satisfactory to it (who may be counsel for the Company) and the Warrant Agent
shall incur no liability or responsibility to the Company or to any holder of
any Warrant Certificate 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.
(d) The Warrant Agent shall incur no liability or responsibility to
the Company or to any holder of any Warrant Certificate for any action taken in
reliance on any Warrant Certificate, certificate of shares, notice, resolution,
waiver, consent, order, certificate, or other paper, document or instrument
believed by it to be genuine and to have been signed, sent or presented by the
proper party or parties.
(e) The Company agrees to pay to the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent in the execution of
this Agreement, to reimburse the Warrant Agent for all expenses, taxes and
governmental charges and other charges of any kind and nature incurred by the
Warrant Agent in the execution of this Agreement and to indemnify the Warrant
Agent and save it harmless against any and all liabilities, including
judgments, costs and counsel fees, for anything done or omitted by the Warrant
Agent in the execution of this Agreement except as a result of its negligence
or bad faith.
(f) The Warrant Agent shall be under no obligation to institute any
action, suit or legal proceeding or to take any other action likely to involve
expense unless the Company or one or more registered holders of Warrants shall
furnish the Warrant Agent with reasonable security and indemnity for any costs
and expenses which may be incurred, but this provision shall not affect the
power of the Warrant Agent to take such action as it may consider proper,
whether with or without any such security or indemnity. All rights of action
under this Agreement or under any of the Warrants may be enforced by the
Warrant Agent without the possession of any of the Warrant Certificates or the
production thereof at any trial or other proceeding relative thereto, and any
such action, suit or proceeding instituted by the Warrant Agent shall be
brought in its name as Warrant Agent and any recovery of judgment shall be for
the ratable benefit of the registered holders of the Warrants, as their
respective rights or interests may appear.
(g) The Warrant Agent, and any stockholder, director, officer or
employee of it, 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.
(h) The Warrant Agent shall act hereunder solely as agent for the
Company, and its duties shall be determined solely by the provisions hereof.
The Warrant Agent shall not be liable for anything which it may do or refrain
from doing in connection with this Agreement except for its own negligence or
bad faith.
(i) The Warrant Agent shall not at any time be under any duty or
responsibility to any holder of any Warrant Certificate to make or cause to be
made any adjustment of the Exercise Price or number of the Warrant Shares or
other securities or property deliverable as provided in this Agreement, or to
determine whether any facts exist which may require any of such adjustments, or
with respect to the nature or extent of any such adjustments, when made, or
with respect to the method employed in making the same. The Warrant Agent shall
not be accountable with respect to the validity or value or the kind or amount
of any Warrant Shares or of any securities or property which may at any time be
issued or delivered upon the exercise of any Warrant or with respect to whether
any such Warrant Shares or other securities will when issued be validly issued
and fully paid and nonassessable, and makes no representation with respect
thereto.
SECTION 16. Change of Warrant Agent. If the Warrant Agent shall
become incapable of acting as Warrant Agent, the Company shall appoint a
successor to such Warrant Agent. If the Company shall fail to make such
appointment within a period of 30 days after it has been notified in writing of
such incapacity by the Warrant Agent or by the registered holder of a Warrant
Certificate, then the registered holder of any Warrant may apply to any court
of competent jurisdiction for the appointment of a successor to the Warrant
Agent. Pending appointment of a successor to such Warrant Agent, either by the
Company or by such a court, the duties of the Warrant Agent shall be carried
out by the Company. The holders of a majority of the unexercised Warrants shall
be entitled at any time to remove the Warrant Agent and appoint a successor to
such Warrant Agent. Such successor to the Warrant Agent need not be approved by
the Company or the former Warrant Agent. After appointment the successor to the
Warrant Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Warrant Agent without
further act or deed; provided that the former Warrant Agent shall deliver and
transfer to the successor to the Warrant Agent any property at the time held by
it hereunder and execute and deliver any further assurance, conveyance, act or
deed necessary for the purpose. Failure to give any notice provided for in this
Section 16, however, or any defect therein, shall not affect the legality or
validity of the appointment of a successor to the Warrant Agent.
