Exhibit 4.5
EXECUTION COPY
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WARRANT AGREEMENT
________________________________________
GLOBE HOLDINGS, INC.
as Issuer
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
as Warrant Agent
________________________________________
August 6, 1998
________________________________________
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WARRANT AGREEMENT dated as of August 6, 1998 between Globe Holdings, Inc.
(the "Company") and Norwest Bank Minnesota National Association, as Warrant
Agent (the "Warrant Agent").
WHEREAS, the Company proposes to issue common stock purchase warrants, as
hereinafter described (the "Warrants"), to purchase up to an aggregate of 69,481
shares of Class A Common Stock, par value $0.01 per share (the "Common Stock"),
of the Company (the Common Stock issuable on exercise of the Warrants being
referred to herein as the "Warrant Shares"), in connection with an offering of
an aggregate of $49,086,000 principal amount at maturity of the 14% Senior
Discount Notes due 2009 (the "Notes") of the Company and 49,086 Warrants, each
Warrant entitling the holder thereof to purchase 1.4155 Warrant Shares. The
Notes and Warrants will be sold in units (the "Units"), each Unit consisting of
$1,000 in aggregate principal amount of Notes and one Warrant.
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing so to act, in connection with the
issuance of Warrant Certificates (as defined below) and other matters as
provided herein;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereto agree as follows:
Section 1. Definitions. Capitalized terms used herein shall have the
meanings assigned to such terms in this Agreement. In addition, the following
terms shall have the meanings set forth below.
"144A Global Warrant" means a Global Warrant in the form of Exhibit A
hereto bearing the Global Warrant Legend and the Private Placement Legend and
deposited with or on behalf of, and registered in the name of, the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
number of the Warrants sold in reliance on Rule 144A.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with") as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise.
"Applicable Procedures" means, with respect to any transfer or exchange of
or for beneficial interests in any Global Warrant, the rules and procedures of
the Depositary that apply to such transfer or exchange.
"Business Day" means any day other than a Legal Holiday.
"Definitive Warrant" means a certificated Warrant registered in the name of
the holder thereof and issued in accordance with Section 3 hereof, in the form
of Exhibit A1 hereto except that such Warrant shall not bear the Global Warrant
Legend and shall not have the "Schedule of Exchanges of Interests in the Global
Warrant" attached thereto.
"Depositary" means, with respect to the Warrants issuable or issued in
whole or in part in global form, the Person specified in Section 3.3 hereof as
the Depositary with respect to the Warrants, and any and all successors thereto
appointed as Depositary hereunder and having become such pursuant to the
applicable provision of this Agreement.
"Disinterested Director" means, in connection with any issuance of
securities that give rise to a determination of the Fair Market Value thereof
under this Agreement, each member of the Board of Directors of the Company who
is not an officer, employee, director or other Affiliate of the party to whom
the Company is proposing to issue the securities giving rise to such
determination.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" for a security shall mean (A) the average over the 20
trading days ending on the date immediately preceding the date of such
determination of the last reported sale price, or, if no such sale takes place
on any such day, the closing bid price, in either case as reported for
consolidated transactions on the principal national securities exchange
(including the NASDAQ National Market) on which such security is listed or
admitted for trading or (B) if such security is not listed on any exchange or
admitted for trading on the NASDAQ Stock Market, the Fair Market Value shall be
(1) in connection with a sale to a party that is not an Affiliate of the Company
in an arm's length transaction (a "Non-Affiliate Sale"), the fair market value
of such security determined in good faith by a majority of the Board of
Directors of the Company, including a majority of the Disinterested Directors,
and approved in a board resolution delivered to the Warrant Agent and (2) in
connection with any sale to an Affiliate of the Company, (a) the last price per
security at which such security was sold in a Non-Affiliate Sale within the
three-month period preceding such date of determination, (b) if clause (a) is
not applicable and the sale involves aggregate gross proceeds to the Company of
$15 million or less, the fair market value of such security determined in good
faith by a majority of the Board of Directors of the Company, including a
majority of the Disinterested Directors, and approved in a board resolution
delivered to the Warrant Agent or (c) if neither clause (a) nor clause (b) is
applicable, the fair market value of such security determined in good faith by
an Independent Financial Expert, in each case, taking into account, among other
factors deemed relevant by the Board of Directors or such Independent Financial
Expert, the trading price and volume of such security on any national securities
exchange or automated quotation system on which such security is traded.
"Fully Diluted Shares" means (i) shares of Common Stock outstanding as of a
specified date and (ii) shares of Common Stock into or for which rights,
options, warrants or other securities outstanding as of such date are or, within
180 days after the date of determination, will be exercisable, convertible or
exchangeable (including the Warrants).
"Global Warrants" means, individually and collectively, each of the
Restricted Global Warrants, in the form of Exhibit A hereto issued in accordance
with Section 3.1 hereof.
"Global Warrant Legend" means the legend set forth in Section 3.5(e)(ii),
which is required to be placed on all Global Warrants issued under this Warrant
Agreement.
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"IAI Global Warrant" means the Global Warrant in the form of Exhibit A
hereto bearing the Global Warrant Legend and the Private Placement Legend and
deposited with or on behalf of and registered in the name of the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
number of the Warrants sold to Institutional Accredited Investors.
"Indenture" means the Indenture dated August 6, 1998 between the Company
and Norwest Bank Minnesota, National Association, as trustee, relating to the
Company's 14% Senior Discount Notes due 2009.
"Independent Financial Expert" means a nationally recognized investment
banking, appraisal or valuation firm reasonably acceptable to the Warrant Agent
(i) that does not (and whose directors, officers, employees and Affiliates do
not) have a direct or indirect material financial interest in the Company or any
of its Affiliates, (ii) that has not been and, at the time it is called upon to
serve as Independent Financial Expert under this Agreement, is not (and none of
its directors, officers, employees or Affiliates is) a promoter, director or
officer of the Company, (iii) that has not been retained by the Company or any
of its Affiliates for any purpose, other than to perform an equity valuation,
within the preceding twelve months, and (iv) that, in the reasonable judgment of
the Board of Directors of the Company, is otherwise qualified to serve as an
independent financial advisor. Any such Person may receive customary
compensation and indemnification by the Company for opinions or services it
provides as an Independent Financial Expert.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who are not also QIBs.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York are not required to be open. If a date on
which any action required to be taken under this Agreement is a Legal Holiday,
such action shall be taken at the next succeeding day that is not a Legal
Holiday, and no interest or penalty shall accrue for the intervening period.
"Non-Affiliate Sale" has the meaning assigned to such term in the
definition of Fair Market Value.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Officer" means, with respect to any Person, the Chief Executive Officer,
the President, the Chief Financial Officer, the Treasurer, the Controller, any
Vice-President the Secretary or Clerk, and any Assistant Secretary or Assistant
Clerk of such Person.
"Opinion of Counsel" means an opinion from legal counsel who is reasonably
acceptable to the Warrant Agent in form and substance reasonably acceptable to
the Warrant Agent. The counsel may be an employee of or counsel to the Company,
any subsidiary of the Company or the Warrant Agent.
"Participant" means a Person who has an account with the Depositary.
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"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust, business
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Private Placement Legend" means the legend set forth in Section 3.5(e)(i)
to be placed on all Warrants issued under this Warrant Agreement except where
otherwise permitted by the provisions of this Warrant Agreement.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Warrant" means a Global Warrant in the form of Exhibit
A hereto bearing the Global Warrant Legend and the Private Placement Legend and
deposited with or on behalf of and registered in the name of the Depositary or
its nominee, issued in a denomination equal to the outstanding number of the
Warrants initially sold in reliance on Rule 903 of Regulation S.
"Restricted Definitive Warrant" means a Definitive Warrant bearing the
Private Placement Legend.
"Restricted Global Warrant" means a Global Warrant bearing the Private
Placement Legend.
"Restricted Warrant" means a Warrant that is a "restricted security" as
defined in Rule 144(a)(3) under the Securities Act; provided, that the Warrant
Agent shall be entitled to request and conclusively rely upon an Opinion of
Counsel with respect to whether any Warrant is a Restricted Warrant.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended.
"U.S. Person" means a U.S. person as defined in Rule 902(o) under the
Securities Act.
"Unrestricted Definitive Warrant" means a Definitive Warrant that is an
Unrestricted Warrant.
"Unrestricted Global Warrant" means a Global Warrant that is an
Unrestricted Warrant.
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"Unrestricted Warrant" means a Warrant other than a Restricted Warrant.
"Warrant Number" means the number of Warrant Shares issuable upon the
exercise of each Warrant.
"Warrant Registration Rights Agreement" means the Warrant Registration
Rights Agreement dated August 6, 1998 between the Company and BancAmerica
Xxxxxxxxx Xxxxxxxx.
"Warrant Shares" has the meaning assigned to such term in the preamble to
this Agreement.
Section 2. Appointment of Warrant Agent.
The Company hereby appoints the Warrant Agent to act as agent for the
Company in accordance with the instructions set forth hereinafter in this
Agreement, and the Warrant Agent hereby accepts such appointment.
Section 3. Warrant Certificate.
3.1. Form and Dating.
(a) General.
The Warrants shall be substantially in the form of Exhibit A hereto (the
"Warrant Certificates"). The Warrants may have notations, legends or
endorsements required by law, stock exchange rule or usage. Each Warrant shall
be dated the date of the countersignature.
The terms and provisions contained in the Warrants shall constitute, and
are hereby expressly made, a part of this Warrant Agreement. The Company and the
Warrant Agent, by their execution and delivery of this Warrant Agreement,
expressly agree to such terms and provisions and to be bound thereby. However,
to the extent any provision of any Warrant conflicts with the express provisions
of this Warrant Agreement, the provisions of this Warrant Agreement shall govern
and be controlling.
(b) Global Warrants.
Warrants issued in global form shall be substantially in the form of
Exhibit A attached hereto (including the Global Warrant Legend thereon and the
"Schedule of Exchanges of Interests in the Global Warrant" attached thereto).
Warrants issued in definitive form shall be substantially in the form of Exhibit
A attached hereto (but without the Global Warrant Legend thereon and without the
"Schedule of Exchanges of Interests in the Global Warrant" attached thereto).
Each Global Warrant shall represent such of the outstanding Warrants as shall be
specified therein and each shall provide that it shall represent the number of
outstanding Warrants from time to time endorsed thereon and that the number of
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outstanding Warrants represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges and redemptions. Any endorsement
of a Global Warrant to reflect the amount of any increase or decrease in the
number of outstanding Warrants represented thereby shall be made by the Warrant
Agent in accordance with instructions given by the holder thereof as required by
Section 3.5 hereof.
3.2. Execution.
An Officer shall sign the Warrants for the Company by manual or facsimile
signature.
If the Officer whose signature is on a Warrant no longer holds that office
at the time a Warrant is countersigned, the Warrant shall nevertheless be valid.
A Warrant shall not be valid until countersigned by the manual signature of
the Warrant Agent. The signature shall be conclusive evidence that the Warrant
has been authenticated under this Warrant Agreement.
The Warrant Agent shall, upon a written order of the Company signed by an
Officer (a "Warrant Countersignature Order"), countersign Warrants for original
issue up to the number stated in the preamble hereto.
The Warrant Agent may appoint an agent acceptable to the Company to
countersign Warrants. Such an agent may countersign Warrants whenever the
Warrant Agent may do so. Each reference in this Warrant Agreement to a
countersignature by the Warrant Agent includes a countersignature by such agent.
Such an agent has the same rights as the Warrant Agent to deal with the Company
or an Affiliate of the Company.
3.3. Warrant Registrar.
The Company shall maintain an office or agency where Warrants may be
presented for registration of transfer or for exchange ("Warrant Registrar").
The Warrant Registrar shall keep a register of the Warrants and of their
transfer and exchange. The Company may appoint one or more co-Warrant
Registrars. The term "Warrant Registrar" includes any co-Warrant Registrar. The
Company may change any Warrant Registrar without notice to any holder. The
Company shall notify the Warrant Agent in writing of the name and address of any
Warrant Registrar or Co-Warrant Registrar. If the Company fails to appoint or
maintain another entity as Warrant Registrar, the Warrant Agent shall act as
such. The Company or any of its subsidiaries may act as Warrant Registrar.
The Depository Trust Company shall act as the Depositary with respect to
the Global Warrants until a successor shall be appointed by the Company and the
Warrant Agent. The Global Warrants shall be registered in the name of the
Depositary, or the nominee of such Depositary. So long as the Depositary or its
nominee is the registered owner of a Global Warrant it will be deemed to be the
sole owner and holder of such Global Warrant for all purposes hereunder and
under such Global Warrant.
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The Company initially appoints the Warrant Agent to act as the Warrant
Registrar with respect to the Global Warrants. References in this Agreement to
the Warrant Agent shall include the Warrant Agent in its capacity as Warrant
Registrar.
