WARRANT AGREEMENT
WARRANT AGREEMENT, dated as of August 2, 1996 (the "Agreement"),
between HOMELAND HOLDING CORPORATION, a Delaware corporation (the
"Company"), and LIBERTY BANK AND TRUST COMPANY OF OKLAHOMA CITY, N.A., as
Warrant Agent (the "Warrant Agent").
WHEREAS, in connection with the financial restructuring (the
"Restructuring") of the Company and its subsidiary, Homeland Stores, Inc., a
Delaware corporation ("Homeland"), to be consummated pursuant to their Plan of
Reorganization (as such term and all other capitalized terms used herein are
defined in section 15), the Company proposes to issue the Warrants described
herein to purchase up to an aggregate of 263,158 shares of Common Stock,
subject to adjustment as provided herein (the "Warrants"), to the holders of
the Old Common Stock in exchange (together with certain shares of Common
Stock) for all issued and outstanding shares of Old Common Stock, pursuant to
the Plan of Reorganization; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of
the Company, and the Warrant Agent is willing to act, in connection with
the issuance, transfer, exchange, replacement and exercise of the Warrant
Certificates and other matters as provided herein; and
WHEREAS, the Company desires to enter into this Agreement to set
forth the terms and conditions of the Warrants and the rights of the
holders thereof; and
WHEREAS, concurrently with the execution hereof, and in connection
with the consummation of the Restructuring, the Company and certain stock
holders of the Company are entering into a Registration Rights Agreement,
dated as of the date hereof (the "Registration Rights Agreement"), under
which the Company will grant certain registration rights to the holders of
the Warrants;
NOW, THEREFORE, in consideration of the foregoing premises and of
the mutual agreements set forth herein, the Company and the Warrant Agent
hereby agree as follows:
1. Issuance of Warrants.
1.1 Initial Issuance; Initial Share Amount. On the date
hereof (the "Original Issue Date"), the Company shall issue an
aggregate of 263,158 Warrants to the holders of the Old Common
Stock, pursuant to the Plan of Reorganization. The number of
shares of Common Stock issuable upon exercise of all such
Warrants shall be subject to all adjustments from and after the
Original Issue Date provided in sections 4 and 5, as set forth in
section 3.1, whether or not such Warrants were issued on or after
the date on which any event resulting in an adjustment occurred.
1.2 Form of Warrant Certificates. The Warrants shall be
evidenced by certificates substantially in the form attached
hereto as Exhibit A (the "Warrant Certificates"). Each Warrant
Certificate shall be dated as of the date on which it is countersigned by
the Warrant Agent, which shall be either on the
Original Issue Date or other date of issuance thereof, or on
division, exchange, substitution or transfer of any of the
Warrants. Each Warrant Certificate may have such legends and
endorsements stamped, printed, lithographed or engraved thereon
as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to
comply with any law or with any rule or regulation pursuant
thereto or with any rule or regulation of any securities exchange
on which the Warrants may be listed.
1.3 Execution of Warrant Certificates. Warrant Certificates
shall be executed on behalf of the Company by its President, any
Vice President, its Treasurer or Secretary, either manually or by
facsimile signature printed thereon. In case any such officer of
the Company whose signature shall have been placed upon any
Warrant Certificate shall cease to be such officer of the Company
before countersignature by the Warrant Agent or issuance and
delivery thereof, such Warrant Certificate nevertheless may be
countersigned by the Warrant Agent and issued and delivered with
the same force and effect as though such person had not ceased to
be such officer of the Company.
1.4 Countersignature of Warrant Certificates. Warrant
Certificates shall be manually countersigned by an authorized
signatory of the Warrant Agent and shall not be valid for any
purpose unless so countersigned. Such manual countersignature
shall constitute conclusive evidence of such authorization. The
Warrant Agent is hereby authorized to countersign, in accordance
with the provisions of this section 1.4, and deliver any new War
rant Certificates as and when required pursuant to the provisions
of sections 12 and 13. Each Warrant Certificate shall, when
manually countersigned by an authorized signatory of the Warrant
Agent, entitle the registered holder thereof to exercise the
rights as the holder of the number of Warrants set forth thereon,
subject to the provisions of this Agreement.
2. Duration of Warrants.
Irrespective of the date ofissuance, each Warrant shall
entitle the holder thereof to purchase from the Company one share of
Common Stock, at any time up to and including 5:00 p.m., New York City
time on August 2, 2001 (the "Expiration Date").
3. Exercise of Warrants.
3.1 Manner of Exercise. All or any of the Warrants
represented by a Warrant Certificate may be exercised by the
registered holder thereof during normal business hours on any
Business Day, by surrendering such Warrant Certificate, with the
subscription form set forth therein duly executed by such holder,
by hand or by mail to the Warrant Agent at the address set forth
in Section 17.1 (or, if such exercise shall be in connection with
an underwritten Public Offering, at the location designated by
the Company). Such Warrant Certificate shall be accompanied by
payment in respect of each Warrant that is exercised, which shall
be made by certified or official bank or bank cashier's check
payable to the order of the Company. Such payment shall be in an
amount equal to the product of (i) the number of shares of Common
Stock (without giving effect to any adjustment therein) designated in
such subscription form multiplied by (ii) the Warrant
Purchase Price in effect as of the date of such exercise. Upon
such surrender and payment, such holder shall thereupon be en
titled to receive the number of duly authorized, validly issued,
fully paid and nonassessable shares of Common Stock (or Other
Securities) determined as provided in sections 4 and 5.
3.2 When Exercise Effective. Each exercise of any Warrant
pursuant to section 3.1 shall be deemed to have been effected
immediately prior to the close of business on the Business Day on
which the Warrant Certificate representing such Warrant, duly
executed, with accompanying payment shall have been delivered as
provided in section 3.1, and at such time the Person or Persons
in whose name or names the certificate or certificates for Common
Stock (or Other Securities) shall be issuable upon such exercise
as provided in section 3.3 shall be deemed to have become the
holder or holders of record thereof.
3.3 Delivery of Certificates, etc.
(a) As promptly as practicable after the exercise of
any Warrant, and in any event within five Business Days thereafter
(or, if such exercise is in connection with an underwritten
Public Offering concurrently with such exercise), the Company at its
expense (other than as to payment of transfer taxes) will cause to be issued
and delivered to such holder, or as such holder may direct in writing
(subject to section 13),
(i) a certificate or certificates for the number of full
shares of Common Stock (or Other Securities) to which such holder
is entitled,
(ii) any cash payment in lieu of any fraction of a share or
security as provided in section 3.4, and
(iii) if less than all the Warrants represented by a Warrant
Certificate are exercised, a new Warrant Certificate or
Certificates of the same tenor and for the aggregate number of
Warrants that were not exercised, executed and countersigned in
accordance with sections 1.3 and 1.4.
(b) The Warrant Agent shall countersign any new Warrant
Certificate, register it in such name or names as may be directed in
writing by such holder, and shall deliver it to the person entitled to
receive the same in accordance with section 3.3(a). The Company, whenever
required by the Warrant Agent, will supply the Warrant Agent with Warrant
Certificates executed on behalf of the Company for such purpose.
3.4 Fractional Shares. No fractional shares of Common Stock
(or Other Securities) shall be issued upon any exercise of
Warrants. If more than one Warrant Certificate shall be
delivered for exercise at one time by the same holder, the number
of full shares or securities that shall be issuable upon exercise
shall be computed on the basis of the aggregate number of
Warrants exercised. As to any fraction of a share of Common
Stock (or Other Securities), the Company shall pay a cash
adjustment in respect thereto in an amount equal to the product
of the Market Price per share of Common Stock (or Other Securities)
as of the Business Day next preceding the date of such
exercise multiplied by such fraction.
4. Adjustment of Common Stock Issuable Upon Exercise.
4.1 Adjustment of Number of Shares. The number of shares of
Common Stock that the holder of a Warrant shall be entitled to
receive upon each exercise thereof shall be determined by multiplying
the number of shares of Common Stock that would otherwise
(but for the provisions of this section 4) be issuable upon such
exercise, as designated by such holder pursuant to section 3.1,
by a fraction of which (i) the numerator is $11.85 and (ii) the
denominator is the Warrant Purchase Price in effect on the date
of such exercise.
4.2 Adjustment of Warrant Purchase Price.
(a) The "Warrant Purchase Price" shall initially be $11.85 per
share, shall be adjusted and readjusted from time to time as
provided in this section 4 and, as so adjusted or readjusted,
shall remain in effect until a further adjustment or readjustment
thereof is required by this section 4.
(b) Additional Shares of Common Stock. If at any time or from
time to time after the Original Issue Date, the Company shall
issue or sell Additional Shares of Common Stock without consideration
or for a consideration per share less than the Current
Market Price in effect on the date of and immediately prior to
such issuance or sale or Additional Shares of Common Stock are
deemed to be issued pursuant to section 4.4 or 4.5, then in each
such case (subject to section 4.9), the Warrant Purchase Price
then in effect shall be reduced, concurrently with such issuance
or sale, to a price (calculated to the nearest .001 of a cent)
determined by multiplying such Warrant Purchase Price by a
fraction,
(i) the numerator of which shall be (A) the number of shares
of Common Stock outstanding immediately prior to such issuance or
sale plus (B) the number of shares of Common Stock that the aggregate
consideration received by the Company (computed in
accordance with section 4.6) for the total number of such
Additional Shares of Common Stock so issued or sold would
purchase at the Current Market Price, and
(ii) the denominator of which shall be the number of
shares of Common Stock outstanding immediately after such
issuance or sale,
provided that, for the purposes of this section 4.2(b), (x) immediately
after any Additional Shares of Common Stock are deemed to have been
issued pursuant to section 4.3(a) or 4.4, such Additional Shares shall
be deemed to be out standing, and (y) treasury shares shall not be
deemed to be outstanding.