SECTION 17. Registration. Holders shall be able to exercise their
Warrants only if a registration statement relating to the Warrant Shares is
then in effect, or the exercise of such Warrants is exempt from the
registration requirements of the Securities Act, and such securities are
qualified for sale or exempt from qualification under the applicable securities
laws of the states in which the various holders of the Warrants or other
persons to whom it is proposed that the Warrant Shares be issued on exercise of
the Warrants reside.
(a) The Company shall prepare and cause to be filed within 30 days of
the issuance date of the Warrants with the Commission pursuant to Rule 415
under the Securities Act a shelf registration statement (the "Registration
Statement") on the appropriate form relating to the offer and sale by the
Company of the Warrant Shares to the holders of Warrants upon exercise of the
Warrants.
(b) The Company shall use its reasonable best efforts to cause such
Registration Statement to be declared effective by the Commission on or before
90 days from the date of issuance of the Warrants.
(c) The Company shall use its reasonable best efforts to keep the
Registration Statement continuously effective under the Securities Act in order
to permit the prospectus included therein to be lawfully delivered by the
Company to the holders exercising the Warrants until the later of (i) two years
following the effective date of the Registration Statement and (ii) the earlier
of (A) the Expiration Date and (B) the first date as of which all Warrants have
been exercised; provided that, except as provided below with respect to any
Black Out Period (as defined herein), the Company shall be deemed not to have
used its reasonable best efforts to keep the Registration Statements effective
during the requisite period if it voluntarily takes any action that would
result in it not being able to offer and sell the Warrant Shares upon exercise
of the Warrants during that period, unless such action is required by
applicable law. Notwithstanding the foregoing, the Company shall not be
required to amend or supplement the Registration Statement, any related
prospectus or any document incorporated therein by reference, for a period (a
"Black Out Period") not to exceed, for so long as this Agreement is in effect,
an aggregate of 60 days in any calendar year, in the event that (i) an event
occurs and is continuing as a result of which the Registration Statements, any
related prospectus or any document incorporated therein by reference as then
amended or supplemented would, in the Company's good faith judgment, contain an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and (ii)(A) the Company determines
in its good faith judgment that the disclosure of such event at such time would
have a material adverse effect on the business, operations or prospects of the
Company or (B) the disclosure otherwise relates to a material business
transaction which has not yet been publicly disclosed; provided, further, that
such Black Out Period shall be extended for any period, not to exceed an
aggregate of 30 days in any calendar year, during which the Commission is
reviewing any proposed amendment or supplement to the Registration Statement,
any related prospectus or any document incorporated therein by reference which
has been filed by the Company; and provided, further, that no Black Out Period
may be in effect during the three months prior to the Expiration Date.
(d) The Company shall cause the Registration Statement and the related
prospectus and any amendment or supplement thereto, as of the effective date of
the Registration Statement, amendment or supplement, (i) to comply in all
material respects with the applicable requirements of the Securities Act and
the rules and regulations of the Commission and (ii) not to contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(e) The Company shall give prompt written notice to the holders of the
Warrants, the Initial Purchaser and the Warrant Agent of (i) the effectiveness
of the Registration Statement or any post-effective amendment thereto, (ii) the
issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statements or the initiation or threatening of any proceedings
for that purpose, (iii) the receipt by the Company or its legal counsel of any
notification with respect to the suspension of the qualification of the Warrant
Shares for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose, (iv) the happening of any event that requires the
Company to make changes in the Registration Statements or the prospectus in
order to make the statements therein not misleading and (v) the commencement
and termination of any Black Out Period.
(f) The Company shall use its reasonable best efforts to prevent the
issuance or obtain the withdrawal of any order suspending the effectiveness of
the Registration Statements at the earliest possible time.
