WARRANT AGREEMENT
between
MERCURY FINANCE COMPANY
and
XXXXXX TRUST AND SAVINGS BANK
as Warrant Agent
--------------------------
Dated as of __________, 1998
TABLE OF CONTENTS
PAGE
Section 1. Definitions................................................ 1
Section 2. Form of Warrant; Execution; Registration....................3
2.1 Form of Warrant; Execution of Warrants......................3
2.2 Registration................................................3
2.3 Countersignature of Warrants................................3
Section 3. Transfer and Exchange of Warrants...........................4
Section 4. Term of Warrants; Exercise of Warrants; Compliance with
Government Regulation.......................................4
4.1 Term of Warrants............................................4
4.2 Exercise of Warrants........................................5
4.3 Compliance with Government Regulations; Qualification under
Securities Laws.............................................6
Section 5. Payment of Taxes............................................6
Section 6. Mutilated or Missing Warrant Certificates...................7
Section 7. Reservation of Warrant Shares...............................7
Section 8. Stock Exchange Listings.....................................7
Section 9. Adjustment of Exercise Price, Number of Warrant Shares and
Shares of Capital Stock Warrants Are Exercisable Into.......8
9.1 Mechanical Adjustments......................................8
(a) Adjustment for Change in Capital Stock.............8
(b) Adjustment for Rights Issue........................8
(c) Adjustment for Other Distributions.................9
(d) Adjustment for Common Stock and Convertible
Securities Issue...................................9
(e) Current Market Price; Price Per Share..............10
(f) When De Minimis Adjustment May Be Deferred.........12
(g) Adjustment in Exercise Price.......................12
(h) When No Adjustment Required........................12
(i) Capitalization, Reclassification or Consolidation..13
(j) Shares of Common Stock.............................13
(k) Expiration of Rights, etc..........................13
9.2 Voluntary Adjustment by the Company.........................14
9.3 Notice of Adjustment........................................14
9.4 Preservation of Purchase Rights upon Merger or
Consolidation...............................................15
9.5 Statement on Warrants.......................................15
Section 10. Fractional Interests........................................15
Section 11. No Rights as Stockholders; Notices to Holders...............15
Section 12. Payments in U.S. Currency...................................16
Section 13. Merger or Consolidation or Change of Name of Warrant Agent..16
Section 14. Appointment of Warrant Agent................................17
14.1 Concerning the Warrant Agent................................17
14.2 Correctness of Statements...................................17
14.3 Breach of Covenants.........................................17
14.4 Performance of Duties.......................................17
14.5 Reliance on Counsel.........................................17
14.6 Proof of Actions Taken......................................18
14.7 Compensation and Indemnification............................18
14.8 Legal Proceedings...........................................18
14.9 Other Transactions in Securities of Company.................18
14.10 Liability of Warrant Agent..................................19
14.11 Reliance on Documents.......................................19
14.12 Validity of Agreement.......................................19
14.13 Instructions from Company...................................19
Section 15. Change of Warrant Agent.....................................19
Section 16. Notices.....................................................20
Section 17. Cancellation of Warrants....................................20
Section 18. Supplements and Amendments..................................20
Section 19. Successors..................................................21
Section 20. Applicable Law..............................................21
Section 21. Benefits of this Agreement..................................21
Section 22. Counterparts................................................21
Section 23. Captions....................................................21
WARRANT AGREEMENT, dated as of __________, 1998, between Mercury
Finance Company, a Delaware corporation (the "Company"), and [Xxxxxx Trust and
Savings Bank], as Warrant Agent (together with any successors and assigns, the
"Warrant Agent").
W I T N E S S E T H :
WHEREAS, the Company was a Debtor and Debtor-in-Possession in the case
(the "Chapter 11 Case") filed in the United States Bankruptcy Court for the
District of ___________________ (the "Bankruptcy Court"), entitled "In re
Mercury Finance Company, Debtor," Chapter 11 Case No. ________, under the
Bankruptcy Code;
WHEREAS, in connection with and as part of the transactions to be
consummated pursuant to the confirmation of a Plan of Reorganization (as
amended, modified or supplemented from time to time) of the Company in the
Chapter 11 Case (the "Plan"), the Company has agreed to issue three series of
Warrants (the "Series A Warrants", the "Series B Warrants" and the "Series C
Warrants" and collectively, the "Warrants") with each series of Warrants
exercisable for the purchase of 580,000 shares of Common Stock of the Company.
WHEREAS, by Order dated __________ __, 1998, the Bankruptcy Court
confirmed the Plan;
WHEREAS, the Plan contemplates that the Company will enter into certain
agreements, including, without limitation, this Warrant Agreement;
WHEREAS, the Company desires to issue the Warrants, each of which
entitles the holder thereof to purchase one share of its Common Stock (each of
said shares of Common Stock deliverable upon exercise of the Warrants, a
"Warrant Share"); and
WHEREAS, the Company wishes the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing to so act in connection with the
issuance, division, transfer, exchange and exercise of Warrants.
NOW, THEREFORE, in consideration of the foregoing, to implement the
terms of the Plan, and for the purpose of defining the terms and provisions of
the Warrants and the respective rights and obligations thereunder of the Company
and the registered owners of the Warrants (the "Holders") and any security into
which they may be exchanged, the Company and the Warrant Agent hereby agree as
follows:
Section 1. Definitions. The following terms, as used herein, have the
following meanings (all terms defined in the singular to have the correlative
meanings when used in the plural and vice versa):
"Agreement" means this Warrant Agreement, as the same may be amended,
modified or supplemented from time to time.
"Assets" has the meaning ascribed to such term in Section 9.1(c)
hereof.
"Business Day" means a day other than (a) a Saturday or Sunday, (b) any
day on which banking institutions located in the City of New York, New York or
Chicago, Illinois are required or authorized by law or by local proclamation to
close, or (c) any day on which the New York Stock Exchange is closed.
"Commercially Reasonable Efforts", when used with respect to any
obligation to be performed or term or provision to be observed hereunder, means
such efforts as a prudent Person seeking the benefits of such performance or
action would make, use, apply or exercise to preserve, protect or advance its
rights or interests, provided that such efforts do not require such Person to
incur a material financial cost or a substantial risk of material liability
unless such cost or liability (i) would customarily be incurred in the course of
performance or observance of the relevant obligation, term or provision, (ii) is
caused by or results from the wrongful act or negligence of the Person whose
performance or observance is required hereunder, or (iii) is not excessive or
unreasonable in view of the rights or interests to be preserved, protected or
advanced. Such efforts may include, without limitation, the expenditure of such
funds and retention by such Person of such accountants, attorneys or other
experts or advisors as may be necessary or appropriate to effect the relevant
action; the undertaking of any special audit or internal investigation that may
be necessary or appropriate to effect the relevant action; and the commencement,
termination or settlement of any action, suit or proceeding involving such
Person to the extent necessary or appropriate to effect the relevant action.
"Common Stock" means the common stock, par value $___, of the Company
after the Effective Date (as defined in the Plan).
"Convertible Securities" has the meaning ascribed to such term in
Section 9.1(d) hereof.
"Exercise Period" has the meaning ascribed to such term in Section 4.1
hereof.
"Exercise Price" means (i) $_____________ per share for the Series A
Warrants, (ii) $_____________ per share for the Series B Warrants, and (iii)
$______________ per share for the Series C Warrants, as adjusted pursuant to
Section 9 hereof.
"Holder" has the meaning ascribed to such term in the preamble hereto.
"NASD" has the meaning ascribed to such term in Section 4.2 hereof.
"Person" means a natural person, a corporation, a partnership, a trust,
a joint venture, any regulatory authority or any other entity or organization.
"Plan" has the meaning ascribed to such term in the preamble hereto.
"Price Per Share" has the meaning ascribed to such term in Section
9.1(e)(ii) hereof.
"Rights" has the meaning ascribed to such term in Section 9.1(b)
hereof.
"Transfer Agent" has the meaning ascribed to such term in Section 7
hereof.
"SEC" means the United States Securities and Exchange Commission, or
any successor governmental agency or authority thereto.
"Series A Warrants" has the meaning ascribed to such term in the
preamble hereto.
"Series B Warrants" has the meaning ascribed to such term in the
preamble hereto.
"Series C Warrants" has the meaning ascribed to such term in the
preamble hereto.
"Subsidiary" has the meaning ascribed to such term in Section 9.1(c)
hereof.
"Warrant" has the meaning ascribed to such term in the preamble hereto.
"Warrant Certificate" has the meaning ascribed to such term in Section
2.1 hereof.
"Warrant Register" has the meaning ascribed to such term in Section 2.2
hereof.
"Warrant Share" has the meaning ascribed to such term in the preamble
hereto.
Section 2. Form of Warrant; Execution; Registration.
2.1 Form of Warrant; Execution of Warrants. The certificates evidencing
the Warrants (the "Warrant Certificates") shall be in registered form only and
shall be in the form set forth as Exhibit A hereto. The Warrant Certificates
shall be signed on behalf of the Company by its Chairman of the Board,
President, Chief Executive Officer or one of its Vice Presidents. The signature
of any such officer on the Warrant Certificates may be manual or by facsimile.
Any Warrant Certificate may be signed on behalf of the Company by any person
who, at the actual date of the execution of such Warrant Certificate, shall be a
proper officer of the Company to sign such Warrant Certificate. Each Warrant
Certificate shall be dated the date it is countersigned by the Warrant Agent
pursuant to Section 2.3 hereof.