3.4. Holder Lists.
The Warrant Agent shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all holders or Warrants. If the Warrant Agent is not the Warrant Registrar, the
Company shall furnish to the Warrant Agent upon the Warrant Agent's written
request a list in such form and as of such date as the Warrant Agent may
reasonably require of the names and addresses of the holders of Warrants.
3.5. Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Global Warrants. The transfer and exchange
of Global Warrants or beneficial interests therein shall be effected through the
Depositary, in accordance with this Agreement and the Applicable Procedures.
(b) Book-Entry Provisions for Global Warrants.
(i) The Global Warrants initially shall (i) be registered in the name
of Cede & Co., as the nominee of The Depository Trust Company, (ii) be
delivered to the Warrant Agent as custodian for such Depositary and (iii)
bear the Private Placement Legend.
Members of, or Participants in, the Depositary ("Agent Members") shall
have no rights under this Warrant Agreement with respect to any Global
Warrant held on their behalf by the Depositary, or the Warrant Agent as its
custodian, or under the Global Warrant, and the Depositary may be treated
by the Company, the Warrant Agent and any agent of the Company or the
Warrant Agent as the absolute owner of the Global Warrant for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Warrant Agent or any agent of the Company or the Warrant Agent
from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or impair, as between the
Depositary and its Agent Members, the operation of customary practices
governing the exercise of the rights of a holder of any Warrant.
(ii) Transfers of Global Warrants shall be limited to transfers in
whole, but not in part, to the Depositary, its successors or their
respective nominees. Interests of beneficial owners in the Global Warrants
may be transferred or exchanged for Definitive Warrants in accordance with
the Applicable Procedures and the provisions of Section 3.5(c). In
addition, Definitive Warrants shall be transferred to all beneficial owners
in exchange for their beneficial interests in Global Warrants if (i) the
Company notifies the Warrant Agent that the Depositary is unwilling or
unable to continue as Depositary for any Global Warrant and a successor
depositary is not appointed by the Company and the Warrant Agent within 90
days
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of such notice or (ii) the Company, at its option, notifies the Warrant
Agent in writing that it elects to cause the issuance of Warrants in
definitive form under this Warrant Agreement.
(iii) In connection with any transfer or exchange of a portion of the
beneficial interest in any Global Warrant to beneficial owners pursuant to
this Section 3.5(b), the Warrant Agent shall (if one or more Definitive
Warrants are to be issued) reflect on its books and records the date and a
decrease in the number of Warrants represented by the Global Warrant in an
amount equal to the number of Warrants represented by the beneficial
interest in the Global Warrant to be transferred, and the Company shall
execute, and the Warrant Agent shall countersign and cause to be delivered,
one or more Definitive Warrants of like amount.
(iv) In connection with the transfer of Global Warrants as an
entirety to beneficial owners pursuant to this Section 3.5(b), the Global
Warrants shall be deemed to be surrendered to the Warrant Agent for
cancellation, and the Company shall execute, and the Warrant Agent shall
countersign and cause to be delivered to each beneficial owner identified
by the Depositary in exchange for its beneficial interest in the Global
Warrants, Definitive Warrants of authorized denominations representing, in
the aggregate, the number of Warrants theretofore represented by the Global
Warrants so transferred.
(v) Any Definitive Warrant constituting a Restricted Warrant
delivered in exchange for an interest in a Global Warrant pursuant to this
Section 3.5(b) shall, except as otherwise provided by Section 3.5(e)(i)(B),
bear the Private Placement Legend.
(vi) The registered holder of any Global Warrant may grant proxies
and otherwise authorize any person, including Agent Members and persons
that may hold interests through Agent Members, to take any action which a
holder is entitled to take under this Warrant Agreement or the Warrants.
(c) Special Transfer Provisions.
(i) Transfers to Non-QIB Institutional Accredited Investors and Non-
U.S. Persons and other Transfers Exempt under the Securities Act. The following
provisions shall apply (x) with respect to the registration of any proposed
transfer of a Warrant constituting a Restricted Warrant to any Institutional
Accredited Investor which is not a QIB or to any Non-U.S. Person and (y) with
respect to the registration of any proposed transfer pursuant to another
available exemption from the registration requirements of the Securities Act:
(A) the Warrant Agent shall register the transfer of any Warrant
constituting a Restricted Warrant, whether or not such Warrant bears the
Private Placement Legend, if (w) the requested transfer is after the second
anniversary of the original issue date with respect thereto; provided,
however, that neither the Company nor any Affiliate of the Company has held
any beneficial interest in such security, or portion thereof, at any time
on or prior to the second
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anniversary of such issue date or (x) the requested transfer is to an
Institutional Accredited Investor pursuant to a private placement exemption
from the registration requirements of the Securities Act or (y) the
requested transfer is to a Non-U.S. Person pursuant to an exemption from
the registration requirements of the Securities Act in accordance with Rule
904 under the Securities Act or (z) the requested transfer is being made in
reliance on another exemption from the registration requirements of the
Securities Act, together, in the case of either clause (w), (x), (y) or (z)
with a certification to such effect (in substantially the form of Exhibit
B) and such other certifications, Opinions of Counsel or other information
as the Company or the Warrant Agent may reasonably require to confirm that
such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities
Act; and
(B) the Warrant Agent shall register the transfer of any Warrant
constituting a Restricted Warrant, whether or not such Warrant bears the
Private Placement Legend, if the proposed transferor is an Agent Member
holding a beneficial interest in a Global Warrant, upon, receipt by the
Warrant Agent of (x) the certificate, if any, required by paragraph (A)
above and (y) instructions given in accordance with the Applicable
Procedures and the Warrant Agent's procedures,
whereupon (a) the Warrant Agent shall reflect on its books and records the date
and (if the transfer does not involve a transfer of outstanding Definitive
Warrants) a decrease in the number of Warrants represented by the applicable
Global Warrant in an amount equal to the number of Warrants represented by the
beneficial interest in the Global Warrant to be transferred (the "Transfer
Amount"), (b) if the Warrants to be transferred are to be evidenced by
Definitive Warrants, the Company shall execute and the Warrant Agent shall
countersign upon receipt of a Warrant Countersignature Order, and cause to be
delivered one or more Definitive Warrants in an aggregate number equal to the
Transfer Amount and (c) if the Warrants to be transferred are to be evidenced by
an interest in a Global Warrant, upon receipt of instructions given in
accordance with the Applicable Procedures and the Warrant Agent's procedures,
the Warrant Agent shall reflect on its books and records the date and an
increase in the number of Warrants represented by the Global Warrant in which
the transferee will hold its beneficial interest in an amount equal to the
Transfer Amount.
(ii) Transfers to QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer of a Warrant constituting a
Restricted Warrant to a QIB (excluding transfers to Non-U.S. Persons):
(A) the Warrant Agent shall register the transfer if such transfer is
being made by a proposed transferor who has delivered a certification (in
substantially the form of Exhibit B) stating, or has otherwise advised the
Company and the Warrant Agent in writing, that the sale has been made in
compliance with the provisions of Rule 144A to a transferee who has advised
the Company and the Warrant Agent in writing that it is purchasing the
Warrant for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
QIB within the meaning of Rule 144A, and is aware that the sale to it is
being made in reliance on Rule 144A and acknowledges that it has received
such information regarding the Company as it has requested pursuant to Rule
144A or has determined not to request such
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information and that it is aware that the Company and the transferor are
relying upon its foregoing representations in order to claim the exemption
from registration provided by Rule 144A; if the Warrant Agent or the
Company shall so request, such proposed transferor shall have delivered an
Opinion of Counsel, an officers' certificate and such other information as
the Warrant Agent or the Company may reasonably require in connection with
such proposed transfer; and
(B) if the proposed transferee is an Agent Member, and the Warrants
to be transferred consist of Definitive Warrants which after transfer are
to be evidenced by an interest in the 144A Global Warrant, upon receipt by
the Warrant Agent of instructions given in accordance with the Applicable
Procedures and the Warrant Agent's procedures, the Warrant Agent shall
reflect on its books and records the date and an increase in the number of
Warrants represented by the 144A Global Warrant in an amount equal to the
number of Definitive Warrants to be transferred, and the Warrant Agent
shall cancel the Definitive Warrants so transferred; and
(C) if the proposed transferee is an Agent Member, and the Warrants
to be transferred consist of a beneficial interest in a Global Warrant
which after transfer is to continue to be evidenced by an interest in a
Global Warrant, upon receipt by the Warrant Agent of instructions given in
accordance with the Applicable Procedures and the Warrant Agent's
procedures, the Warrant Agent shall reflect on its books and records (A)
the date, (B) a decrease in the number of Warrants represented by the
Global Warrant in which the transferor owns the beneficial interest to be
transferred in an amount equal to the number of Warrants represented by the
beneficial interest to be transferred and (C) an increase in the number of
Warrants represented by the Global Warrant in which the transferee will
hold its beneficial interest in a like amount.
(d) General. By its acceptance of any Warrant bearing the Private
Placement Legend, each holder of such a Warrant acknowledges the restrictions on
transfer of such Warrant set forth in this Warrant Agreement and in the Private
Placement Legend and agrees that it will transfer such Warrant only as provided
in this Warrant Agreement and such Warrant.
(e) Legends.
The following legends shall appear on the face of all Global Warrants
and Definitive Warrants issued under this Warrant Agreement unless specifically
stated otherwise in the applicable provisions of this Warrant Agreement.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each Global
Warrant and each Definitive Warrant (and all Warrants issued in exchange
therefor or substitution thereof) shall bear the legend in substantially
the following form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0
XX XXX XXXXXX XXXXXX SECURITIES ACT OF 1933, AS AMENDED (THE
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"SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED
HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE
144A THEREUNDER OR ANOTHER EXEMPTION UNDER THE SECURITIES ACT. THE HOLDER
OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT
(A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY
(1)(a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (b)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES
ACT, (c) OUTSIDE THE UNITED STATES TO A NON-U.S. PERSON IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, (d) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3)
OR (7) OF THE SECURITIES ACT (AN "INSTITUTIONAL ACCREDITED INVESTOR") IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
OR (e) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, (2) TO THE COMPANY OR (3) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH
ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."
(B) Upon the transfer, exchange or replacement of Warrants not
bearing the Private Placement Legend, the Warrant Agent shall deliver
Warrants that do not bear the Private Placement Legend. Upon the transfer,
exchange or replacement of Warrants bearing the Private Placement Legend,
the Warrant Agent shall deliver only Warrants that bear the Private
Placement Legend unless (i) such transfer is after the second anniversary
of the later of (x) the original issue date of such Warrants or (y) the
last date on which the Company or any Affiliate of the Company held a
beneficial interest in such Warrants (or any predecessor securities), or
any portion thereof; (ii) there is delivered to the Company and the Warrant
Agent an Opinion of Counsel reasonably satisfactory to the Company and the
Warrant Agent to the effect that neither such legend nor the related
restrictions on transfer are required in order to maintain compliance with
the provisions of the Securities Act or (iii) such Warrants have been sold
pursuant to an effective registration statement under the Securities Act.
(ii) Global Warrant Legend. Each Global Warrant shall bear a
legend in substantially the following form:
"THIS GLOBAL WARRANT IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
WARRANT AGREEMENT GOVERNING THIS WARRANT) OR ITS
11
NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS
NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE
WARRANT AGENT MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO
SECTION 3.7 OF THE WARRANT AGREEMENT, (II) THIS GLOBAL WARRANT MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 3.5 OF THE WARRANT
AGREEMENT, (III) THIS GLOBAL WARRANT MAY BE DELIVERED TO THE WARRANT AGENT
FOR CANCELLATION PURSUANT TO SECTION 3.8 OF THE WARRANT AGREEMENT AND (IV)
THIS GLOBAL WARRANT MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE
PRIOR WRITTEN CONSENT OF THE COMPANY.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) TO
THE COMPANY OR ITS AGENT FOR REGISTRATION OR TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IT IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY (AND ANY PAYMENT 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 INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN."