4.3 Extraordinary Dividends and Distributions. In case the
Company at any time or from time to time after the Original Issue
Date shall declare, order, pay or make a dividend or other
distribution (including, without limitation, any distribution of
other or additional stock or other securities or property or
Options by way of dividend or spin-off, reclassification,
recapitalization or similar corporate rearrangement) on any
Common Stock, other than (a) a dividend payable in Additional
Shares of Common Stock or in Options for Common Stock or (b) a
regular, periodic dividend payable in cash and declared out of
the earned surplus of the Company as at the date hereof as
increased by any credits (other than credits resulting from a
revaluation of property) and decreased by any debits made thereto
after such date, then, and in each such case, subject to section
4.9, the Warrant Purchase Price in effect immediately prior to
the close of business on the record date fixed for the
determination of holders of any class of securities entitled to
receive such dividend or distribution shall be reduced, effective
as of the close of business on such record date, to a price
(calculated to the nearest .001 of a cent) determined by
multiplying such Warrant Purchase Price by a fraction,
(i) the numerator of which shall be the Current Market Price
in effect on such record date or, if the Common Stock trades on
an ex-dividend basis, on the date prior to the commencement of ex-
dividend trading, less the value of such dividend or distribution
(as determined in good faith by the Board of Directors of the
Company) applicable to one share of Common Stock, and
(ii) the denominator of which shall be such Current Market
Price.
4.4 Options and Convertible Securities.
(a) If at any time or from time to time after the Original
Issue Date, the Company shall issue, sell, grant or assume, or shall fix a
record date for the determination of holders of any class of securities
entitled to receive, any Options or Convertible Securities, then in each
such case, the maximum number of Additional Shares of Common Stock issuable
(as set forth in the instruments relating thereto, without regard to any
provision thereof for subsequent adjustment of such number) upon the exercise
of such Options or the conversion or exchange of such Convertible
Securities (and in the case of Options for Convertible Securities, the
exercise of such Options and the conversion or exchange of such Convertible
Securities), shall be deemed to be issued for purposes of section 4.2(b) as
of the time of such issuance, sale, grant or assumption or, in case
such a record date shall have been fixed, as of the close of business on such
record date, provided that such Additional Shares of Common Stock shall
not be deemed to have been issued unless the consideration per share
(determined pursuant to section 4.6) for such shares would be less than the
Current Market Price in effect on the date of and immediately prior to such
issuance, sale, grant or assumption or immediately prior to the close of
business on such record date (or, if the Common Stock trades on an
ex-dividend basis, on the date prior to the commencement of ex-dividend
trading), as the case may be. In any such case in which
Additional Shares of Common Stock are deemed to be issued,
(i) no further adjustment of the Warrant Purchase Price shall
be made upon the subsequent issuance or sale of Additional Shares
of Common Stock or Convertible Securities upon the exercise of
such Options or the conversion or exchange of such Convertible
Securities;
(ii) if such Options or Convertible Securities by their terms
provide, with the passage of time or otherwise, for any increase
in the consideration payable to the Company, or decrease in the
number of Additional Shares of Common Stock issuable, upon the
exercise, conversion or exchange thereof (by change of rate or
otherwise), the Warrant Purchase Price computed upon the original
issuance, sale, grant or assumption thereof or upon the
occurrence of the record date with respect thereto, and any
subsequent adjustments based thereon, shall, upon any such in
crease or decrease becoming effective, be recomputed to reflect
such increase or decrease insofar as it affects such Options, or
the rights of conversion or exchange under such Convertible
Securities, that are outstanding at such time;
(iii) upon the expiration of any such Options or of the rights
of conversion or exchange under any such Convertible Securities
that shall not have been exercised (or upon purchase by the
Company and cancellation or retirement of any such Options that
shall not have been exercised or of any such Convertible Se
curities the rights of conversion or exchange under which shall
not have been exercised), the Warrant Purchase Price computed
upon the original issuance, sale, grant or assumption thereof or
upon the occurrence of the record date with respect thereto, and
any subsequent adjustments based thereon, shall, upon such expiration
(or such cancellation or retirement, as the case may be), be
recomputed as if:
(A) in the case of Options for Common Stock or
of Convertible Securities, the only Additional Shares of Common Stock
issued or sold were the Additional Shares of Common Stock, if any,
actually issued or sold upon the exercise of such Options or the
conversion or exchange of such Convertible Securities, and the consideration
received therefor was an amount equal to (x) the consideration actually
received by the Company for the issuance, sale, grant or assumption of
all such Options, whether or not exercised, or all such Convertible
Securities that were actually converted or exchanged, plus (y) the
consideration actually received by the Company upon such exercise,
conversion or exchange, if any, minus (z) the consideration paid by
the Company for any purchase of any such Options that were not exercised,
or any such Convertible Securities the rights of conversion or exchange
under which were not exercised, and
(B) in the case of Options for Convertible Securities,
only the Convertible Securities, if any, actually issued or sold upon
the exercise of such Options were issued at the time of the issuance, sale,
grant or assumption of such Options, and the consideration received by the
Company for the Additional Shares of Common Stock deemed to have then been
issued was an amount equal to (x) the consideration actually received by the
Company for the issuance, sale, grant or assumption of all such Options,
whether or not exercised, plus (y) the consideration deemed to have been
received by the Company (pursuant to section 4.8) upon the issuance or sale
of the Convertible Securities with respect to which such Options were actually
exercised, minus (z) the consideration paid by the Company for any purchase
of such Options that were not exercised; and
(iv) no readjustment pursuant to clause (ii) or (iii) above
shall have the effect of increasing the Warrant Purchase Price by
an amount in excess of the amount of the adjustment thereof originally
made in respect of the issuance, sale, grant or assumption of such
Options or Convertible Securities.
(b) Notwithstanding section 4.4(a), in the case of any
such Options that expire by their terms not more than 30 days after the
date of issuance, sale, grant or assumption thereof, no adjustment of
the Warrant Purchase Price shall be made until the expiration or exercise
of all such Options, whereupon such adjustment shall be made in
the manner provided in clause (iii) of section 4.4(a) above.
(c) If at any time or from time to time after the Original
Issue Date, the Company shall be required to increase the number of
Additional Shares of Common Stock subject to any Option or into which
any Convertible Securities are convertible or exchangeable pursuant to the
operation of anti-dilution provisions applicable thereto, such Additional
Shares of Common Stock shall be deemed to be issued for purposes of
section 4.2(b) as of the time of such increase.
4.5 Stock Dividends, Stock Splits, etc. If at any time or
from time to time after the Original Issue Date, the Company
shall declare or pay any dividend or other distribution on any
class of stock of the Company payable in Common Stock, or shall
effect a subdivision of the outstanding shares of Common Stock
into a greater number of shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in Common
Stock), then in each such case, Additional Shares of Common Stock
shall be deemed to have been issued for the purposes of section 4.2(b),
(i) in the case of any such dividend, immediately
after the close of business on the record date for the determination of
holders of any class of securities entitled to
receive such dividend, or (ii) in the case of any such
subdivision, at the close of business on the day immediately
prior to the day upon which such subdivision becomes effective.
4.6 Computation of Consideration. For the purposes of this
section 4:
(a) Subject to the other provisions of this section 4.6, the
consideration for the issuance or sale of any Additional Shares
of Common Stock or for the issuance, sale, grant or assumption of
any Options, Convertible Securities or Other Securities, irrespective of
the accounting treatment of such consideration, shall equal
(i) (x) insofar as it consists of cash, the amount of cash
received by the Company, without deducting any expenses paid or
incurred (including but not limited to any commissions or
compensation paid or payable or concessions or discounts allowed
to underwriters, dealers or others performing similar services),
and any accrued interest or dividends, in connection with such
issuance, sale, grant or assumption, plus
(y) insofar as it consists of consideration other
than cash (including securities and other property), the Fair Value, at
the time of such issuance, sale, grant or assumption, of such
consideration received by the Company, without deducting any expenses
paid or incurred (including but not limited to any commissions or
compensation paid or payable or concessions or discounts allowed
to underwriters, dealers or others performing similar services), and
any accrued interest or dividends, in connection with such issuance, sale,
grant or assumption, or
(ii) if Additional Shares of Common Stock are issued
or sold or Options or Convertible Securities are issued, sold, granted or
assumed together with other stock or securities or other assets
of the Company or a Subsidiary for a consideration that covers
both, the proportion of such consideration so received, computed
as provided in clause (i) above, allocable based on relative Fair
Value to such Additional Shares of Common Stock, Options, or
Convertible Securities, as the case may be, all as determined in
good faith by the Board of Directors of the Company.
(b) All Options or Convertible Securities issued or delivered
in payment of any dividend or other distribution on any class of
stock of the Company, shall be deemed to have been issued without
consideration.
(c) All Additional Shares of Common Stock shall be deemed to
have been issued without consideration that are (x) issued or
delivered in payment of any dividend or other distribution on any
class of stock of the Company, (y) issued to effect a subdivision
of the outstanding shares of Common Stock into a greater number
of shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in Common Stock), or (z) issued or
deemed to have been issued pursuant to the operation of
anti-dilution provisions applicable to Options, Convertible
Securities or other securities of the Company or a Subsidiary,
whether as a result of the adjustments provided for hereby or
otherwise.