(g) Upon the occurrence of any event contemplated by Section 17(e)(iv)
or (v) hereof (subject to the last sentence of Section 17(c) hereof) the
Company shall promptly prepare a post-effective amendment to the Registration
Statement or a supplement to the related prospectus or file any other required
document so that, as thereafter delivered to holders of the Warrants, the
prospectus will not contain an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading and will contain
the current information required by the Securities Act.
(h) Not later than the effective date of the Registration Statements,
the Company will provide a CUSIP number for the Warrant Shares and provide the
Warrant Agent with printed certificates for the Warrant Shares in a form
eligible for deposit with the Depository Trust Company.
(i) The Company will comply with all rules and regulations of the
Commission to the extent and so long as they are applicable to the Registration
Statement.
(j) The Company shall register or qualify or cooperate with the
holders in connection with the registration or qualification of the Warrant
Shares for offer and sale by the Company upon exercise of the Warrants under
the securities or blue sky laws of such states of the United States as any
holder reasonably requests and do any and all other acts or things necessary or
advisable to enable such offer and sale in such jurisdictions; provided that
the Company shall not be required to (i) qualify to do business in any
jurisdiction in which it is not then so qualified or (ii) take any action which
would subject it to general service of process or to taxation in any
jurisdiction in which it is not then so subject.
(k) The Company shall bear all expenses incurred by it in connection
with the performance of its obligations under this Section 17.
(l) The Company acknowledges and agrees that any remedy at law for
breach of any provision of this Section 17 will be inadequate and that, in
addition to any other remedies that the holder may have, the holders shall be
entitled to the remedy of specific performance to ensure the Company performs
its obligations under this Section 17. The election of any one or more remedies
by the holders hereunder shall not constitute a waiver of the right to pursue
other available remedies.
(m) No person is entitled to include any securities of the Company
held by such person in, or to have such securities registered under, the
Registration Statement.
SECTION 18. Reports.
(a) Whether or not required by the rules and regulations of the
Securities and Exchange Commission (the "Commission"), so long as any Warrants
or the Warrant Shares are outstanding, the Company shall furnish to the Warrant
Agent and the holders of Warrants or Warrant Shares (i) all quarterly and
annual financial information that would be required to be contained in a filing
with the Commission on Forms 10-Q and 10-K if the Company were required to file
such Forms, including a "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and, with respect to the annual
information only, a report thereon by the Company's certified independent
accountants and (ii) all current reports that would be required to be filed
with the Commission on Form 8-K if the Company were required to file such
reports. In addition, whether or not required by the rules and regulations of
the Commission, the Company shall file a copy of all such information and
reports with the Commission for public availability (unless the Commission
shall not accept such a filing) and make such information available to
securities analysts and prospective investors upon request.
(b) The Company shall provide the Warrant Agent with a sufficient
number of copies of all such reports that the Warrant Agent may be required to
deliver to the holders of the Warrants and the Warrant Shares under this
Section 18.
SECTION 19. Notices to Company and Warrant Agent. Any notice or demand
authorized by this Agreement to be given or made by the Warrant Agent or by the
registered holder of any Warrant to or on the Company shall be sufficiently
given or made when received if deposited in the mail, first class or
registered, postage prepaid, addressed (until another address is filed in
writing by the Company with the Warrant Agent) as follows:
Insilco Holding Co.
000 Xxxxx Xxxxx X.
Xxx 0000
Xxxxxx, Xxxx 00000
Telephone: (000) 000-0000
Attention: Xxxxxxx X. Xxxx, Esq.
In case the Company shall fail to maintain such office or agency or
shall fail to give such notice of the location or of any change in the location
thereof, presentations may be made and notices and demands may be served at the
principal office of the Warrant Agent.