2.2 Registration. The Warrant Certificates shall be numbered and shall
be registered on the books of the Company maintained at the principal office of
the Warrant Agent initially in Chicago, Illinois (or such other place in the
continental United States as the Warrant Agent shall from time to time notify
the Company and the Holders in writing) (the "Warrant Register") as they are
issued. The Company and the Warrant Agent shall be entitled to treat the
registered owner of any Warrant as the owner in fact thereof for all purposes
and shall not be bound to recognize any equitable or other claim to or interest
in such Warrant on the part of any other person.
2.3 Countersignature of Warrants. The Warrant Certificates shall be
countersigned by the Warrant Agent and shall not be valid for any purpose unless
so countersigned. Warrant Certificates may be countersigned, however, by the
Warrant Agent and may be delivered by the Warrant Agent notwithstanding that the
persons whose manual or facsimile signatures appear thereon as proper officers
of the Company shall have ceased to be such officers at the time of such
countersignature, issuance or delivery. The Warrant Agent shall, upon written
instructions of the Chairman of the Board, the President, the Chief Executive
Officer, any Vice President, the Treasurer or the Secretary of the Company,
countersign, issue and deliver Warrant Certificates entitling the Holders
thereof to purchase not more than an aggregate of 1,740,000 Warrant Shares
(subject to adjustment pursuant to Section 9 hereof) and shall countersign,
issue and deliver Warrant Certificates as otherwise provided in this Agreement.
Section 3. Transfer and Exchange of Warrants. Subject to the terms
hereof, the Warrant Agent shall initially countersign, register in the Warrant
Register and deliver Warrants hereunder in accordance with the written
instructions of the Company. Subject to the terms hereof and the receipt of such
documentation as the Warrant Agent may reasonably require, the Warrant Agent
shall thereafter from time to time register the transfer of any outstanding
Warrants upon the Warrant Register upon surrender of the Warrant Certificate or
Certificates evidencing such Warrants duly endorsed or accompanied (if so
required by it) by a written instrument or instruments of transfer in form
reasonably satisfactory to the Warrant Agent, duly executed by the registered
Holder or Holders thereof or by the duly appointed legal representative thereof
or by a duly authorized attorney. Subject to the terms of this Agreement, each
Warrant Certificate may be exchanged for another Warrant Certificate or
Certificates entitling the Holder thereof to purchase a like aggregate number of
Warrant Shares, at the same exercise price and having the same term, as the
surrendered Warrant Certificate or Certificates then entitles such Holder to
purchase. Any Holder desiring to exchange a Warrant Certificate or Certificates
shall make such request in writing delivered to the Warrant Agent, and shall
surrender, duly endorsed or accompanied (if so required by the Warrant Agent) by
a written instrument or instruments of transfer in form reasonably satisfactory
to the Warrant Agent, the Warrant Certificate or Certificates to be so
exchanged. Upon registration of transfer, the Company shall issue and the
Warrant Agent shall countersign and deliver by certified mail a new Warrant
Certificate or Certificates to the persons entitled thereto. Upon any partial
transfer, a new Warrant Certificate of like tenor and representing in the
aggregate the number of warrants which were not so transferred, shall be issued
to, and in the name of, the holder.
No service charge shall be made for any exchange or registration of
transfer of a Warrant Certificate or of Warrant Certificates, but the Company
may require payment of a sum sufficient to cover any stamp tax or other tax or
other governmental charge that is imposed in connection with any such exchange
or registration of transfer pursuant to Section 5 hereof.
By accepting the initial delivery, transfer or exchange of Warrants,
each Holder shall be deemed to agree to the terms of this Agreement as it may be
in effect from time to time, including any amendments or supplements duly
adopted in accordance with Section 18 hereof.
Section 4. Term of Warrants; Exercise of Warrants; Compliance with
Government Regulation.
4.1 Term of Warrants. Subject to the terms of this Agreement, each
Holder shall have the right, until the expiration of the applicable Exercise
Period for the Warrants held, to receive from the Company the number of Warrant
Shares which the Holder may at the time be entitled to receive upon exercise of
such Warrants and payment of the Exercise Price then in effect for such Warrant
Shares, and the Warrant Shares issued to a Holder upon exercise of its Warrants
shall be duly authorized, validly issued, fully paid, nonassessable and shall
not have been issued in violation of or subject to any preemptive rights. Each
Warrant not exercised prior to the expiration of its Exercise Period shall
become void, and all rights thereunder and all rights in respect thereof under
this Agreement shall cease as of the expiration of such Exercise Period. The
Exercise Period for the Warrants shall begin at 9:00 a.m., New York City time,
on the date of their issuance, and end at 5:00 p.m., New York City time, on (a)
____________________, 2001 (three years after the Effective Date (as defined in
the Plan)) for the Series A Warrants, (b) _______________, 2002 (four years
after the Effective Date) for the Series B Warrants, and (c) _______________,
2003 (five years after the Effective Date) for the Series C Warrants.
4.2 Exercise of Warrants. During the Exercise Period, each Holder may,
subject to this Agreement, exercise from time to time some or all of the
Warrants evidenced by its Warrant Certificate(s) by (i) surrendering to the
Company at the principal office of the Warrant Agent such Warrant Certificate(s)
with the form of election to purchase on the reverse thereof duly filled in and
signed which signature shall be guaranteed by a bank or trust company having an
office or correspondent in the United States or a broker or dealer which is a
member of a registered securities exchange or the National Association of
Securities Dealers, Inc. (the "NASD"), or , to the extent held in "street" name,
Holder shall comply with applicable law, and (ii) paying to the Warrant Agent
for the account of the Company the aggregate Exercise Price for the number of
Warrant Shares in respect of which such Warrants are exercised. Warrants shall
be deemed exercised on the date such Warrant Certificate(s) are surrendered to
the Warrant Agent and tender of payment of the aggregate Exercise Price is made.
Payment of the aggregate Exercise Price shall be made in cash by wire transfer
of immediately available funds to the Warrant Agent for the account of the
Company or by certified or official bank check or checks to the order of the
Company or by any combination thereof.
Upon the exercise of any Warrants in accordance with this Agreement,
the Company shall issue and cause to be delivered with all reasonable dispatch,
to or upon the written order of the Holder and in such name or names as the
Holder may designate, a certificate or certificates for the number of full
Warrant Shares issuable upon the exercise of such Warrants and shall take such
other actions at its sole expense as are necessary to complete the exercise of
such Warrants (including, without limitation, payment of any cash with respect
to fractional interests required under Section 10 hereof). The Warrant Agent
shall have no responsibility or liability for such issuance or the determination
of the number of Warrant Shares issuable upon such exercise. The certificate or
certificates representing such Warrant Shares shall have been issued and any
person so designated to be named therein shall be deemed to have become a holder
of record of such Warrant Shares as of the date such Warrants are exercised
hereunder. Each Warrant Share, when issued upon exercise of the Warrants, shall
be duly authorized, validly issued, fully paid and non-assessable and will not
have been issued in violation of or subject to any preemptive rights.
In the event that less than all of the Warrants evidenced by a Warrant
Certificate are exercised, the Holder thereof shall be entitled to receive a new
Warrant Certificate or Certificates as specified by such Holder evidencing the
remaining Warrant or Warrants, and the Warrant Agent is hereby irrevocably
authorized by the Company to countersign, issue and deliver the required new
Warrant Certificate or Certificates evidencing such remaining Warrant or
Warrants pursuant to the provisions of this Section 4.2 hereof and of Section 3
hereof. The Company, whenever required by the Warrant Agent, will supply the
Warrant Agent with Warrant Certificates duly executed on behalf to the Company
for such purpose.
Upon delivery of the Warrant Shares issuable upon exercise in
accordance herewith and of any required new Warrant Certificates, the Company
shall direct the Warrant Agent by written order to cancel the Warrant
Certificates surrendered upon exercise. Such canceled Warrant Certificates shall
then be disposed of by the Warrant Agent in a manner permitted by applicable
laws and satisfactory to the Company in accordance with its written instructions
to the Warrant Agent. The Warrant Agent shall account promptly to the Company
with respect to Warrants exercised and concurrently pay to the Company all
amounts received by the Warrant Agent upon exercise of such Warrants.
The Warrant Agent shall keep copies of this Agreement and any notices
given or received hereunder available for inspection by the Holders during
normal business hours at its office. The Company shall at its sole expense
supply the Warrant Agent from time to time with such numbers of copies of this
Agreement as the Warrant Agent may reasonably request.
4.3 Compliance with Government Regulations; Qualification under
Securities Laws. The Company is issuing the Warrants based upon the belief that
the issuance and the exercise of the Warrants, and the issuance of the Common
Stock upon exercise of the Warrants, are exempt from registration under the
Federal securities laws pursuant to Section 1145 of the Bankruptcy Code. The
Company covenants that if following a due demand to exercise warrants any shares
of Common Stock required to be reserved for purposes of exercise of such
Warrants require, under any federal or state law, registration with or approval
of any governmental authority before such shares may be issued upon exercise
and/or subsequently transferred, and the Holder requesting the exercise of a
Warrant provides an opinion of counsel acceptable to the Company to the effect
that the exercise of the Warrant and/or the transfer of the underlying Common
Stock require registration, then, the Company will, unless the Company has
received an opinion of counsel to the effect that such registration is not then
required by such laws, use its Commercially Reasonable Efforts to cause such
shares to be duly so registered or approved, as the case may be; provided that
in no event shall such shares of Common Stock be issued, and the exercise of all
such Warrants shall be suspended, for the period from the date of such due
demand for exercise until such registration or approval is in effect; provided,
further, that the Exercise Period for such Warrants (but only such Warrants)
shall be extended one day for each day (or portion thereof) that any such
suspension is in effect. The Company shall promptly notify the Warrant Agent of
any such suspension, and the Warrant Agent shall have no duty, responsibility or
liability in respect of any shares of Common Stock issued or delivered prior to
its receipt of such notice. The Company shall promptly notify the Warrant Agent
of the termination of any such suspension, and such notice shall set forth the
number of days that the Exercise Period with respect to such Warrants shall be
extended as a result of such suspension.