(d) For purposes of section 4.4 (subject to section 4.6(c)),
Additional Shares of Common Stock shall be deemed to have been
issued for a consideration per share determined by dividing
(i) the total amount, if any, received and receivable
by the Company as consideration for the issuance, sale, grant or assumption
of the relevant Options or Convertible Securities, plus the
minimum aggregate amount of additional consideration (as set
forth in the instruments relating thereto, without regard to any
provision thereof for subsequent adjustment of such
consideration) payable to the Company upon the exercise in full
of such Options or the conversion or exchange of such Convertible
Securities (and in the case of Options for Convertible
Securities, the exercise of such Options and the conversion or
exchange of such Convertible Securities), in each case computing
such consideration as provided in section 4.6(a) or 4.6(b),
by
(ii) the maximum number of shares of Common Stock issuable
(as set forth in the instruments relating thereto, without regard to
any provision thereof for subsequent adjustment of such number)
upon the exercise of such Options or the conversion or exchange
of such Convertible Securities (and in the case of Options for
Convertible Securities, the exercise of such Options and the
conversion or exchange of such Convertible Securities).
4.7 Adjustments for Combinations, etc. If at any time or
from time to time after the Original Issue Date, the outstanding
shares of Common Stock shall be combined or consolidated, by
reclassification or otherwise, into a lesser number of shares of
Common Stock, the Warrant Purchase Price in effect immediately
prior to such combination or consolidation shall, at the close of
business on the day on which such combination or consolidation
becomes effective, be proportionately increased.
4.8 Dilution in Case of Other Securities. If at any time or
from time to time after the Original Issue Date the Warrants
shall be exercisable for Other Securities (either alone or in
addition to Common Stock), and Other Securities shall be issued,
sold, granted or assumed, or shall become subject to issuance,
sale, grant or assumption upon any exercise, conversion or
exchange of any stock, options or convertible or other securities
(including but not limited to any Options or Other Securities) of
the Company (or any issuer of Other Securities or any other
Person referred to in section 5), or to subscription, purchase or
other acquisition pursuant to any Options issued or granted by
the Company (or any other issuer or Person), for a consideration
such as to dilute, on a basis consistent with the standards
established in the other provisions of this section 4, the rights
to purchase Other Securities granted hereunder and under the
Warrants, then in each such case, the computations, adjustments
and readjustments provided for in this section 4 with respect to
the Warrant Purchase Price shall be made as nearly as possible in
the manner so provided and applied to determine the amount of
Other Securities from time to time receivable upon the exercise
of the Warrants, so as to protect the holders of the Warrants
against the effect of such dilution.
4.9 Minimum Adjustment of Warrant Purchase Price. If the
amount of any adjustment of the Warrant Purchase Price required
pursuant to this section 4 would be less than one-tenth of
one percent (0.1%) of the Warrant Purchase Price in effect at the
time such adjustment is otherwise so required to be made, such
amount shall be carried forward and adjustment with respect
thereto made at the time of and together with any subsequent
adjustment that, together with such amount and any other amount
or amounts so carried forward, shall aggregate at least one-tenth
of one percent (0.1%) of such Warrant Purchase Price; provided
that, upon exercise of this Warrant, all adjustments carried
forward and not theretofore made up to and including the date of
such exercise shall be made to the nearest one one-hundredth
(.01) of a cent.
4.10 Other Dilutive Events. If any event shall occur as to
which the provisions of this section 4 or of section 5 are not
strictly applicable but the failure to make any adjustment would
not fairly protect the purchase rights represented by this
Agreement and the Warrants issued hereunder in accordance with
the essential intent and principles of such sections, then in
each such case, the Company shall appoint a firm of independent
public accountants of recognized national standing (which may be
the regular auditors of the Company), which shall give their
opinion upon the adjustment, if any, on a basis consistent with
the essential intent and principles established in sections 4 and
5, necessary to preserve, without dilution, the purchase rights
represented by this Agreement and the Warrants issued hereunder.
Upon receipt of such opinion, the Company will promptly mail a
copy thereof to the Warrant Agent and each holder of a Warrant
and shall make the adjustments described therein.
5. Consolidation, Merger, Sale of Assets, Reorganization, etc.
5.1 General Provisions. In case the Company, after the
Original Issue Date, (a) shall consolidate with or merge into any
other Person and shall not be the continuing or surviving
corporation of such consolidation or merger, or (b) shall permit
any other Person to consolidate with or merge into the Company
and the Company shall be the continuing or surviving Person but,
in connection with such consolidation or merger, Common Stock or
Other Securities shall be changed into or exchanged for cash,
stock or other securities of any other Person or any other
property, or (c) shall transfer all or substantially all of its
properties and assets to any other Person, or (d) shall effect a
capital reorganization or reclassification of Common Stock or
Other Securities (other than a capital reorganization or
reclassification resulting in the issue of Additional Shares of
Common Stock for which adjustment in the Warrant Purchase Price
is provided in section 4.2(b) or 4.3), then, and in the case of
each such transaction, the Company shall give written notice
thereof to each holder of any Warrant not less than 30 days prior
to the consummation thereof and proper provision shall be made so
that, upon the basis and the terms and in the manner provided in
this section 5, the holder of this Warrant, upon the exercise
hereof at any time after the consummation of such transaction,
shall be entitled to receive, at the aggregate Warrant Purchase
Price in effect at the time of such consummation for all Common
Stock (or Other Securities) issuable upon such exercise
immediately prior to such consummation, in lieu of the Common
Stock (or Other Securities) issuable upon such exercise prior to
such consummation, either of the following, as such holder shall
elect by written notice to the Company on or before the date
immediately preceding the date of the consummation of such
transaction:
(i) the highest amount of cash, securities or other property
to which such holder would actually have been entitled as a
shareholder upon such consummation if such holder had exercised
this Warrant immediately prior thereto, subject to adjustments
(subsequent to such consummation) as nearly equivalent as
possible to the adjustments provided for in section 4 and this
section 5, provided that if a purchase, tender or exchange offer
shall have been made to and accepted by the holders of Common
Stock under circumstances in which, upon completion of such
purchase, tender or exchange offer, the maker thereof, together
with members of any group (within the meaning of Rule 13d-5(b)(1)
under the Exchange Act) of which such maker is a part, and
together with any affiliate or associate of such maker (within
the meaning of Rule 12b-2 under the Exchange Act) and any members
of any such group of which any such affiliate or associate is a
part, own beneficially (within the meaning of Rule 13d-3 under
the Exchange Act) more than 50% of the outstanding shares of
Common Stock, and if the holder of this Warrant so designates in
such notice given to the Company, the holder of this Warrant
shall be entitled to receive the highest amount of cash,
securities or other property to which such holder would actually
have been entitled as a shareholder if the holder of this Warrant
had exercised this Warrant prior to the expiration of such
purchase, tender or exchange offer and accepted such offer (or,
if prorationing shall have been applicable to such purchase,
tender or exchange offer, the combined amount per share of cash,
securities or other property to which such holder would have been
entitled if such holder had accepted such offer and sold the same
percentage of shares pursuant thereto as other accepting
shareholders, and, as to the shares not sold in such offer, had
the same rights to receive cash, securities or other property per
share as other shareholders holding shares immediately prior to
the consummation of such transaction), subject to adjustments
(from and after the consummation of such purchase, tender or
exchange offer) as nearly equivalent as possible to the
adjustments provided for in section 4 and this section 5; or
(ii) in the event of a Stock Sale, the number of shares of
capital stock (or equivalent equity interests) of the Acquiring
Person (the "Merger Stock"), subject to adjustments (subsequent
to such corporate action) as nearly equivalent as possible to the
adjustments provided for in section 4 and this section 5,
determined by dividing (x) the product obtained by multiplying
(1) the number of shares of Common Stock (or Other Securities) to
which the holder of this Warrant would have been entitled had
such holder exercised this Warrant immediately prior to the
consummation of such transaction, times (2) the greater of the
Acquisition Price and the Warrant Purchase Price in effect on the
date immediately preceding the date of such consummation, by
(y) the Current Market Price per share of the the Merger Stock,
on the date immediately preceding the date of such consummation.
5.2 Assumption of Obligations, etc. Notwithstanding anything
contained in this Agreement to the contrary, the Company will not
effect any of the transactions described in clauses (a) through
(d) of section 5.1 unless, prior to the consummation thereof,
(a) each Person (other than the Company) that may be required to
deliver any cash, stock or other securities or other property
upon the exercise of the Warrants as provided herein shall
assume, by written instrument delivered to, and reasonably
satisfactory to, the Warrant Agent, (x) the obligations of the
Company under this Agreement (and if the Company shall survive
the consummation of such transaction, such assumption shall be in
addition to, and shall not release the Company from, any
continuing obligations of the Company under this Agreement) and
(y) the obligation to deliver to each holder of a Warrant such
cash, stock or other securities or other property as such holder
may be entitled to receive in accordance with the provisions of
section 5.1, and (b) such Person shall have similarly delivered
to the Warrant Agent an opinion of counsel for such Person, which
counsel may be an in-house counsel of such Person or such other
counsel reasonably satisfactory to the Warrant Agent and which
opinion shall be reasonably satisfactory to the Warrant Agent,
addressed to the Warrant Agent and stating that this Agreement
and the Warrants issued hereunder shall thereafter continue in
full force and effect and the terms hereof and thereof (in
cluding, but not limited to, all of the provisions of section 4
and this section 5) shall be applicable to the cash, stock or
other securities or other property that such Person may be
required to deliver upon any exercise of any Warrant or the
exercise of any rights pursuant thereto. Nothing in this sec
tion 5 or in section 8 shall be deemed to authorize the Company
to enter into any transaction not otherwise permitted by this
Agreement.