Any notice pursuant to this Agreement to be given by the Company or by
the registered holder(s) of any Warrant to the Warrant Agent shall be
sufficiently given when and if deposited in the mail, first-class or
registered, postage prepaid, addressed (until another address is filed in
writing by the Warrant Agent with the Company) to the Warrant Agent as follows:
National City Bank
Corporate Trust Administration
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Telephone: (000) 000-0000
Attention: J. Xxxx Xxxxxxx
SECTION 20. Supplements and Amendments. The Company and the Warrant
Agent may from time to time supplement or amend this Agreement without the
approval of any holders of Warrants in order to cure any ambiguity or to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provision herein, or to make any other provisions
in regard to matters or questions arising hereunder which the Company and the
Warrant Agent may deem necessary or desirable and which shall not in any way
adversely affect the interests of the holders of Warrants. Any amendment or
supplement to this Agreement that has a material adverse effect on the
interests of the holders of Warrants shall require the written consent of the
holders of a majority of the then outstanding Warrants (excluding Warrants held
by the Company or any of its affiliates). The consent of each holder of
Warrants affected shall be required for any amendment pursuant to which the
Exercise Price would be increased or the number of Warrant Shares purchasable
upon exercise of Warrants would be decreased (other than pursuant to
adjustments provided in this Agreement.
SECTION 21. 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 22. Termination. This Agreement shall terminate at 5:00 p.m.,
New York City time on August 15, 2008. Notwithstanding the foregoing, this
Agreement will terminate on any earlier date if all Warrants have been
exercised. The provisions of Section 15 shall survive such termination.
SECTION 23. Governing Law. This Agreement and each Warrant Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of New York and for all purposes shall be construed in accordance with the
internal laws of said State.
SECTION 24. Benefits of This Agreement. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company, the
Warrant Agent and the registered holders of Warrants any legal or equitable
right, remedy or claim under this Agreement; but this Agreement shall be for the
sole and exclusive benefit of the Company, the Warrant Agent and the registered
holders of Warrants.
SECTION 25. 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.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
SILKWORM ACQUISITION CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title:
NATIONAL CITY BANK, as Warrant Agent
By: /s/ J. Xxxx Xxxxxxx
------------------------------
Name: J. Xxxx Xxxxxxx
Title: Vice President
EXHIBIT A
FORM OF WARRANT
[Face of Warrant Certificate]
EXERCISABLE ON OR AFTER AUGUST 17, 1998.
No. _______________Warrants
Warrant Certificate
SILKWORM ACQUISITION CORPORATION
THIS WARRANT (OR ITS PREDECESSOR) AND THE SHARES OF COMMON STOCK
ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY,
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET
FORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL
INTEREST HEREIN, THE HOLDER:
(1) REPRESENTS THAT (A) IT HAS ACQUIRED THIS WARRANT
IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S
UNDER THE SECURITIES ACT OR (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A) (1), (2),
(3) OR (7) OR REGULATION D UNDER THE SECURITIES ACT (AN
"IAI")),
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE
TRANSFER THIS WARRANT EXCEPT (A) TO THE ISSUER OR ANY OF ITS
SUBSIDIARIES, (B) IN AN OFFSHORE TRANSACTION MEETING THE
REQUIREMENTS OF RULE 903 OR 904 OF THE SECURITIES ACT, (C) IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (D) TO AN IAI THAT, PRIOR TO SUCH TRANSFER,
FURNISHES THE WARRANT AGENT A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
TRANSFER OF THIS WARRANT (THE FORM OF WHICH CAN BE OBTAINED
FROM THE WARRANT AGENT) AND AN OPINION OF COUNSEL ACCEPTABLE
TO THE ISSUER THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER) OR
(F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN
EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THIS SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES"
HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE
SECURITIES ACT. THE WARRANT AGREEMENT CONTAINS A PROVISION REQUIRING THE
WARRANT AGENT TO REFUSE TO REGISTER ANY TRANSFER OF THIS SECURITY IN VIOLATION
OF THE FOREGOING.