Section 5. Payment of Taxes. The Company will pay all documentary stamp
and other like taxes, if any, attributable to the initial issuance and delivery
of the Warrants and the initial issuance and delivery of the Warrant Shares upon
the exercise of Warrants, provided, that the Company shall not be required to
pay any tax or taxes which may be payable in respect of any transfer of the
Warrants or involved in the issuance or delivery of any Warrant Shares in a name
other than that of the Holder of the Warrants being exercised, and the Warrant
Agent shall not register any such transfer or issue or deliver any Warrant
Certificate(s) or Warrant Shares unless or until the persons requesting the
registration or issuance shall have paid to the Warrant Agent for the account of
the Company the amount of such tax, if any, or shall have established to the
reasonable satisfaction of the Company that such tax, if any, has been paid.
Section 6. Mutilated or Missing Warrant Certificates. In the event that
any Warrant Certificate shall be mutilated, lost, stolen or destroyed, the
Company shall issue, and at the direction of the Company by written order the
Warrant Agent shall countersign and deliver in exchange and substitution for and
upon cancellation of the mutilated Warrant Certificate or in lieu of and
substitution for the Warrant Certificate lost, stolen or destroyed, a new
Warrant Certificate of like tenor and representing an equivalent right or
interest, but only upon receipt of evidence reasonably satisfactory to the
Company and the Warrant Agent of such loss, theft or destruction of such Warrant
Certificate and an indemnity or bond, if requested by the Company or the Warrant
Agent, also reasonably satisfactory to them. An applicant for such a substitute
Warrant Certificate shall also comply with such other reasonable procedures as
the Company or the Warrant Agent may reasonably require.
Section 7. Reservation of Warrant Shares. There have been reserved, and
the Company shall at all times keep reserved, out of its authorized Common
Stock, free of all preemptive rights, a number of shares of Common Stock
sufficient to provide for the exercise of the rights of purchase represented by
the outstanding Warrants. The transfer agent for the Common Stock and every
subsequent or other transfer agent for any shares of the Company's capital stock
issuable upon the exercise of the Warrants (each, a "Transfer Agent") will be
and are hereby irrevocably authorized and directed at all times to reserve such
number of authorized shares as shall be required for such purpose. The Company
will keep a copy of this Agreement on file with each Transfer Agent. The Warrant
Agent is hereby irrevocably authorized to requisition from time to time from the
Company or a Transfer Agent, as the case may be, the certificates for Warrant
Shares required to honor outstanding Warrants upon exercise thereof in
accordance with the terms of this Agreement. The Company will supply its
Transfer Agents with duly executed stock certificates for such purposes and will
itself provide or otherwise make available any cash which may be payable as
provided in Section 10 hereof. The Company will furnish to its Transfer Agents a
copy of all notices of adjustments and certificates related thereto, transmitted
to each Holder pursuant to Section 9.3 hereof. The Company will give the Warrant
Agent prompt notice of any change in any Transfer Agent or any change of address
of any Transfer Agent.
Before taking any action which would cause an adjustment pursuant to
Section 9 reducing the Exercise Price, the Company will take any and all
corporate action which may be necessary in order that the Company may validly
and legally issue fully paid and nonassessable Warrant Shares at the Exercise
Price as so adjusted.
Section 8. Stock Exchange Listings. The Company shall use its
Commercially Reasonable Efforts (including requests for waivers) to have each
series of the Warrants included for quotation in The Nasdaq National Market or
the Nasdaq Small Cap Market or listed on the American Stock Exchange, and shall
use its Commercially Reasonable Efforts to maintain such listing or inclusion.
In the event the Warrants do not qualify for such listing or inclusion, the
Company will use its Commercially Reasonable Efforts (including, requests for
waivers) to effect such inclusion or listing whenever the Warrants qualify
therefor, and prior to such time, shall use Commercially Reasonable Efforts to
cause some other customary trading market to admit the warrants for trading. Any
such listing and inclusion shall be at the Company's sole expense.
Section 9. Adjustment of Exercise Price, Number of Warrant Shares and
Shares of Capital Stock Warrants Are Exercisable Into. The number and kind of
securities purchasable upon the exercise of each Warrant, and the Exercise
Price, shall be subject to adjustment from time to time upon the happening of
certain events, as hereinafter described. The Warrant Agent shall be fully
protected in relying on the certificate described in Section 9.3 below regarding
the adjustment and on any adjustment therein contained, and shall not be
obligated or responsible for calculating any adjustment, nor shall it be deemed
to have knowledge of such an adjustment unless and until it shall have received
such certificate.
9.1 Mechanical Adjustments. The number of Warrant Shares purchasable
upon the exercise of each Warrant and the Exercise Price shall be subject to
adjustment as follows:
(a) Adjustment for Change in Capital Stock. Subject to
paragraphs (f) and (h) below, in case the Company shall (i)
pay a dividend on its outstanding shares of Common Stock in
shares of Common Stock or make a distribution of shares of
Common Stock on its outstanding shares of Common Stock, (ii)
make a distribution on its outstanding shares of Common Stock
in shares of its capital stock other than Common Stock, (iii)
subdivide its outstanding shares of Common Stock into a
greater number of shares of Common Stock, (iv) combine its
outstanding shares of Common Stock into a smaller number of
shares of Common Stock, or (v) issue, by reclassification of
its shares of Common Stock, other securities of the Company
(including any such reclassification in connection with a
consolidation or merger in which the Company is the surviving
entity), then the number of Warrant Shares purchasable upon
exercise of each Warrant immediately prior thereto shall be
adjusted so that the Holder of each Warrant shall be entitled
to receive upon the exercise of the Warrant the kind and
number of Warrant Shares or other securities of the Company
which such Holder would have owned or have been entitled to
receive upon the happening of any of the events described
above had such Warrant been exercised in full immediately
prior to the happening of such event or any record date with
respect thereto. If a Holder is entitled to receive shares of
two or more classes of capital stock of the Company pursuant
to the foregoing upon exercise of Warrants, the allocation of
the adjusted Exercise Price between such classes of capital
stock shall be determined reasonably and in good faith by the
Board of Directors of the Company. After such allocation, the
exercise privilege and the Exercise Price with respect to
each class of capital stock shall thereafter be subject to
adjustment on terms substantially identical to those
applicable to Common Stock in this Section 9. An adjustment
made pursuant to this paragraph (a) shall become effective
immediately after the record date for such event or, if none,
immediately after the effective date of such event. Such
adjustment shall be made successively whenever such an event
occurs.
(b) Adjustment for Rights Issue. Subject to paragraphs
(f) and (h) below, in case the Company shall issue rights,
options or warrants (collectively, "Rights") to all holders
of its outstanding Common Stock entitling them to subscribe
for or purchase shares of Common Stock at a Price Per Share
(as defined in paragraph (e) below) which is lower at the
record date mentioned below than the Current Market Price (as
defined in paragraph (e) below) per share of Common Stock on
such record date, then the number of Warrant Shares
thereafter purchasable upon the exercise of each Warrant
shall be determined by multiplying the number of Warrant
Shares theretofore purchasable upon exercise of each Warrant
by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding on the date of issuance of
such Rights plus the additional Number of Shares (as defined
in paragraph (e) below) of Common Stock offered for
subscription or purchase in connection with such Rights and
the denominator of which shall be the number of shares of
Common Stock outstanding on the date of issuance of such
Rights plus the number of shares of Common Stock which the
aggregate Proceeds (as defined in paragraph (e) below)
received or receivable by the Company upon exercise of such
Rights would purchase at the Current Market Price per share
of Common Stock at such record date. Such adjustment shall be
made whenever Rights are issued, and shall become effective
immediately after the record date for the determination of
stockholders entitled to receive Rights.
(c) Adjustment for Other Distributions. Subject to
paragraphs (f) and (h) below, in case the Company shall
distribute to all holders of its shares of Common Stock (x)
evidences of indebtedness or assets (excluding cash dividends
or distributions payable out of the consolidated earnings or
surplus legally available for such dividends or distributions
and dividends or distributions referred to in paragraphs (a)
or (b) above) of the Company or any corporation or other
legal entity a majority of the voting equity or equity
interests of which are owned, directly or indirectly, by the
Company (a "Subsidiary"), or (y) shares of capital stock of a
Subsidiary (such evidences of indebtedness, assets and
securities as set forth in clauses (x) and (y) above,
collectively, "Assets"), then in each case the number of
Warrant Shares thereafter purchasable upon the exercise of
each Warrant shall be determined by multiplying the number of
Warrant Shares theretofore purchasable upon the exercise of
each Warrant by a fraction, the numerator of which shall be
the Current Market Price per share of Common Stock on the
date of such distribution and the denominator of which shall
be such Current Market Price per share of Common Stock less
the fair value as of such record date as determined
reasonably and in good faith by the Board of Directors of the
Company of the portion of the Assets applicable to one share
of Common Stock. Such adjustment shall be made whenever any
such distribution is made, and shall become effective on the
date of distribution retroactive to the record date for the
determination of stockholders entitled to receive such
distribution.
