Exhibit 10.4
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WARRANT AGREEMENT
between
SUNTERRA CORPORATION
and
MELLON INVESTOR SERVICES LLC
(Warrant Agent)
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This WARRANT AGREEMENT (this "Agreement"), dated as of July 26, 2002,
between SUNTERRA CORPORATION, a Maryland corporation (the "Company"), and Mellon
Investor Services LLC, a New Jersey limited liability company (in its capacity
as warrant agent hereunder, the "Warrant Agent").
W I T N E S S E T H:
WHEREAS, pursuant to the Third Amended and Restated Joint Plan of
Reorganization dated May 9, 2002 (as the same has been and may be further
modified, supplemented or amended, the "Plan") of the Company and certain of its
affiliates under Chapter 11 of Title 11 of the United States Code, 11 U.S.C.
(S)(S)101 et seq., the Company proposes to issue 600,000 warrants (the
"Warrants") entitling the Holders to purchase initially an aggregate of up to
600,000 shares (as may be adjusted from time to time pursuant to this Agreement,
the "Shares") of the Company's Common Stock, $0.01 par value per share (the
"Common Stock"); and
WHEREAS, the Warrant Agent, at the request of the Company, has agreed
to act as the agent of the Company in connection with the issuance,
registration, transfer, exchange and exercise of the Warrants;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein set forth, the parties hereto agree as follows:
SECTION 1. Appointment of Warrant Agent. The Company hereby appoints
Mellon Investor Services LLC to act as agent for the Company in accordance with
the provisions of this Agreement, and Mellon Investor Services LLC hereby
accepts such appointment, upon the terms and conditions hereinafter set forth.
SECTION 2. Issuances. Subject to the provisions of this Agreement, in
accordance with the terms of the Plan, on (and from time to time after) the
Effective Date under, and as defined in, the Plan, Warrants to purchase the
Shares will be issued and delivered by the Company in the amounts and to the
recipients specified in, or determined pursuant to, the Plan. On, and/or, to the
extent provided under the Plan, after the Effective Date, the Company will
deliver, or cause to be delivered, to or for the Class 8 claimants under the
Plan one or more Global Warrant Certificates (as defined below) evidencing the
Warrants issued to such Class 8 claimants in accordance with the terms of the
Plan.
SECTION 3. Form of Warrant Certificates. Subject to Section 6 of this
Agreement, the Warrants shall initially be issued in the form of one or more
global certificates (the "Global Warrant Certificates"), the forms of election
to exercise and of assignment to be printed on the reverse thereof, in
substantially the form set forth in Exhibit A hereto (including the information
set forth in footnote 1 thereto). Warrant Certificates (as defined below) may
have such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Agreement and may have such letters,
numbers or other marks of identification and such legends or endorsements
thereon as may be required to comply with any law or any rules made pursuant
thereto or with any rules of any securities exchange or trading system or as
may, consistently herewith, be determined by the officers of the Company
executing such Warrant Certificates, as evidenced by their execution thereof.
The Global Warrant Certificates shall be deposited on or after the
Effective Date with, or with the Warrant Agent as custodian for, The Depository
Trust Company (the "Depositary") and registered in the name of Cede & Co., as
the Depositary's nominee. Each Global Warrant Certificate shall represent such
number of the outstanding Warrants as specified therein, and each shall provide
that it shall represent the aggregate amount of outstanding Warrants from time
to time endorsed thereon and that the aggregate amount of outstanding Warrants
represented thereby may from time to time be reduced or increased, as
appropriate, in accordance with the terms of this Agreement. Upon request, a
Holder may receive from the Depositary and the Warrant Agent Warrants in
definitive form (the "Definitive Warrant Certificates" and, together with the
Global Warrant Certificates, the "Warrant Certificates"), substantially in the
form of Exhibit A (not including footnote 1 thereto) as set forth in Section 6
hereof.
SECTION 4. Execution of Warrant Certificates. Warrant Certificates
shall be signed on behalf of the Company by its Chairman of the Board of
Directors, its Chief Executive Officer, its President, a Vice President or its
Treasurer (each an "Officer") and attested by its Secretary or an Assistant
Secretary, under its corporate seal. Each such signature upon the Warrant
Certificates may be in the form of a facsimile signature of any such Officer and
may be imprinted or otherwise reproduced on the Warrant Certificates. The
corporate 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.
If any Officer 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 Officer 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 a
proper officer of the Company to sign such Warrant Certificate, although at the
date of the execution of this Agreement any such person was not such officer.
SECTION 5. Registration and Countersignature. The Warrant Agent shall,
upon receipt of the Warrant Certificates duly executed on behalf of the Company,
countersign one or more Warrant Certificates evidencing the Warrants and shall
deliver such Warrant Certificates to or upon the written order of the Company. A
Warrant Certificate shall be, and shall remain, subject to the provisions of
this Agreement until such time as all of the Warrants evidenced thereby shall
have been duly exercised or shall have expired or been canceled in accordance
with the terms hereof.
No Warrant Certificate shall be valid for any purpose, and no Warrant
evidenced thereby shall be exercisable, until such Warrant Certificate has been
countersigned by the manual signature of the Warrant Agent. Such signature by
the Warrant Agent upon any Warrant Certificate executed by the Company shall be
conclusive evidence that such Warrant Certificate so countersigned has been duly
issued hereunder.
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The Warrant Agent shall keep, at an office designated for such
purpose, books (the "Warrant Register") in which, subject to such reasonable
regulations as it may prescribe, it shall register the Warrant Certificates and
exchanges and transfers of outstanding Warrant Certificates in accordance with
the procedures set forth in Section 6 hereof, all in form satisfactory to the
Company and the Warrant Agent. No service charge shall be made for any exchange
or registration of transfer of the Warrant Certificates, but the Company may
require payment of a sum sufficient to cover any stamp or other tax or other
governmental charge that may be imposed in connection with any such exchange or
registration of transfer. The Warrant Agent shall have no obligation to effect
an exchange or register a transfer unless and until any payments required by the
immediately preceding sentence have been made.
Prior to due presentment for registration of transfer or exchange of
any Warrant in accordance with the procedures set forth in this Agreement, the
Warrant Agent and the Company may deem and treat the person in whose name any
Warrant is registered (the "Holder" of such Warrant) as the absolute owner
thereof (notwithstanding any notation of ownership or other writing thereon made
by anyone), for the purpose of any exercise thereof or any distribution to the
Holder thereof and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary.
SECTION 6. Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Global Warrant Certificates or
Beneficial Interests Therein. The transfer and exchange of Global Warrant
Certificates or beneficial interests therein shall be effected through the
Depositary, in accordance with this Agreement and the procedures of the
Depositary therefor.
(b) Exchange of a Beneficial Interest in a Global Warrant
Certificate for a Definitive Warrant Certificate.
(i) Any Holder of a beneficial interest in a Global Warrant
Certificate may, upon request, exchange such beneficial interest for a
Definitive Warrant Certificate. Upon receipt by the Warrant Agent from the
Depositary or its nominee of written instructions or such other form of
instructions as is customary for the Depositary on behalf of any person having a
beneficial interest in a Global Warrant Certificate, the Warrant Agent shall
cause, in accordance with the standing instructions and procedures existing
between the Depositary and Warrant Agent, the number of Warrants represented by
the Global Warrant Certificate to be reduced by the number of Warrants to be
represented by the Definitive Warrant Certificates to be issued in exchange for
the interest of such person in the Global Warrant Certificate and, following
such reduction, the Company shall execute and the Warrant Agent shall
countersign and deliver to the transferee, as the case may be, a Definitive
Warrant Certificate.
(ii) Definitive Warrant Certificates issued in exchange for
a beneficial interest in a Global Warrant Certificate pursuant to this Section
6(b) shall be registered in such names as the Depositary, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Warrant Agent. The Warrant Agent shall deliver such Definitive
Warrant Certificates to the persons in whose names such Warrants are so
registered.
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(c) Transfer and Exchange of Definitive Warrant Certificates.
When Definitive Warrant Certificates are presented to the Warrant Agent with a
request:
(i) to register the transfer of the Definitive Warrant
Certificates; or
(ii) to exchange such Definitive Warrant Certificates for an
equal number of Definitive Warrant Certificates of other authorized
denominations,
the Warrant Agent shall register the transfer or make the exchange as requested
if its requirements for such transactions are met; provided, however, that the
Definitive Warrant Certificates presented or surrendered for registration of
transfer or exchange shall be duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the Warrant Agent, duly executed
by the Holder thereof or by his attorney, duly authorized in writing.