This Warrant Certificate certifies that ______________, or registered
assigns, is the registered holder of Warrants expiring August 15, 2008 (the
"Warrants") to purchase Common Stock. Each Warrant entitles the holder upon
exercise to receive from the Company commencing August 17, 1998 until 5:00 p.m.
New York City Time on August 15, 2008, the number of fully paid and
nonassessable Warrant Shares as set forth in the Warrant Agreement, subject to
adjustment as set forth in Section 11 of the Warrant Agreement, at the initial
exercise price (the "Exercise Price") of $0.01 payable in lawful money of the
United States of America upon surrender of this Warrant Certificate and payment
of the Exercise Price at the office or agency of the Warrant Agent, but only
subject to the conditions set forth herein and in the Warrant Agreement
referred to on the reverse hereof. Notwithstanding the foregoing, Warrants may
be exercised without the exchange of funds pursuant to the net exercise
provisions of Section 6 of the Warrant Agreement. The Exercise Price and number
of Warrant Shares issuable upon exercise of the Warrants are subject to
adjustment upon the occurrence of certain events set forth in the Warrant
Agreement. No Warrant may be exercised after 5:00 p.m., New York City Time on
August 15, 2008, and to the extent not exercised by such time such Warrants
shall become void. Reference is hereby made to the further provisions of this
Warrant Certificate set forth on the reverse hereof and such further provisions
shall for all purposes have the same effect as though fully set forth at this
place. This Warrant Certificate shall not be valid unless countersigned by the
Warrant Agent, as such term is used in the Warrant Agreement. This Warrant
Certificate shall be governed and construed in accordance with the internal
laws of the State of New York.
IN WITNESS WHEREOF, Silkworm Acquisition Corporation has caused this
Warrant Certificate to be signed by the undersigned officer and may cause its
corporate seal to be affixed hereunto or imprinted hereon.
Dated:
---------------
SILKWORM ACQUISITION
CORPORATION
By:
------------------------------
Name:
Title:
Countersigned:
NATIONAL CITY BANK,
as Warrant Agent
By:
------------------------------
Name:
Title:
[Reverse of Warrant Certificate]
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants expiring August 15, 2008 entitling the holder on
exercise to receive shares of Common Stock, and are issued or to be issued
pursuant to a Warrant Agreement dated as of August 17, 1998 (the "Warrant
Agreement"), duly executed and delivered by the Company to National City Bank,
as warrant agent (the "Warrant Agent"), which Warrant Agreement is hereby
incorporated by reference in and made a part of this instrument and is hereby
referred to for a description of the rights, limitation of rights, obligations,
duties and immunities thereunder of the Warrant Agent, the Company and the
holders (the words "holders" or "holder" meaning the registered holders or
registered holder) of the Warrants. A copy of the Warrant Agreement may be
obtained by the holder hereof upon written request to the Company.
Warrants may be exercised at any time on or after August 17, 1998 and
on or before August 15, 2008; provided that holders shall be able to exercise
their Warrants only if a registration statement relating to the Warrants Shares
is then in effect, or the exercise of such Warrants is exempt from the
registration requirements of the Securities Act of 1933, as amended (the
"Securities Act"), and such securities are qualified for sale or exempt from
qualification under the applicable securities laws of the states in which the
various holders of the Warrants or other persons to whom it is proposed that
the Warrant Shares be issued on exercise of the Warrants reside. In order to
exercise all or any of the Warrants represented by this Warrant Certificate,
the holder must deliver to the Warrant Agent at its New York corporate trust
office set forth in Section 19 of the Warrant Agreement this Warrant
Certificate and the form of election to purchase on the reverse hereof duly
filled in and signed, which signature shall be medallion guaranteed by an
institution which is a member of a Securities Transfer Association recognized
signature guarantee program, and upon payment to the Warrant Agent for the
account of the Company of the Exercise Price, as adjusted as provided in the
Warrant Agreement, for the number of Warrant Shares in respect of which such
Warrants are then exercised. No adjustment shall be made for any dividends on
any Common Stock issuable upon exercise of this Warrant.