(d) Adjustment for Common Stock and Convertible
Securities Issue. Subject to paragraphs (f) and (h) below, in
case the Company shall issue shares of its Common Stock, or
securities convertible into, or exchangeable or exercisable
for Common Stock or Rights to subscribe for or purchase such
securities (collectively, "Convertible Securities")
(excluding the issuance of (i) Common Stock or Convertible
Securities issued in any of the transactions described in
paragraphs (a), (b) or (c) above or (ii) Warrant Shares
issued upon the exercise of the Warrants), at a Price Per
Share of Common Stock, in the case of the issuance of Common
Stock, or at a Price Per Share of Common Stock initially
deliverable upon conversion, exercise or exchange of such
Convertible Securities, in each case, together with any other
consideration received by the Company in connection with such
issuance, below the Current Market Price per share of Common
Stock on the date the Company fixed the offering, conversion
or exercise or exchange price of such additional shares, then
the number of Warrant Shares thereafter purchasable upon the
exercise of each Warrant shall be determined by multiplying
the number of Warrant Shares theretofore purchasable upon
exercise of each Warrant by a fraction, the numerator of
which shall be the total number of shares of Common Stock
outstanding on such date plus the additional Number of Shares
(as defined below) offered for subscription or purchase and
the denominator of which shall be the number of shares
outstanding on such date plus the additional Number of Shares
which the aggregate Proceeds (as defined below) of the total
amount of Convertible Securities so offered would purchase at
the Current Market Price per share of Common Stock at such
record date. In case the Company shall issue and sell
Convertible Securities for a consideration consisting, in
whole or in part, of property other than cash or its
equivalent, then in determining the "Price Per Share" of
Common Stock and the "consideration received by the Company"
for purposes of this paragraph (d), the Board of Directors of
the Company shall reasonably and in good faith determine the
fair value of such property. The determination of whether any
adjustment is required under this paragraph (d), by reason of
the sale and issuance of any Convertible Securities and the
amount of such adjustment, if any, shall be made at such time
and not at the subsequent time of issuance of shares of
Common Stock upon the exercise, conversion or exchange of
Convertible Securities.
(e) Current Market Price; Price Per Share. (i) For the
purpose of any computation under Section 4.2 hereof or this
Section 9.1, the "Current Market Price" per share of Common
Stock at any date shall be the average of the daily closing
prices for the 20 consecutive trading days preceding the date
of such computation. The closing price for each day shall be
(x) if the Common Stock shall be then listed or admitted to
trading on the New York Stock Exchange, the closing price on
the NYSE - Consolidated Tape (or any successor composite tape
reporting transactions on the New York Stock Exchange) or,
(y) if such a composite tape shall not be in use or shall not
report transactions in the Common Stock, or if the Common
Stock shall be listed on a stock exchange other than the New
York Stock Exchange, the last reported sales price regular
way or, in case no such reported sale takes place on such
day, the average of the closing bid and asked prices regular
way for such day, in each case on the principal national
securities exchange on which the shares of Common Stock are
listed or admitted to trading (which shall be the national
securities exchange on which the greatest number of shares of
the Common stock have been traded during such 20 consecutive
trading days) or (z) if the Common Stock is not listed or
admitted to trading, the average of the closing bid and asked
prices of the Common Stock in the over-the-counter market as
reported by The Nasdaq National Market or any comparable
system or, if the Common Stock is not included for quotation
in The Nasdaq National Market or a comparable system, the
average of the closing bid and asked prices as furnished by
two members of the NASD selected reasonably and in good faith
from time to time by the Board of Directors for that purpose.
In the absence of one or more such quotations, the Current
Market Price per share of the Common Stock shall be
determined reasonably and in good faith by the Board of
Directors of the Company.
(ii) For purposes of this Section 9.1, "Price Per Share"
shall be defined and determined according to the following
formula:
P = R/N
where
P = Price Per Share;
R = the "Proceeds" received or receivable by
the Company which (x) in the case of shares
of Common Stock is the total amount received
or receivable by the Company in
consideration for the issuance and sale of
such shares; (y) in the case of Rights or of
Convertible Securities with respect to
shares of Common Stock, is the total amount
received or receivable by the Company in
consideration for the issuance and sale of
Rights or such Convertible Securities, plus
the minimum aggregate amount of additional
consideration, other than the surrender of
such Convertible Securities, payable to the
Company upon exercise, conversion or
exchange thereof; and (z) in the case of
Rights to subscribe for or purchase such
Convertible Securities, is the total amount
received or receivable by the Company in
consideration for the issuance and sale of
such Rights plus the minimum aggregate
amount of additional consideration, other
than the surrender of such Convertible
Securities, payable upon the exercise of the
Right and the conversion or exchange or
exercise of such Convertible Securities;
provided that in each case the proceeds
received or receivable by the Company shall
be the net cash proceeds after deducting
therefrom any compensation paid or discount
allowed in the sale, underwriting or
purchase thereof by underwriters or dealers
or other performing similar services;
N = the "Number of Shares," which (x) in the
case of Common Stock is the number of shares
issued; and (y) in the case of Rights or of
Convertible Securities with respect to
shares of Common Stock, is the maximum
number of shares of Common Stock initially
issuable upon exercise, conversion or
exchange thereof.
(f) When De Minimis Adjustment May Be Deferred. No
adjustment in the number of Warrant Shares purchasable
hereunder shall be required unless such adjustment would
require an increase or decrease of at least one percent (1%)
in the number of Warrant Shares purchasable upon the exercise
of each Warrant, provided that any adjustments which by
reason of this paragraph (f) are not required to be made
shall be carried forward and taken into account in any
subsequent adjustment. All calculations shall be made to the
nearest one-thousandth of a Warrant Share and the nearest
cent.
(g) Adjustment in Exercise Price. Whenever the number of
Warrant Shares purchasable upon the exercise of each Warrant
is adjusted as herein provided, the Exercise Price payable
upon exercise of each Warrant immediately prior to such
adjustment shall be adjusted by multiplying such Exercise
Price by a fraction, the numerator of which shall be the
number of Warrant Shares purchasable upon the exercise of
each Warrant immediately prior to such adjustment and the
denominator of which shall be the number of Warrant Shares
purchasable immediately thereafter.
(h) When No Adjustment Required. No adjustment in the
number of Warrant Shares purchasable upon the exercise of
each Warrant or in the exercise price need be made under this
Section 9.1 in connection with: (i) the issuance of Common
Stock, options, rights, Warrants or other securities pursuant
to the Plan; (ii) shares of Common Stock, options, rights,
warrants or other securities issued pursuant to any plan
adopted by the Company or its subsidiaries for the benefit of
employees or directors; (iii) any issuance of shares of
Common Stock or securities convertible into or exchangeable
for shares of Common Stock pursuant to an underwritten public
offering for a price per share of Common Stock in the case of
an issuance of shares of Common Stock, or for a price per
share of Common Stock initially deliverable upon conversion
or exchange of such securities, that is equal to or greater
than 95% of the Current Market Price per share of Common
Stock on the date the Company fixed the offering, conversion
or exchange price of such additional shares of Common Stock;
(iv) sales of Common Stock pursuant to a plan adopted by the
Company for reinvestment of dividends or interest; provided,
however, that if such sales of Common Stock are at a discount
of 20% to the Current Market Price, such issuances shall
require adjustment under this Section, or (v) shares of
Common Stock issued to shareholders of any corporation that
is acquired by, merged into or made a part or subsidiary of
the Company in an arm's-length transaction. Additionally, no
adjustment need be made if the Company issues or distributes
to each Holder of Warrants the shares, rights, options,
warrants, evidences of indebtedness, assets or other
securities referred to in those paragraphs which each Holder
of Warrants would have been entitled to receive had the
Warrants been exercised for the number of Warrant Shares for
which Warrants are then exercisable prior to the happening of
such event or the record date with respect thereto. No
adjustment in the number of Warrant Shares will be made for a
change in the par value of the shares of Common Stock.
(i) Capitalization, Reclassification or Consolidation.
If any capital reorganization of the Company, or any
reclassification of the Common Stock, or any consolidation of
the Company with or merger of the Company with or into any
other Person or any sale, lease or other transfer of all or
substantially all of the assets of the Company to any other
Person, shall be effected in such a way that the holders of
the Common Stock shall be entitled to receive stock, other
securities, cash or other assets (whether such stock, other
securities, cash or other assets are issued or distributed by
the Company or another Person) with respect to or in exchange
for the Common Stock, then, upon exercise of each Warrant,
the Warrantholder shall have the right to receive the kind
and amount of stock, other securities, cash or other assets
receivable upon such reorganization, reclassification,
consolidation, merger or sale, lease or other transfer, by a
holder of the number of Warrant Shares that such Warrant
holder would have been entitled to receive upon exercise of
such Warrant had such Warrant been exercised immediately
before such reorganization, reclassification, consolidation,
merger or sale, lease or other transfer, subject to
adjustments (as determined in good faith by the Board of
Directors of the Company). Adjustments for events subsequent
to the effective date of such a reorganization,
reclassification, consolidation, merger, sale or transfer of
assets shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Agreement. In any such
event, effective provisions shall be made in the certificate
or articles of incorporation of the resulting or surviving
corporation, in any contract of sale, merger, conveyance,
lease transfer or otherwise so that the provisions set forth
herein for the protection of the rights of the Warrantholders
shall thereafter continue to be applicable; and any such
resulting or surviving corporation shall expressly assume the
obligation to deliver, upon exercise, such shares of stock,
other securities, cash and property. The provisions of
Section 9 shall similarly apply to successive consolidations,
mergers, sales, leases or transfers.