(d) Restrictions on Exchange or Transfer of a Definitive Warrant
Certificate for a Beneficial Interest in a Global Warrant Certificate. A
Definitive Warrant Certificate may not be exchanged for a beneficial interest in
a Global Warrant Certificate except upon satisfaction of the requirements set
forth in this paragraph (d). Upon receipt by the Warrant Agent of a Definitive
Warrant Certificate, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Warrant Agent, together with written
instructions directing the Warrant Agent to make, or to direct the Depositary to
make, an endorsement on the Global Warrant Certificate to reflect an increase in
the number of Warrants represented by the Global Warrant Certificate equal to
the number of Warrants represented by such Definitive Warrant Certificate, then
the Warrant Agent shall cancel such Definitive Warrant Certificate and cause, or
direct the Depositary to cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Warrant Agent, the number of
Warrants represented by the Global Warrant Certificate to be increased
accordingly. If no Global Warrant Certificates are then outstanding, the Company
shall issue and the Warrant Agent shall countersign a new Global Warrant
Certificate representing the appropriate number of Warrants.
(e) Restrictions on Transfer and Exchange of Global Warrant
Certificates. Notwithstanding any other provision of this Agreement (other than
the provisions set forth in Section 6(f)), unless and until it is exchanged in
whole for Definitive Warrant Certificates, a Global Warrant Certificate may not
be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(f) Countersigning of Definitive Warrant Certificates in Absence
of Depositary. If at any time:
(i) the Depositary for the Global Warrant Certificates
notifies the Company that the Depositary is unwilling or unable to continue as
Depositary for the Global Warrant Certificates and a successor Depositary for
the Global Warrant Certificates is not appointed by the Company within 90 days
after delivery of such notice; or
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(ii) the Company, in its sole discretion, notifies the
Warrant Agent in writing that it elects to cause the issuance of Definitive
Warrant Certificates under this Agreement,
then the Company shall execute, and the Warrant Agent, upon written
instructions signed by an officer of the Company, shall countersign and deliver
Definitive Warrant Certificates, in an aggregate number equal to the number of
Warrants represented by the Global Warrant Certificates, in exchange for such
Global Warrant Certificates.
(g) No Warrants, or shares of Common Stock issuable upon exercise
of the Warrants, shall be sold, exchanged or otherwise transferred in violation
of the Securities Act of 1933, as amended (the "Securities Act"), or state
securities laws. The Company or the Warrant Agent may require that, as a
condition to any sale, exchange or transfer of a Warrant or such shares of
Common Stock, the Holder deliver to the Company and the Warrant Agent an opinion
of counsel, which opinion and counsel shall be reasonably satisfactory to the
Company and to the Warrant Agent, to the effect that such sale, exchange or
transfer is made in compliance with the Securities Act and all applicable state
securities laws or pursuant to an exemption under the Securities Act and state
securities laws. The provisions of this paragraph (g) shall not apply to the
exercise of any Warrant to the extent that the Shares issued upon such exercise
(and any unexercised portion of the Warrant so exercised) shall be issued to the
same Holder that exercised such Warrant.
(h) The Warrant Certificates, or Warrant Certificates of a
particular Holder or Holders, and the shares of Common Stock issuable upon
exercise of such Warrants, shall bear such legends, if any, as the Company shall
determine reflecting the restrictions in the immediately preceding subsection
(g).
(i) Cancellation of Global Warrant Certificate. At such time as
all beneficial interests in Global Warrant Certificates have either been
exchanged for Definitive Warrant Certificates, redeemed, repurchased or
cancelled, all Global Warrant Certificates shall be returned to or retained and
cancelled by the Warrant Agent.
(j) Obligations with Respect to Transfers and Exchanges of
Warrants.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Warrant Agent is hereby authorized to countersign,
in accordance with the provisions of Section 3 and this Section 6, Definitive
Warrant Certificates and Global Warrant Certificates as required pursuant to the
provisions of this Section 6 and for the purpose of any distribution of Warrant
Certificates contemplated by Section 12.
(ii) All Definitive Warrant Certificates and Global Warrant
Certificates issued upon any registration of transfer or exchange of Definitive
Warrant Certificates or Global Warrant Certificates shall be the valid
obligations of the Company, entitled to the same benefits under this Agreement
as the Definitive Warrant Certificates or Global Warrant Certificates
surrendered upon such registration of transfer or exchange.
(iii) No service charge shall be made to a Holder for any
registration, transfer or exchange.
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(iv) So long as the Depositary, or its nominee, is the
registered owner of a Global Warrant Certificate, the Depositary or such
nominee, as the case may be, will be considered the sole owner or holder of the
Warrants represented by such Global Warrant Certificate for all purposes under
this Agreement. Except as provided in Section 6(b) upon the exchange of a
beneficial interest in a Global Warrant Certificate for a Definitive Warrant
Certificate, owners of beneficial interests in a Global Warrant Certificate will
not be entitled to have any Warrants registered in their names, and will not
receive or be entitled to receive physical delivery of any such Warrants as
Definitive Warrant Certificates and will not be considered the owners or holders
thereof under the Warrants or this Agreement. Neither the Company nor the
Warrant Agent, in its capacity as registrar for such Warrants, will have any
responsibility or liability for any aspect of the records relating to beneficial
interests in a Global Warrant Certificate or for maintaining, supervising or
reviewing any records relating to such beneficial interests.
(v) Subject to Sections 6(b), (c), (d) and this Section
6(j), the Warrant Agent shall, upon receipt of all information required to be
delivered hereunder, from time to time register the transfer of any outstanding
Warrants represented by Warrant Certificates in the Warrant Register, upon
surrender of Warrant Certificates representing such Warrants at the Warrant
Agent Office (as defined below), duly endorsed, and accompanied by a completed
form of assignment, duly signed by the Holder thereof or by the duly appointed
legal representative thereof or by a duly authorized attorney, such signature to
be guaranteed by (i) a bank or trust company, (ii) a broker or dealer that is a
member of the National Association of Securities Dealers, Inc. (the "NASD") or
(iii) a member of a national securities exchange. Upon any such registration of
transfer, a new Warrant Certificate shall be issued to the transferee.
SECTION 7. Duration and Exercise of Warrants.
(a) The Warrants shall expire at 5:00 p.m. New York City time on
July 26, 2007 (the "Expiration Date"). After the Expiration Date, the Warrants
will become and be void and of no value.
(b) Subject to the provisions of this Agreement, including
Section 12, each Warrant shall entitle the holder thereof to purchase from the
Company (and the Company shall issue and sell to such holder) one fully paid and
nonassessable Share at a price equal to $20.00 per share (as the same may be
hereafter adjusted pursuant to Section 12, the "Exercise Price").
(c) From and after the Effective Date under, and as defined in,
the Plan and until 5:00 p.m., New York City time, on the Expiration Date with
respect to such Warrant, the Holder of a Warrant may exercise such Holder's
right to purchase Shares by
(i) providing written notice of such election ("Warrant
Exercise Notice") to exercise the Warrant to the Warrant Agent at the address
set forth in Section 19 hereof, "Re: Sunterra Corporation Warrant Exercise", by
hand or by facsimile, no later than 5:00 p.m., New York City time, on the
Expiration Date, which Warrant Exercise Notice shall be in the form of an
election to purchase Shares of Common Stock of the Company substantially in the
form set forth either (x) in Exhibit B-1 hereto, properly completed and
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executed by the Holder; provided that such written notice may only be submitted
by persons who hold Definitive Warrant Certificates, or (y) in Exhibit B-2
hereto, properly completed and executed by the Holder; provided that such
written notice may only be submitted with respect to Warrants held through the
book-entry facilities of the Depositary, by or through persons that are direct
participants in the Depositary;
(ii) delivering, either (x) no later than 5:00 p.m., New
York City time, on the business day immediately prior to the Settlement Date, as
defined below, such Warrants to the Warrant Agent by book-entry transfer through
the facilities of the Depositary or (y) no later than 5:00 p.m., New York City
time, on the business day immediately prior to the Settlement Date, the Warrant
Certificates evidencing such Warrants to the Warrant Agent if Definitive Warrant
Certificates have been issued and delivered pursuant to Section 3; and
(iii) paying the applicable Exercise Price multiplied by the
number of Shares in respect of which such Warrants are being exercised (the
"Exercise Amount"), together with any applicable taxes and governmental charges.
The date three business days after a Warrant Exercise Notice is delivered is
referred to for all purposes under this Agreement as the "Settlement Date".
(d) The Exercise Amount shall be payable in lawful money of the
United States of America by check or wire transfer in funds of the Exercise
Amount to the Warrant Agent specified in writing by the Warrant Agent for such
purpose, no later than 5:00 p.m., New York City time, on the business day
immediately prior to the Settlement Date. In the alternative, each Warrant
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
receives that number of Warrant Shares otherwise issuable (or payable) upon
exercise of its Warrants less that number of Warrant Shares having an aggregate
Market Price (as defined below) at the time of exercise equal to the aggregate
Exercise Price that would otherwise have been paid by the holder of the Warrant
Shares upon such exercise ("Net Exercise"). The term "Market Price" shall mean
(x) the average of the closing sale price of a share of Common Stock for the ten
consecutive trading days immediately preceding, but not including, the date of
exercise of this Warrant as reported on the principal national securities
exchange on which the shares of Common Stock are listed or admitted to trading
or (y) if not listed or admitted to trading on any national securities exchange,
the average of the closing sale prices during such ten trading day period as
reported by the Nasdaq Stock Market or, if not traded on such market, the
average of the closing bid and asked prices during such ten trading day period
in the over-the-counter market as reported by the NASD Automated Quotation
System or any comparable system or (z) in all other cases, as determined in good
faith by the Board of Directors of the Company (including any authorized
committee thereof, the "Board of Directors"), whose determination shall be
conclusive absent manifest error.