6. No Dilution or Impairment.
The Company will not, by amendment of its certificate of
incorporation or through any consolidation, merger, reorganization,
transfer of assets, dissolution, issuance or sale of securities
or any other voluntary action or omission, avoid or seek to avoid the
observance or performance of any of the terms of this Agreement or any
of the Warrants issued hereunder, but will at all times in
good faith observe and perform all such terms and take all such action
as may be necessary or appropriate in order to protect the rights of each
holder of a Warrant against dilution or other impairment. Without
limiting the generality of the foregoing, the Company (a) will not permit
the par value of any shares of stock receivable upon the exercise of
any Warrant to exceed the amount payable therefor upon such exercise,
(b) 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 stock upon the exercise of all of the Warrants
from time to time outstanding, (c) will not take any action that results
in any adjustment of the Warrant Purchase Price if the total number of
shares of Common Stock (or Other Securities) issuable after the action
upon the exercise of all of the Warrants would exceed the total number
of shares of Common Stock (or Other Securities) then authorized by the
Company's certificate of incorporation and available for the purpose
of issuance upon such exercise and (d) will not issue any capital stock
of any class that (x) has the right to more than one vote per share or
(y) is preferred as to dividends or as to the distribution of assets upon
voluntary or involuntary dissolution, liquidation or winding-up, unless
such stock is sold for a cash consideration at least equal to the amount
of its preference upon voluntary or involuntary dissolution, liquidation
or winding-up and the rights of the holders thereof shall be limited to a
fixed per centage (not exceeding 15%) of such cash consideration in
respect of participation in dividends.
7. Accountants' Reports.
In each case of any adjustment or readjustment in the
Warrant Purchase Price or the shares of Common Stock (or Other Securities)
issuable upon the exercise of the Warrants, the Company at its expense
will promptly compute such adjustment or readjustment in accordance with the
terms of this Agreement and cause independent public accountants of
recognized national standing selected by the Company (which may be the
regular auditors of the Company) to verify each such computation and
prepare a report setting forth such adjustment or readjustment and showing
in reasonable detail the method of calculation thereof and the facts upon
which such adjustment or readjustment is based, including, but not limited
to, a statement of (a) the consideration received or to be received by
the Company for any Additional Shares of Common Stock issued, sold or
transferred or deemed hereby to have been issued, (b) the number of shares
of Common Stock outstanding or deemed hereby to be outstanding, and (c) the
Warrant Purchase Price in effect immediately prior to such issuance or
sale and as adjusted and readjusted (if required by section 4) on account
thereof. The Company will forthwith mail a copy of each such report to
the Warrant Agent, which shall promptly mail a copy to each holder of a
Warrant. The Warrant Agent will cause the same to be available for
inspection at its principal office during normal business hours by any
holder of a Warrant or any prospective purchaser of a Warrant
designated by the holder thereof.
8. Notification of Certain Events.
8.1 Corporate Action. In the event of:
(a) any taking by the Company of a record of the holders of
any class of securities for the purpose of determining the
holders thereof who are entitled to receive any dividend (other
than a regular periodic dividend payable in cash out of earned
surplus in an amount not exceeding by more than 10% the amount of
the cash dividend for the immediately preceding period) or other
distribution of any kind, or any right to subscribe for, purchase
or otherwise acquire any shares of stock of any class or any
other securities or property, or to receive any other right or
interest of any kind; or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the Common Stock or other
capital stock of the Company, any consolidation or merger
involving the Company, or any sale or transfer of all or
substantially all of the assets of the Company; or
(c) the voluntary or involuntary dissolution, liquidation, or
winding up of the Company or Homeland;
the Company shall cause to be filed with the Warrant Agent and mailed
to each holder of a Warrant a notice specifying (i) the date or
expected date on which any such record is to be taken for the purpose
of such dividend, distribution or rights, and the amount and character of
such dividend, distribution or right, or, if a record is not to be taken,
the date as of which the holders of Common Stock of record to be entitled to
such dividend, distribution or rights are to be determined, and the
amount and character of such dividend, distribution or right, and (ii)
the date or expected date on which any such reorganization,
reclassification, recapitalization, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up is expected to become effective,
and the time, if any such time is to be fixed, as of which holders of
record of Common Stock (or Other Securities) shall be entitled to exchange
their shares of Common Stock (or Other Securities) for the securities
or other property deliverable upon such reorganization, reclassification,
recapitalization, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up. Such notice shall be delivered not less than
20 days prior to such date therein specified, in the case of any such
date referred to in clause (i) of the preceding sentence, and not less
than 45 days prior to such date therein specified, in the case of any
such date referred to in clause (ii) of the preceding sentence.
8.2 Expiration Date. The Company shall give each holder of a
Warrant written notice of the Expiration Date. Such notice may
be given by the Company not fewer than 30 days but not more than
60 days prior to the Expiration Date.
8.3 Available Information. The Company shall promptly file
with the Warrant Agent copies of its annual reports and of the
information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may by rules
and regulations prescribe) that the Company is required to file
with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act. If the Company is not required to make such
filings, the Company shall promptly deliver to the Warrant Agent
adequate current public information with respect to the Company
within the meaning of paragraph (c)(2) of Rule 144 of the General
Rules and Regulations under the Securities Act.
9. Registration Rights Agreement.
(a) Each holder of a Warrant or of any securities issued or
issuable upon the exercise thereof or any securities issued or
issuable upon the exercise, conversion or exchange of such
securities is entitled to the benefits of the Registration Rights
Agreement, to the extent and for so long as therein provided. By
acceptance of a Warrant Certificate or of any securities issued
or issuable upon the exercise thereof or any securities issued or
issuable upon the exercise, conversion or exchange of such
securities, each holder of a Warrant agrees to be bound by the
terms of the Registration Rights Agreement, to the extent and for
so long as therein provided.
(b) Each Warrant Certificate issued hereunder and each Warrant
Certificate issued upon transfer or in substitution for any such
Warrant Certificate pursuant to section 13 or 14 shall be stamped
or otherwise imprinted with a legend in substantially the
following form, until such time as the rights of any holder
thereof under the Registration Rights Agreement shall terminate
in accordance with the terms thereof:
"Each holder of this Warrant
Certificate or any shares acquired upon the
exercise of any Warrant represented hereby by
acceptance of this Warrant Certificate or any
certificate representing any such shares
acknowledges that such holder is entitled to the
benefits of and bound by the terms of the Registration
Rights Agreement, dated as of August 2,
1996, among the Company and certain of its
stockholders and holders of other equity interests,
a copy of which is on file at the offices of the
Company."
(c) Each certificate for Common Stock (or Other Securities)
issued upon the exercise of any Warrant and each certificate
issued upon the direct or indirect transfer of any such Common
Stock (or Other Securities) shall be stamped or otherwise
imprinted with a legend in substantially the following form,
until such time as the rights of any holder thereof under the
Registration Rights Agreement shall terminate in accordance with
the terms thereof:
"Each holder of the shares represented
by this certificate by acceptance of this
certificate acknowledges that such holder is
entitled to the benefits of and bound by the terms
of the Registration Rights Agreement, dated as of
August 2, 1996, among the Company and certain of
its stockholders and holders of other equity
interests, a copy of which is on file at the
offices of the Company."
10. Reservation of Stock, etc.
10.1 Reservation; Due Authorization, etc. The Company shall at
all times reserve and keep available, free from preemptive
rights, out of its authorized but unissued Common Stock (or out
of authorized Other Securities), solely for issuance and delivery
upon exercise of Warrants, the full number of shares of Common
Stock (and Other Securities) from time to time issuable upon the
exercise of all Warrants from time to time outstanding. All
shares of Common Stock (and Other Securities) shall be duly
authorized and, when issued upon such exercise, shall be duly and
validly issued, and (in the case of shares) fully paid and non
assessable, and free from all taxes, liens, charges, security
interests, encumbrances and other restrictions created by or
through the Company.
10.2 Compliance with Law. The Company will use its best
efforts, at its expense and on a continual basis, to assure that
all shares of Common Stock (and Other Securities) that may be
issued upon exercise of Warrants may be so issued and delivered
without violation of any Federal or state securities law or
regulation, or any other law or regulation applicable to the
Company or any of its subsidiaries, provided that with respect to
any such exercise involving a sale or transfer of Warrants or any
such securities issuable upon such exercise, the Company shall
have no obligation to register such Warrants or securities under
any such securities law except as provided in the Registration
Rights Agreement.
11. Payment of Taxes.
The Company will pay any and all documentary stamp or similar
issue taxes payable to the United States of America or any State, or any
political subdivision or taxing authority thereof or therein, in respect
of the issuance or delivery of shares of Common Stock (or Other Securities)
on exercise of Warrants, provided that the Company shall not be required
to pay any tax that may be payable in respect of any transfer involved in the
issuance and delivery of Common Stock (or Other Securities) in a name other
than that of the registered holder of the Warrants to be exercised, and
no such issuance or delivery shall be made unless and until the person
requesting such issuance has paid to the Company the amount of any such tax
or has established, to the reasonable satisfaction of the Company, that
such tax has been paid.