(j) Shares of Common Stock. For all purposes of this
Agreement, the term "shares of Common Stock" shall mean (i)
the class of stock designated as the Common Stock of the
Company at the date of this Agreement, or (ii) any other
class of stock resulting from successive changes or
reclassification of such shares consisting solely of changes
in par value, or from par value to no par value, or from no
par value to par value. In the event that at any time, as a
result of an adjustment made pursuant to this Section 9.1,
the Holders shall become entitled to purchase any securities
of the Company other than shares of Common Stock, thereafter
the number of such other shares so purchasable upon exercise
of each Warrant and the Exercise Price of such shares shall
be subject to adjustment from time to time in a manner and on
terms substantially identical to the provisions with respect
to the Warrant Shares contained in paragraphs (a) through (h)
above, and the provisions of this Agreement with respect to
the Warrant Shares shall apply on like terms to any such
other securities.
(k) Expiration of Rights, etc. Upon the expiration of
any Rights or conversion or exchange or exercise rights, if
any thereof shall not have been exercised, the Exercise Price
and the number of Warrant Shares purchasable upon the
exercise of each Warrant shall, upon such expiration, be
readjusted and shall thereafter be such as it would have been
had it been originally adjusted (or had the original
adjustment not been required, as the case may be) as if (A)
the only shares of Common Stock so issued were the shares of
Common Stock, if any, actually issued or sold upon the
exercise of such Rights or conversion or exchange or exercise
rights and (B) such shares of Common Stock, if any, were
issued or sold for the consideration actually received by the
Company upon such exercise plus the aggregate consideration,
if any, actually received by the Company for the issuance,
sale or grant of all of such Rights or conversion or exchange
or exercise rights whether or not exercised, provided that no
such readjustment shall have the effect of increasing the
Exercise Price or decreasing the number of Warrant Shares
purchasable upon the exercise of each Warrant by an amount in
excess of the amount of the adjustment initially made in
respect of the issuance, sale or grant of such Rights or
conversion or exchange or exercise rights.
9.2 Voluntary Adjustment by the Company. (a) The Company may at its
option, at any time during the term of the Warrants, reduce the then current
Exercise Price, and/or increase the number of Warrant shares issuable upon
exercise of the Warrant, to any amount deemed appropriate by the Board of
Directors of the Company.
(b) If, after one or more adjustments to the Exercise Price pursuant
to Section 9, the Exercise Price cannot be reduced further without falling below
the greater of (i) $0.01 or (ii) the lowest positive exercise price legally
permissible for warrants to acquire shares of Common Stock, the Company shall
make further adjustments to compensate the Holder, consistent with the foregoing
principles, as the Board of Directors, acting in good faith, deems necessary,
including an increase in the number of Warrant Shares issuable upon exercise of
outstanding Warrants and/or cash payment to the Holders.
9.3 Notice of Adjustment. Whenever the number of Warrant Shares
purchasable upon the exercise of each Warrant or the Exercise Price of Warrant
Shares is adjusted, as herein provided, the Company shall cause the Warrant
Agent promptly to mail to each Holder, at the sole expense of the Company by
first class mail, postage prepaid, notice of such adjustment or adjustments and
shall deliver to the Warrant Agent a certificate of a firm of independent public
accounts (who may be the regular accountants employed by the Company) setting
forth the number of Warrant Shares purchasable upon the exercise of each Warrant
and the Exercise Price of Warrant Shares after such adjustment, setting forth a
brief statement of the facts requiring such adjustment and setting forth in
reasonable detail the computations by which such adjustment was made. The
Warrant Agent shall be entitled to rely on such certificate and shall be under
no duty or responsibility with respect to any such certificate, except to
exhibit the same, from time to time, to any Holder requesting an inspection
thereof during reasonable business hours. The Warrant Agent shall not at any
time be under any duty or responsibility to any Holder to determine whether any
facts exist which may require any adjustment of the Exercise Price or the number
of Warrant Shares or other stock or property purchasable on exercise of
Warrants, or with respect to the nature or extent of any such adjustment when
made, or with respect to the method employed in making such adjustment.
9.4 Preservation of Purchase Rights upon Merger or Consolidation. In
case of any consolidation of the Company with or merger of the Company into
another entity, the Company or such successor entity shall execute and deliver
to the Warrant Agent an agreement, which shall be binding on the Holders, that
each Holder shall have the right thereafter upon payment of the Exercise Price
in effect immediately prior to such action (after giving effect to any
applicable adjustments under Section 9.1 hereof) to purchase upon exercise of
each Warrant (and in lieu of the Common Stock issuable upon exercise of the
Warrant) the kind and amount of shares and other securities and property
(including cash) which such Holder would have owned or have been entitled to
receive after the happening of such consolidation or merger had such Warrant
been exercised immediately prior to such action. The Company shall at its sole
expense mail by first class mail, postage prepaid, to each Holder notice of the
execution of any such agreement. Such agreement shall provide for adjustments,
which shall be substantially identical to the adjustments provided for in this
Section 9. In addition, the Company shall not merge or consolidate with or into,
any other entity unless the successor entity (if not the Company), shall
expressly assume, by supplemental agreement reasonably satisfactory in form and
substance to the Warrant Agent in its sole judgment and executed and delivered
to the Warrant Agent, the due and punctual performance and observance of each
and every covenant and condition of this Agreement to be performed and observed
by the Company. The provisions of this Section 9.4 shall similarly apply to
successive consolidations or mergers. The Warrant Agent shall be under a good
faith duty and responsibility to determine the correctness of any provisions
contained in any such agreement relating to the kind or amount of shares of
stock or other securities or property receivable upon exercise of Warrants or
with respect to the method employed and provided therein for any adjustments and
shall be entitled to rely upon the provisions contained in any such agreement.
In the event of any conflict between Section 9.4 and Section 9.1(i), Section
9.1(i) shall prevail. 9.5 Statement on Warrants. Irrespective of any adjustments
in the Exercise Price or the number or kind of shares purchasable upon the
exercise of the Warrants, Warrants theretofore or thereafter issued may continue
to express the same Exercise Price and number and kind of Warrant Shares as are
stated in the Warrants initially issuable pursuant to this Agreement.
Section 10. Fractional Interests. Neither the Company nor the Warrant
Agent shall be required to issue fractional Warrant Shares on the exercise of
Warrants. If more than one Warrant shall be exercised at the same time by the
same Holder, the number of full Warrant Shares which shall be issuable upon such
exercise shall be computed on the basis of the aggregate number of Warrants so
exercised. If any fraction of a Warrant Share would, except for the provisions
of this Section 10, be issuable on the exercise of any Warrant, then the Company
shall pay an amount in cash equal to the closing price for one share of Common
Stock on the date the Warrant Certificate is presented for exercise (determined
in accordance with the second sentence of Section 9.1(e)(i) hereof), multiplied
by such fraction.
Section 11. No Rights as Stockholders; Notices to Holders. Nothing
contained in this Agreement or in any of the Warrants shall be construed as
conferring upon the Holders or their transferees the right to vote or to receive
dividends or to consent or to receive notice as stockholders in respect of any
meeting of stockholders for the election of directors of the Company or any
other matter, or any rights whatsoever as stockholders of the Company.
In case:
(a) the Company shall authorize the issuance to all holders of
shares of Common Stock of rights, options or warrants to subscribe for
or purchase shares of Common Stock or of any other subscription rights
or warrants; or
(b) the Company shall authorize the distribution to all holders of
shares of Common stock of securities or assets (other than cash
dividends); or
(c) of any consolidation or merger to which the Company is a party
and for which approval of any stockholders of the Company is required,
or of the conveyance or transfer of a substantial portion of the
properties and assets of the Company for which approval of any
stockholders of the Company is required, or of any reclassification or
change of Common Stock issuable upon exercise of the Warrants (other
than a change in par value, or from par value to no par value, or from
no par value to par value, or as a result of a subdivision or
combination), or a tender offer or exchange offer for shares of Common
Stock; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then the Company shall cause to be filed with the Warrant Agent and shall cause
to be given to each Holder at its address appearing on the Warrant Register, at
least twenty (20) days prior to the applicable record date hereinafter
specified, or promptly in the case of events for which there is no record date,
by first class mail, postage prepaid, a written notice stating (i) the date as
of which the holders of record of shares of Common Stock entitled to receive any
such rights, options, warrants or distribution are to be determined, or (ii) the
initial expiration date set forth in any tender offer or exchange offer for
shares of Common Stock, or (iii) the date on which any such reclassification,
consolidation, merger, conveyance, transfer, dissolution, liquidation or winding
up is expected to become effective or consummated, as well as the date as of
which it is expected that holders of record of shares of Common Stock shall be
entitled to exchange such shares for securities or other property, if any,
deliverable upon such reclassification, consolidation, merger, conveyance,
transfer, dissolution, liquidation, or winding up. The failure to give the
notice required by this Section 11 or any defect therein shall not affect the
legality or validity of any distribution, right, option, Warrant,
reclassification, consolidation, merger, conveyance, transfer, dissolution,
liquidation, winding up or action, or the vote upon any of the foregoing.
Section 12. Payments in U.S. Currency. All payments required to be made
hereunder shall be made in lawful money of the United States of America.
Section 13. Merger or Consolidation or Change of Name of Warrant Agent.
Any corporation into which the Warrant Agent may be merged or with which it may
be consolidated, or any corporation resulting from any merger or consolidation
to which the Warrant Agent shall be a party, or any corporation succeeding to
the corporation trust business of the Warrant Agent, shall be the successor to
the Warrant Agent hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Warrant Agent under
the provisions of Section 15 hereof. In case at the time such successor to the
Warrant Agent shall succeed to the agency created by this Agreement, any of the
Warrant Certificates shall have been countersigned but not delivered, any such
successor to the Warrant Agent may adopt the countersignature of the original
Warrant Agent and deliver such Warrant Certificates so countersigned; and in
case at that time any of the Warrant Certificates shall not have been
countersigned, any successor to the Warrant Agent may countersign such Warrant
Certificates either in the name of the predecessor Warrant Agent or in its name;
and in all such cases such Warrant Certificates shall be fully valid and
effective as provided therein and in this Agreement.