(iii) Unit Legend. Each Warrant issued prior to the Separation
Date shall bear the following legend (the "Unit Legend") on the face
thereof:
"THE WARRANTS EVIDENCED BY THIS CERTIFICATE ARE INITIALLY ISSUED
AS PART OF AN ISSUANCE OF UNITS (THE "UNITS"), EACH OF WHICH CONSIST OF
$1,000 PRINCIPAL AMOUNT AT MATURITY OF THE 14% SENIOR DISCOUNT NOTES DUE
2009 OF THE COMPANY (THE "NOTES") AND ONE WARRANT (THE "WARRANT") INITIALLY
ENTITLING THE HOLDER THEREOF TO PURCHASE 1.4155 SHARES OF CLASS A COMMON
STOCK, PAR VALUE $0.01 PER SHARE, OF THE COMPANY. PRIOR TO THE EARLIEST TO
OCCUR OF (I) THE DATE THAT IS SIX MONTHS FOLLOWING THE INITIAL SALE OF THE
UNITS, (II) THE COMMENCEMENT OF AN EXCHANGE OFFER WITH RESPECT TO THE
NOTES, (III) THE DATE A SHELF REGISTRATION STATEMENT (AS DEFINED IN THE
REGISTRATION RIGHTS AGREEMENT) WITH RESPECT TO THE NOTES IS DECLARED
EFFECTIVE, (IV) A CHANGE OF CONTROL (AS DEFINED IN THE INDENTURE), OR (V)
SUCH DATE AS BANCAMERICA XXXXXXXXX XXXXXXXX MAY, IN ITS SOLE DISCRETION,
DEEM APPROPRIATE, THE WARRANTS EVIDENCED BY THIS CERTIFICATE MAY NOT BE
TRANSFERRED OR EXCHANGED SEPARATELY FROM, BUT MAY BE TRANSFERRED OR
EXCHANGED ONLY TOGETHER WITH, THE NOTES."
(f) Cancellation and/or Adjustment of Global Warrants.
12
At such time as all beneficial interests in a particular Global
Warrant have been exercised or exchanged for Definitive Warrants or a particular
Global Warrant has been exercised, redeemed, repurchased or canceled in whole
and not in part, each such Global Warrant shall be returned to or retained and
canceled by the Warrant Agent in accordance with Section 3.8 hereof. At any time
prior to such cancellation, if any beneficial interest in a Global Warrant is
exercised or exchanged for or transferred to a Person who will take delivery
thereof in the form of a beneficial interest in another Global Warrant or for
Definitive Warrants, the amount of Warrants represented by such Global Warrant
shall be reduced accordingly and an endorsement shall be made on such Global
Warrant by the Warrant Agent or by the Depositary at the direction of the
Warrant Agent to reflect such reduction; and if the beneficial interest is being
exchanged for or transferred to a Person who will take delivery thereof in the
form of a beneficial interest in another Global Warrant, such other Global
Warrant shall be increased accordingly and an endorsement shall be made on such
Global Warrant by the Warrant Agent or by the Depositary at the direction of the
Warrant Agent to reflect such increase.
(g) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Warrant Agent shall countersign Global
Warrants and Definitive Warrants upon the Company's order or at the
Warrant Agent's request.
(ii) No service charge shall be made to a holder of a
beneficial interest in a Global Warrant or to a holder of a Definitive
Warrant for any registration of transfer or exchange, but the Company
may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith.
(iii) All Global Warrants and Definitive Warrants issued upon
any registration of transfer or exchange of Global Warrants or
Definitive Warrants shall be the duly authorized, executed and issued
warrants for Common Stock of the Company, not subject to any
preemptive rights, and entitled to the same benefits under this
Warrant Agreement, as the Global Warrants or Definitive Warrants
surrendered upon such registration of transfer or exchange.
(iv) Prior to due presentment for the registration of a
transfer of any Warrant, the Warrant Agent and the Company may deem
and treat the Person in whose name any Warrant is registered as the
absolute owner of such Warrant for all purposes and neither the
Warrant Agent nor the Company shall be affected by notice to the
contrary.
(v) The Warrant Agent shall countersign Global Warrants and
Definitive Warrants in accordance with the provisions of Section 3.2
hereof.
(h) Facsimile Submissions to Warrant Agent.
All certifications, certificates and Opinions of Counsel required to
be submitted to the Warrant Agent pursuant to this Section 3.5 to effect a
registration of transfer or exchange may be submitted by facsimile.
13
Notwithstanding anything herein to the contrary, as to any
certificates and/or certifications delivered to the Warrant Agent pursuant to
this Section 3.5, the Warrant Agent's duties shall be limited to confirming that
any such certifications and certificates delivered to it are in the form of
Exhibit B attached hereto. The Warrant Registrar shall not be responsible for
confirming the truth or accuracy of representations made in any such
certifications or certificates. As to any Opinions of Counsel delivered pursuant
to this Section 3.5, the Warrant Registrar may rely upon, and be fully protected
in relying upon, such opinions.
(i) Exchange.
Any holder of Warrants may, subject to the provision of this
Agreement, exchange a Definitive Warrant for a beneficial interest in a Global
Warrant, a beneficial interest in a Global Warrant for a Definitive Warrant or a
Restricted Warrant for an Unrestricted Warrant, in each case in accordance with
the Applicable Procedures and the Warrant Agent's procedures, upon delivery to
the Warrant Agent of a certification (in substantially the form of Exhibit C)
and such other certifications, Opinions of Counsel or other information as the
Company or the Warrant Agent may reasonably require.
3.6. Replacement Warrants.
If any mutilated Warrant is surrendered to the Warrant Agent or the
Company or the Warrant Agent receives evidence to its satisfaction of the
destruction, loss or theft of any Warrant, the Company shall issue and the
Warrant Agent, upon receipt of a Warrant Countersignature Order, shall
countersign a replacement Warrant if the Warrant Agent's requirements are met.
If required by the Warrant Agent or the Company, an indemnity bond must be
supplied by the holder that is sufficient in the judgment of the Warrant Agent
and the Company to protect the Company, the Warrant Agent, and any agent for
purposes of the countersignature from any loss that any of them may suffer if a
Warrant is replaced. The Company may charge for its expenses in replacing a
Warrant.
Every replacement Warrant is an additional warrant of the Company and
shall be entitled to all of the benefits of this Warrant Agreement equally and
proportionately with all other Warrants duly issued hereunder.
3.7. Temporary Warrants.
Until certificates representing Warrants are ready for delivery, the
Company may prepare and the Warrant Agent, upon receipt of a Warrant
Countersignature Order, shall countersign temporary Warrants. Temporary Warrants
shall be substantially in the form of certificated Warrants but have variations
that the Company considers appropriate for temporary Warrants and as shall be
reasonably acceptable to the Warrant Agent. Without unreasonable delay, the
Company shall prepare and the Warrant Agent shall countersign definitive
Warrants in exchange for temporary Warrants.
Holders of temporary Warrants shall be entitled to all of the benefits
of this Warrant Agreement.
14
3.8. Cancellation.
The Company at any time may deliver Warrants to the Warrant Agent for
cancellation. The Warrant Registrar (if not the Warrant Agent) shall forward to
the Warrant Agent any Warrants surrendered to them for registration of transfer,
exchange or exercise. The Warrant Agent and no one else shall cancel all
Warrants surrendered for registration of transfer, exchange, exercise,
replacement or cancellation and shall destroy canceled Warrants (subject to the
record retention requirement of the Exchange Act). Certification of the
destruction of all canceled Warrants shall be delivered to the Company. The
Company may not issue new Warrants to replace Warrants that have been exercised
or that have been delivered to the Warrant Agent for cancellation.
Section 4. Separation of Warrants; Terms of Warrants; Exercise of
Warrants.
4.1. The Notes and Warrants will not be separately transferable until
the earliest to occur of (i) the date that is six months following the initial
sale of the Units, (ii) the commencement of the Exchange Offer (as defined in
the Indenture), (iii) the date a Shelf Registration Statement (as defined in the
Registration Rights Agreement) with respect to the Notes is declared effective,
(iv) a Change of Control (as defined in the Indenture) or (v) such date as
BancAmerica Xxxxxxxxx Xxxxxxxx may, in its sole discretion, deem appropriate
(the earliest of such dates, the "Separation Date"), at which time such Warrants
shall become separately transferable. Subject to the terms of this Agreement,
each Warrant holder shall have the right, which may be exercised commencing on
the opening of business on the Separation Date and through and until 5:00 p.m.,
New York City time on August 1, 2009 (or such later date as provided in the
following paragraph) (the "Exercise Period"), to receive from the Company the
number of fully paid and nonassessable Warrant Shares which the holder may at
the time be entitled to receive on exercise of such Warrants and payment of the
exercise price (the "Exercise Price") then in effect for such Warrant Shares;
provided that holders shall be able to exercise their Warrants only if a
registration statement relating to the Warrant Shares is then in effect, or the
exercise of such Warrants is exempt from the registration requirements of the
Securities Act of 1933, as amended (the "Securities Act"), and such securities
are qualified for sale or exempt from qualification under the applicable
securities laws of the states in which the various holders of the Warrants or
other persons to whom it is proposed that the Warrant Shares be issued on
exercise of the Warrants reside. In the alternative, each holder may exercise
its right 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 upon exercise of its Warrants less that number of Warrant
Shares having a Fair Market Value equal to the aggregate Exercise Price that
would otherwise have been paid by the holder for the Warrant Shares being
issued. Except as provided in the following paragraph, each Warrant not
exercised prior to 5:00 p.m., New York City time, on August 1, 2009 (the
"Expiration Date") shall become void and all rights thereunder and all rights in
respect thereof under this Agreement shall cease as of such time. No adjustments
as to dividends will be made upon exercise of the Warrants.
The Company shall give notice not less than 90, and not more than 120,
days prior to the Expiration Date to the registered holders of all then
outstanding Warrants to the effect that the Warrants will terminate and become
void as of 5:00 p.m., New York City time, on the Expiration Date. If the Company
fails to give such notice, the Warrants will not expire until 5:00 p.m., New
York City time, on the 90th day after the Company gives such notice; provided,
however, in no event will holders be entitled
15
to any damages or other remedy for the Company's failure to give such notice
other than any such extension. The Company shall give written notice to all
Warrant holders at least 20 days prior to the establishment of a record date for
the payment of any dividend on any shares of Common Stock or the repurchase of
Common Stock from the holders thereof.
4.2. In order to exercise all or any of the Warrants represented by a
Warrant Certificate, (i) in the case of Definitive Warrants, the holder thereof
must surrender for exercise the Warrant Certificate to the Company at the office
of the Warrant Agent at its corporate trust office, (ii) in the case of a book-
entry interest in a Global Warrant, the exercising Participant whose name
appears on a securities position listing of the Depositary as the holder of such
book-entry interest must comply with the Depositary's procedures relating to the
exercise of such book-entry interest in such Global Warrant and (iii) in the
case of both Global Warrants and Definitive Warrants, the holder thereof or the
Participant, as applicable, must deliver to the Company at the office of the
Warrant Agent the form of election to purchase on the reverse thereof duly
filled in and signed, which signature shall be medallion guaranteed by an
institution which is a member of a Securities Transfer Association recognized
signature guarantee program, and upon payment to the Warrant Agent for the
account of the Company of the Exercise Price, which is set forth in the form of
Warrant Certificate as adjusted as herein provided, for the number of Warrant
Shares in respect of which such Warrants are then exercised. In addition, if the
holder is exercising Warrants sold pursuant to Regulation S, such holder must
certify in writing that it is not a U.S. Person and that the Warrant is not
being exercised on behalf of a U.S. Person or provide a written Opinion of
Counsel to the effect that the Warrant and the securities delivered upon
exercise thereof have been registered under the Securities Act or are exempt
from registration thereunder. Payment of the aggregate Exercise Price shall be
made (i) in cash, by wire transfer or by certified or official bank check
payable to the order of the Company or (ii) on a net basis in the manner
provided in Section 4.1 hereof.
4.3. Subject to the provisions of Section 5 hereof, upon compliance
with Section 4.2 above, the Company shall deliver or cause to be delivered with
all reasonable dispatch, to or upon the written order of the holder and in such
name or names as the Warrant holder or Participant may designate, a certificate
or certificates for the number of whole Warrant Shares issuable upon the
exercise of such Warrants or other securities or property to which such holder
is entitled hereunder, together with cash as provided in Section 10 hereof;
provided that if any consolidation, merger or lease or sale of assets is
proposed to be effected by the Company as described in Section 8.11 hereof, or a
tender offer or an exchange offer for shares of Common Stock is made, upon such
surrender of Warrants and payment of the Exercise Price as aforesaid, the
Company shall, as soon as possible, but in any event not later than two Business
Days thereafter, deliver or cause to be delivered the full number of Warrant
Shares issuable upon the exercise of such Warrants in the manner described in
this sentence or other securities or property to which such holder is entitled
hereunder, together with cash as provided in Section 10 hereof. Such certificate
or certificates shall be deemed to have been issued and any person so designated
to be named therein shall be deemed to have become a holder of record of such
Warrant Shares as of the date of the surrender of such Warrants and payment of
the Exercise Price.
4.4. The Warrants shall be exercisable, at the election of the holders
thereof, either in full or from time to time in part. If less than all the
Warrants represented by a Definitive Warrant are exercised, such Definitive
Warrant shall be surrendered and a new Definitive Warrant of the same tenor
16
and for the number of Warrants which were not exercised shall be executed by the
Company and delivered to the Warrant Agent and the Warrant Agent shall
countersign the new Definitive Warrant, registered in such name or names as may
be directed in writing by the holder, and shall deliver the new Definitive
Warrant to the Person or Persons entitled to receive the same. The Warrant Agent
shall make such notations on Schedule A to each Global Warrant as are required
to reflect any change in the number of Warrants represented by such Global
Warrant resulting from any exercise in accordance with the terms hereof.