12. Loss or Mutilation.
Upon receipt by the Company and the Warrant Agent of evidence
reasonably satisfactory to them of the ownership of and the loss, theft,
destruction or mutilation of any Warrant Certificate and of an indemnity
bond reasonably satisfactory to them in form or amount, and (in the case of
mutilation) upon surrender and cancellation thereof, then, in the absence
of notice to the Company or the Warrant Agent that the Warrants represented
thereby have been acquired by a bona fide purchaser, the Company shall
execute and deliver to the Warrant Agent and, upon the Company's request,
an authorized signatory of the Warrant Agent shall manually countersign
and deliver, to the registered holder of the lost, stolen, destroyed or
mutilated Warrant Certificate, in exchange for or in lieu thereof, a new
Warrant Certificate of the same tenor and for a like aggregate number of
Warrants. Upon the issuance of any new Warrant Certificate under this
section 12, the Company may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the reasonable fees and expenses
of the Warrant Agent) in connection there with. Every new Warrant
Certificate executed and delivered pursuant to this section 12 in lieu of
any lost, stolen or destroyed Warrant Certificate shall be entitled to the
same benefits of this Agreement equally and proportionately with any and
all other Warrant Certificates, whether or not the allegedly lost, stolen
or destroyed Warrant Certificate shall be at any time enforceable by
anyone. The provisions of this section 12 are exclusive and shall preclude
(to the extent lawful) all other rights or remedies with respect to the
replacement of mutilated, lost, stolen or destroyed Warrant Certificates.
13. Warrant Registration.
13.1 Registration. The Warrant Certificates shall be issued
inregistered form only and shall be registered in the names of the
record holders of the Warrant Certificates to whom they are to be
delivered. The Company shall maintain or cause to be maintained
a register in which, subject to such reasonable regulations as it
may prescribe, the Company shall provide for the registration of
Warrants and of transfers or exchanges of Warrant Certificates as
provided in this Agreement. Such register shall be maintained at
the office of the Company or the Warrant Agent located at the
respective address therefor as provided in section 17.1. Such
register shall be open for inspection upon notice at all
reasonable times by the Warrant Agent and each holder of a
Warrant.
13.2 Transfer or Exchange. At the option of the holder,
Warrant Certificates may be exchanged or transferred for other
Warrant Certificates for a like aggregate number of Warrants,
upon surrender of the Warrant Certificates to be exchanged at the
office of the Company or the Warrant Agent maintained for such
purpose at the respective address therefor as provided in section 17.1,
and upon payment of the charges hereinafter provided. Whenever any Warrant
Certificates are so surrendered for exchange or transfer, the Company shall
execute, and an authorized signatory of the Warrant Agent shall manually
countersign and deliver, the Warrant Certificates that the holder making the
exchange is entitled to receive.
All Warrant Certificates issued upon any registration of
transfer or exchange of Warrant Certificates shall be the valid obligations
of the Company, evidencing the same obligations, and entitled to the same
benefits under this Agreement, as the Warrant Certificates surrendered for
such registration of transfer or exchange.
Every Warrant Certificate surrendered for registration of
transfer or exchange shall (if so required by the Company or the Warrant
Agent) be duly endorsed, or be accompanied by an instrument of transfer
in form reasonably satisfactory to the Company and the Warrant Agent and
duly executed, by the registered holder thereof or such holder's
officer or representative duly authorized in writing.
No service charge shall be made for any registration of
transfer or exchange of Warrant Certificates.
Any Warrant Certificate surrendered for registration of
transfer, exchange or the exercise of the Warrants represented thereby shall,
if surrendered to the Company, be delivered to the Warrant Agent, and all
Warrant Certificates surrendered or so delivered to the Warrant Agent
shall be promptly cancelled by the Warrant Agent. Any such Warrant
Certificate shall not be reissued by the Company and, except as provided in
this section 13 in case of an exchange or transfer, in section 12 in case
of a mutilated Warrant Certificate and in section 3 in case of the exercise
of less than all the Warrants represented thereby, no Warrant Certificate
shall be issued hereunder in lieu thereof. The Warrant Agent shall deliver to
the Company from time to time or otherwise dispose of such cancelled Warrant
Certificates in a manner reasonably satisfactory to the Company.
14. Warrant Agent.
The Warrant Agent undertakes the duties and obligations imposed
by this Agreement upon the terms and conditions set forth in this section 14.
The Company, and the holders of Warrants by their acceptance thereof, shall
be bound by all of such terms and conditions.
(a) The Warrant Agent shall not by countersigning Warrant
Certificates or by any other act hereunder be accountable with
respect to or be deemed to make any representations as to the
validity or authorization of the Warrants or the Warrant
Certificates (except as to its countersignature thereon), as to
the validity, authorization or value (or kind or amount) of any
Common Stock or of any other securities or other property delivered or
deliverable upon exercise of any Warrant, or as to the purchase price of
such Common Stock, securities or other property. The Warrant Agent shall
not (i) be liable for any recital or statement of fact contained herein or
in the Warrant Certificates or for any action taken, suffered or omitted by
the Warrant Agent in good faith in the belief that any Warrant
Certificate or any other document or any signature is genuine or
properly authorized, (ii) be responsible for determining whether
any facts exist that may require any adjustment of the purchase
price and the number of shares of Common Stock purchasable upon
exercise of Warrants, or with respect to the nature or extent of
any such adjustments when made, or with respect to the method of
adjustment employed, (iii) be responsible for any failure on the
part of the Company to issue, transfer or deliver any Common
Stock or other securities or property upon the surrender of any
Warrant for the purpose of exercise or to comply with any other
of the Company's covenants and obligations contained in this
Agreement or in the Warrant Certificates or (iv) be liable for
any act or omission in connection with this Agreement except for
its own negligence or willful misconduct.
(b) The Warrant Agent is hereby authorized to accept
instructions with respect to the performance of its duties hereunder
from the President, any Vice President, the Treasurer or any
Assistant Treasurer of the Company and to apply to any such
officer for advice or instructions. The Warrant Agent shall not
be liable for any action taken, suffered or omitted by it in good
faith in accordance with the instructions of any such officer.
(c) The Warrant Agent may execute and exercise any of the
rights and powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys, agents or
employees, provided reasonable care has been exercised in the
selection and in the continued employment of any such attorney,
agent or employee. The Warrant Agent shall not be under any
obligation or duty to institute, appear in, or defend any action,
suit or legal proceeding in respect hereof, but this provision
shall not affect the power of the Warrant Agent to take such
action as the Warrant Agent may consider proper. The Warrant
Agent shall promptly notify the Company in writing of any claim
made or action, suit or proceeding instituted against the Warrant
Agent arising out of or in connection with this Agreement.
(d) The Company will perform, execute, acknowledge and deliver
or cause to be performed, executed, acknowledged and delivered
all such further acts, instruments and assurances as may
reasonably be required by the Warrant Agent in order to enable
the Warrant Agent to carry out or perform its duties under this
Agreement.
(e) The Warrant Agent shall act solely as agent. The Warrant
Agent shall not be liable except for the performance of such
duties as are specifically set forth herein, and no implied
covenants or obligations shall be read into this Agreement
against the Warrant Agent, whose duties and obligations shall be
determined solely by the express provisions hereof.
(f) The Warrant Agent may at any time consult with legal
counsel satisfactory to it (who may be legal counsel for the
Company) and the Warrant Agent shall incur no liability or responsibility
to the Company or to any Warrant holder for any action
taken, suffered or omitted by the Warrant Agent in good faith in
accordance with the opinion or advice of such counsel.
(g) The Company agrees to pay the Warrant Agent reasonable
compensation for its services hereunder and to reimburse the
Warrant Agent for its reasonable expenses hereunder; and further
agrees to indemnify the Warrant Agent and hold it harmless
against any and all liabilities, including, but not limited to,
judgments, costs and counsel fees, for anything done, suffered or
omitted by the Warrant Agent in the execution of its duties and
powers hereunder, except for any such liabilities that arise as a
result of the Warrant Agent's negligence or willful misconduct.
(h) The Warrant Agent shall account promptly to the Company
with respect to Warrants exercised and concurrently pay to the
Company all moneys received by the Warrant Agent on behalf of the
Company on the purchase of shares of Common Stock through the
exercise of Warrants.
(i) The Warrant Agent and any stockholder, director, officer
or employee of the Warrant Agent may buy, sell or deal in any of
the Warrants or other securities of the Company or become
pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the Company
or otherwise act as fully and freely as though it were not
Warrant Agent under this Agreement. Nothing herein shall
preclude the Warrant Agent from acting in any other capacity for
the Company or for any other legal entity.
(j) The Warrant Agent may resign its duties and be discharged
from all further duties and liabilities hereunder (except
liabilities arising as a result of the Warrant Agent's negligence
or willful misconduct), after giving 30 days' prior written
notice to the Company. The Company may remove the Warrant Agent
upon 30 days' written notice, and the Warrant Agent shall
thereupon in like manner be discharged from all further duties
and liabilities hereunder, except as to liabilities arising as a
result of the Warrant Agent's negligence or willful misconduct.
The Company shall cause to be mailed (by first class mail,
postage prepaid) to each registered holder of a Warrant at such
holder's last address as shown on the register of the Company, at
the Company's expense, a copy of such notice of resignation or
notice of removal, as the case may be. Upon such resignation or
removal the Company shall promptly appoint in writing a new
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 resignation by the resigning Warrant Agent or
after such removal, then the holder of any Warrant may apply to
any court of competent jurisdiction for the appointment of a new
warrant agent. Pending appointment of a successor to the Warrant
Agent, either by the Company or by such a court, the duties of
the Warrant Agent shall be carried out by the Company. Any
successor warrant agent, whether appointed by the Company or by
such a court, shall be a corporation, incorporated under the laws
of the United States or of any State thereof and authorized under
such laws to exercise corporate trust powers, be subject to supervision
and examination by Federal or State authority, and have a combined capital
and surplus of not less than $100,000,000 as set
forth in its most recent published annual report of condition.