The Warrant Agreement provides that upon the occurrence of certain
events the Exercise Price set forth on the face hereof may, subject to certain
conditions, be adjusted. If the Exercise Price is adjusted, the Warrant
Agreement provides that the number of shares of Common Stock issuable upon the
exercise of each Warrant shall be adjusted. No fractions of a share of Common
Stock will be issued upon the exercise of any Warrant, but the Company will pay
the cash value thereof determined as provided in the Warrant Agreement.
The Company has agreed under the terms of the Warrant Agreement to
file and use its reasonable best efforts to make effective on or before 30 days
after the issuance of the Warrants a shelf registration statement on the
appropriate form under the Securities Act, and (subject to Black Out Periods)
to use its reasonable best efforts to keep such registration statement
continuously effective under the Securities Act in order to permit the
prospectus included therein to be lawfully delivered by the Company to the
holders exercising the Warrants until the later of (i) two years following the
effective date of the registration statement and (ii) the earlier of (A) the
expiration of the Warrants and (B) the first date as of which all Warrants have
been exercised. In addition, the Company has agreed pursuant to a separate
Warrant Registration Rights Agreement dated as of August 17, 1998 (the "Warrant
Registration Rights Agreement") to file within 30 days after the issuance of
the Warrants and use its reasonable best efforts to make effective on or before
90 days after such date a shelf registration statement on the appropriate form
under the Securities Act, and to use its reasonable best efforts to keep such
registration statement continuously effective under the Securities Act in order
to permit the resale of the Warrants and Warrant Shares by the holders thereof
for the period of time referred to in the immediately preceding sentence.
Warrant Certificates, when surrendered at the office of the Warrant
Agent by the registered holder thereof in person or by legal representative or
attorney duly authorized in writing, may be exchanged, in the manner and
subject to the limitations provided in the Warrant Agreement, but without
payment of any service charge, for another Warrant Certificate or Warrant
Certificates of like tenor evidencing in the aggregate a like number of
Warrants.
Upon due presentation for registration of transfer of this Warrant
Certificate at the office of the Warrant Agent a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like
number of Warrants shall be issued to the transferee(s) in exchange for this
Warrant Certificate, subject to the limitations provided in the Warrant
Agreement, without charge except for any tax or other governmental charge
imposed in connection therewith.
The Company and the Warrant Agent may deem and treat the registered
holder(s) thereof as the absolute owner(s) of this Warrant Certificate
(notwithstanding any notation of ownership or other writing hereon made by
anyone), for the purpose of any exercise hereof, of any distribution to the
holder(s) hereof, and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary. Neither the
Warrants nor this Warrant Certificate entitles any holder hereof to any rights
of a stockholder of the Company.
Form of Election to Purchase
(To Be Executed Upon Exercise Of Warrant)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to receive __________ shares of Common
Stock and herewith tenders payment for such shares to the order of the Company
in the amount of $______ in accordance with the terms hereof unless the holder
is exercising Warrants pursuant to the net exercise provisions of Section 6 of
the Warrant Agreement in which case the holder shall receive such number of
Warrant Shares equal to the product of (A) the number of Warrant Shares for
which this Warrant Certificate is exercisable as of the date of exercise (if
the Exercise Price were being paid in cash) and (B) the Cashless Exercise Ratio
(as defined in the Warrant Agreement). The undersigned requests that a
certificate for such shares be registered in the name of
_______________________________, whose address is _______________________ and
that such shares be delivered to ________________ whose address is
______________________________. If said number of shares is less than all of
the shares of Common Stock purchasable hereunder, the undersigned requests that
a new Warrant Certificate representing the remaining balance of such shares be
registered in the name of ______________, whose address is
____________________, and that such Warrant Certificate be delivered to
_________________, whose address is __________________.
Date: ____________________, ____
------------------------------
(Signature)
------------------------------
(Signature Guaranteed)
EXHIBIT A
FORM OF PURCHASER LETTER
Insilco Holding Co.