4.5. All Warrant Certificates surrendered upon exercise of Warrants
shall be canceled by the Warrant Agent. Such canceled Warrant Certificates shall
then be disposed of by the Warrant Agent in a manner satisfactory to the
Company. The Warrant Agent shall account promptly to the Company with respect to
Warrants exercised and concurrently pay to the Company all monies received by
the Warrant Agent for the purchase of the Warrant Shares through the exercise of
such Warrants.
4.6. The Warrant Agent shall keep copies of this Agreement and any
notices given or received hereunder available for inspection by the holders
during normal business hours at its office. The Company shall supply the Warrant
Agent from time to time with such numbers of copies of this Agreement as the
Warrant Agent may request.
Section 5. 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 6. Reservation of Warrant Shares.
6.1. The Company will at all times reserve and keep available, free
from preemptive rights, out of the aggregate of its authorized but unissued
Common Stock or its authorized and issued Common Stock held in its treasury, for
the purpose of enabling it to satisfy any obligation to issue Warrant Shares
upon exercise of Warrants, the maximum number of shares of Common Stock which
may then be deliverable upon the exercise of all outstanding Warrants.
6.2. The Company or, if appointed, the transfer agent for the Common
Stock (the "Transfer Agent") and every subsequent transfer agent for any shares
of the Company's capital stock issuable upon the exercise of any of the rights
of purchase aforesaid will be irrevocably authorized and directed at all times
to reserve such number of authorized shares as shall be required for such
purpose. The Company will keep a copy of this Agreement on file with the
Transfer Agent and with every subsequent transfer agent for any shares of the
Company's capital stock issuable upon the exercise of the
17
rights of purchase represented by the Warrants. The Warrant Agent is hereby
irrevocably authorized to requisition from time to time from such Transfer Agent
the stock certificates required to honor outstanding Warrants upon exercise
thereof in accordance with the terms of this Agreement. The Company will supply
such Transfer Agent with duly executed certificates for such purposes and will
provide or otherwise make available any cash which may be payable as provided in
Section 10. The Company will furnish such Transfer Agent a copy of all notices
of adjustments and certificates related thereto, transmitted to each holder
pursuant to Section 11 hereof.
6.3. Before taking any action which would cause an adjustment pursuant
to Section 8 hereof to reduce the Exercise Price below the then par value (if
any) of the Warrant Shares, the Company will take any corporate action which
may, in the opinion of its counsel (which may be counsel employed by the
Company), be necessary in order that the Company may validly and legally issue
fully paid and nonassessable Warrant Shares at the Exercise Price as so
adjusted.
6.4. The Company covenants that all Warrant Shares which may be issued
upon exercise of Warrants will, upon issue, be fully paid, nonassessable, free
of preemptive rights and free from all taxes, liens, charges and security
interests with respect to the issue thereof.
Section 7. Obtaining Stock Exchange Listings.
The Company will from time to time take all action which may be
necessary so that the Warrant Shares, immediately upon their issuance upon the
exercise of Warrants, will be listed on the principal securities exchanges and
markets within the United States of America, if any, on which other shares of
Common Stock are then listed.
Section 8. Adjustment of Exercise Price and Number of Warrant Shares
Issuable.
The Exercise Price and the number of Warrant Shares issuable upon the
exercise of each Warrant are subject to adjustment from time to time upon the
occurrence of the events enumerated in this Section 8. For purposes of this
Section 8, "Common Stock" means shares now or hereafter authorized of any class
of common stock of the Company and any other stock of the Company, however
designated, that has the right (subject to any prior rights of any class or
series of preferred stock) to participate in any distribution of the assets or
earnings of the Company without limit as to per share amount.
8.1. Adjustment for Change in Capital Stock.
If the Company:
(i) pays a dividend or makes a distribution on its Common
Stock in shares of its Common Stock;
(ii) subdivides its outstanding shares of Common Stock into a
greater number of shares;
18
(iii) combines its outstanding shares of Common Stock into a
smaller number of shares;
(iv) makes a distribution on its Common Stock in shares of its
capital stock other than Common Stock; or
(v) issues by reclassification or conversion of its Common
Stock any shares of its capital stock,
then the Warrant Number in effect immediately prior to such action shall be
proportionately adjusted so that the holder of any Warrant thereafter exercised
may receive the aggregate number and kind of shares of capital stock of the
Company which he would have owned immediately following such action if such
Warrant had been exercised immediately prior to such action.
The adjustment shall become effective immediately after the record
date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or reclassification.
Such adjustment shall be made successively whenever any event listed
above shall occur.
8.2. Adjustment for Rights Issue.
If the Company distributes any rights, options or warrants to all
holders of its Common Stock entitling them to purchase shares of Common Stock or
securities convertible into, or exchangeable or exercisable for, Common Stock at
a price per share (or with an initial conversion, exchange or exercise price)
less than the Fair Market Value per share on the record date specified below,
the Warrant Number shall be adjusted in accordance with the following formula:
W' = W x O + N
-------------------------
O + N x P
-----
M
where:
W' = the adjusted Warrant Number.
W = the Warrant Number immediately prior to such adjustment.
O = the number of Fully Diluted Shares outstanding on the record date.
N = the number of additional shares of Common Stock offered or otherwise
issuable upon exercise of such rights, options or warrants.
P = the offering price per share of the additional shares offered or
otherwise issuable.
19
M = the Fair Market Value per share of Common Stock on the record date.
The adjustment shall be made successively whenever any such rights,
options or warrants are issued and shall become effective immediately after the
record date for the determination of stockholders entitled to receive the
rights, options or warrants. If at the end of the period during which such
rights, options or warrants are exercisable, not all rights, options or warrants
shall have been exercised, the Warrant Number shall be immediately readjusted to
what it would have been if "N" in the above formula had been the number of
shares actually issued.
8.3. Adjustment for Other Distributions.
If the Company distributes to all or any holders of its Common Stock
(i) evidences of indebtedness of the Company or any of its Subsidiaries, (ii)
any assets (including cash) of the Company or any of its Subsidiaries or (iii)
any rights, options or warrants to acquire any of the foregoing, the Warrant
Number shall be adjusted in accordance with the following formula:
W' = W x M
-------
M - F
where:
W' = the adjusted Warrant Number.
W = the Warrant Number immediately prior to the record date or, if
applicable, the date of distribution mentioned above.
M = the Fair Market Value per share of Common Stock on the record date
mentioned below.
F = the fair market value on the record date of the indebtedness, assets,
securities, rights, options or warrants so distributed applicable to
one share of Common Stock. The Board of Directors shall determine the
fair market value in such manner as it deems reasonable under the
circumstances.
The adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of stockholders entitled to receive the distribution
(or, if no record date is established, on the date of distribution). If an
adjustment shall be made pursuant to this Section 8.3 as a result of the
issuance of rights, options or warrants and at the end of the period during
which such rights, options or warrants are exercisable, not all such rights,
options or warrants shall have been exercised, the Warrant shall be immediately
readjusted as if "F" in the above formula was the fair market value on the
record date of the indebtedness or assets actually distributed upon exercise of
such rights, options or warrants divided by the number of shares of Common Stock
outstanding on the record date.
This Section 8.3 does not apply to cash dividends or distributions
declared by the Board of Directors of the Company, provided that the Company has
provided written notice of any such
20
dividend to the holders of the Warrants at least 20 business days prior to the
record date with respect thereto in accordance with Section 11. In addition,
this Section 8.3 does not apply to the transactions referred to in Section 8.1
or to rights, options or warrants referred to in Section 8.2.
8.4. Adjustment for Certain Common Stock Issues.
If the Company issues shares of Common Stock (other than any issuance
pursuant to a Non-Affiliate Sale) for a consideration per share less than the
Fair Market Value per share of Common Stock on the date the Company fixes the
offering price of such additional shares, the Warrant Number shall be adjusted
in accordance with the formula:
W' = W x A
---------
O + P
-
M
where:
W' = the adjusted Warrant Number.
W = the Warrant Number immediately prior to any such issuance.
O = the number of Fully Diluted Shares outstanding immediately prior to
the issuance of such additional shares.
P = the aggregate consideration received for the issuance of such
additional shares of Common Stock.
M = the Fair Market Value per share on the date of issuance of such
additional shares of Common Stock.
A = the number of Fully Diluted Shares outstanding immediately after the
issuance of such additional shares of Common Stock.
The adjustment shall be made successively whenever any such issuance
is made, and shall become effective immediately after such issuance.
This Section 8.4 does not apply to:
(i) any of the transactions described in Section 8.1 or the
issuance of Common Stock pursuant to any transaction
described in Sections 8.2 or 8.3;
(ii) the issuance of Common Stock in connection with (a) the
exercise of Warrants or (b) the conversion, exercise or
exchange of any options, warrants or other securities
convertible into or exchangeable for Common Stock which
are issued after the date hereof in a transaction
21
described in Section 8.5 and in compliance with all other
applicable provisions of this Agreement;
(iii) the issuance of Common Stock pursuant to any option,
warrant or other convertible or exchangeable security
outstanding on the date hereof;
(iv) Common Stock issued in a bona fide public offering
pursuant to a firm commitment underwriting by a nationally
recognized investment banking firm; and
(v) the issuance of Common Stock pursuant to any employee
benefit, compensation or incentive arrangement approved by
a majority of the Board of Directors of the Company,
including a majority of the Disinterested Directors.
8.5. Adjustments for Convertible Securities Issue.
If the Company after the date hereof issues any options, warrants or
other securities convertible into or exchangeable or exercisable for Common
Stock, or securities convertible into or exchangeable or exercisable for Common
Stock (other than securities issued in any Non-Affiliate Sale or in transactions
described in Sections 8.3 or 8.4), for a consideration per share of Common Stock
initially deliverable upon conversion or exchange of such securities (including
the amount of consideration paid to the Company for issuance of each option,
warrant or other security) less than the Fair Market Value per share on the date
of issuance of such securities, the Warrant Number shall be adjusted in
accordance with the formula:
W' = W x O + D
-----
O + P
-
M
where:
W' = the adjusted Warrant Number.
W = the Warrant Number immediately prior to any such issuance.
O = the number of Fully Diluted Shares outstanding immediately prior to
the issuance of such securities.
P = the aggregate consideration received for the issuance of such
securities.
M = the Fair Market Value per share on the date of issuance of such
securities.
D = the maximum number of shares of Common Stock deliverable upon
conversion or in exchange for or upon exercise of such securities at
the initial conversion, exchange or exercise rate.
22
The adjustment shall be made successively whenever any such issuance
is made, and shall become effective immediately after such issuance.
If all of the Common Stock deliverable upon conversion or exchange of
such securities has not been issued when such securities are no longer
outstanding, then the Warrant Number shall promptly be readjusted to the Warrant
Number which would then be in effect had the adjustment upon the issuance of
such securities been made on the basis of the actual number of shares of Common
Stock issued upon conversion or exchange of such securities.
This Section 8.5 does not apply to:
(i) convertible securities issued in a bona fide public
offering pursuant to a firm commitment underwriting by a
nationally recognized investment banking firm;
(ii) the issuance by the Company of options, warrants or other
securities convertible into exchangeable or exercisable
for Common Stock pursuant to any employee benefit,
compensation or incentive arrangement approved by a
majority of the Board of Directors of the Company,
including a majority of the Disinterested Directors; and
(iii) transactions described in Section 8.2.
8.6. Consideration Received.
For purposes of any computation respecting consideration received
pursuant to Sections 8.4 and 8.5, the following shall apply:
(i) in the case of the issuance of shares of Common Stock or
securities convertible into or exchangeable or exercisable
for Common Stock, for cash, the consideration shall be the
gross amount of such cash, provided that in no case shall
any deduction be made for any commissions, discounts or
other costs, fees or expenses incurred by the Company for
any underwriting of the issue or otherwise in connection
with the sale and issuance of such shares;
(ii) in the case of the issuance of Common Stock, or securities
convertible into or exchangeable or exercisable for Common
Stock, for a consideration in whole or in part other than
cash, the consideration other than cash shall be deemed to
be the fair market value thereof as determined in good
faith by the Board of Directors (irrespective of the
accounting treatment thereof), whose determination shall
be conclusive, and described in a board resolution
delivered to the Warrant Agent; and
23
(iii) in the case of the issuance of securities convertible into
or exchangeable or exercisable for shares of Common Stock,
the aggregate consideration received therefor shall be
deemed to be the consideration received by the Company for
the issuance of such securities plus the additional
minimum consideration, if any, to be received by the
Company upon the conversion, exchange or exercise thereof
(the consideration in each case to be determined in the
same manner as provided in clauses (i) and (ii) of this
Section 8.6).