After acceptance in writing of such appointment by the new
warrant agent it shall be vested with the same powers, rights,
duties and responsibilities as if it had been originally named
herein as the Warrant Agent, without any further assurance, conveyance,
act or deed; but if for any reason it shall be necessary or expedient to
execute and deliver any further assurance,
conveyance, act or deed, the same shall be done at the expense of
the Company and shall be legally and validly executed and
delivered by the resigning or removed Warrant Agent. Not later
than the effective date of any such appointment the Company shall
file notice thereof with the resigning or removed Warrant Agent
and shall forthwith cause a copy of such notice to be mailed (by
first class mail, postage prepaid) to each registered holder of a
Warrant at such holder's last address as shown on the register of
the Company. Failure to give any notice provided for in this
paragraph (j), or any defect in any such notice, shall not affect
the legality or validity of the resignation of the Warrant Agent
or the appointment of a new warrant agent, as the case may be.
(k) If at any time the name of the Warrant Agent shall be
changed and at such time any of the Warrant Certificates shall
have been countersigned but not delivered, the Warrant Agent may
adopt the countersignature under its prior name and deliver
Warrant Certificates so countersigned; and if at that time any of
the Warrant Certificates shall not have been countersigned, the
Warrant Agent may countersign such Warrant Certificates either in
its prior name or in its changed name; and in all such cases such
Warrant Certificates shall have the full force and effect
provided in the Warrant Certificates and this Agreement.
(l) Any corporation into which the Warrant Agent or any new
warrant agent may be merged or any corporation resulting from any
consolidation to which the Warrant Agent or any new warrant agent
shall be a party or any corporation succeeding to all or sub
stantially all the agency business of the Warrant Agent or any
new warrant agent shall be a successor Warrant Agent under this
Agreement without any further act, provided that such corporation
would be eligible for appointment as a new warrant agent under
the provisions of paragraph (j) of this section 14. The Company
shall promptly cause notice of the succession as Warrant Agent of
any such successor Warrant Agent to be mailed (by first class
mail, postage prepaid) to each registered holder of a Warrant at
his last address as shown on the register of the Company.
15. Definitions.
As used herein, the following terms have the following
respective meanings:
Acquiring Person:
(a) the continuing or surviving corporation of a consolidation
or merger with the Company (if other than the Company), (b) the
transferee of substantially all of the properties and assets of the Company,
(c) the corporation consolidating with, merging into or acquiring the
Company in a consolidation, merger or other transaction in connection with
which the Common Stock is changed into or exchanged for stock or
other securities of any other Person or cash or any other property, or (d)
in the case of a capital reorganization or reclassification or
recapitalization, the Company.
Acquisition Price:
as applied to the Common Stock, with respect to any transaction
to which section 5 applies, (a) the price per share equal to the
greater of the following, determined in each case as of the date immediately
preceding the date of consummation of such transaction: (i) the Market
Price of the Common Stock and (ii) the highest amount of cash plus the Fair
Value of the highest amount of securities or other property which the
holder of this Warrant would have been entitled as a shareholder to receive
upon such consummation if such holder had exercised this Warrant immediately
prior thereto, or (b) if a purchase, tender or an exchange offer is made by
the Acquiring Person (or by any of its affiliates) to the holders of the
Common Stock and such offer is accepted by the holders of more than 50% of
the outstanding shares of Common Stock, the greater of (i) the price
determined in accordance with the foregoing subdivision (a) and (ii) the
price per share equal to the greater of the following, determined in each
case as of the date immediately preceding the acceptance of such offer by the
holders of more than 50% of the outstanding shares of Common Stock:
(x) the Market Price of the Common Stock and (y) the highest amount of cash
plus the Fair Value of the highest amount of securities or other property
which the holder of this Warrant would be entitled as a shareholder to
receive pursuant to such offer if such holder had exercised this Warrant
immediately prior to the expiration of such offer and accepted the same.
Additional Shares of Common Stock: all shares (including
treasury shares) of Common Stock issued or sold (or, pursuant to section 4.4
or 4.5, deemed to be issued) by the Company after the Original Issue Date,
whether or not subsequently reacquired or retired by the Company,
other than (a) shares of Common Stock issued or issuable upon the exercise
of Warrants issued hereunder and (b) not more than 263,158 shares of
Common Stock issued or issuable upon the exercise of the Management Stock
Options.
Affiliate: with respect to any Person, any Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such Person. For purposes of this definition, (a) "control" when
used with respect to any Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the
ownership of Voting Common Stock (or equivalent equity interests), by
contract or otherwise, and the terms "controlling" or "controlled" have
meanings correlative to the foregoing, and (b) a Subsidiary is an Affiliate
of the Company and each other Subsidiary.
Bankruptcy Court: the United States Bankruptcy Court for the
District of Delaware.
Business Day: any day other than a Saturday or a Sunday or a
day on which commercial banking institutions in New York City are
authorized by law to be closed, provided that, in determining the period
within which certificates or Warrants are to be issued and delivered pursuant to
section 3.1 at a time when shares of Common Stock (or Other Securities) are
listed or admitted to trading on any national securities exchange or in
the over-the-counter market and in determining the Market Price of any
securities listed or admitted to trading on any national securities exchange
xxxx the over-the-counter market, "Business Day" shall mean any day when
the principal exchange on which such securities are then listed or admitted
to trading is open for trading or, if such securities are traded in the
over-the-counter market in the United States, such market is open
for trading, and provided further that any reference in this Agreement to
"days" (unless Business Days are specified) shall mean calendar days.
Commission: the Securities and Exchange Commission or any
other Federal agency at the time administering the Securities Act or the
Exchange Act, whichever is the relevant statute for the particular purpose.
Common Stock: the Company's Common Stock, par value $.01 per
share, as constituted on the Original Issue Date after giving effect to the
consummation of the Restructuring, any stock into which such Common Stock
shall have been changed or any stock resulting from any reclassification of
such Common Stock, and all other stock of any class or classes (however
designated) of the Company the holders of which have the right, without
limitation as to amount, either to all or to a share of the
balance of current dividends and liquidating dividends after the payment of
dividends and distributions on any shares entitled to preference.
Company: the meaning specified in the opening paragraphs of
this Agreement.
Convertible Securities: any evidences of indebtedness, shares
of stock (other than Common Stock) or other securities directly or indirectly
convertible into or exchangeable for Common Stock.
Current Market Price: on any date specified herein, (a) with
respect to Common Stock or to Voting Stock (or equivalent equity interests)
of an Acquiring Person or its Parent, (i) the average daily Market Price
during the period of the most recent 20 consecutive Business Days ending on
such date, or (ii) if shares of Common Stock are not then listed or admitted
to trading on any national securities exchange and if the closing bid
and asked prices thereof are not then quoted or published in the
over-the-counter market, the Market Price on such date and (b) with respect to
any other securities, the Market Price on such date.
Exchange Act: the Securities Exchange Act of 1934, or any
similar Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be amended and in effect at the time.
Reference to a particular section of the Securities Exchange Act of 1934
shall include a reference to the comparable section, if any, of any such
similar Federal statute.
Expiration Date: the meaning specified in section 2.
Fair Value: with respect to any securities or other property,
the Fair Value thereof as of a date which is within 15 days of the
date as of which the determination is to be made (a) determined by an
agreement between the Company and the Requisite Holders of Warrants or (b)
if the Company and the Requisite Holders of Warrants fail to agree,
determined jointly by an independent investment banking firm retained by the
Company and by an independent investment banking firm retained by the
Requisite Holders of Warrants, either of which firms may be an independent
investment banking firm regularly retained by the Company or any such holder
or (c) if the Company or such holders shall fail so to retain an independent
investment banking firm within five Business Days of the retention of such
firm by such holders or the Company, as the case may be, determined solely
by the firm so retained or (d) if the firms so retained by the Company and
by such holders shall be unable to reach a joint determination within 15
Business Days of the retention of the last firm so retained, determined by
another independent investment banking firm which is not a regular investment
banking firm of the Company or any such holder chosen by the first two such
firms.
Management Stock Options: the options to purchase up to
263,158 shares of Common Stock to be granted to certain executive officers
and key employees of the Company and its Subsidiaries pursuant to Management
Stock Option Plan to be implemented in connection with the Restructuring.
Market Price: on any date specified herein, (a) with respect
to Common Stock, the amount per share equal to (i) the last sale price
of shares of Common Stock, regular way, on such date or, if no such sale
takes place on such date, the average of the closing bid and asked prices
thereof on such date, in each case as officially reported on the principal
national securities exchange on which the Common Stock is then listed
or admitted to trading, or (ii) if the Common Stock is not then listed or
admitted to trading on any national securities exchange but the Common Stock
is designated as a national market system security by the NASD, the last
trading price of the Common Stock on such date, or if the Common Stock is not
so designated, the average of the reported closing bid and asked prices
thereof on such date as shown by the NASD automated quotation system or, if no
shares thereof are then quoted in such system, as published by the National
Quotation Bureau, Incorporated or any successor organization, and in
either case as reported by any member firm of the New York Stock Exchange
selected by the Company, or (iii) if the Common Stock is not then listed or
admitted to trading on any national exchange or designated as a national
market system security and if no closing bid and asked prices thereof are then
so quoted or published in the over-the-counter market, the higher of (x) the
book value thereof as determined by any firm of independent public
accountants of recognized national standing selected by the Board of
Directors of the Company, as of the last day of any month ending within 60 days
preceding the date as of which the determination is to be made and (y) the
Fair Value thereof, determined on the basis of an assumed sale of the
Company and its Subsidiaries as a whole without giving effect to any control
premium, to any discount for lack of liquidity or to the fact that
the Company has no class of equity securities registered under the Exchange
Act; and (b) with respect to any other securities, (x) the value as
determined in accordance with the methods provided in (i) and (ii) of clause
(a) above or (y) if such other security is not then listed or admitted to
trading on any national exchange or designated as a national market system
security and if no closing bid and asked prices thereof are then quoted or
published in the over-the-counter market, the Fair Value thereof.