(e) Any exercise of a Warrant pursuant to the terms of this
Agreement shall be irrevocable and shall constitute a binding agreement between
the Holder and the Company, enforceable in accordance with its terms.
(f) The Warrant Agent shall notify the Depositary of (x) the
Warrant Agent's account at the Depositary to which the Warrants must be
delivered by the business day
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immediately prior to the Settlement Date for those Warrants to be exercised
through the book-entry facilities of the Depositary and (y) the address, phone
number and facsimile number where holders of the Warrants can contact the
Warrant Agent to which Warrant Exercise Notices are to be submitted.
(g) Promptly following delivery of Warrants to a Holder, the
Warrant Agent shall notify such Holder (through the clearing system) of (i) the
Warrant Agent's account at the Depositary to which holders must deliver Warrants
on the business day immediately prior to the Settlement Date, (ii) the Warrant
exercise procedures of the Depositary and (iii) the address, telephone number
and facsimile number where Holders can contact the Warrant Agent and to which
Holders must submit Warrant Exercise Notices if they decide to exercise their
Warrants. At such time, the Warrant Agent shall also provide the Holders with a
Warrant Exercise Notice and the pertinent instructions as to how to exercise
their Warrants.
(h) The Warrant Agent shall:
(i) examine all Warrant Exercise Notices and all other
documents delivered to it by or on behalf of holders as contemplated by the
Warrant Certificates to ascertain whether, on their face, such Warrant Exercise
Notices and any such other documents have been executed and completed in
accordance with their terms and the terms of the Warrant Certificates;
(ii) determine whether the exercising Warrant Holder has
delivered the related Warrants to the Warrant Agent's account at the Depositary.
In each case where a Warrant Exercise Notice or other document appears on its
face to have been improperly completed or executed or some other irregularity in
connection with the exercise of the Warrants exists, the Warrant Agent shall
endeavor to inform the appropriate parties (including the person submitting such
instrument) of the need for fulfillment of all requirements, specifying those
requirements which appear to be unfulfilled. Except to the extent provided in
the immediately preceding sentence, the Warrant Agent shall be under no duty to
give notice to any person of any irregularities in Warrant Exercise Notices,
delivery of Warrants or any other document completed or executed in connection
therewith nor shall it incur any liability for failure to give such notice;
(iii) inform the Company of and cooperate with and assist
the Company in resolving any reconciliation problems between Warrant Exercise
Notices received and delivery of Warrants to the Warrant Agent's account;
(iv) advise the Company no later than one business day after
receipt of a Warrant Exercise Notice, of (i) the receipt of such Warrant
Exercise Notice and the number of Warrants exercised in accordance with the
terms and conditions of this Agreement, (ii) the instructions with respect to
delivery of the shares of Common Stock of the Company deliverable upon such
exercise, subject to timely receipt from the Depositary of the necessary
information, and (iii) such other information as the Company shall reasonably
require;
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(v) notify, by such time as necessary to ensure a prompt
closing, the Depositary, with a copy to the Company, each account at the
Depositary to be credited with Common Stock and the amount thereof to be
credited to each such account; and
(vi) subject to Common Stock being made available to the
Warrant Agent by or on behalf of the Company for delivery to accounts within the
Depositary, coordinate with the Depositary and endeavor to effect such delivery
to the relevant accounts at the Depositary in accordance with its requirements.
(i) All questions as to the validity, form and sufficiency
(including time of receipt) of a Warrant exercise will be determined by the
Company in its sole discretion, which determination shall be final and binding.
The Warrant Agent shall incur no liability for or in respect of such
determination by the Company. The Company reserves the right to reject any and
all Warrant Exercise Notices not in proper form or for which any corresponding
agreement by the Company to exchange would, in the opinion of the Company, be
unlawful. Such determination by the Company shall be final and binding on the
Holders, absent manifest error. Moreover, the Company reserves the absolute
right to waive any of the conditions to the exercise of Warrants or defects in
Warrant Exercise Notices with regard to any particular exercise of Warrants. The
Company shall be under no duty to give notice to the holders of the Warrants of
any irregularities in any exercise of Warrants, nor shall it incur any liability
for the failure to give such notice.
(j) As soon as practicable after the exercise of any Warrant, the
Company shall issue, or otherwise deliver, in authorized denominations to or
upon the order of the Holder of the Warrant Certificates evidencing such
Warrants, either
(i) if such Holder holds the Warrants being exercised
through the Depositary's book-entry transfer facilities, by same-day credit to
such Holder's account at the Depositary or to the account of a participant in
the Depositary the number of Shares to which such Holder is entitled, in each
case registered in such name and delivered to such account as directed in the
Warrant Exercise Notice by such Holder or by the direct participant in the
Depositary through which such Holder is acting, or
(ii) if such Holder holds the Warrants being exercised in
the form of Definitive Warrant Certificates, by delivery to the address
designated by such Holder in its Warrant Exercise Notice of a physical
certificate representing the number of Shares to which such Holder is entitled,
in fully registered form, registered in such name or names as may be directed by
such Holder. If less than all of the Warrants evidenced by a Warrant Certificate
surrendered upon the exercise of Warrants are exercised at any time prior to the
date of expiration for the Warrants, a new Warrant Certificate or Certificates
shall be issued for the remaining number of Warrants evidenced by the Warrant
Certificate so surrendered, and the Warrant Agent is hereby authorized to
countersign the required new Warrant Certificate or Certificates pursuant to the
provisions of Section 6 and this Section 7.
SECTION 8. Cancellation of Warrants. If the Company shall purchase or
otherwise acquire Warrants, the Warrant Certificates representing such Warrants
shall thereupon be delivered to the Warrant Agent and be cancelled by it and
retired. The Warrant Agent shall
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cancel all Warrant Certificates surrendered for exchange, substitution, transfer
or exercise in whole or in part. Such cancelled Warrant Certificates shall
thereafter be disposed of in a manner satisfactory to the Company.
SECTION 9. Mutilated or Missing Warrant Certificates. If any of the
Warrant Certificates shall be mutilated, lost, stolen or destroyed, the Company
shall issue, and the Warrant Agent shall countersign and deliver, in exchange
and substitution for and upon cancellation of the mutilated Warrant Certificate,
or in lieu of and substitution for the Warrant Certificate lost, stolen or
destroyed, a new Warrant Certificate of like tenor and representing an
equivalent number of Warrants, but only upon receipt of evidence reasonably
satisfactory to the Company and the Warrant Agent of the loss, theft or
destruction of such Warrant Certificate and the posting of an indemnity or bond,
if requested by either the Company or the Warrant Agent, also reasonably
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 and as required by
Section 8-405 of the Uniform Commercial Code as in effect in the State of
Maryland.
SECTION 10. Reservation of Shares; Restrictive Legend. (a) For the
purpose of enabling it to satisfy any obligation to issue Shares upon exercise
of Warrants, the Company will at all times through the Expiration Date reserve
and keep available, free from preemptive rights and out of its aggregate
authorized but unissued or treasury shares of Common Stock, the number of Shares
deliverable upon the exercise of all outstanding Warrants, and the transfer
agent for the Company's Common Stock (such agent, in such capacity, as may from
time to time be appointed by the Company, the "Transfer Agent") is hereby
irrevocably authorized and directed at all times to reserve such number of
authorized and unissued or treasury shares of Common Stock 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 transfer agent for any shares of the Company's
capital stock issuable upon the exercise of Warrants pursuant to this Agreement.
The Warrant Agent is hereby irrevocably authorized to requisition from time to
time from the Transfer Agent stock certificates issuable upon exercise of
outstanding Warrants, and the Company will supply the Transfer Agent with duly
executed stock certificates for such purpose.
Before taking any action that would cause an adjustment pursuant to
Section 12 reducing any Exercise Price below the then par value (if any) of the
Shares issuable upon exercise of the Warrants, the Company will take any
corporate action that may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue fully paid and nonassessable
Shares at such Exercise Price as so adjusted.
The Company covenants that all shares of Common Stock issued upon
exercise of the Warrants will, upon issuance in accordance with the terms of
this Agreement, be fully paid and nonassessable and free from all taxes, liens,
charges and security interests created by or imposed upon the Company with
respect to the issuance thereof.
(b) Certificates for shares of Common Stock issued upon the exercise
of any Warrant, or certificates for such shares issued to a particular Holder or
Holders, shall bear such legends as the Company shall determine to be necessary
or appropriate to reflect restrictions under applicable securities laws. The
Holder (or its transferee, as applicable) of any shares of
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Common Stock bearing any such legend shall be entitled to receive from the
Company, without expense, new securities of like tenor not bearing such legend
when such securities shall have been (i) effectively registered under the
Securities Act and disposed of in accordance with the registration statement
covering such shares of Common Stock or (ii) disposed of pursuant to the
provisions of Rule 144 or any comparable rule under the Securities Act or when,
in the opinion of counsel for the Holder thereof (which opinion and counsel
shall be reasonably satisfactory to the Company), such restrictions are no
longer required in order to insure compliance with the Securities Act and
applicable state securities laws.