In case at any time the name of the Warrant Agent shall be changed and
at such time any of the Warrant Certificates shall have been countersigned but
not delivered, the Warrant Agent may adopt the countersignatures under its prior
name and deliver such Warrant Certificates so countersigned; and in case at that
time any of the Warrant Certificates shall not have been countersigned, the
Warrant Agent may countersign such Warrant Certificates either in its prior name
or in its changed name; and in all such cases such Warrant Certificates shall be
fully valid and effective as provided therein and in this Agreement.
Section 14. Appointment of Warrant Agent. The Company hereby appoints
the Warrant Agent to act as agent for the Company hereunder and in accordance
with the terms and conditions hereof, and the Warrant Agent hereby accepts such
appointment.
14.1 Concerning the Warrant Agent. The Warrant Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, and no implied duties or obligations shall be read into this Warrant
Agreement against the Warrant Agent, by all of which the Company and the
Holders, by their acceptance of Warrant Certificates, shall be bound.
14.2 Correctness of Statements. The statements contained herein and in
the Warrant Certificates shall be taken as statements of the Company, and the
Warrant Agent assumes no responsibility for the correctness of any of the same
except statements that describe the Warrant Agent or action taken by it. The
Warrant Agent assumes no responsibility with respect to the distribution of the
Warrant Certificates or Warrants except as herein otherwise provided.
14.3 Breach of Covenants. The Warrant Agent shall not be responsible
for any failure of the Company to comply with any of the covenants contained in
this Agreement or in the Warrant to be complied with by the Company.
14.4 Performance of Duties. The Warrant Agent may execute and exercise
any of the rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents and shall not be
responsible for the misconduct or negligence of any attorney or agent (which
shall not include an employee of the Warrant Agent) appointed with due care.
14.5 Reliance on Counsel. Before the Warrant Agent acts or refrains
from acting, the Warrant Agent may consult at any time with legal counsel
satisfactory to it (who may be counsel for the Company), and the Warrant Agent
shall incur no liability or responsibility to the Company or to any Holder in
respect to any action taken, suffered or omitted by it hereunder in good faith
and in accordance with the opinion or the advice of such counsel.
14.6 Proof of Actions Taken. Whenever in the performance of its duties
under this Agreement the Warrant Agent shall deem it necessary or desirable that
any fact or matter be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed conclusively to
be proved and established by a certificate signed by any of the Chairman of the
Board, the President, a Vice President, the Treasurer or the Secretary of the
Company and delivered to the Warrant Agent; and such certificate shall be full
authorization to the Warrant Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
14.7 Compensation and Indemnification. The Company agrees to pay the
Warrant Agent reasonable compensation for all services rendered by the Warrant
Agent in the performance of its duties under this Agreement, to reimburse the
Warrant Agent for all reasonable expenses, taxes and governmental charges and
other charges of any kind and nature incurred by the Warrant Agent in the
performance of its duties under this Agreement (including but not limited to
legal fees and expenses), and to indemnify the Warrant Agent and its officers,
agents and directors for and to hold each harmless from any and all losses,
liabilities, including judgments, costs and counsel fees, for anything done or
omitted by the Warrant Agent or any of its agents in the performance of its
duties under this Agreement, except as a result of the Warrant Agent's gross
negligence or willful misconduct as determined in a final judgment of a court of
competent jurisdiction and authority. The Company's obligations under this
Section 14.7 and any claim arising hereunder shall survive the resignation or
removal of the Warrant Agent and the termination or discharge of the Company's
obligations under this Agreement. The costs and expenses incurred in enforcing
this right of indemnification shall be paid by the Company.
14.8 Legal Proceedings. The Warrant Agent shall be under no obligation
to institute any action, suit or legal proceeding or to take any other action
likely to involve expense unless the Company or any one or more Holders shall
furnish the Warrant Agent with reasonable security and indemnity for any costs
and expenses which may be incurred or any liabilities which may arise, but this
provision shall not affect the power of the Warrant Agent to take such action as
the Warrant Agent may consider proper, whether with or without any such security
or indemnity. All rights of action of any Holder under this Agreement or under
any of the Warrants may be enforced by the Warrant Agent without the possession
of any of the Warrant Certificates or the production thereof at any trial or
other proceeding relative thereto, and any such action, suit or proceeding
instituted by the Warrant Agent shall be brought in its name as Warrant Agent,
and any recovery of judgment shall be for the ratable benefit of the Holders, as
their respective rights or interests may appear.
14.9 Other Transactions in Securities of Company. 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 any other securities of the Company or
have a pecuniary interest 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.
14.10 Liability of Warrant Agent. The Warrant Agent shall act hereunder
solely as agent, and its duties shall be determined solely by the provisions
hereof. The Warrant Agent shall not be liable for anything which it may do or
refrain from doing in connection with this Agreement except for its own
negligence or bad faith.
14.11 Reliance on Documents. The Warrant Agent will not incur any
liability or responsibility to the Company or to any Holder for any action taken
in reliance on any notice, resolution, waiver, consent order, certificate, or
other paper, document or instrument reasonably believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties.
14.12 Validity of Agreement. The Warrant Agent shall not be under any
responsibility in respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Warrant Agent) or for
any of the statements of fact or recitals contained in this Agreement or in
respect of the validity or execution of any Warrant Certificate (except its
countersignature thereof) or any Warrant; nor shall the Warrant Agent by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Warrant Shares (or other securities) to be
issued pursuant to this Agreement or any Warrant, or as to whether any Warrant
Shares (or other securities) will, when issued, be validly issued, fully paid
and nonassessable, or as to the Exercise Price or the number or amount of
Warrant Shares or other securities or any Assets or other property issuable upon
exercise of any Warrant.
14.13 Instructions from Company. The Warrant Agent is hereby authorized
and directed to accept instructions with respect to the performance of its
duties hereunder from any person believed in good faith by the Warrant Agent to
be one of the Chairman of the Board, the President, a Vice President, the
Treasurer or the Secretary of the Company, and to apply to such officers for
advice or instructions in connection with its duties, and shall not be liable
for any action taken or suffered to be taken by it in good faith in accordance
with instructions of any such officer or officers or any delay in acting while
waiting for these instructions..
Section 15. Change of Warrant Agent. The Warrant Agent may resign and
be discharged from its duties under this Agreement by giving to the Company
thirty (30) days' written notice. The Warrant Agent may be removed by like
notice to the Warrant Agent and the Holders from the Company, such notice to
specify the date when removal shall become effective. If the Warrant Agent shall
resign or be removed or shall otherwise become incapable of acting, then the
Company shall appoint a successor to the Warrant Agent. If the Company shall
fail to make such appointment within a period of thirty (30) days after such
removal or written notification of such resignation or incapacity by the
resigning or incapacitated Warrant Agent or by any Holder (who shall with such
notice submit his Warrant Certificate or Certificates for inspection by the
Company), then any Holder may apply to any court of competent jurisdiction for
the appointment of a successor to the Warrant Agent. Any successor Warrant
Agent, whether appointed by the Company or such a court, shall be a bank or
trust company, in good standing, incorporated under the laws of the United
States of America or any state thereof and having at the time of its appointment
as Warrant Agent a combined capital and surplus of at least $100,000,000. After
appointment and acceptance of such appointment in writing, the successor Warrant
Agent shall be vested with the same powers, rights, duties and responsibilities
as if it had been originally named as Warrant Agent without further act or deed;
but the former Warrant Agent shall deliver and transfer to the successor Warrant
Agent any property at the time held by it hereunder, and shall execute and
deliver any further assurance, conveyance, act or deed necessary for the
purpose. Failure to file any notice provided for in this Section 15, however, or
any defect therein, shall not affect the legality or validity of the resignation
or removal of the Warrant Agent or the appointment of the successor Warrant
Agent, as the case may be. In the event of such resignation or removal, the
successor Warrant Agent shall mail, by first class mail, postage prepaid, to
each Holder, written notice of such removal or resignation and the name and
address of such successor Warrant Agent.
Section 16. Notices. Any notice pursuant to this Agreement by the
Company or by any Holder to the Warrant Agent, shall be in writing and shall be
delivered in person or sent by registered or certified mail and shall be deemed
given upon receipt at its offices at Xxxxxx Trust & Savings Bank, 000 X. Xxxxxx
Xxxxxx, Xxxxxxx, XX 00000 Attention: Xxxxxx Xxxxxxxxxx. Any notice pursuant to
this Agreement by the Warrant Agent or by any Holder to the Company, shall be in
writing and shall be delivered in person or by confirmed facsimile transmission
(plus a copy delivered by overnight mail) or first class mail, postage prepaid
at its offices at Mercury Finance Company, 000 Xxxxx Xxxxx, Xxxx Xxxxxx,
Xxxxxxxx 00000, Attention: Corporate Secretary, Telecopier No.:
___________________. Each party hereto may from time to time change the address
to which its notices are to be delivered or mailed hereunder by notice to the
other party. Any notice mailed pursuant to this Agreement by the Company or the
Warrant Agent to the Holders shall be in writing and shall be mailed first
class, postage prepaid, or otherwise delivered, to such Holders at their
respective addresses in the Warrant Register. The initial address of each Holder
shall be as provided by the Company to the Warrant Agent. Any Holder may change
its address by notice to the Company and the Warrant Agent given in accordance
with this Section 16.
Section 17. Cancellation of Warrants. In the event the Company shall
purchase or otherwise acquire Warrants, the same shall thereupon be delivered to
the Warrant Agent and be cancelled by it and retired. The Warrant Agent shall
cancel any Warrant Certificate surrendered for exchange, substitution, transfer
or exercise in whole or in part.