000 Xxxxx Xxxxx X.
Xxx 0000
Xxxxxx, Xxxx 00000
Telephone: (000) 000-0000
Attention: Xxxxxxx X. Xxxx, Esq.
National City Bank
Corporate Trust Administration
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Telephone: (000) 000-0000
Attention: J. Xxxx Xxxxxxx
Re: Warrants to Purchase Common Stock of Silkworm Acquisition
Corporation, a Delaware corporation (CUSIP: 457661 12 2).
Reference is hereby made to the Warrant Agreement, dated as of August
17, 1998 (the "Warrant Agreement"), among Silkworm Acquisition Corporation, as
assumed by Insilco Holding Co. (the "Issuer"), and National City Bank, as
warrant agent. Capitalized terms used but not defined herein shall have the
meanings given to them in the Warrant Agreement.
In connection with our proposed purchase of Warrants or Warrant
Shares:
we confirm that:
1. We understand that any subsequent transfer of the Warrants or
Warrant Shares or any interest therein is subject to certain restrictions and
conditions set forth in the Warrant Agreement and the undersigned agrees to be
bound by, and not to resell, pledge or otherwise transfer the Warrants or
Warrant Shares or any interest therein except in compliance with, such
restrictions and conditions and the United States Securities Act of 1933, as
amended (the "Securities Act").
2. We understand that the offer and sale of the Warrants and Warrant
Shares have not been registered under the Securities Act, and that the Warrants
and Warrant Shares and any interest therein may not be offered or sold except
as permitted in the following sentence. We agree, on our own behalf and on
behalf of any accounts for which we are acting as hereinafter stated, that if
we should sell the Warrants or Warrant Shares or any interest therein, we will
do so only (A) to the Issuer or any subsidiary thereof, (B) to an institutional
"accredited investor" (as defined below) that, prior to such transfer,
furnishes (or has furnished on its behalf by a U.S. broker-dealer) to you and
to the Issuer a signed letter substantially in the form of this letter and, an
Opinion of Counsel in form reasonably acceptable to the Issuer to the effect
that such transfer is in compliance with the Securities Act, (C) outside the
United States in accordance with Rule 904 of Regulation S under the Securities
Act, (D) pursuant to the provisions of Rule 144(k) under the Securities Act or
(E) pursuant to an effective registration statement under the Securities Act
and, in each case, in accordance with the applicable securities laws of any
state of the United States or any other applicable jurisdiction and we further
agree to provide to any person purchasing the Warrants or Warrant Shares from
us in a transaction meeting the requirements of clauses (A) through (D) of this
paragraph a notice advising such purchaser that resales thereof are restricted
as stated herein. We further understand that the Warrants or Warrant Shares
purchased by us will bear a legend to the foregoing effect.
3. We understand that, on any proposed resale of the Warrants or
Warrant Shares or beneficial interest therein, we will be required to furnish
to you and the Issuer such certifications, legal opinions and other information
as you and the Issuer may reasonably require to confirm that the proposed sale
complies with the foregoing restrictions. We further understand that any
subsequent transfer by us of the Warrants or Warrant Shares or beneficial
interest therein acquired by us must be effected through the Warrant Agent.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Warrants or
Warrant Shares, and we and any accounts for which we are acting are each able
to bear the economic risk of our or its investment.
5. We are acquiring the Warrants or Warrant Shares for our own account
(or for accounts as to which we exercise sole investment discretion and have
full power to make, and do make, the statements contained in this letter on
behalf of each such account) for investment purposes and not with a view to, or
for offer or sale in connection with, any distribution of the Warrants or
Warrant Shares in violation of the Securities Act, subject, nevertheless, to
the understanding that the disposition of our property or the property of such
investor account or accounts shall at all times be and remain within our
control.
You and the Issuer are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.
-------------------------------
[Insert Name of Accredited Investor]
By:
----------------------------
Name:
Title:
Dated:
---------------------, -----