SECTION 11. Stock Exchange Listings. So long as any Warrants remain
outstanding, the Company will use commercially reasonable efforts to take all
necessary action to have the shares of Common Stock, upon their issuance upon
exercise of Warrants, (i) listed on each national securities exchange on which
the Common Stock is then listed or (ii) if the Common Stock is not then listed
on any national securities exchange, admitted for trading on the Nasdaq Stock
Market or such other over-the-counter quotation system on which the Common Stock
may then be listed.
SECTION 12. Adjustment of Exercise Price and Number of Shares
Purchasable or Number of Warrants. The Exercise Price, the number of shares of
Common Stock purchasable upon the exercise of each Warrant and the number of
Warrants outstanding are subject to adjustment from time to time upon the
occurrence of the events enumerated in this Section 12.
(a) If the Company shall (i) pay a dividend on Common Stock
consisting of shares of Common Stock, (ii) subdivide its outstanding shares of
Common Stock, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock or (iv) issue any securities or
distribute any property or assets in a reclassification of the Common Stock, the
number of Shares purchasable upon exercise of each Warrant immediately prior
thereto shall be adjusted so that the Holder of each Warrant shall be entitled
upon exercise to receive the kind and number of Shares or other securities,
property or assets of the Company which such Holder would have owned or have
been entitled to receive after the happening of any of the events described
above had such Warrant been exercised immediately prior to the happening of such
event or any record date with respect thereto. An adjustment made pursuant to
this subsection (a) shall become effective immediately after the effective date
of such event retroactive to the record date, if any, for such event. Whenever
the number of Shares of Common Stock purchasable upon the exercise of any
Warrant is adjusted as provided in this Section 12(a), the Exercise Price
payable upon exercise of such Warrant shall be adjusted by multiplying such
Exercise Price immediately prior to such adjustment by a fraction of which the
numerator shall be the number of Shares purchasable upon the exercise of such
Warrant immediately prior to such adjustment and of which the denominator shall
be the number of Shares so purchasable immediately thereafter.
(b) If the Company declares a dividend on its Common Stock
payable in shares of any class or series of its capital stock or in securities
convertible into or exchangeable for Common Stock (including, without
limitation, rights, options or warrants to subscribe for or purchase shares of
Common Stock), the number and kind of securities for which a Warrant may be
exercised shall be adjusted, as of the record date for determining which
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Holders of Common Stock shall be entitled to receive such dividend, so that the
Holder of each Warrant exercised after such time shall be entitled to receive,
upon exercise of such Warrant, the aggregate number and kind of Shares of Common
Stock and other securities of the Company which, if such Warrant had been
exercised immediately prior to such date, such Holder would have owned or been
entitled to receive upon such exercise and as a result of such dividend; and the
Exercise Price shall be adjusted, if necessary, so that the aggregate amount
payable for the purchase of all the Shares of Common Stock and other securities
issuable thereunder immediately after such record date shall equal the aggregate
amount so payable immediately before such record date. Upon the expiration of
any securities exercisable for, convertible into or exchangeable for Common
Stock (if any thereof shall not have been exercised, converted or exchanged)
with respect to which an adjustment has been made pursuant to this Section
12(b), the number of Shares or securities for which the Warrant may be exercised
and the Exercise Price shall be readjusted to be as they would have been had the
securities exercisable for, convertible into or exchangeable for Common Stock
which expired without exercise, conversion or exchange not been issued.
(c) If the Company distributes to the Holders of its Common
Stock, other than as part of its dissolution or liquidation or the winding up of
its affairs, any evidence of indebtedness or any of its assets or securities
(other than regularly quarterly cash dividends paid out of current earnings or
surplus or dividends or distributions provided for in Section 12(a) or 12(b)),
the Exercise Price in effect immediately prior to the close of business on the
record date fixed for the determination of Holders of Common Stock entitled to
receive any such distribution shall be adjusted, effective as of the close of
business on such record date, to a price (calculated to the nearest cent)
determined by multiplying such Exercise Price by a fraction (x) the numerator of
which shall be the Market Price less the fair market value of such distribution
(as determined in good faith by the Board of Directors of the Company or a duly
constituted committee thereof, if made other than in cash) payable in respect of
one share of the Common Stock, and (y) the denominator of which shall be such
Market Price. As used in this Section 12(c), the term "Market Price" shall have
the meaning set forth in Section 7(d), but determined for the ten consecutive
trading days immediately preceding (but not including) the record date referred
to above.
(d) In the event of any consolidation of the Company with or
merger of the Company into another corporation or other entity, then unless the
Company is the surviving corporation, the Company shall cause adequate provision
to be made so that each Holder of a Warrant shall be entitled to receive, upon
exercise of such Warrant at any time after the effectiveness of such merger or
consolidation (but prior to 5:00 p.m. New York City time on the Expiration
Date), the securities, cash and other property to which the number of Shares of
Common Stock and other securities (if any) covered by such Warrant would have
been entitled at an aggregate purchase price equal to the Exercise Amount which
would have been payable if such Holder had exercised such Warrant immediately
prior to such merger or consolidation.
(e) No adjustment in the number of Shares purchasable hereunder
shall be required unless such adjustment would require an increase or decrease
of at least one percent (1%) in the number of Shares purchasable upon the
exercise of each Warrant; provided, however, that any adjustments which by
reason of this subsection (e) are not required to be made
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shall be carried forward and taken into account in any subsequent adjustment.
All calculations shall be made to the nearest cent and to the nearest
one-hundredth of a share, as the case may be.
(f) For the purpose of this Section 12, the term "shares of
Common Stock" shall mean (i) the shares of stock designated as the Common Stock
of the Company at the date of this Agreement or (ii) any other class of stock
resulting from successive changes or reclassification of such shares consisting
solely of changes in par value, or from par value to no par value, or from no
par value to par value. If at any time, as a result of an adjustment made
pursuant to Section 12(a), (b) or (d), the Holders of Warrants shall become
entitled to purchase any shares of the Company other than shares of Common
Stock, thereafter the number of such other shares so purchasable upon exercise
of each Warrant and the applicable Exercise Price of such shares shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to such shares
contained in Section 12(a) through this Section 12(f), inclusive, and the
provisions contained in this Agreement with respect to such shares shall apply
on like terms to any such other shares.
(g) Except as otherwise expressly provided in this Section 12, no
adjustment in respect of any dividends shall be made during the term of a
Warrant or upon the exercise of a Warrant.
(h) Irrespective of any adjustments in an Exercise Price or the
number or kind of shares purchasable upon the exercise of the Warrants, Warrant
Certificate theretofore or thereafter issued may continue to express the same
price and number and kind of shares as are stated in the Warrant Certificates
initially issuable pursuant to this Agreement. The Company, however, may at any
time in its sole discretion make any change in the form of Warrant Certificate
that it may deem appropriate (but which do not affect the rights, duties or
obligations of the Warrant Agent) or to give effect to such adjustments and that
does not otherwise affect the substance of the Warrant Certificate, and any
Warrant Certificate thereafter issued, whether in exchange or substitution for
an outstanding Warrant Certificate or otherwise, may be in the form as so
changed.
(i) The Company may elect, in its sole discretion, on or after
the date of any adjustment required by paragraph (a) of this Section 12, to
adjust the number of Warrants in substitution for an adjustment in the number of
Shares purchasable upon the exercise of a Warrant. Each of the Warrants
outstanding after such adjustment of the number of Warrants shall be exercisable
for the same number of Shares as immediately prior to such adjustment. Each
Warrant held of record prior to such adjustment of the number of Warrants shall
become that number of Warrants (calculated to the nearest one-hundredth)
obtained by dividing the applicable Exercise Price in effect prior to adjustment
of such Exercise Price by the applicable Exercise Price in effect after
adjustment of such Exercise Price. The Company shall notify the holders of
Warrants of its election to adjust the number of Warrants in the same manner as
provided in the first paragraph of Section 14, indicating the record date for
the adjustment, and, if known at the time, the amount of the adjustment to be
made, and shall give prompt written notice thereof to the Warrant Agent. This
record date may be the date on which the Exercise Price is adjusted or any day
thereafter. Upon each adjustment of the number of Warrants pursuant to this
Section 12(i) the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Warrants on such record date Warrant
Certificates evidencing,
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subject to Section 13, the additional Warrants to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company, shall
cause to be distributed to such holders of record in substitution and
replacement for the Warrant Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Company, new
Warrant Certificates evidencing all the Warrants to be issued, executed and
registered in the manner specified in Sections 4 and 5 (and which may bear, at
the option of the Company, the applicable adjusted Exercise Price) and shall be
registered in the names of the holders of record of Warrant Certificates on the
record date specified in the notice.