8.7. When De Minimis Adjustment May Be Deferred.
No adjustment in the Warrant Number need be made unless the adjustment
would require an increase or decrease of at least 1% in the Warrant Number. Any
adjustments that are not made shall be carried forward and taken into account in
any subsequent adjustment, provided that no such adjustment shall be deferred
after the date on which the Warrants become exercisable.
All calculations under this Section 8 shall be made to the nearest
1/100th of a share.
8.8. When No Adjustment Required.
If an adjustment is made upon the establishment of a record date for a
distribution subject to Sections 8.1, 8.2 or 8.3 and such distribution is
subsequently canceled, the Warrant Number then in effect shall be readjusted,
effective as of the date when the Board of Directors of the Company determines
to cancel such distribution, to that which would have been in effect if such
record date had not been fixed.
No adjustment need to be made for a change in the par value, or from
par value to no par value, or from no par value to par value, of the Common
Stock.
To the extent the Warrants become convertible into cash, no adjustment
need be made thereafter as to the cash. Interest will not accrue on the cash.
8.9. Notice of Adjustment.
Whenever the Warrant Number is adjusted, the Company shall provide the
notices required by Section 11.
8.10. Voluntary Reduction.
The Company from time to time may, as the Board of Directors deems
appropriate, reduce the Exercise Price by any amount for any period of time if
the period is at least 20 days and if the reduction is irrevocable during the
period; provided, however, that in no event may the Exercise Price be less than
the par value of a share of Common Stock.
Whenever the Exercise Price is reduced, the Company shall mail to
Warrant holders a notice of the reduction. The Company shall mail the notice at
least 15 days before the date the reduced
24
Exercise Price takes effect. The notice shall state the reduced Exercise Price
and the period it will be in effect.
A reduction in the Exercise Price does not change or adjust the
Warrant Number otherwise in effect for purposes of Sections 8.1, 8.2, 8.3, 8.4
and 8.5.
8.11. Reorganization of the Company.
In case of any capital reorganization or the consolidation or merger
of the Company with or into another corporation (other than a merger or
consolidation in which the Company is the continuing corporation and which does
not result in any reclassification of the outstanding shares of Common Stock
into shares of other stock or other securities, cash or property), or the sale
of the assets and property of the Company as an entirety or substantially as an
entirety (collectively, such actions being hereinafter referred to as
"Reorganizations"), there shall thereafter be deliverable upon exercise of any
Warrant (in lieu of the number of shares of Common Stock theretofore
deliverable) the number of shares of stock or other securities or property to
which a holder of the number of shares of Common Stock that would otherwise have
been deliverable upon the exercise of such Warrant would have been entitled upon
such Reorganization if such Warrant had been exercised in full immediately prior
to such Reorganization. In case of any Reorganization, appropriate adjustment,
as determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a board resolution delivered to the Warrant
Agent, shall be made in the application of the provisions herein set forth with
respect to the rights and interests of holders of Warrants so that the
provisions set forth herein shall thereafter be applicable, as nearly as
possible, in relation to any shares or other property thereafter deliverable
upon exercise of Warrants.
The Company shall not effect any such Reorganization unless prior to
or simultaneously with the consummation thereof the successor corporation (if
other than the Company) resulting from such Reorganization or the corporation
purchasing such assets or other appropriate corporation or entity shall
expressly assume, by a supplemental Warrant Agreement executed and delivered to
the Warrant Agent (and a notice of which shall be delivered to the holders of
the Warrants) the obligation to deliver to each such holder such shares of
stock, securities, cash or assets as, in accordance with the foregoing
provisions, such holder may be entitled to purchase, and all other obligations
and liabilities under this Agreement. If this Section 8.11 applies, Sections
8.1, 8.2, 8.3, 8.4 and 8.5 hereof do not apply.
8.12. Warrant Agent's Disclaimer.
The Warrant Agent has no duty to determine when an adjustment under
this Section 8 should be made, how it should be made or what it should be. The
Warrant Agent has no duty to determine whether any provisions of a supplemental
Warrant Agreement under Section 8.11 are correct. The Warrant Agent makes no
representation as to the validity or value of any securities or assets issued
upon exercise of Warrants. The Warrant Agent shall not be responsible for the
Company's failure to comply with this Section 8.
8.13. When Issuance or Payment May Be Deferred.
25
In any case in which this Section 8 shall require that an adjustment
in the Warrant Number be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event (i)
issuing to the holder of any Warrant exercised after such record date the
Warrant Shares and other capital stock of the Company, if any, issuable upon
such exercise over and above the Warrant Shares and other capital stock of the
Company, if any, issuable prior to such record date upon such exercise on the
basis of the Exercise Price and (ii) paying to such holder any amount in cash in
lieu of a fractional share pursuant to Section 10; provided, however, that the
Company shall deliver to such holder a due xxxx or other appropriate instrument
evidencing such holder's right to receive such additional Warrant Shares, other
capital stock and cash upon the occurrence of the event requiring such
adjustment.
8.14. Adjustment in Exercise Price.
Upon each adjustment of the Warrant Number pursuant to this Section 8,
the Exercise Price applicable to each Warrant outstanding prior to the making of
the adjustment in the Warrant Number shall thereafter be adjusted to reflect an
adjusted Exercise Price (calculated to the nearest hundredth) obtained from the
following formula:
E' = E x W
---
W'
where:
E' = the adjusted Exercise Price for each Warrant following the adjustment
of the Warrant Number.
E = the Exercise Price prior to adjustment.
W' = the adjusted Warrant Number.
W = the Warrant Number prior to adjustment.
provided that in no event shall the Exercise Price be less than the par value of
each share of capital stock deliverable upon the exercise of the Warrant for one
Warrant Share.
8.15. Form of Warrants.
Upon each adjustment of the Exercise Price or the number or kind of
shares purchasable upon the exercise of the Warrants, each Warrant outstanding
immediately prior to the making of such adjustment shall thereafter evidence the
right to purchase the number and kind of shares then purchasable upon the
exercise of the Warrants, after giving effect to such adjustment, at the
adjusted Exercise Price. The Company may elect on or after any adjustment of the
Exercise Price or the number or kind of shares purchasable upon the exercise of
the Warrants to cause to be distributed to registered holders of Warrant
Certificates either Warrant Certificates representing the additional Warrants
issuable pursuant to the adjustment, or substitute Warrant Certificates to
replace all outstanding Warrant Certificates.
26
Section 9. No Dilution or Impairment.
9.1. If any event shall occur as to which the provisions of Section 8
are not strictly applicable but the failure to make any adjustment would
adversely affect the purchase rights represented by the Warrants in accordance
with the essential intent and principles of such Section, then, in each such
case, the Company shall appoint an Independent Financial Expert, which shall
give its opinion upon the adjustment, if any, on a basis consistent with the
essential intent and principles established in Section 8, necessary to preserve,
without dilution, the purchase rights, represented by the Warrants. Upon receipt
of such opinion, the Company will promptly file a copy thereof with the Warrant
Agent, mail a copy thereof to the holders of the Warrants and make the
adjustments described therein.
9.2. The Company will not, by amendment of its articles of
incorporation or through any consolidation, merger, reorganization, transfer of
assets, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of the
Warrants, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the holder of the Warrants against
dilution or other impairment. Without limiting the generality of the foregoing,
the Company (1) will take all such action as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock on the exercise of the Warrants from time
to time outstanding and (2) will not take any action which results in any
adjustment of the Exercise Price or the Warrant Number if the total number of
Warrant Shares issuable after the action upon the exercise of all of the
Warrants would exceed the total number of shares of Common Stock then authorized
by the Company's articles of incorporation and available for the purposes of
issue upon such exercise.
Section 10. Fractional Interests. The Company shall not be required to
issue fractional Warrant Shares on the exercise of Warrants. If more than one
Warrant shall be presented for exercise in full at the same time by the same
holder, the number of full Warrant Shares which shall be issuable upon the
exercise thereof shall be computed on the basis of the aggregate number of
Warrant Shares purchasable on exercise of the Warrants so presented. If any
fraction of a Warrant Share would, except for the provisions of this Section 10,
be issuable on the exercise of any Warrants (or specified portion thereof), the
Company shall pay an amount in cash equal to the same fraction of the Fair
Market Value (as determined by the Company) of one Warrant Share on the day
immediately preceding the date the Warrant is presented for exercise, multiplied
by such fraction.
Section 11. Notice to Warrant Holders. Upon any adjustment of the
Warrant Number pursuant to Section 8, the Company shall within 15 days
thereafter: (i) cause to be filed with the Warrant Agent a certificate of a firm
of independent public accountants of recognized standing selected by the Board
of Directors of the Company (who may be the regular auditors of the Company)
setting forth the Warrant Number and Exercise Price after giving effect to such
adjustment and setting forth in reasonable detail the method of calculation and
the facts upon which such calculations are based, which certificate shall be
conclusive evidence of the correctness of the matters set forth therein; and
(ii) cause to be given to each of the registered holders of the Warrant
Certificates at such registered holder's address appearing on the Warrant
register written notice of such adjustments by first-class mail, postage
prepaid. Where
27
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 11.
In case:
(a) The Company shall authorize the issuance to all holders of shares
of Common Stock of Common Stock or rights, options or warrants to subscribe for
or purchase shares of Common Stock or of any other subscription rights or
warrants; or
(b) The Company shall authorize the distribution to all holders of
shares of Common Stock of assets including, without limitation, cash dividends
or distributions, evidences of its indebtedness or other securities; or
(c) of any consolidation or merger to which the Company is a party and
for which approval of any stockholders of the Company is required, or of the
conveyance or transfer of the properties and assets of the Company substantially
as an entirety, or of any reclassification or change of Common Stock issuable
upon exercise of the Warrants (other than a change in par value, or from par
value to no par value, or from no par value to par value, or as a result of a
subdivision or combination), or a tender offer or exchange offer for shares of
Common Stock; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(e) The Company proposes to take any other action which would require
an adjustment of the Warrant Number or Exercise Price pursuant to Section 8;
then the Company shall cause to be filed with the Warrant Agent and shall cause
to be given to each of the registered holders of the Warrant certificates at its
address appearing on the Warrant register, at least 20 business days prior to
the applicable record date, or promptly in the case of events for which there is
no record date, by first-class mail, postage prepaid, a written notice stating
(i) the date as of which the holders of record of shares of Common Stock to be
entitled to receive any such dividends, rights, options, warrants or
distributions are to be determined, or (ii) the initial expiration date set
forth in any tender offer or exchange offer for shares of Common Stock, or (iii)
the date on which any such consolidation, merger, conveyance, transfer,
dissolution, liquidation or winding up is expected to become effective or
consummated, and the date as of which it is expected that holders of record of
shares of Common Stock shall be entitled to exchange such shares for securities
or other property, if any, deliverable upon such reclassification,
consolidation, merger, conveyance, transfer, dissolution, liquidation or winding
up. The failure to give the notice required by this Section 11 or any defect
therein shall not affect the legality or validity of any distribution, right,
option, warrant, consolidation, merger, conveyance, transfer, lease,
dissolution, liquidation or winding up, or the vote upon any action.
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 consent or to receive notice as stockholders in respect of the
meetings of stockholders or the election of Directors of the Company or any
other matter, or any rights whatsoever as stockholders of the Company.
28
Section 12. Merger, Consolidation or Change of Name of Warrant Agent.
Any corporation into which the Warrant Agent may be merged or with
which it may be consolidated, or any corporation resulting from any merger or
consolidation to which the Warrant Agent shall be a party, or any corporation
succeeding to the business of the Warrant Agent, shall be the successor to the
Warrant Agent hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor warrant agent under
the provisions of Section 14. In case at the time such successor to the Warrant
Agent shall succeed to the agency created by this Agreement, and in case at that
time any of the Warrant Certificates shall have been countersigned but not
delivered, any such successor to the Warrant Agent may adopt the
countersignature of the original Warrant Agent; and in case at that time any of
the Warrant Certificates shall not have been countersigned, any successor to the
Warrant Agent may countersign such Warrant Certificates either in the name of
the predecessor Warrant Agent or in the name of the successor to the Warrant
Agent; and in all such cases such Warrant Certificates shall have the full force
and effect provided in tile Warrant Certificates and in this Agreement.
In case at any time the name of the Warrant Agent shall be changed and
at such time any of the Warrant Certificates shall have been countersigned but
not delivered, the Warrant Agent whose name has been changed may adopt the
countersignature under its prior name, and in case at that time any of the
Warrant Certificates shall not have been countersigned, the Warrant Agent may
countersign such Warrant Certificates either in its prior name or in its changed
name, and in all such cases such Warrant Certificates shall have the full force
and effect provided in the Warrant Certificates and in this Agreement.