Merger Stock: the meaning specified in section 5.1(i).
NASD: the National Association of Securities Dealers.
Old Common Stock: the Company's former Class A Common Stock,
$.01 par value per share, outstanding immediately prior to the
effectiveness of the Plan of Reorganization.
Options: options, warrants or other rights to subscribe for,
purchase or otherwise acquire either Common Stock or Convertible
Securities.
Original Issue Date: the meaning specified in section 1.1.
Other Securities: any stock (other than Common Stock) and other
securities of the Company or any other Person (corporate or otherwise) that
the holders of the Warrants at any time shall be entitled to receive, or
shall have received, upon the exercise of the Warrants, in lieu of or in
addition to Common Stock, or that at any time shall be issuable or shall have
been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to section 5 or otherwise.
Parent: as to any Acquiring Person, any corporation that (a)
controls the Acquiring Person directly or indirectly through one or more
intermediaries, (b) is required to include the Acquiring Person in its
consolidated financial statements under generally accepted accounting
principles and (c) is not itself included in the consolidated financial
statements of any other Person (other than its consolidated subsidiaries).
Person: any individual, partnership, association, joint
venture, corporation, business, trust, unincorporated organization,
government or department, agency or subdivision thereof, or other
person or entity.
Plan of Reorganization: the Joint Plan of Reorganization of
the Company and Homeland, which was approved by the Bankruptcy Court on July
19, 1996 and pursuant to which the Restructuring will be consummated.
Public Offering: any offering of Common Stock (or Other
Securities) to the public pursuant to an effective registration statement
under the Securities Act.
Registration Rights Agreement: the meaning specified in the
recitals of this Agreement.
Requisite Holders of Warrants: the holders of at least a
majority of all Warrants at the time outstanding, determined on the basis of
the number of shares of Common Stock or Other Securities deliverable upon
exercise thereof.
Restructuring: the meaning specified in the recitals of this
Agreement.
Securities Act: the Securities Act of 1933, or any successor
Federal statute, and the rules and regulations of the Commission thereunder,
all as the same shall be amended and in effect at the time. Reference to a
particular section of the Securities Act of 1933 shall include a reference to
the comparable section, if any, of any such successor Federal statute.
Stock Sale: a transaction of the type described in clauses (a),
(b), (c) or (d) of section 5.1, pursuant to which Common Stock or Other
Securities are changed into or exchanged for capital stock (or equivalent
equity interests, including, without limitation, Convertible
Securities) of an Acquiring Person.
Subsidiary: any corporation, association or other business
entity a majority (by number of votes) of the Voting Common Stock (or
equivalent equity interests entitled to vote for the election of a majority
of the directors thereof or persons performing similar functions therefor)
of which is at the time owned by the Company or by one of or more
Subsidiaries or by the Company and one or more Subsidiaries.
Voting Common Stock: with respect to any corporation, stock of
any class or classes if the holders of the stock of such class or classes
are ordinarily (in the absence of contingencies) entitled to vote for the
election of a majority of the directors of such corporation.
Warrant: the meaning specified in section 1.1.
Warrant Certificates: the meaning specified in section 1.2.
Warrant Purchase Price: the meaning specified in section 4.2.
Warrants: the meaning specified in the opening recitals of
this Agreement.
16. Remedies, etc.
16.1 Remedies. The Company stipulates that the remedies at law
of each holder of a Warrant in the event of any default or
threatened default by the Company in the performance of or
compliance with any of the terms of this Warrant are not and will
not be adequate and that, to the fullest extent permitted by law,
such terms may be specifically enforced by a decree for the
specific performance of any agreement contained herein or by an
injunction against a violation of any of the terms hereof or
otherwise.
16.2 Warrant Holder Not Deemed a Stockholder. Prior to the
exercise of the Warrants represented thereby no holder of a
Warrant Certificate, as such, shall be entitled to any rights of
a stockholder of the Company, including, but not limited to, the
right to vote, to receive dividends or other distributions, to
exercise any preemptive right or to receive any notice of
meetings of stockholders, and no such holder shall be entitled to
receive notice of any proceedings of the Company except as
provided in this Agreement. Nothing contained in this Agreement
shall be construed as imposing any liabilities on such holder to
purchase any securities or as a stockholder of the Company,
whether such liabilities are asserted by the Company or by
creditors or stockholders of the Company or otherwise.
16.3 Right of Action. All rights of action in respect of this
Agreement are vested in the registered holders of the Warrants.
Any registered holder of any Warrant, without the consent of the
Warrant Agent or the registered holder of any other Warrant, may
in such holder's own behalf and for such holder's own benefit enforce,
and may institute and maintain any suit, action or
proceeding against the Company suitable to enforce, or otherwise
in respect of, such holder's right to exercise such holder's
Warrants in the manner provided in the Warrant Certificate representing
such Warrants and in this Agreement.
17. Miscellaneous.
17.1 Notices. Any notice, demand or delivery authorized by
this Agreement shall be sufficiently given or made if sent by
first class mail, postage prepaid, addressed to any registered
holder of a Warrant at such holder's last known address appearing
on the register of the Company, and to the Company or the Warrant
Agent as follows:
To the Company:
Homeland Holding Corporation
0000 Xxxxxxxxx Xxxxxxxxxx
Oil Center East, 11th Floor
Oklahoma City, OK 73112
Attention: Secretary
with a copy to:
Xxxxx & Xxxxxxx
0000 Mid-American Tower
00 Xxxxx Xxxxxxxx
Xxxxxxxx Xxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
To the Warrant Agent:
By Hand
Liberty Bank and Trust Company of Oklahoma, N.A.
000 Xxxxx Xxxxxxxx, Ninth Floor
Stock Transfer Department
Xxxxxxxx Xxxx, XX 00000
By Mail
Liberty Bank and Trust Company of Oklahoma, N.A.
X.X. Xxx 00000
Xxxxxxxx Xxxx, XX 00000
Attention: Stock Transfer Department
or such other address as shall have been furnished in writing, in accordance
with this section 17.1, to the party giving or making such notice, demand
or delivery.
17.2 Governing Law. This Agreement, each Warrant Certificate
issued hereunder and all rights arising hereunder shall be
construed and determined in accordance with the laws of the State
of New York, without giving effect to the conflict of laws
principles or rules thereof, and the performance thereof shall be
governed and enforced in accordance with such laws.
17.3 Benefits of this Agreement. This Agreement shall be
binding upon and inure to the benefit of the Company and the
Warrant Agent and their respective successors and assigns, and
the registered and beneficial holders from time to time of the
Warrants. Nothing in this Agreement is intended or shall be
construed to confer upon any person, other than the Company, the
Warrant Agent and the registered and beneficial holders of the
Warrants, any right, remedy or claim under or by reason of this
Agreement or any part hereof.
17.4 Agreement of Holders of Warrant Certificates. Every
holder of a Warrant Certificate, by accepting the same, consents
and agrees with the Company, the Warrant Agent and with every
other holder of a Warrant Certificate that the Warrant
Certificates are transferable on the registry books of the
Warrant Agent only upon the terms and conditions set forth in
this Agreement, and the Company and the Warrant Agent may deem
and treat the person in whose name the Warrant Certificate is
registered as the absolute owner for all purposes whatsoever and
neither the Company nor the Warrant Agent shall be affected by
any notice to the contrary.
17.5 Counterparts. This Agreement may be executed in any
number of counterparts and each such counterpart shall for all
purposes be deemed to be an original, and all such counterparts
shall together constitute but one and the same instrument.
17.6 Amendments. The Warrant Agent may, without the consent
or concurrence of the holders of the Warrants, by supplemental
agreement or other writing, join with the Company in making any
amendments or modifications of this Agreement that they shall
have been advised by counsel (a) are required to cure any
ambiguity or to correct any defective or inconsistent provision
or clerical omission or mistake or manifest error herein
contained, (b) add to the covenants and agreements of the Company
in this Agreement further covenants and agreements of the Company
thereafter to be observed, or surrender any rights or power
reserved to or conferred upon the Company in this Agreement or
(c) do not and will not adversely affect, alter or change the
rights, privileges or immunities of the registered holders of
Warrants. Any other amendment to this Agreement may be effected
only with the consent of the Requisite Holders of Warrants.
17.7 Headings. The table of contents hereto and the
descriptive headings of the several sections here of are inserted
for convenience only and shall not control or affect the meaning
or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above written.