SECTION 13. Fractional Shares. Notwithstanding any adjustment pursuant
to Section 12 in the number of Shares purchasable upon the exercise of a
Warrant, the Company shall not be required to issue Warrants to purchase
fractions of Shares, or to issue fractions of Shares upon exercise of the
Warrants, or to distribute certificates which evidence fractional Shares.
SECTION 14. Notices to Warrantholders. Upon any adjustment of the
number of shares of Common Stock purchasable upon exercise of each Warrant, the
number of Warrants outstanding or of any Exercise Price, including any
adjustment pursuant to Section 12, the Company, within 20 business days
thereafter, shall (i) cause to be filed with the Warrant Agent a certificate of
a firm of independent public accountants of recognized standing selected by the
Company (who may be the regular auditors of the Company) setting forth the event
giving rise to such adjustment, such Exercise Price and either the number of
Shares purchasable upon exercise of each Warrant or the additional number of
Warrants to be issued for each previously outstanding Warrant, as the case may
be, after such adjustment and setting forth in reasonable detail the method of
calculation and the facts upon which such adjustment was made, 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 Holders of the Warrant
Certificates at such Holder's address appearing on the Warrant Register, 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 14. The
Warrant Agent shall be fully protected in relying on good faith on any such
certificate and in making any adjustment described therein and shall have no
duty with respect to, and shall not be deemed to have knowledge of, any
adjustment unless and until it shall have received such a certificate.
If:
(a) the Company shall order, declare, make or pay any dividend
payable in any securities upon its Common Stock or make any distribution (other
than a cash dividend) to the Holders of its Common Stock,
(b) the Company shall offer or grant to the Holders of its Common
Stock any additional shares of Common Stock or securities convertible into or
exchangeable for shares of Common Stock or any right to subscribe thereto, or
(c) dissolution, liquidation or winding up of the Company (other
than in connection with a consolidation, merger or sale of all or substantially
all of its property, assets and business as an entirety) shall be proposed,
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then the Company shall (i) cause written notice of such event to be filed with
the Warrant Agent and shall cause written notice of such event to be given to
each of the Holders of the Warrant Certificates at such Holder's address
appearing on the Warrant Register, by first-class mail, postage prepaid, and
(ii) make a public announcement in a daily newspaper of general circulation in
New York City of such event, such giving of notice and publication to be
completed at least 10 days prior to the date fixed as a record date or the date
of closing the transfer books for the determination of the stockholders entitled
to such dividend, distribution or subscription rights or for the determination
of stockholders entitled to vote on such proposed dissolution, liquidation or
winding up. Such notice shall specify such record date or the date of closing
the transfer books, as the case may be. The failure to give the notice required
by this Section 14 or any defect therein shall not affect the legality or
validity of any dividend, distribution, right, warrant, dissolution,
subscription right, liquidation or winding up or the vote upon or any other
action taken in connection therewith.
SECTION 15. Merger, Consolidation or Change of Name of Warrant Agent.
Any person into which the Warrant Agent may be merged or converted or with which
it may be consolidated, or any person resulting from any merger, conversion or
consolidation to which the Warrant Agent shall be a party, or any corporation
succeeding to the corporate trust or shareholder services business of the
Warrant Agent, shall be the successor to the Warrant Agent hereunder without the
execution or filing of any document or any further act on the part of any of the
parties hereto, provided that person would be eligible for appointment as a
successor Warrant Agent under the provisions of Section 17. If at the time such
successor to the Warrant Agent shall succeed under this Agreement, 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 if 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 Warrant Agent; and in all such cases such Warrant
Certificates shall have the full force provided in the Warrant Certificates and
in this Agreement.
If 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 changed may adopt the
countersignature under its prior name; and if 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
provided in the Warrant Certificates and in this Agreement.
SECTION 16. Warrant Agent. The Warrant Agent undertakes only the
duties and obligations expressly imposed by this Agreement and the Warrant
Certificate, in each case 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 accuracy of any of the same except such as
describe the Warrant Agent or action taken or
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to be taken by it. Except as herein otherwise provided, the Warrant Agent
assumes no responsibility with respect to the execution, delivery or
distribution of the Warrant Certificates.
(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 nor shall it at
any time be under any duty or responsibility to any Holder of a Warrant to make
or cause to be made any adjustment in any Exercise Price or in the number of
Shares issuable upon exercise of any Warrant (except as instructed by the
Company), or to determine whether any facts exist which may require any such
adjustment, or with respect to the nature or extent of or method employed in
making any such adjustment when made.
(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 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 absent gross negligence, bad faith or willful misconduct (each as
determined by a final order, judgment, ruling or decree of a court of competent
jurisdiction) in the selection and continued retention of such counsel and the
reliance on such counsel's advice.
(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 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 under this
Agreement, to reimburse the Warrant Agent upon demand for all expenses, taxes
and governmental charges and other charges of any kind and nature incurred by
the Warrant Agent in the preparation, administration, delivery, execution and
amendment of this Agreement and the performance of its duties under this
Agreement and to indemnify the Warrant Agent and save it harmless against any
and all losses, liabilities and expenses, including judgments, damages, fines,
penalties, claims, demands, settlements, costs and reasonable counsel fees and
expenses, for anything done or omitted by the Warrant Agent arising out of or in
connection with this Agreement except as a result of its gross negligence, bad
faith or willful misconduct (each as determined by a final order, judgment,
ruling or decree of a court of competent jurisdiction). The costs and expenses
incurred by the Warrant Agent in enforcing the right to indemnification shall be
paid by the Company unless it is determined by a final order, judgment, decree
or ruling of a court of competent jurisdiction that the Warrant Agent is not
entitled to indemnification due to its gross negligence, bad faith or willful
misconduct.
(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 Holders of Warrant
Certificates shall furnish the Warrant Agent with reasonable security and
indemnity for any costs or expenses which may be incurred. All rights
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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 or judgment shall be for
the ratable benefit of the Holders of the Warrants, as their respective rights
or interests may appear.
(g) The Warrant Agent, and any stockholder, affiliate, director,
officer or employee thereof, 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
the Warrant Agent under this Agreement, or a stockholder director, officer or
employee of the Warrant Agent, as the case may be. 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 that it may do or refrain from
doing in connection with this Agreement except for its own gross negligence, bad
faith or willful misconduct (each as determined by a final order, judgment,
decree or ruling of a court of competent jurisdiction). In no event will the
Warrant Agent be liable for special, indirect, incidental, punitive or
consequential loss or damage of any kind whatsoever, even if the Warrant Agent
has been advised of the possibility of such loss or damage. Any liability of
Mellon hereunder will be limited to an amount in the aggregate not to exceed
$75,000.
(i) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Warrant Agent for the carrying out or performing of the
provisions of this Agreement.
(j) The Warrant Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the valid authorization and due execution hereof by the Warrant Agent)
or in respect of the validity or execution of any Warrant Certificate (except
its valid authorization and due execution of its countersignature thereof), nor
shall the Warrant Agent by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of the Shares
to be issued pursuant to this Agreement or any Warrant Certificate or as to
whether the Shares will when issued be validly issued, fully paid and
nonassessable or as to the Exercise Price or the number of Shares issuable upon
exercise of any Warrant.
(k) The Warrant Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the Chief Executive Officer, the President, the Chief
Financial Officer, any Vice President, the Treasurer, the Secretary or an
Assistant Secretary of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and such instructions shall be full
authorization and protection to the Warrant Agent and the Warrant Agent shall
not be liable for any action taken, suffered to be taken, or omitted to be taken
by it in good faith in
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accordance with instructions of any such officer or in good faith reliance upon
any statement signed by any one of such officers of the Company with respect to
any fact or matter (unless other evidence in respect thereof is herein
specifically prescribed) which may be deemed to be conclusively proved and
established by such signed statement.
(l) If the Warrant Agent shall receive any notice or demand
(other than notice of or demand for exercise of Warrants) addressed to the
Company by the holder of the Warrant Certificates pursuant to the provisions of
the Warrant Certificates, the Warrant Agent shall promptly forward such notice
or demand to the Company.
(m) No provision of this Agreement shall require the Warrant
Agent to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of its
rights if it believes that repayment of such funds or adequate indemnification
against such risk or liability is not reasonably assured to it.
(n) The provisions of this Section 16 shall survive the
termination of this Agreement, the exercise or expiration of the Warrants and
the resignation or removal of the Warrant Agent.