Section 13. Warrant Agent.
The Warrant Agent undertakes the duties and obligations imposed by
this Agreement upon the following terms and conditions, by all of which the
Company and the holders of Warrants, by their acceptance thereof, shall be
bound:
(a) The duties of the Warrant Agent shall be determined by the express
provisions of this Warrant Agreement and no implied covenants or obligations
shall be read into this Warrant Agreement against the Warrant Agent.
(b) The statements contained herein and in the Warrant Certificates
shall be taken as statements of the Company and the Warrant Agent assumes no
responsibility for the correctness of any of the same except such as describe
the Warrant Agent or action taken or to be taken by it. The Warrant Agent
assumes no responsibility with respect to the distribution of the Warrant
Certificates except as herein otherwise provided.
(c) 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 compiled with by the Company.
(d) Before the Warrant Agent acts or refrains from acting, the Warrant
Agent may consult at any time with counsel satisfactory to it (who may be
counsel for the Company) and the Warrant
29
Agent shall incur no liability or responsibility, to the Company or to any
holder of any Warrant Certificate in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance with the opinion or the
advice of such counsel.
(e) The Warrant Agent shall incur no liability or responsibility to
the Company or to any holder of any Warrant Certificate for any action taken in
reliance on any Warrant Certificate, certificate of shares, notice, resolution,
waiver, consent, order, certificate, or other paper, document or instrument
believed by it to be genuine and to have been signed, sent or presented by the
proper party or parties.
(f) The Company agrees to pay to the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent in the execution of
this Agreement, to reimburse the Warrant Agent for all expenses, taxes and
governmental charges and other charges of any kind and nature incurred by the
Warrant Agent in the execution of this Agreement and to indemnify the Warrant
Agent and save it harmless against any and all liabilities, including judgments,
costs and counsel fees, for anything done or omitted by the Warrant Agent in the
execution of this Agreement except as a result of its negligence, bad faith or
willful misconduct.
(g) The Company shall indemnify the Warrant Agent against any and all
losses, liabilities or expenses incurred by it arising out of or in connection
with the acceptance or administration of its duties under this Warrant
Agreement, including the costs and expenses of enforcing this Warrant Agreement
against the Company (including this Section 13(g)) and defending itself or
investigating against any claim (whether asserted by the Company or any Warrant
holder or any other person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder, except to the extent any
such loss, liability or expense may be attributable to its negligence, bad faith
or willful misconduct. The Warrant Agent shall notify the Company promptly of
any claim for which it may seek indemnity. Failure by the Warrant Agent to so
notify the Company shall not relieve the Company of its obligations hereunder.
The Company shall defend the claim and the Warrant Agent shall cooperate in the
defense. The Warrant Agent may have separate counsel and the Company shall pay
for reasonable fees and expenses of such counsel. The Company need not pay for
any settlement made without its consent. All rights of action under this
Agreement or under any of the Warrants may be enforced by the Warrant Agent
without the possession of any of the Warrant Certificates or the production
thereof at any trial or other proceeding relative thereto, and any such action,
suit or proceeding instituted by the Warrant Agent shall be brought in its name
as Warrant Agent and any recovery of judgment shall be for the ratable benefit
of the registered holders of the Warrants, as their respective rights or
interests may appear.
(h) The Warrant Agent, and any stockholder, director, officer or
employee of it, may buy, sell or deal in any of the Warrants or other securities
of the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Warrant Agent under this
Agreement. Nothing herein shall preclude the Warrant Agent from acting in any
other capacity for the Company or for any other legal entity.
30
(i) The Warrant Agent shall act hereunder solely as agent for the
Company, and its duties shall be determined solely by the provisions hereof. The
Warrant Agent shall not be liable for anything which it may do or refrain from
doing in connection with this Agreement except for its own negligence or bad
faith.
(j) The Warrant Agent shall not at any time be under any duty or
responsibility to any holder of any Warrant to make or cause to be made any
adjustment of the Exercise Price or number of the Warrant Shares or other
securities or property deliverable as provided in this Agreement, or to
determine whether any facts exist which may require any of such adjustments, or
with respect to the nature or extent of any such adjustments, when made, or with
respect to the method employed in making the same. The Warrant Agent shall not
be accountable with respect to the legality, validity or value or the kind or
amount of any Warrant Shares or of any securities or property which may at any
time be issued or delivered upon the exercise of any Warrant or with respect to
whether any such Warrant Shares or other securities will when issued be validly
issued and fully paid and nonassessable, and makes no representation with
respect thereto.
(k) The Warrant Agent shall not be required to take notice or be
deemed to have notice of any fact, event or determination (including, without
limitation, any dates other than the end of the Exercise Period or events
defined in this Agreement or the designation of any Person as an Affiliate),
under this Agreement unless and until the Warrant Agent shall be specifically
notified in writing by the Company or any holder of such fact, event or
determination.
(l) No provision of this Agreement shall require the Warrant Agent to
expand or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(m) The Warrant Agent may act through its attorneys or agents and
shall not be responsible for the willful misconduct or negligence of any agent
appointed with due care.
Section 14. Change of Warrant Agent.
If the Warrant Agent shall become incapable of acting as Warrant
Agent, the Company shall appoint a successor to such Warrant Agent. If the
Company shall fail to make such appointment within a period of 30 days after it
has been notified in writing of such incapacity by the Warrant Agent or by the
registered holder of a Warrant, then the registered holder of any Warrant may
apply to any court of competent jurisdiction for the appointment of a successor
to the Warrant Agent. Pending appointment of a successor to such Warrant Agent,
either by the Company or by such a court, the duties of the Warrant Agent shall
be carried out by the Company. After appointment the successor to the Warrant
Agent shall be vested with the same powers, rights, duties and responsibilities
as if it had been originally named as Warrant Agent without further act or deed;
but the former Warrant Agent shall deliver and transfer to the successor to the
Warrant Agent any property at the time held by it hereunder and execute and
deliver any further assurance, conveyance, act or deed necessary for the
purpose. Failure to give any notice provided for in this Section 14, however, or
any defect therein, shall not affect the legality or validity of the
31
appointment of a successor to the Warrant Agent. The Warrant Agent shall at all
times be an institution that meets the eligibility requirements for a trustee
under the Indenture.
Section 15. Registration.
Holders shall be able to exercise their Warrants only if a
registration statement relating to the Warrant Shares is then in effect, or the
exercise of such Warrants is exempt from the registration requirements of the
Securities Act, and such securities are qualified for sale or exempt from
qualification under the applicable securities laws of the states in which the
various holders of the Warrants or other persons to whom it is proposed that the
Warrant Shares be issued on exercise of the Warrants reside.
Section 16. Reports.
(a) Whether or not required by the rules and regulations of the
Securities and Exchange Commission (the "Commission"), so long as any Warrants
are outstanding, the Company shall furnish to the Warrant Agent and the holders
of Warrants (i) all quarterly and annual financial information that would be
required to be contained in a filing with the Commission on Forms 10-Q and 10-K
if the Company were required to file such Forms, including a "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and,
with respect to the annual information only, a report thereon by the Company's
certified independent accountants and (ii) all current reports that would be
required to be filed with the Commission on Form 8-K if the Company were
required to file such reports. In addition, whether or not required by the rules
and regulations of the Commission, the Company shall file a copy of all such
information and reports the Commission for public availability (unless the
Commission shall not accept such a filing) and make such information available
to securities analysts and prospective investors upon request.
(b) The Company shall provide the Warrant Agent with a sufficient
number of copies of all such reports that the Warrant Agent may be required to
deliver to the holders of the Warrants under this Section 16.
Section 17. Notices to the Company and Warrant Agent.
Any notice or demand authorized by this Agreement to be given or made
by the Warrant Agent or by the registered holder of any Warrant to or on the
Company shall be sufficiently given or made when and if deposited in the mail,
first class or registered, postage prepaid, addressed (until another address is
filed in writing by the Company with the Warrant Agent), as follows:
Globe Holdings, Inc.
000 Xxxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxx
with a copy to:
Xxxxxxxx & Xxxxx
32
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
In case the Company shall fail to maintain such office or agency or
shall fail to give such notice of the location or of any change in the location
thereof, presentations may be made and notices and demands may be served at the
principal office of the Warrant Agent.
Any notice pursuant to this Agreement to be given by the Company or by
the registered holder(s) of any Warrant Certificate to the Warrant Agent shall
be sufficiently given when and if deposited in the mail, first-class or
registered. postage prepaid, addressed (until another address is filed in
writing by the Warrant Agent with the Company) to the Warrant Agent as follows:
Norwest Bank Minnesota, National Association
Norwest Center
Sixth and Marquette
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Corporate Trust Services
Section 18. Supplements and Amendments.
From time to time, the Company and the Warrant Agent, without consent
of the holders of the Warrants, may amend or supplement the Warrant Agreement
for certain purposes, including curing defects or inconsistencies or making
chances that do not materially adversely affect the rights of any holder. Any
amendment or supplement to the Warrant Agreement that has a material adverse
effect on the interests of the holders of the Warrants requires the written
consent of the holders of a majority of the then outstanding Warrants (excluding
Warrants held by the Company or any of its Affiliates). The consent of each
holder of the Warrants is required for any amendment pursuant to which the
Exercise Price would be increased or the number of Warrant Shares or other
securities or property purchasable upon exercise of Warrants would be decreased
(other than pursuant to adjustments provided for in the Warrant Agreement as
generally described above). Notwithstanding anything in this Agreement to the
contrary, no supplement or amendment that changes the rights and duties of the
Warrant Agent under this Agreement will be effective against the Warrant Agent
without the execution of such supplement or amendment by the Warrant Agent.
Section 19. 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 20. Termination.
This Agreement shall terminate at 5:00 p.m., New York City time on
August 1, 2009, or on such later date to which the Exercise Period shall have
been extended pursuant to Section 4.1.
33
Notwithstanding the foregoing, this Agreement will terminate on any earlier date
if all Warrants have been exercised. The provisions of Section 13, regarding
indemnification, shall survive such termination.
Section 21. Governing Law.
This Agreement and each Warrant Certificate issued hereunder shall be
deemed to be a contract made under the laws of the State of New York and for all
purposes shall be construed in accordance with the internal laws of said State.
Section 22. Benefits of This Agreement.
Nothing in this Agreement shall be construed to give to any person or
corporation other than the Company, the Warrant Agent and the registered holders
of the Warrant Certificates any legal or equitable right, remedy or claim under
this Agreement; but this Agreement shall be for the sole and exclusive benefit
of the Company, the Warrant Agent and the registered holders of the Warrant
Certificates.
Section 23. Counterparts.
This Agreement may be executed in any number of counterparts and each
of such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute but one and the same instrument.
[Signature Page Follows]
34
IN WITNESS WHEREOF, the parties hereto have caused this Warrant
Agreement to be duly executed, as of the day and year first above written.
GLOBE HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxx, III
----------------------------------
Name: Xxxxxx X. Xxxxxxx, III
Title: President
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Warrant Agent
By: /s/ Xxxxxx X. Xxxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Assistant Vice President
EXHIBIT A
FORM OF WARRANT
[Face of Warrant Certificate]
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX XXXXXX
XXXXXX SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER OR ANOTHER EXEMPTION UNDER THE
SECURITIES ACT. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE
BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY (1)(a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) PURCHASING FOR ITS OWN ACCOUNT IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A UNDER THE SECURITIES ACT, (b) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED
STATES TO A NON-U.S. PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
904 UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT PROVIDED THAT IN THE CASE OF
A TRANSFER PURSUANT TO CLAUSE (d) SUCH TRANSFER IS EFFECTED BY THE DELIVERY TO
THE TRANSFEREE OF DEFINITIVE SECURITIES REGISTERED IN ITS NAME (OR ITS NOMINEE'S
NAME) IN THE BOOKS MAINTAINED BY THE REGISTRAR, AND IS SUBJECT TO THE RECEIPT BY
THE REGISTRAR (AND THE COMPANY, IF ITS SO REQUESTS) OF A CERTIFICATION OF THE
TRANSFEROR AND AN OPINION OF COUNSEL TO THE EFFECT THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT, (ii) TO THE COMPANY OR (iii) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITIES
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE WARRANT
AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") OR A NOMINEE OF THE DEPOSITARY OR A
SUCCESSOR. THIS SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE
NAME OF A PERSON OTHER THAN THE
A-1
DEPOSITARY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
WARRANT AGREEMENT, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF
THIS SECURITY AS A WHOLE 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) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE WARRANT AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITARY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IT IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT 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 INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF GLOBAL SECURITIES SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO THE DEPOSITARY, ITS SUCCESSORS OR THEIR RESPECTIVE NOMINEES.