Section 18. Supplements and Amendments. The Company and the Warrant
Agent may from time to time supplement or amend this Agreement, the Warrants and
the Warrant Certificates without approval of any Holder, in order to cure any
ambiguity or to correct or supplement any provision contained herein which may
be defective or inconsistent with any other provision herein, or to comply with
the requirements of any national securities exchange or The Nasdaq National
Market, or to make any other provisions in regard to matters or questions
arising hereunder which the Company and the Warrant Agent may deem necessary or
desirable and which shall not be inconsistent with the provisions of the
Warrants and this Agreement. Any other supplement or amendment to this Agreement
may be made with the approval of the Holders of a majority of outstanding
Warrants of each series of Warrants, voting separately as three classes.
Notwithstanding the foregoing, any amendment or supplement that (i) increases
the Exercise Price; (ii) decreases the number of shares of Common Stock issuable
upon exercise of a Warrant; or (iii) shortens the period during which the
Warrants may be exercised shall require the consent of each Holder of a Warrant
affected thereby. Notwithstanding anything in this Agreement to the contrary, no
supplement or amendment that changes the rights and duties of the Warrant Agent
under this Agreement will be effective against the Warrant Agent without the
execution of such supplement or amendment by the Warrant Agent.
Section 19. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Warrant Agent shall bind
and inure solely to the benefit of the Company or the Warrant Agent and their
respective successors hereunder.
Section 20. Applicable Law. This Agreement and each Warrant issued
hereunder shall be governed by and construed in accordance with the laws of the
state of Delaware without giving effect to the principles of conflict of laws
thereof, except as to the rights and obligations of the Warrant Agent, which
shall be governed by and construed in accordance with the laws of the Sate of
Illinois.
Section 21. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company, the
Warrant Agent and the Holders any legal or equitable right, remedy or claim
under this Agreement; but this Agreement shall be for the sole and exclusive
benefit of the Company, the Warrant Agent, their respective successors, and the
Holders of the Warrants.
Section 22. Counterparts. This Agreement may be executed in any number
of counterparts; each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
Section 23. Captions. The captions of the Sections and subsections of
this Agreement have been inserted for convenience only and shall have no
substantive effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.
MERCURY FINANCE COMPANY
By:
Name:
Title:
XXXXXX TRUST AND SAVINGS BANK
as Warrant Agent
By:
Name:
Title:
No. __________ __________ Warrants
Series A
Warrant Certificate
MERCURY FINANCE COMPANY
This Warrant Certificate certifies that ____________________ or
registered assigns, is the registered holder of Series A Warrants (the
"Warrants") expiring at 5:00 p.m., New York City time, on __________ __, 2002
[Three years from the Effective Date] (the "Expiration Date"), to purchase
Common Stock, $___ par value per share (the "Common Stock"), of MERCURY FINANCE
COMPANY, a Delaware corporation (the "Company"). The Warrants may be exercised
at any time from 9:00 am., New York City time, on __________ __, 1998 to 5:00
p.m., New York City time, on the Expiration Date. Each Warrant entitles the
holder upon exercise to receive from the Company, if exercised before 5:00 p.m.,
New York City time, on the Expiration Date, one fully paid and nonassessable
share of Common Stock (a "Warrant Share") at the Exercise Price (as defined in
the Warrant Agreement referred to on the reverse side hereof), payable in lawful
money of the United States of America, upon surrender of this Warrant
Certificate and payment of the Exercise Price at the office or agency of the
Warrant Agent, but only subject to the conditions set forth herein and in the
Warrant Agreement. The Exercise Price and number of Warrant Shares issuable upon
exercise of the Warrants are subject to adjustment upon the occurrence of
certain events as set forth in the Warrant Agreement.
WARRANTS NOT EXERCISED ON OR BEFORE 5:00 P.M., NEW YORK CITY TIME, ON
__________ __, 2002 [THREE YEARS FROM THE EFFECTIVE DATE] SHALL BECOME VOID.
Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse hereof, and such further provisions shall
for all purposes have the same effect as though fully set forth at this place.
This Warrant Certificate shall not be valid unless countersigned by the
Warrant Agent, as such term is used in the Warrant Agreement.
IN WITNESS WHEREOF, MERCURY FINANCE COMPANY has caused this Warrant
Certificate to be duly executed.
MERCURY FINANCE COMPANY
By:
Title:
Dated:
Countersigned:
[XXXXXX TRUST AND SAVINGS BANK],
as Warrant Agent
By:
Authorized Signatory
[Form of Warrant Certificate]
(Reverse)
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants expiring on the Expiration Date entitling the
holder on exercise to receive shares of Common Stock of the Company and are
issued or to be issued pursuant to a Warrant Agreement dated as of __________,
1998 (the "Warrant Agreement"), duly executed and delivered by the Company to
Xxxxxx Trust and Savings Bank, as Warrant Agent (the "Warrant Agent"), which
Warrant Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights, limitation
of rights, obligations, duties and immunities thereunder of the Warrant Agent,
the Company and the holders (the words "holders" or "holder" meaning the
registered holders or registered holder) of the Warrants. A copy of the Warrant
Agreement may be obtained by the holder hereof upon written request to the
Company. By accepting initial delivery, transfer or exchange of this Warrant,
the duly registered holder shall be deemed to have agreed to the terms of the
Warrant Agreement as it may be in effect from time to time, including any
amendments or supplements duly adopted in accordance therewith.
The holder of Warrants evidenced by this Warrant Certificate may
exercise them by surrendering this Warrant Certificate, with the form of
election to purchase set forth hereon properly completed and executed, together
with payment of the Exercise Price in the manner described below at the office
of the Warrant Agent. In the event that upon any exercise of Warrants evidenced
hereby the number of Warrants exercised shall be less than the total number of
Warrants evidenced hereby, there shall be issued to the holder hereof or its
assignee a new Warrant Certificate evidencing the number of Warrants not
exercised.
Payment of the Exercise Price may be made in cash by wire transfer to
the Warrant Agent for the account of the Company or by certified or official
bank check or checks to the order of the Company or by any combination thereof.
The Warrant Agreement provides that upon the occurrence of certain
events the number of shares of Common Stock issuable upon the exercise of each
Warrant, and the Exercise Price of each Warrant, may, subject to certain
conditions, be adjusted. No fractions of a share of Common Stock will be issued
upon the exercise of any Warrant, but the Company shall pay the cash value
thereof determined as provided in the Warrant Agreement.
Warrant Certificates, when surrendered at the office of the Warrant
Agent by the registered holder thereof in person or by legal representative or
attorney duly authorized in writing, may be exchanged, in the manner and subject
to the limitations provided in the Warrant Agreement, but without payment of any
service charge, for another Warrant Certificate or Warrant Certificates of like
tenor evidencing in the aggregate a like number of Warrants.
Upon due presentation for registration of transfer of this Warrant
Certificate at the office of the Warrant Agent, a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided in the Warrant Agreement,
without charge except for any tax or other governmental charge imposed in
connection therewith.
The Company and the Warrant Agent may deem and treat the registered
holder(s) hereof as the absolute owner(s) of this Warrant Certificate
(notwithstanding any notation of ownership or other writing hereon made by
anyone), for the purpose of any exercise hereof, of any distribution to the
holder(s) hereof, and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary. Neither the
Warrants nor this Warrant Certificate entitles any holder hereof to any rights
of a stockholder of the Company.
PURCHASE FORM
The undersigned hereby irrevocably elects to exercise this Series A
Warrant, according to the terms and conditions hereof, to the extent of
purchasing __________ shares of Common Stock and hereby makes payment of
$________ in payment of the exercise price thereof. If the number of shares
shall not be all of the shares purchasable under this Warrant, then a new
Warrant Certificate for the balance remaining shall be issued in the name of the
undersigned or its assignee as indicated on the Assignment Form.
Dated:
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name:
(please typewrite or print in block letters)
Address:
Signature
Note: The signature must conform in all respects to
name of holder as specified on the face of this
Warrant Certificate
Signature Guaranteed:
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
Name:
(please typewrite or print in block letters)
Address:
its right to purchase __________ shares of Common Stock represented by this
Series A Warrant and does hereby irrevocably constitute and appoint __________
Attorney, to transfer the same on the books of the Company, with full power of
substitution in the premises.
Dated:
Signature:
Social Security or other identifying Note: The signature must
number of holder conform in all respects to
name of holder as specified on the
face of this Warrant Certificate
Signature Guaranteed:
No. __________ __________ Warrants
Series B
Warrant Certificate
MERCURY FINANCE COMPANY
This Warrant Certificate certifies that ____________________ or
registered assigns, is the registered holder of Series B Warrants (the
"Warrants") expiring at 5:00 p.m., New York City time, on __________ __, 2003
[Four years from the Effective Date] (the "Expiration Date"), to purchase Common
Stock, $___ par value per share (the "Common Stock"), of MERCURY FINANCE
COMPANY, a Delaware corporation (the "Company"). The Warrants may be exercised
at any time from 9:00 am., New York City time, on __________ __, 1998 to 5:00
p.m., New York City time, on the Expiration Date. Each Warrant entitles the
holder upon exercise to receive from the Company, if exercised before 5:00 p.m.,
New York City time, on the Expiration Date, one fully paid and nonassessable
share of Common Stock (a "Warrant Share") at the Exercise Price (as defined in
the Warrant Agreement referred to on the reverse side hereof), payable in lawful
money of the United States of America, upon surrender of this Warrant
Certificate and payment of the Exercise Price at the office or agency of the
Warrant Agent, but only subject to the conditions set forth herein and in the
Warrant Agreement. The Exercise Price and number of Warrant Shares issuable upon
exercise of the Warrants are subject to adjustment upon the occurrence of
certain events as set forth in the Warrant Agreement.