SECTION 17. Change of Warrant Agent. If the Warrant Agent resigns
(such resignation to become effective not earlier than 90 calendar days after
the giving of written notice thereof to the Company and the Holders of Warrant
Certificates) or shall be adjudged a bankrupt or insolvent, or shall file a
voluntary petition in bankruptcy or make an assignment for the benefit of its
creditors or consent to the appointment of a receiver of all or any substantial
part of its property or affairs or shall generally not pay its debts as such
debts become due, or shall admit in writing its inability to pay or meet its
debts generally as they become due, or if an order of any court shall be entered
approving any petition filed by or against the Warrant Agent under the
provisions of bankruptcy laws or any similar legislation, or if a receiver,
trustee or other similar official of it or of all or any substantial part of its
property shall be appointed, or if any public officer shall take charge or
control of it or of its property or affairs, for the purpose of rehabilitation,
conservation, protection, relief, winding up or liquidation, or becomes
incapable of acting as Warrant Agent or if the Board of Directors of the Company
shall by resolution remove the Warrant Agent (such removal to become effective
not earlier than 30 days after the filing of a certified copy of such resolution
with the Warrant Agent and the giving of written notice of such removal to the
Holders of Warrant Certificates), the Company shall appoint a successor to the
Warrant Agent. If the Company shall fail to make such appointment within a
period of 30 days after such removal or after it has been so notified in writing
of such resignation or incapacity by the Warrant Agent or by the Holder of a
Warrant Certificate (in the case of incapacity), then the Holder of any Warrant
Certificate may apply to any court of competent jurisdiction for the appointment
of a successor to the Warrant Agent. Pending appointment of a successor to the
Warrant Agent, either by the Company or by such a court, the duties of the
Warrant Agent shall be carried out by the Company. Any successor Warrant Agent,
whether appointed by the Company or by such a court, shall be a bank or trust
company, in good standing, incorporated under the laws of any state or of the
United States of America. As soon as practicable after appointment of the
successor Warrant Agent, the Company shall cause written notice of the change in
the Warrant Agent to be given to each of the Holders of the Warrant Certificates
at such Holder's address appearing on the Warrant Register. After appointment,
the
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successor 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. The former Warrant Agent shall deliver and transfer to the
successor Warrant Agent any property at the time held by it hereunder and
execute and deliver, at the expense of the Company, any further assurance,
conveyance, act or deed necessary for the purpose. Failure to give any notice
provided for in this Section 17 or any defect therein, shall not affect the
legality or validity of the removal of the Warrant Agent or the appointment of a
successor Warrant Agent, as the case may be.
SECTION 18. Warrantholder Not Deemed a Stockholder. Nothing contained
in this Agreement or in any of the Warrant Certificates shall be construed as
conferring upon the Holders thereof the right to vote or to receive dividends or
to consent or to receive notice as stockholders in respect of the meetings of
stockholders or for the election of directors of the Company or any other
matter, or any rights whatsoever as stockholders of the Company.
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 any
Holder of any Warrant Certificate to or on the Company shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing by the Company with the Warrant Agent), or
by facsimile transmission with receipt confirmed, as follows:
Sunterra Corporation
0000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: General Counsel
Facsimile No: 407 -532-1180
If the Company shall fail to maintain such office or agency or shall
fail to give such notice of any change in the location thereof, presentation 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
any Holder of any Warrant Certificate to the Warrant Agent shall be sufficiently
given if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing by the Warrant Agent with the Company), or by
facsimile transmission with receipt confirmed, as follows:
Mellon Investor Services LLC
000 X. Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx
Facsimile No.: (000) 000-0000
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With a copy to:
Mellon Investor Services LLC
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: General Counsel
Facsimile No.: (000) 000-0000
The Warrant Agent maintains a Warrant Agent Office at:
Mellon Investor Services LLC
000 X. Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx
Facsimile No.: (000) 000-0000
SECTION 20. Supplements and Amendments. This Agreement constitutes the
entire agreement and supersedes all other prior agreements and understandings,
both written and oral, among the parties, or any of them, with respect to the
subject matter hereof and may not be amended, except in a writing signed by both
of them.
The Company and the Warrant Agent may from time to time supplement or
amend this Agreement (a) without the approval of any Holders of Warrant
Certificates in order to cure any ambiguity, manifest error or other mistake in
this Agreement, or to correct or supplement any provision contained herein that
may be defective or inconsistent with any other provision herein or in the Plan,
or to make any other provisions in regard to matters or questions arising
hereunder that the Company and the Warrant Agent may deem necessary or desirable
and that shall not adversely affect, alter or change the interests of the
Holders of the Warrants or (b) with the prior written consent of Holders of the
Warrants exercisable for a majority of the Shares then issuable upon exercise of
the Warrants then outstanding; provided that each amendment or supplement that
decreases the Warrant Agent's rights or increases its duties and
responsibilities hereunder shall also require the prior written consent of the
Warrant Agent.
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 on the
Expiration Date. Notwithstanding the foregoing, this Agreement will terminate on
any earlier date when all Warrants have been exercised. The provisions of
Section 16, this Section 22, Section 23 and Section 24 shall survive such
termination and the resignation or removal of the Warrant Agent.
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 Maryland and for all purposes shall be construed in accordance with the
laws of such State (without giving effect to the conflict of laws provisions
thereof); provided, however that the provisions of Section 1 and Section 16 of
this Agreement shall, as and to the extent relating to the duties and
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obligations of the Warrant Agent, be governed by and construed in accordance
with the laws of the State of New York (without giving effect to the conflict of
laws provisions thereof).
SECTION 24. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any person or entity other than the Company, the
Warrant Agent and the Holders of the Warrant Certificates any legal or equitable
right, remedy or claim under this Agreement, and this Agreement shall be for the
sole and exclusive benefit of the Company, the Warrant Agent and the Holders of
the Warrant Certificates.
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 such counterparts shall together constitute but one and
the same instrument.
SECTION 26. Headings. The headings of sections of this Agreement have
been inserted for convenience of reference only, are not to be considered a part
hereof and in no way modify or restrict any of the terms or provisions hereof.
SECTION 27. Meaning of Terms Used in Agreement. The language used in
this Agreement shall be deemed to be the language chosen by the parties to
express their mutual intent, and no rule of strict construction shall be applied
against any party. Any references to any federal, state, local or foreign
statute or law shall also refer to all rules and regulations promulgated
thereunder, unless the context otherwise requires. Unless the context otherwise
requires: (a) a term has the meaning assigned to it by this Agreement; (b) forms
of the word "include" mean that the inclusion is not limited to the items
listed; (c) "or" is disjunctive but not exclusive; (d) words in the singular
include the plural, and in the plural include the singular; (e) provisions apply
to successive events and transactions; (f) "hereof", "hereunder", "herein" and
"hereto" refer to the entire Agreement and not any section or subsection; (g)
"$" means the currency of the United States; (h) "business day" means any day,
except for Saturday and Sunday, on which banks are not required or authorized by
law or executive order to close in New York City; and (i) "person" means a
natural person, a partnership, a corporation, a limited liability company, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization or other entity, or a governmental entity or any department, agency
or political subdivision thereof.
SECTION 28. 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, however, 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 29. Severability. If any part of this Agreement shall be held
to be invalid or unenforceable by any court, or regulatory agency or body, such
invalidity or unenforceability shall attach only to such part and shall not
affect the validity or enforceability of
-21-
the rest of this Agreement. Furthermore, in lieu of any such invalid or
unenforceable provision or condition, the parties hereto intend that there shall
be added as a part of this Agreement a provision as similar in terms and
commercial effect to such invalid or unenforceable provision as may be possible
and be valid and enforceable.
[The next page is the signature page]
-22-
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Warrant Agreement as of the day and year first above written.
SUNTERRA CORPORATION
By:
----------------------------
Name:
Title:
ATTEST:
By:
----------------------------
Name:
Title:
MELLON INVESTOR SERVICES LLC
By:
----------------------------
Name:
Title:
-23-
EXHIBIT A
[FORM OF FACE OF WARRANT CERTIFICATE]
VOID AFTER JULY 26, 2007
This Global Warrant Certificate is held by The Depository Trust Company (the
"Depositary") or its nominee in custody for the benefit of the beneficial owners
hereof, and is not transferable to any person under any circumstances except
that (i) this Global Warrant Certificate may be exchanged in whole but not in
part pursuant to Section 6(a) of the Warrant Agreement (as defined herein), (ii)
this Global Warrant Certificate may be delivered to the Warrant Agent for
cancellation pursuant to Section 6(i) of the Warrant Agreement and (iii) this
Global Warrant Certificate may be transferred to a successor Depositary with the
prior written consent of the Company./(1)/
Unless this Global Warrant Certificate is presented by an authorized
representative of the Depositary to the Company or the Warrant Agent for
registration of transfer, exchange or payment and any certificate issued is
registered in the name of Cede & Co. or such other entity as is requested by an
authorized representative of the Depositary (and any payment hereon is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of the Depositary), any transfer, pledge or other use hereof for
value or otherwise by or to any person is wrongful because the registered owner
hereof, Cede & Co., has an interest herein./(1)/
Transfers of this Global Warrant Certificate shall be limited to transfers in
whole, but not in part, to nominees of the Depositary or to a successor thereof
or such successor's nominee, and transfers of portions of this Global Warrant
Certificate shall be limited to transfers made in accordance with the
restrictions set forth in Section 6 of the Warrant Agreement./(1)/
No registration or transfer of the securities issuable pursuant to the Warrant
will be recorded on the books of the Company until such provisions have been
complied with.
----------
/(1)/ These paragraphs are to be included only if the Warrant is
in the form of Global Warrant Certificate.