INTERESTS OF BENEFICIAL OWNERS IN THE GLOBAL SECURITIES MAY BE TRANSFERRED OR
EXCHANGED FOR CERTIFICATED SECURITIES IN ACCORDANCE WITH THE RULES AND
PROCEDURES OF THE DEPOSITARY AND THE PROVISIONS OF SECTION 3.5(c) OF THE WARRANT
AGREEMENT. IN ADDITION, CERTIFICATED SECURITIES SHALL BE TRANSFERRED TO ALL
BENEFICIAL OWNERS IN EXCHANGE FOR THEIR BENEFICIAL INTERESTS IN GLOBAL
SECURITIES IF (i) THE COMPANY NOTIFIES THE REGISTRAR THAT THE DEPOSITARY IS
UNWILLING OR UNABLE TO CONTINUE AS DEPOSITARY FOR ANY GLOBAL SECURITY AND A
SUCCESSOR DEPOSITARY IS NOT APPOINTED BY THE ISSUER WITHIN 90 DAYS OF SUCH
NOTICE OR (ii) THE COMPANY, AT ITS OPTION, NOTIFIES THE REGISTRAR IN WRITING
THAT IT ELECTS TO CAUSE THE ISSUANCE OF SECURITIES IN DEFINITIVE FORM UNDER THE
WARRANT AGREEMENT.
THE WARRANTS EVIDENCED BY THIS CERTIFICATE ARE INITIALLY ISSUED AS
PART OF AN ISSUANCE OF UNITS (THE "UNITS"), EACH OF WHICH CONSIST OF $1,000
PRINCIPAL AMOUNT AT MATURITY OF 14% SENIOR DISCOUNT NOTES DUE 2009 OF THE
COMPANY AND ONE WARRANT ("WARRANT") INITIALLY ENTITLING THE HOLDER THEREOF TO
PURCHASE 1.4155 SHARES OF CLASS A COMMON STOCK, PAR VALUE $0.01 PER SHARE, OF
THE COMPANY. PRIOR TO THE EARLIEST TO OCCUR OF (I) THE DATE THAT IS SIX MONTHS
FOLLOWING THE INITIAL SALE OF THE UNITS, (II) THE COMMENCEMENT OF AN EXCHANGE
OFFER (AS DEFINED IN THE REGISTRATION RIGHTS AGREEMENT) WITH RESPECT TO THE
NOTES, (III) THE DATE A SHELF REGISTRATION STATEMENT (AS DEFINED IN THE
REGISTRATION RIGHTS AGREEMENT) WITH RESPECT
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TO THE NOTES IS DECLARED EFFECTIVE, (IV) A CHANGE OF CONTROL (AS DEFINED IN THE
INDENTURE), OR (V) SUCH DATE AS BANCAMERICA XXXXXXXXX XXXXXXXX MAY, IN ITS SOLE
DISCRETION, DEEM APPROPRIATE, THE WARRANTS EVIDENCED BY THIS CERTIFICATE MAY NOT
BE TRANSFERRED OR EXCHANGED SEPARATE FROM. BUT MAY BE TRANSFERRED OR EXCHANGED
ONLY TOGETHER WITH, THE NOTES.
A-3
EXERCISABLE ON OR AFTER THE SEPARATION DATE
No. __________ CUSIP No. _________
__________ Warrants
Warrant Certificate
GLOBE HOLDINGS, INC.
This Warrant Certificate certifies that ______________, or registered
assigns, is the registered holder of Warrants expiring August 1, 2009 (the
"Warrants") to purchase Class A Common Stock, $.01 par value per share ("Common
Stock"), of Globe Holdings, Inc. (the "Company"). Each Warrant entitles the
holder upon exercise to receive from the Company, commencing on the Separation
Date (as defined in the Warrant Agreement) and through and until 5:00 p.m. New
York City Time on August 1, 2009 (or on such later date to which the Exercise
Period shall have been extended pursuant to Section 4.1 of the Warrant
Agreement), 1.4155 fully paid and nonassessable shares of Common Stock as set
forth in the Warrant Agreement, subject to adjustment as set forth in Sections 8
and 9 of the Warrant Agreement, at the initial exercise price (the "Exercise
Price") of $0.01 per share payable in lawful money of the United States of
America upon surrender of this Warrant Certificate and payment of the Exercise
Price at the office or agency of the Warrant Agent, but only subject to the
conditions set forth herein and in the Warrant Agreement referred to on the
reverse hereof. Notwithstanding the foregoing, Warrants may be exercised without
the exchange of funds pursuant to the net exercise provisions of Section 4 of
the Warrant Agreement. The Exercise Price and number of Warrant Shares issuable
upon exercise of the Warrants are subject to adjustment upon the occurrence of
certain events set forth in the Warrant Agreement. No Warrant may be exercised
after 5:00 p.m., New York City Time, on August 1, 2009 (or such later date
provided in Section 4.1 of the Warrant Agreement), and to the extent not
exercised by such time such Warrants shall become void. Reference is hereby made
to the further provisions of this Warrant Certificate set forth on the reverse
hereof and such further provisions shall for all purposes have the same effect
as though fully set forth at this place. This Warrant Certificate shall not be
valid unless countersigned by the Warrant Agent, as such term is used in the
Warrant Agreement. This Warrant Certificate shall be governed and construed in
accordance with the internal laws of the State of New York.
A-4
IN WITNESS WHEREOF, Globe Holdings, Inc. has caused this Warrant
Certificate to be signed by its duly authorized officers and may cause its
corporate seal to be affixed hereunto or imprinted hereon.
Dated: August 6, 1998
GLOBE HOLDINGS, INC.
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
Countersigned:
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as Warrant Agent
By:
--------------------------------------
Name:
Title:
A-5
[Reverse of Warrant Certificate]
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants expiring August 1, 2009 entitling the holder on
exercise to receive shares of Common Stock, and are issued or to be issued
pursuant to a Warrant Agreement dated as of August 6, 1998 (the "Warrant
Agreement") and a Warrant Registration Rights Agreement dated as of August 6,
1998 (the "Warrant Registration Rights Agreement"), both duly executed and
delivered by the Company to Norwest Bank Minnesota, National Association, as
warrant agent (the "Warrant Agent"), which Warrant Agreement and Warrant
Registration Rights Agreement are hereby incorporated by reference in and made a
part of this instrument and are 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. Copies of
the Warrant Agreement and the Warrant Registration Rights Agreement may be
obtained by the holder hereof upon written request to the Company.
Warrants may be exercised at any time on or after the Separation Date,
and on or before August 1, 2009 (or such later date to which the Exercise Period
shall have been extended pursuant to Section 4.1 of the Warrant Agreement);
provided that holders shall be able to exercise their Warrants only if a
registration statement relating to the Warrant Shares is then in effect, or the
exercise of such Warrants is exempt from the registration requirements of the
Securities Act of 1933, as amended (the "Securities Act"), and such securities
are qualified for sale or exempt from qualification under the applicable
securities laws of the states in which the various holders of the Warrants or
other persons to whom it is proposed that the Warrant Shares be issued on
exercise of the Warrants reside. In order to exercise all or any of the Warrants
represented by this Warrant Certificate, (i) in the case of Definitive Warrants,
the holder must surrender for exercise this Warrant Certificate to the Warrant
Agent at its corporate trust office set forth in Section 17 of the Warrant
Agreement, (ii) in the case of a book-entry interest in a Global Warrant, the
exercising Participant whose name appears on a securities position listing of
the Depositary as the holder of such book-entry interest must comply with the
Depositary's procedures relating to the exercise of such book-entry interest in
such Global Warrant and (iii) in the case of both Global Warrants and Definitive
Warrants, the holder thereof or the Participant, as applicable, must deliver to
the Warrant Agent the form of election to purchase on the reverse hereof duly
filled in and signed, which signature shall be a medallion guaranteed by an
institution which is a member of a Securities Transfer Association recognized
signature guarantee program, and upon payment to the Warrant Agent for the
account of the Company of the Exercise Price, as adjusted as provided in the
Warrant Agreement, for the number of Warrant Shares in respect of which such
Warrants are then exercised. No adjustment shall be made for any dividends on
any Common Stock issuable upon exercise of this Warrant, provided that the
Company complies with the notice provisions set forth in Sections 8.3 and 11 of
the Warrant Agreement.
The Warrant Agreement provides that upon the occurrence of certain
events the number of shares of Common Stock or other securities issuable upon
exercise of the Warrants evidenced hereby may, subject to certain conditions, be
adjusted. If the Warrant Number is adjusted, the Warrant Agreement provides that
the Exercise Price set forth on the face hereof may be adjusted. No fractions of
a share of Common Stock will be issued upon the exercise of any Warrant, but the
Company will pay the cash value thereof determined as provided in the Warrant
Agreement.
A-6
Warrant Certificates, when surrendered at the office of the Warrant
Agent by the registered holder thereof in person or by legal representative or
attorney duly authorized in writing, may be exchanged, in the manner and subject
to the limitations provided in the Warrant Agreement, but without payment of any
service charge, for another Warrant Certificate or Warrant Certificates of like
tenor evidencing in the aggregate number of Warrants.
Upon due presentation for registration of transfer of this Warrant
Certificate at the office of the Warrant Agent a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided in the Warrant Agreement,
without charge except for any tax or other governmental charge imposed in
connection therewith.
The Company and the Warrant Agent may deem and treat the registered
holder(s) thereof as the absolute owner(s) of this Warrant Certificate
(notwithstanding any notation of ownership or other writing hereon made by
anyone), for the purpose of any exercise hereof, of any distribution to the
holder(s) hereof, and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary. Neither the
Warrants nor this Warrant Certificate entities any holder hereof to any rights
of a stockholder of the Company.
A-7
Form of Election to Purchase
(To Be Executed Upon Exercise Of Warrant)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to receive __________ shares of Common
Stock and herewith tenders payment for such shares to the order of the Company
in the amount of $________ in accordance with the terms hereof unless the holder
is exercising Warrants pursuant to the net exercise provisions of Section 4 of
the Warrant Agreement in which case the holder shall tender Warrants having a
fair market value (as provided in the Warrant Agreement) equal to the Exercise
Price of the Warrants being exercised by such holder. The undersigned requests
that a certificate for such shares be registered in the name of
______________________________, whose address is ______________________________
and that such shares be delivered to _________________________ whose address is
______________________________. If said number of shares is less than all of the
shares of Common Stock purchasable hereunder, the undersigned requests that a
new Warrant Certificate representing the remaining balance of such shares be
registered in the name of _____________, whose address is ____________________,
and that such Warrant Certificate be delivered to ______________, whose address
is ____________________.
Date: _____________, ____
-----------------------------------------
(Signature)
-----------------------------------------
(Signature Guaranteed)
A-8
SCHEDULE A
SCHEDULE OF EXCHANGES
OF INTERESTS IN THE GLOBAL WARRANT
The initial number of Warrants evidenced by this Global Warrant shall
be _______________. The following decreases/increases in the number of Warrants
evidenced by this Warrant have been made:
Total Number of
Warrants
Decrease in Increase in Evidenced by
Number of Number of this
Warrants Warrants Global Warrant Notation Made
Date of Evidenced by Evidenced by Following such by or on
Decrease/ this Global this Global Decrease/ Behalf of
Increase Warrant Warrant Increase Warrant Agent
--------- ------------ ------------ --------------- -------------
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A-9
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Globe Holdings, Inc.
000 Xxxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxx
Norwest Bank Minnesota, National Association
Norwest Center
Sixth and Marquette
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Corporate Trust Services
Re: Warrants to Purchase Shares of Common Stock
-----------------------------------------------------------------
(CUSIP __________)
Reference is hereby made to the Warrant Agreement, dated as of August
6, 1998 (the "Warrant Agreement"), between Globe Holdings, Inc., as issuer (the
"Company"), and Norwest Bank Minnesota, National Association, as Warrant Agent.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Warrant Agreement.
_______________, (the "Transferor") owns and proposes to transfer the
Warrant[s] or interest in such Warrant[s] specified in Annex A hereto, in the
amount of ________________ in such Warrant[s] or interests (the "Transfer"), to
________________ (the "Transferee"), as further specified in Annex A hereto. In
connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [_] Check if Transferee will take delivery of a beneficial interest in the
144A Global Warrant or a Definitive Warrant Pursuant to Rule 144A. The Transfer
is being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Warrant is being transferred to a Person that the
Transferor reasonably believed and believes is purchasing the beneficial
interest or Definitive Warrant for its own account, or for one or more accounts
with respect to which such Person exercises sole investment discretion, and such
Person and each such account is a "qualified institutional buyer" within the
meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and
such Transfer is in compliance with any applicable blue sky securities laws of
any state of the United States. Upon consummation of the proposed Transfer in
accordance with the terms of the Warrant Agreement, the transferred beneficial
interest or Definitive Warrant will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed
B-1
on the 144A Global Warrant and/or the Definitive Warrant and in the Warrant
Agreement and the Securities Act.