HOMELAND HOLDING CORPORATION
By:_____________________________
Name:
Title:
LIBERTY BANK AND TRUST COMPANY
OF OKLAHOMA CITY, N.A.,
as Warrant Agent
By:_____________________________
Name:
175444 Title:
WARRANT AGREEMENT
between
HOMELAND HOLDING CORPORATION
and
LIBERTY BANK AND TRUST COMPANY OF
OKLAHOMA CITY, N.A.,
as Warrant Agent
263,158 Warrants
Dated as of August 2, 1996
EXHIBIT A
[FORM OF FACE OF WARRANT CERTIFICATE]
Warrant No. __________ Number of Warrant(s): ___________
Exercisable On or Before Xxxxxx 0, 0000
XXXXXXX TO PURCHASE
COMMON STOCK
OF
HOMELAND HOLDING CORPORATION
SEE REVERSE FOR CERTAIN DEFINITIONS
This Certifies that _____________ or registered assigns, is
the owner of the number of WARRANTS set forth above, each of which
represents the right, at any time after the date hereof and on
or before 5:00 p.m., New York City time, on August 2, 2001, to purchase
from Homeland Holding Corporation, a Delaware corporation (the "Company"),
at the price of $ (the "Warrant Purchase Price"), one share of Common
Stock, $.01 par value, of the Company as such stock was constituted as of
August 2, 1996, subject to adjustment as provided in the Warrant Agreement
hereinafter referred to, upon surrender hereof, with the subscription form
on the reverse hereof duly executed, by hand or by mail to Liberty Bank and
Trust Company of Oklahoma City, National Association, as warrant agent under
the Warrant Agreement, at its office at 000 Xxxxx Xxxxxxxx, Ninth Floor,
Stock Transfer Department, Xxxxxxxx Xxxx, Xxxxxxxx 00000, or to any
successor thereto, as the warrant agent under the Warrant Agreement, at the
office of such successor maintained for such purpose (any such warrant agent
being herein called the "Warrant Agent") (or, if such exercise shall be
in connection with an underwritten public offering of shares of such Common
Stock (or Other Securities (as such term and other capitalized terms used
herein are defined in the Warrant Agreement)) subject to the Warrant
Agreement, at the location at which the Company shall have agreed to deliver
such securities), and simultaneous payment in full (by certified or official
bank or bank cashier's check payable to the order of the Company) of the
Warrant Pur chase Price in respect of each Warrant represented by this
Warrant Certificate that is so exercised, all subject to the terms and
conditions hereof and of the Warrant Agreement.
Upon any partial exercise of the Warrants represented
by this Warrant Certificate, there shall be issued to the holder hereof a
new Warrant Certificate representing the Warrants that were not exercised.
No fractional shares will be issued upon the exercise of
rights to purchase hereunder. As to any final fraction of a share that the
same holder of one or more Warrant Certificates, the rights under which are
exercised in the same transaction, would otherwise be entitled to purchase
on such exercise, the Company shall pay a cash amount equal to the value thereof
determined as provided in the Warrant Agreement.
This Warrant Certificate is issued under and in accordance with a
Warrant Agreement, dated as of August 2, 1996 (the "Warrant Agreement"),
between the Company and Liberty Bank and Trust Company of Oklahoma City,
National Association, as Warrant Agent, and is subject to the terms and
provisions contained therein, all of which terms and provisions the holder of
this Warrant Certificate consents to by acceptance hereof. Copies of the
Warrant Agreement are on file at the above-mentioned office of the Warrant
Agent and may be obtained by writing to the Warrant Agent.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF
THIS WARRANT SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS
SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.
Dated:August 2, 1996 HOMELAND HOLDING CORPORATION
By:________________________
Title:
Countersigned:
Liberty Bank and Trust Company of Oklahoma City, N.A., as Warrant Agent
By:__________________________
Authorized Signatory
[FORM OF REVERSE OF WARRANT CERTIFICATE]
HOMELAND HOLDING CORPORATION
The transfer of this Warrant Certificate and all rights hereunder
is registrable by the registered holder hereof, in whole or in part, on the
register of the Company upon surrender of this Warrant Certificate at the
office or agency of the Company or the office of the Warrant Agent maintained
for such purpose in Oklahoma City, Oklahoma, duly endorsed or accompanied by
a written instrument of transfer duly executed and in form satisfactory to
the Company and the Warrant Agent, by the registered holder hereof or his
attorney duly authorized in writing and upon payment of any necessary
transfer tax or other governmental charge imposed upon such transfer or
registration thereof. Upon any partial transfer the Company will cause to
be delivered to such holder a new Warrant Certificate or Certificates with
respect to any portion not so transferred.
This Warrant Certificate may be exchanged at the office or
agency of the Company or the office of the Warrant Agent maintained for
such purpose in Oklahoma City, Oklahoma, for Warrant Certificates
representing the same aggregate number of Warrants, each new Warrant
Certificate to represent such number of Warrants as the holder hereof shall
designate at the time of such exchange.
Prior to the exercise of the Warrants represented hereby, the
holder of this Warrant Certificate, as such, shall not be entitled
to any rights of a stockholder of the Company, including, but not limited to,
the right to vote, to receive dividends or other distributions, to exercise
any preemptive right or to receive any notice of meetings of stockholders,
and shall not be entitled to receive notice of any proceedings of the
Company except as provided in the Warrant Agreement. Nothing contained
herein shall be construed as imposing any liabilities upon the holder of this
Warrant Certificate to purchase any securities or as a stockholder of the
Company, whether such liabilities are asserted by the Company or by creditors
or stockholders of the Company or otherwise.
This Warrant Certificate shall be void and all rights represented
hereby shall cease unless exercised on or before the close of business
on August 2, 2001.
This Warrant Certificate shall not be valid for any purpose until
it shall have been manually countersigned by an authorized signatory of the
Warrant Agent.
Witness the facsimile seal of the Company and the signature of
its duly authorized officer.
SUBSCRIPTION FORM
(To be executed only upon exercise of Warrant)
TO HOMELAND HOLDING CORPORATION
c/o [Warrant Agent's address]
The undersigned (i) irrevocably exercises ___________ of the
Warrants represented by the within Warrant Certificate, (ii) purchases one
share of Common Stock of Homeland Holding Corporation (before giving effect
to the adjustments provided in the Warrant Agreement referred to in the
within Warrant Certificate) for each Warrant so exercised and herewith makes
payment in full of the purchase price of $ in respect of each Warrant so
exercised as provided in the Warrant Agreement (such payment being by
certified or official bank or bank cashier's check payable to the order of
Homeland Holding Corporation), all on the terms and conditions specified in
the within Warrant Certificate and the Warrant Agreement, (iii) surrenders
this Warrant Certificate and all right, title and interest therein to
Homeland Holding Corporation and (iv) directs that the securities or other
property deliverable upon the exercise of such Warrants be registered or
placed in the name and at the address specified below and
delivered thereto.
Dated:_____________, 19__
_________________________________
(Owner)*
_________________________________
(Signature of Authorized Representative)
_________________________________
(Street Address)
_________________________________
(City) (State) (Zip Code)
Securities or property to be
issued and delivered to:
____________________________
Signature Guaranteed**
Please insert social
security or other
identifying number
Name__________________________________________________
Street Address___________________________________________
City, State and Zip Code___________________________________
*The signature must correspond with the name as written upon the
face of the within Warrant Certificate in every particular, without
alteration or enlargement or any change whatsoever.
**The signature must be guaranteed by a securities transfer agents
medallion program ("stamp") participant or an institution receiving prior
approval from the Warrant Agent.
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned registered holder of the
within Warrant Certificate hereby sells, assigns and transfers unto the
Assignee named below all of the rights of the undersigned under the within
Warrant Certificate, with respect to the number of Warrants set
forth below:
Name of No. of
Assignee Address Warrants
Please insert social security
or other identifying number
of Assignee
and does hereby irrevocably constitute and appoint ___________ attorney to
make such transfer on the books of Homeland Holding Corporation maintained
for the purpose, with full power of substitution in the premises.
Dated: _______, 19__
Name______________________________*
Signature of Authorized
Representative____________________
Signature Guaranteed_____________**
*The signature must correspond with the name as written upon the
face of the within Warrant Certificate in every particular, without
alteration or enlargement or any change whatsoever.
**The signature must be guaranteed by a securities transfer
agents medallion program ("stamp") participant or an institution receiving
prior approval from the Warrant Agent.
TABLE OF CONTENTS
Page
1. Issuance of Warrants 1
1.1. Initial Issuance; Initial Share Amount 1
1.2. Form of Warrant Certificates 2
1.3. Execution of Warrant Certificates 2
1.4. Countersignature of Warrant Certificates 2
2. Duration of Warrants 2
3. Exercise of Warrants 2
3.1. Manner of Exercise 2
3.2. When Exercise Effective 3
3.3. Delivery of Certificates, etc. 3
3.4. Fractional Shares 4
4. Adjustment of Common Stock Issuable Upon Exercise 4
4.1. Adjustment of Number of Shares 4
4.2. Adjustment of Warrant Purchase Price 4
4.3. Extraordinary Dividends and
Distributions 5
4.4. Options and Convertible Securities 5
4.5. Stock Dividends, Stock Splits, etc. 7
4.6. Computation of Consideration 8
4.7. Adjustments for Combinations, etc. 9
4.8. Dilution in Case of Other Securities 9
4.9. Minimum Adjustment of Warrant Purchase Price 10
4.10. Other Dilutive Events 10
5. Consolidation, Merger, Sale of Assets,
Reorganization, etc. 10
5.1. General Provisions 10
5.2. Assumption of Obligations, etc. 12
6. No Dilution or Impairment 12
7. Accountants' Reports 13
Page
8. Notification of Certain Events 13
8.1. Corporate Action 13
8.2. Expiration 14
8.3. Available Information 14
9. Registration Rights Agreement 14
10. Reservation of Stock, etc. 15
10.1. Reservation; Due Authorization, etc. 15
10.2. Compliance with Law 15
11. Payment of Taxes 16
12. Loss or Mutilation 16
13. Warrant Registration 17
13.1. Registration 17
13.2. Transfer 17
14. Warrant Agent 18
15. Definitions 21
16. Remedies, etc. 26
16.1. Remedies 26
16.2. Warrant Holder Not Deemed a Stockholder 26
16.3. Right of Action 26
17. Miscellaneous 26
17.1. Notices 26
17.2. Governing Law 27
17.3. Benefits of this Agreement 27
17.4. Agreement of Holders of Warrant Certificates 27
17.5. Counterparts 28
17.6. Amendments 28
17.7. Headings 28
Exhibit A - Form of Warrant Certificate