A-1
CUSIP No.
--------------
No. WARRANT TO PURCHASE
----- -------------
SHARES OF COMMON STOCK
SUNTERRA CORPORATION
WARRANT TO PURCHASE COMMON STOCK
This Warrant Certificate ("Warrant Certificate") certifies that
or its registered assigns, is the Holder of a Warrant (the
---------------
"Warrant") of Sunterra Corporation, a Maryland corporation (the "Company"), to
purchase the number of shares (the "Shares") of Common Stock, par value $0.01
per share (the "Common Stock"), of the Company set forth above. This Warrant
expires on July 26, 2007 (such date, the "Expiration Date") and entitles the
holder to purchase from the Company the number of fully paid and nonassessable
Shares set forth above at the exercise price (the "Exercise Price") multiplied
by the number of Shares set forth above (the "Exercise Amount"), payable to the
Company by check or wire transfer of the Exercise Amount to an account of the
Warrant Agent specified in writing by the Warrant Agent for such purpose, no
later than 5:00 p.m., New York City time, on the business day immediately prior
to the Settlement Date (as defined in the Warrant Agreement). In the
alternative, each Warrant 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 receives that number of Warrant Shares
otherwise issuable (or payable) upon exercise of its Warrants less that number
of Warrant Shares having an aggregate Market Price (as defined in the Warrant
Agreement) at the time of exercise equal to the aggregate Exercise Price that
would otherwise have been paid by the holder of the Warrant Shares upon such
exercise ("Net Exercise"). The initial Exercise Price shall be $20.00.
Subject to the terms and conditions set forth herein and in the
Warrant Agreement, this Warrant may be exercised by the Holder thereof, by:
(i) providing written notice of such election ("Warrant
Exercise Notice") to exercise the Warrant to the Warrant Agent at the address
set forth in the Warrant Agreement, "Re: Sunterra Corporation Warrant Exercise",
by hand or by facsimile, no later than 5:00 p.m., New York City time, on the
Expiration Date, which Warrant Exercise Notice shall be in the form of an
election to purchase Shares of Common Stock of the Company substantially in the
form set forth either (x) in Exhibit B-1 to the Warrant Agreement, properly
completed and executed by the Holder; provided that such written notice may only
be submitted by persons who hold Definitive Warrant Certificates, or (y) in
Exhibit B-2 to the Warrant Agreement, properly completed and executed by the
Holder; provided that such written notice may only be submitted with respect to
Warrants held through the book-entry facilities of the Depositary, by or through
persons that are direct participants in the Depositary;
(ii) delivering, either (x) no later than 5:00 p.m., New
York City time, on the business day immediately prior to the Settlement Date,
such Warrants to the Warrant Agent by book-entry transfer through the facilities
of the Depositary or (y) no later than
A-2
5:00 p.m., New York City time, on the business day immediately prior to the
Settlement Date, the Warrant Certificates evidencing such Warrants to the
Warrant Agent if Definitive Warrant Certificates have been issued and delivered
pursuant to the Warrant Agreement; and
(iii) paying the applicable Exercise Amount, together with
any applicable taxes and governmental charges, except as provided in Section 28
of the Warrant Agreement.
The Exercise Price and the number of shares of Common Stock
purchasable upon exercise of this Warrant are subject to adjustment upon the
occurrence of certain events as set forth in the Warrant Agreement.
No Warrant may be exercised prior to the Effective Date or after the
Expiration Date. After the Expiration Date, the Warrants will become wholly void
and of no value.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS WARRANT
CERTIFICATE SET FORTH ON THE REVERSE HEREOF. 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.
A-3
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be executed by its duly authorized officers and its corporate seal hereunto
affixed.
Dated:
----------------
SUNTERRA CORPORATION
By:
--------------------------
Name:
Title:
[Corporate Seal of Sunterra Corporation]
ATTEST:
By:
---------------------------
Name:
Title:
Countersigned:
MELLON INVESTOR SERVICES LLC
as Warrant Agent
By:
---------------------------
Name:
Title:
A-4
[FORM OF REVERSE OF WARRANT CERTIFICATE]
SUNTERRA CORPORATION
The Warrant evidenced by this Warrant Certificate is a part of a duly
authorized issue of Warrants to purchase a maximum of shares of
------------
Common Stock subject to adjustment as provided for in that certain Warrant
Agreement, dated as of July 26, 2002 (the "Warrant Agreement"), duly executed
and delivered by the Company and Mellon Investor Services LLC, as Warrant Agent
(the "Warrant Agent"). The Warrant Agreement hereby is 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 inspected at the Warrant
Agent Office and is available upon written request addressed to the Company. All
capitalized terms used herein but not defined that are defined in the Warrant
Agreement shall have the meanings assigned to them therein.
Warrants may be exercised to purchase Shares from the Company from the
Effective Date through 5:00 p.m. New York City time on the Expiration Date, at
the Exercise Price set forth on the face hereof, subject to adjustment as
described in the Warrant Agreement. Subject to the terms and conditions set
forth herein and in the Warrant Agreement, the Holder of the Warrant evidenced
by this Warrant Certificate may exercise such Warrant by:
(i) providing a Warrant Exercise Notice to the Warrant Agent
at the address set forth in the Warrant Agreement, "Re: Sunterra
Corporation Warrant Exercise", by hand or by facsimile, no later than 5:00
p.m., New York City time, on the Expiration Date, which Warrant Exercise
Notice shall be in the form of an election to purchase Shares of Common
Stock of the Company substantially in the form set forth either (x) in
Exhibit B-1 to the Warrant Agreement, properly completed and executed by
the Holder; provided that such written notice may only be submitted by
persons who hold Definitive Warrant Certificates, or (y) in Exhibit B-2 to
the Warrant Agreement, properly completed and executed by the Holder;
provided that such written notice may only be submitted with respect to
Warrants held through the book-entry facilities of the Depositary, by or
through persons that are direct participants in the Depositary;
(ii) delivering, either (x) no later than 5:00 p.m., New
York City time, on the business day immediately prior to the Settlement
Date, such Warrants to the Warrant Agent by book-entry transfer through the
facilities of the Depositary or (y) no later than 5:00 p.m., New York City
time, on the business day immediately prior to the Settlement Date, the
Warrant Certificates evidencing such Warrants to the Warrant Agent if
Definitive Warrant Certificates have been issued and delivered pursuant to
Section 3; and
(iii) paying the applicable Exercise Amount, together with
any applicable taxes and governmental charges (except as provided in
Section 28 of the Warrant Agreement).
A-1-R
The Exercise Amount shall be payable by check or wire transfer funds of the
Exercise Amount to an account of the Warrant Agent specified in writing by the
Warrant Agent for such purpose, no later than 5:00 p.m., New York City time, on
the business day immediately prior to the Settlement Date. In the alternative,
each Warrant 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 receives that number of Warrant Shares otherwise issuable (or
payable) upon exercise of its Warrants less that number of Warrant Shares having
an aggregate Market Price (as defined in the Warrant Agreement) at the time of
exercise equal to the aggregate Exercise Price that would otherwise have been
paid by the holder of the Warrant Shares upon such exercise ("Net Exercise").
The initial Exercise Price shall be $20.00.
In the event that upon any exercise of the Warrant evidenced hereby
the number of Shares actually purchased shall be less than the total number of
Shares purchasable upon exercise of the Warrant evidenced hereby, there shall be
issued to the holder hereof, or such holder's assignee, a new Warrant
Certificate evidencing a Warrant to purchase the Shares not so purchased. No
adjustment shall be made for any cash dividends on any Shares issuable upon
exercise of this Warrant. After the Expiration Date, unexercised Warrants shall
become wholly void and of no value.
The Company shall not be required to issue fractions of Shares or any
certificates that evidence fractional Shares.
Warrant Certificates, when surrendered at the Warrant Agent Office by
the Holder thereof in person or by a legal representative or attorney duly
authorized in writing, by mail or by book-entry delivery through the facilities
of the Depositary 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
a Warrant to purchase in the aggregate a like number of Shares.
No Warrants may be sold, exchanged or otherwise transferred in
violation of the Securities Act or state securities laws. The Company or the
Warrant Agent may require, as a condition to any sale, exchange or transfer of a
Warrant, that the holder deliver to the Company and the Warrant Agent an opinion
of counsel, which opinion of counsel shall be reasonably satisfactory to the
Company and the Warrant Agent to the effect that such sale, exchange or transfer
is made in compliance with the Securities Act and all applicable state
securities laws or pursuant to an exemption under the Securities Act and such
state securities laws. The provisions of this paragraph shall not apply to the
exercise of any Warrant to the extent the Shares issued upon such exercise (and
any unexercised portion of the Warrant so exercised) shall be issued to the same
Holder that exercised such Warrant.
The Company and the Warrant Agent may deem and treat the Holder hereof
as the absolute owner of this Warrant Certificate (notwithstanding any notation
of ownership or other writing hereon made by anyone) for the purpose of any
exercise hereof and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary.