2. [_] Check if Transferee will take delivery of a beneficial interest in the
Regulation S Global Warrant or a Definitive Warrant pursuant to Regulation S.
The Transfer is being effected pursuant to and in accordance with Rule 903 or
Rule 904 under the Securities Act and, accordingly, the Transferor hereby
further certifies that (i) the Transfer is not being made to a person in the
United States and (x) at the time the buy order was originated the Transferee
was outside the United States or such Transferor and any Person acting on its
behalf reasonably believed and believes that the Transferee was outside the
United States or (y) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling efforts
have been made in contravention of the requirements of Rule 903(a) or Rule
904(a) of Regulation S under the Securities Act and, (iii) the transaction is
not part of a plan or scheme to evade the registration requirements of the
Securities Act and (iv) if the proposed transfer is being made prior to the
expiration of the "restricted period" (as defined in Rule 903 under the
Securities Act), the transfer is not being made to a U.S. Person or for the
account or benefit of a U.S. Person (other than an Initial Purchaser). Upon
consummation of the proposed transfer in accordance with the terms of the
Warrant Agreement, the transferred beneficial interest or Definitive Warrant
will be subject to the restrictions on Transfer enumerated in the Private
Placement Legend printed on the Regulation S Global Warrant and/or the
Definitive Warrant and in the Warrant Agreement and the Securities Act.
3. [_] Check and complete if Transferee will take delivery of a beneficial
interest in the IAI Global Warrant or a Definitive Warrant pursuant to any
provision of the Securities Act other than Rule 144A or Regulation S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Warrants and Restricted
Definitive Warrants and pursuant to and in accordance with the Securities Act
and any applicable blue sky securities laws of any state of the United States,
and accordingly the Transferor hereby further certifies that (check one):
(a) [_] such Transfer is being effected pursuant to and in accordance
with Rule 144 under the Securities Act;
or
(b) [_] such Transfer is being effected to the Company or a subsidiary
thereof;
or
(c) [_] such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act;
or
B-2
(d) [_] such Transfer is being effected to an Institutional Accredited
Investor and pursuant to an exemption from the registration requirements of the
Securities Act other than Rule 144A, Rule 144 or Rule 904, and the Transferor
hereby further certifies that it has not engaged in any general solicitation
within the meaning of Regulation D under the Securities Act and the Transfer
complies with the transfer restrictions applicable to beneficial interests in a
Restricted Global Warrant or Restricted Definitive Warrants and the requirements
of the exemption claimed, which certification is supported by (1) a certificate
executed by the Transferee in the form of Exhibit D to the Warrant Agreement and
(2) an Opinion of Counsel provided by the Transferor or the Transferee (a copy
of which the Transferor has attached to this certification), to the effect that
such Transfer is in compliance with the Securities Act. Upon consummation of the
proposed transfer in accordance with the terms of the Warrant Agreement, the
transferred beneficial interest or Definitive Warrant will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the IAI Global Warrant and/or the Definitive Warrants and in the Warrant
Agreement and the Securities Act.
4. [_] Check if Transferee will take delivery of a beneficial interest in an
Unrestricted Global Warrant or of an Unrestricted Definitive Warrant.
(a) [_] Check if Transfer is pursuant to Rule 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Warrant
Agreement and any applicable blue sky securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Warrant Agreement
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Warrant Agreement, the transferred
beneficial interest or Definitive Warrant will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Warrants, on Restricted Definitive Warrants and in the
Warrant Agreement.
(b) [_] Check if Transfer is Pursuant to Regulation S. (i) The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and in compliance with the transfer restrictions
contained in the Warrant Agreement and any applicable blue sky securities laws
of any state of the United States and (ii) the restrictions on transfer
contained in the Warrant Agreement and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act. Upon
consummation of the proposed Transfer in accordance with the terms of the
Warrant Agreement, the transferred beneficial interest or Definitive Warrant
will no longer be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Warrants, on
Restricted Definitive Warrants and in the Warrant Agreement.
(c) [_] Check if Transfer is Pursuant to Other Exemption. (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144, Rule
903 or Rule 904 and in compliance with the transfer restrictions contained in
the Warrant Agreement and any applicable blue sky securities laws of any State
of the United States and (ii) the restrictions on transfer contained in the
Warrant Agreement and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Warrant Agreement, the
B-3
transferred beneficial interest or Definitive Warrant will not be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Warrants or Restricted Definitive Warrants and in the
Warrant Agreement.
B-4
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
----------------------------------------
[Insert Name of Transferor]
By:
----------------------------------
Name:
Title:
Dated: ________ __, ____
B-5
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [_] a beneficial interest in the:
(i) [_] 144A Global Warrant (CUSIP ____), or
(ii) [_] Regulation S Global Warrant (CUSIP ____), or
(iii) [_] IAI Global Warrant (CUSIP _____); or
(b) [_] a Restricted Definitive Warrant.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [_] a beneficial interest in the:
(i) [_] 144A Global Warrant (CUSIP _____), or
(ii) [_] Regulation S Global Warrant (CUSIP _____), or
(iii) [_] IAI Global Warrant (CUSIP _____); or
(lv) [_] Unrestricted Global Warrant (CUSIP _____); or
(b) [_] a Restricted Definitive Warrant; or
(c) [_] an Unrestricted Definitive Warrant,
in accordance with the terms of the Warrant Agreement.
B-6
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Globe Holdings, Inc.
000 Xxxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxx
Norwest Bank Minnesota, National Association
Norwest Center
Sixth and Marquette
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Corporate Trust Services
Re: Warrants to Purchase Shares of Common Stock
-----------------------------------------------------------------
(CUSIP __________)
Reference is hereby made to the Warrant Agreement, dated as of August
6, 1998 (the "Warrant Agreement"), between Globe Holdings, Inc., as issuer (the
"Company"), and Norwest Bank Minnesota, National Association, as Warrant Agent.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Warrant Agreement.
__________, (the "Owner") owns and proposes to exchange the Warrant[s]
or interest in such Warrant[s] specified herein, in the amount of __________ in
such Warrant[s] or interests (the "Exchange"). In connection with the Exchange,
the Owner hereby certifies that:
1. Exchange of Restricted Definitive Warrants or Beneficial Interests in a
Restricted Global Warrant for Unrestricted Definitive Warrants or Beneficial
Interests in an Unrestricted Global Warrant
(a) [_] Check if Exchange is from beneficial interest in a Restricted
Global Warrant to beneficial interest in an Unrestricted Global Warrant. In
connection with the Exchange of the Owner's beneficial interest in a Restricted
Global Warrant for a beneficial interest in an Unrestricted Global Warrant in an
equal amount, the Owner hereby certifies (i) the beneficial interest is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Global Warrants and pursuant to and in accordance with the United States
Securities Act of 1933, as amended (the "Securities Act"), (iii) the
restrictions on transfer contained in the Warrant Agreement and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act and (iv) the beneficial interest in an Unrestricted Global
Warrant is being acquired in compliance with any applicable blue sky securities
laws of any state of the United States.
C-1
(b) [_] Check if Exchange is from beneficial interest in a Restricted
Global Warrant to Unrestricted Definitive Warrant. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Warrant for
an Unrestricted Definitive Warrant, the Owner hereby certifies (i) the
Definitive Warrant is being acquired for the Owner's own account without
transfer, (ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to the Restricted Global Warrants and pursuant to and in
accordance with the Securities Act, (iii) the restrictions on transfer contained
in the Warrant Agreement and the Private Placement Legend are not required In
order to maintain compliance with the Securities Act and (iv) the Definitive
Warrant is being acquired in compliance with any applicable blue sky securities
laws of any state of the United States.
(c) [_] Check if Exchange is from Restricted Definitive Warrant to
Beneficial interest in an Unrestricted Global Warrant. In connection with the
Owner's Exchange of a Restricted Definitive Warrant for a beneficial interest in
an Unrestricted Global Warrant, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer, (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Warrants and pursuant to and in accordance
with the Securities Act. (iii) the restrictions on transfer contained in the
Warrant Agreement and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the beneficial interest is
being acquired in compliance with any applicable blue sky securities laws of any
state of the United States.
(d) [_] Check if Exchange is from Restricted Definitive Warrant to
Unrestricted Definitive Warrant. In connection with the Owner's Exchange of a
Restricted Definitive Warrant for an Unrestricted Definitive Warrant, the Owner
hereby certifies (i) the Unrestricted Definitive Warrant is being acquired for
the Owner's own account without transfer, (ii) such Exchange has been effected
in compliance with the transfer restrictions applicable to Restricted Definitive
Warrants and pursuant to and in accordance with the Securities Act, (iii) the
restrictions on transfer contained in the Warrant Agreement and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act and (iv) the Unrestricted Definitive Warrant is being acquired in
compliance with any applicable blue sky securities laws of any state of the
United States.
2. Exchange of Restricted Definitive Warrants or Beneficial Interests in
Restricted Global Warrants for Restricted Definitive Warrants or Beneficial
Interests in Restricted Global Warrants.
(a) [_] Check if Exchange is from beneficial interest in a Restricted
Global Warrant to Restricted Definitive Warrant. In connection with the Exchange
of the Owner's beneficial interest in a Restricted Global Warrant for a
Restricted Definitive Warrant with an equal amount, the Owner hereby certifies
that the Restricted Definitive Warrant is being acquired for the Owner's own
account without transfer. Upon consummation of the proposed Exchange in
accordance with the terms of the Warrant Agreement, the Restricted Definitive
Warrant issued will continue to be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Definitive
Warrant and in the Warrant Agreement and the Securities Act.
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(b) [_] Check if Exchange is from Restricted Definitive Warrant to
beneficial interest in a Restricted Global Warrant. In connection with the
Exchange of the Owner's Restricted Definitive Warrant for a beneficial interest
in the [CHECK XXX][_] 000X Xxxxxx Xxxxxxx, [_] Regulation S Global Warrant, [_]
IAI Global Warrant with an equal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer and (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Warrants and pursuant
to and in accordance with the Securities Act, and in compliance with any
applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Exchange in accordance with the terms of the
Warrant Agreement, the beneficial interest issued will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the relevant Restricted Global Warrant and in the Warrant Agreement and the
Securities Act.
C-3
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
-----------------------------------------
[Insert Name of Owner]
By:
----------------------------------
Name:
Title:
Dated: ____________, ____
C-4
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Globe Holdings, Inc.
000 Xxxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxx
Norwest Bank Minnesota, National Association
Norwest Center
Sixth and Marquette
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Corporate Trust Services
Re: Warrants to Purchase Shares of Common Stock
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(CUSIP __________)
Reference is hereby made to the Warrant Agreement, dated as of August
6, 1998 (the "Warrant Agreement"), between Globe Holdings, Inc., as issuer (the
"Company"), and Norwest Bank Minnesota, National Association, as Warrant Agent.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Warrant Agreement.
In connection with our proposed purchase of ______________ amount of:
(a) [_] a beneficial interest in a Global Warrant, or
(b) [_] a Definitive Warrant,
we confirm that:
1. We understand that any subsequent transfer of the Warrants or any
interest therein is subject to certain restrictions and conditions set forth in
the Warrant Agreement and the undersigned agrees to be bound by, and not to
resell, pledge or otherwise transfer the Warrants or any interest therein except
in compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Warrants have not been
registered under the Securities Act, and that the Warrants and any interest
therein may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, that if we should sell the Warrants or any
interest therein, we will do so only (A) to the Company or any subsidiary
thereof, (B) in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined therein), (c) to an institutional
D-1
"accredited investor" (as defined below) that, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. broker-dealer) to you and to the
Company a signed letter substantially in the form of this letter and an Opinion
of Counsel in form reasonably acceptable to the Company to the effect that such
transfer is in compliance with the Securities Act. (D) outside the United States
in accordance with Rule 904 of Regulation S under the Securities Act, (E)
pursuant to the provisions of Rule 144(k) under the Securities Act (or any
successor provision) or (F) pursuant to an effective registration statement
under the Securities Act, and we further agree to provide to any person
purchasing the Definitive Warrant or beneficial interest in a Global Warrant
from us in a transaction meeting the requirements of clauses (A) through (E) of
this paragraph a notice advising such purchaser that resales thereof are
restricted as stated herein.
3. We understand that, on any proposed resale of the Warrants or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Warrants purchased by
us will bear a legend to the foregoing effect. We further understand that any
subsequent transfer by us of the Warrants or beneficial interest therein
acquired by us must be effected through one of the Initial Purchasers.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Warrants, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.
5. We are acquiring the Warrants or beneficial interest therein
purchased by us for our own account or for one or more accounts (each of which
is an institutional "accredited investor") as to each of which we exercise sole
investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
D-2