A-2-R
EXHIBIT B-1
[FORM OF ELECTION TO EXERCISE FOR WARRANT HOLDERS
HOLDING WARRANTS IN FORM OF DEFINITIVE WARRANT
CERTIFICATES WHEN WARRANT CERTIFICATES WILL BE
PHYSICALLY DELIVERED IN CONNECTION WITH THE
WARRANT EXERCISE]
(TO BE EXECUTED UPON EXERCISE OF THE WARRANT)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase newly issued shares of
----
Common Stock of Sunterra Corporation (the "Company") at the Exercise Price of
$ per share. The undersigned represents, warrants and promises that it has
----
the full power and authority to exercise and deliver the Warrants exercised
hereby.
The undersigned represents, warrants and promises that it has
delivered or will deliver in payment for such Shares $ [select one of
----------
the following] [(i) by check or wire transfer of the Exercise Amount to the
Warrant Agent specified in writing by the Warrant Agent for such purpose, no
later than 5:00 p.m., New York City time, on the business day immediately prior
to the Settlement Date], [(ii) Net Exercise (as defined in the Warrant
Agreement)] or [(iii) by a combination of the methods described in clauses (i)
and (ii) above, in accordance with the terms hereof]:
The undersigned requests that a certificate representing the Shares be
registered and delivered as follows:
----------------------------------------
Name
----------------------------------------
Address
----------------------------------------
Delivery Address (if different)
B-1-1
If such number of Shares is less than the aggregate number of Shares purchasable
hereunder, the undersigned requests that a new Warrant Certificate representing
the balance of such Shares shall be registered and delivered as follows:
----------------------------------------
Name
----------------------------------------
Address
----------------------------------------
Delivery Address (if different)
------------------------------------ ----------------------------------------
Social Security or Other Taxpayer Signature
Identification Number of Holder
Note: The above signature must
correspond with the name as written upon
the face of this Warrant Certificate in
every particular, without alteration or
enlargement or any change whatsoever. If
the certificate representing the Shares
or any Warrant Certificate representing
Warrants not exercised is to be
registered in a name other than that in
which this Warrant Certificate is
registered, the signature of the holder
hereof must be guaranteed.
SIGNATURE GUARANTEED:
-------------------------------
X-0-0
XXXXXXX X-0
[FORM OF ELECTION TO EXERCISE WARRANT FOR
HOLDERS HOLDING WARRANTS THROUGH BOOK-ENTRY
FACILITIES OF THE DEPOSITORY TRUST COMPANY
WHEN EXERCISE OF WARRANT WILL OCCUR THROUGH
SUCH FACILITIES]
[TO BE COMPLETED BY DIRECT PARTICIPANT IN THE DEPOSITORY TRUST COMPANY]
Sunterra Corporation
Warrants to Purchase Shares of Common Stock
-----
(TO BE EXECUTED UPON EXERCISE OF THE WARRANT)
The undersigned hereby irrevocably elects to exercise the right,
represented by Warrants held for its benefit through the book-entry
------
facilities of The Depository Trust Company (the "Depositary"), to purchase
----
newly issued shares of Common Stock of Sunterra Corporation (the "Company") at
the Exercise Price of $ per share.
----
The undersigned represents, warrants and promises that (1) it has
delivered or will deliver no later than 5:00 p.m., New York time, on two
business days after the date on which this Warrant Exercise Notice is delivered
the number of Warrants specified below to the Warrant Agent's account at the
Depositary by book-entry transfer; (2) it has the full power and authority to
exercise and deliver the Warrants exercised hereby; and (3) it has delivered the
exercise price of U.S. $ for each Warrant exercised hereby, [(i) by check or
---
wire transfer of the Exercise Amount to the Warrant Agent specified in writing
by the Warrant Agent for such purpose, no later than 5:00 p.m., New York City
time, on the business day immediately prior to the Settlement Date], [(ii) by
Net Exercise (as defined in the Warrant Agreement) or [(iii) by a combination of
the methods described in clauses (i) and (ii) above, in accordance with the
terms hereof]
The undersigned requests that the principal amount of Warrants
exercised hereby be in registered form in the authorized denominations,
registered in such names and delivered, all as specified in accordance with the
instructions set forth below; provided, that if the shares of Common Stock are
evidenced by global securities, the shares of Common Stock shall be registered
in the name of the Depositary or its nominee.
B-2-1
Dated:
---------------
NOTE: THIS EXERCISE NOTICE MUST BE DELIVERED TO THE WARRANT AGENT, PRIOR TO 5:00
P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE. THE WARRANT AGENT SHALL NOTIFY
YOU (THROUGH THE CLEARING SYSTEM) OF (1) THE WARRANT AGENT'S ACCOUNT AT THE
DEPOSITARY TO WHICH YOU MUST DELIVER YOUR WARRANTS ON THE EXERCISE DATE AND (2)
THE ADDRESS, PHONE NUMBER AND FACSIMILE NUMBER WHERE YOU CAN CONTACT THE WARRANT
AGENT AND TO WHICH WARRANT EXERCISE NOTICES ARE TO BE SUBMITTED.
NAME OF DIRECT PARTICIPANT IN THE DEPOSITARY:
-----------------------------------------------------
(PLEASE PRINT)
ADDRESS:
--------------------------------------------
-----------------------------------------------------
CONTACT NAME:
----------------------------------------
ADDRESS:
---------------------------------------------
TELEPHONE (INCLUDING INTERNATIONAL CODE):
------------
-----------------------------------------------------
FAX (INCLUDING INTERNATIONAL CODE):
-----------------------------------------------------
SOCIAL SECURITY OR OTHER TAXPAYER IDENTIFICATION NUMBER
(IF APPLICABLE):
-------------------------------------
ACCOUNT FROM WHICH WARRANTS ARE BEING DELIVERED:
DEPOSITARY ACCOUNT NO.
-------------------------------
WARRANT EXERCISE NOTICES WILL ONLY BE VALID IF DELIVERED IN ACCORDANCE WITH THE
INSTRUCTIONS SET FORTH IN THIS NOTIFICATION (OR AS OTHERWISE DIRECTED), MARKED
TO THE ATTENTION OF "SUNTERRA CORPORATION WARRANT EXERCISE".
WARRANT HOLDER DELIVERING WARRANTS, IF OTHER THAN THE DIRECT DTC PARTICIPANT
DELIVERING THIS WARRANT EXERCISE NOTICE
NAME:
------------------------------------------------
(PLEASE PRINT)
CONTACT NAME:
----------------------------------------
TELEPHONE (INCLUDING INTERNATIONAL CODE):
-----------------------------------------------------
FAX (INCLUDING INTERNATIONAL CODE):
-----------------------------------------------------
SOCIAL SECURITY OR OTHER TAXPAYER IDENTIFICATION NUMBER
(IF APPLICABLE):
-----------------------------------------------------
ACCOUNT TO WHICH THE SHARES OF COMMON STOCK ARE TO BE CREDITED:
DEPOSITARY ACCOUNT NO.
-------------------------------
B-2-2
FILL IN FOR DELIVERY OF THE COMMON STOCK, IF OTHER THAN TO THE PERSON DELIVERING
THIS WARRANT EXERCISE NOTICE:
NAME:
------------------------------------------------
(PLEASE PRINT)
ADDRESS:
---------------------------------------------
-----------------------------------------------------
CONTACT NAME:
----------------------------------------
TELEPHONE (INCLUDING INTERNATIONAL CODE):
-----------------------------------------------------
FAX (INCLUDING INTERNATIONAL CODE):
-----------------------------------------------------
SOCIAL SECURITY OR OTHER TAXPAYER IDENTIFICATION NUMBER
(IF APPLICABLE):
-----------------------------------------------------
NUMBER OF WARRANTS BEING EXERCISED:
-----------------------------------------------------
(ONLY ONE EXERCISE PER WARRANT EXERCISE NOTICE)
SIGNATURE:
-------------------------------------------
NAME:
------------------------------------------------
CAPACITY IN WHICH SIGNING:
---------------------------
SIGNATURE GUARANTEED:
-----------------------------------------------------
B-2-3
EXHIBIT C
[FORM OF ASSIGNMENT]
(TO BE EXECUTED BY THE REGISTERED HOLDER IF SUCH
HOLDER DESIRES TO TRANSFER THE WARRANT CERTIFICATE)
FOR VALUE RECEIVED, the undersigned Holder hereby sells, assigns and transfers
unto
--------------------------------------
Name of Assignee
--------------------------------------
Address of Assignee
this Warrant Certificate, together with all right, title and interest therein,
and does irrevocably constitute and appoint attorney, to
-----------------
transfer the within Warrant Certificate to purchase shares of Common
---------
Stock to which the Warrant Certificate relates on the books of the Warrant
Agent, with full power of substitution.
------------------------------------- ----------------------------------------
Dated Signature
Note: The above signature must
correspond with the name as written upon
the face of this Warrant Certificate in
every particular, without alteration or
enlargement or any change whatsoever.
-------------------------------------
Social Security or Other Taxpayer
Identification Number of Assignee
SIGNATURE GUARANTEED:
-------------------------------------
C-1