WARRANTS NOT EXERCISED ON OR BEFORE 5:00 P.M., NEW YORK CITY TIME, ON
__________ __, 2003 [FOUR YEARS FROM THE EFFECTIVE DATE] SHALL BECOME VOID.
Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse hereof, and such further provisions shall
for all purposes have the same effect as though fully set forth at this place.
This Warrant Certificate shall not be valid unless countersigned by the
Warrant Agent, as such term is used in the Warrant Agreement.
IN WITNESS WHEREOF, MERCURY FINANCE COMPANY has caused this Warrant
Certificate to be duly executed.
MERCURY FINANCE COMPANY
By:
Title:
Dated:
Countersigned:
[XXXXXX TRUST AND SAVINGS BANK],
as Warrant Agent
By:
Authorized Signatory
[Form of Warrant Certificate]
(Reverse)
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants expiring on the Expiration Date entitling the
holder on exercise to receive shares of Common Stock of the Company and are
issued or to be issued pursuant to a Warrant Agreement dated as of __________,
1998 (the "Warrant Agreement"), duly executed and delivered by the Company to
Xxxxxx Trust and Savings Bank, as Warrant Agent (the "Warrant Agent"), which
Warrant Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights, limitation
of rights, obligations, duties and immunities thereunder of the Warrant Agent,
the Company and the holders (the words "holders" or "holder" meaning the
registered holders or registered holder) of the Warrants. A copy of the Warrant
Agreement may be obtained by the holder hereof upon written request to the
Company. By accepting initial delivery, transfer or exchange of this Warrant,
the duly registered holder shall be deemed to have agreed to the terms of the
Warrant Agreement as it may be in effect from time to time, including any
amendments or supplements duly adopted in accordance therewith.
The holder of Warrants evidenced by this Warrant Certificate may
exercise them by surrendering this Warrant Certificate, with the form of
election to purchase set forth hereon properly completed and executed, together
with payment of the Exercise Price in the manner described below at the office
of the Warrant Agent. In the event that upon any exercise of Warrants evidenced
hereby the number of Warrants exercised shall be less than the total number of
Warrants evidenced hereby, there shall be issued to the holder hereof or its
assignee a new Warrant Certificate evidencing the number of Warrants not
exercised.
Payment of the Exercise Price may be made in cash by wire transfer to
the Warrant Agent for the account of the Company or by certified or official
bank check or checks to the order of the Company or by any combination thereof.
The Warrant Agreement provides that upon the occurrence of certain
events the number of shares of Common Stock issuable upon the exercise of each
Warrant, and the Exercise Price of each Warrant, may, subject to certain
conditions, be adjusted. No fractions of a share of Common Stock will be issued
upon the exercise of any Warrant, but the Company shall pay the cash value
thereof determined as provided in the Warrant Agreement.
Warrant Certificates, when surrendered at the office of the Warrant
Agent by the registered holder thereof in person or by legal representative or
attorney duly authorized in writing, may be exchanged, in the manner and subject
to the limitations provided in the Warrant Agreement, but without payment of any
service charge, for another Warrant Certificate or Warrant Certificates of like
tenor evidencing in the aggregate a like number of Warrants.
Upon due presentation for registration of transfer of this Warrant
Certificate at the office of the Warrant Agent, a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided in the Warrant Agreement,
without charge except for any tax or other governmental charge imposed in
connection therewith.
The Company and the Warrant Agent may deem and treat the registered
holder(s) hereof as the absolute owner(s) of this Warrant Certificate
(notwithstanding any notation of ownership or other writing hereon made by
anyone), for the purpose of any exercise hereof, of any distribution to the
holder(s) hereof, and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary. Neither the
Warrants nor this Warrant Certificate entitles any holder hereof to any rights
of a stockholder of the Company.
PURCHASE FORM
The undersigned hereby irrevocably elects to exercise this Series B
Warrant, according to the terms and conditions hereof, to the extent of
purchasing __________ shares of Common Stock and hereby makes payment of
$________ in payment of the exercise price thereof. If the number of shares
shall not be all of the shares purchasable under this Warrant, then a new
Warrant Certificate for the balance remaining shall be issued in the name of the
undersigned or its assignee as indicated on the Assignment Form.
Dated:
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name:
(please typewrite or print in block letters)
Address:
Signature
Note: The signature must conform in all respects to
name of holder as specified on the face of this
Warrant Certificate
Signature Guaranteed:
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
Name:
(please typewrite or print in block letters)
Address:
its right to purchase __________ shares of Common Stock represented by this
Series B Warrant and does hereby irrevocably constitute and appoint __________
Attorney, to transfer the same on the books of the Company, with full power of
substitution in the premises.
Dated:
Signature:
Social Security or other identifying Note: The signature must
number of holder conform in all respects to
name of holder as specified on the
face of this Warrant Certificate
Signature Guaranteed:
No. __________ __________ Warrants
Series C
Warrant Certificate
MERCURY FINANCE COMPANY
This Warrant Certificate certifies that ____________________ or
registered assigns, is the registered holder of Series C Warrants (the
"Warrants") expiring at 5:00 p.m., New York City time, on __________ __, 2003
[Five years from the Effective Date] (the "Expiration Date"), to purchase Common
Stock, $___ par value per share (the "Common Stock"), of MERCURY FINANCE
COMPANY, a Delaware corporation (the "Company"). The Warrants may be exercised
at any time from 9:00 am., New York City time, on __________ __, 1998 to 5:00
p.m., New York City time, on the Expiration Date. Each Warrant entitles the
holder upon exercise to receive from the Company, if exercised before 5:00 p.m.,
New York City time, on the Expiration Date, one fully paid and nonassessable
share of Common Stock (a "Warrant Share") at the Exercise Price (as defined in
the Warrant Agreement referred to on the reverse side hereof), payable in lawful
money of the United States of America, upon surrender of this Warrant
Certificate and payment of the Exercise Price at the office or agency of the
Warrant Agent, but only subject to the conditions set forth herein and in the
Warrant Agreement. The Exercise Price and number of Warrant Shares issuable upon
exercise of the Warrants are subject to adjustment upon the occurrence of
certain events as set forth in the Warrant Agreement.
WARRANTS NOT EXERCISED ON OR BEFORE 5:00 P.M., NEW YORK CITY TIME, ON
__________ __, 2003 [FIVE YEARS FROM THE EFFECTIVE DATE] SHALL BECOME VOID.
Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse hereof, and such further provisions shall
for all purposes have the same effect as though fully set forth at this place.
This Warrant Certificate shall not be valid unless countersigned by the
Warrant Agent, as such term is used in the Warrant Agreement.
IN WITNESS WHEREOF, MERCURY FINANCE COMPANY has caused this Warrant
Certificate to be duly executed.
MERCURY FINANCE COMPANY
By:
Title:
Dated:
Countersigned:
[XXXXXX TRUST AND SAVINGS BANK],
as Warrant Agent
By:
Authorized Signatory
[Form of Warrant Certificate]
(Reverse)
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants expiring on the Expiration Date entitling the
holder on exercise to receive shares of Common Stock of the Company and are
issued or to be issued pursuant to a Warrant Agreement dated as of __________,
1998 (the "Warrant Agreement"), duly executed and delivered by the Company to
Xxxxxx Trust and Savings Bank, as Warrant Agent (the "Warrant Agent"), which
Warrant Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights, limitation
of rights, obligations, duties and immunities thereunder of the Warrant Agent,
the Company and the holders (the words "holders" or "holder" meaning the
registered holders or registered holder) of the Warrants. A copy of the Warrant
Agreement may be obtained by the holder hereof upon written request to the
Company. By accepting initial delivery, transfer or exchange of this Warrant,
the duly registered holder shall be deemed to have agreed to the terms of the
Warrant Agreement as it may be in effect from time to time, including any
amendments or supplements duly adopted in accordance therewith.
The holder of Warrants evidenced by this Warrant Certificate may
exercise them by surrendering this Warrant Certificate, with the form of
election to purchase set forth hereon properly completed and executed, together
with payment of the Exercise Price in the manner described below at the office
of the Warrant Agent. In the event that upon any exercise of Warrants evidenced
hereby the number of Warrants exercised shall be less than the total number of
Warrants evidenced hereby, there shall be issued to the holder hereof or its
assignee a new Warrant Certificate evidencing the number of Warrants not
exercised.
Payment of the Exercise Price may be made in cash by wire transfer to
the Warrant Agent for the account of the Company or by certified or official
bank check or checks to the order of the Company or by any combination thereof.
The Warrant Agreement provides that upon the occurrence of certain
events the number of shares of Common Stock issuable upon the exercise of each
Warrant, and the Exercise Price of each Warrant, may, subject to certain
conditions, be adjusted. No fractions of a share of Common Stock will be issued
upon the exercise of any Warrant, but the Company shall pay the cash value
thereof determined as provided in the Warrant Agreement.
Warrant Certificates, when surrendered at the office of the Warrant
Agent by the registered holder thereof in person or by legal representative or
attorney duly authorized in writing, may be exchanged, in the manner and subject
to the limitations provided in the Warrant Agreement, but without payment of any
service charge, for another Warrant Certificate or Warrant Certificates of like
tenor evidencing in the aggregate a like number of Warrants.
Upon due presentation for registration of transfer of this Warrant
Certificate at the office of the Warrant Agent, a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided in the Warrant Agreement,
without charge except for any tax or other governmental charge imposed in
connection therewith.
The Company and the Warrant Agent may deem and treat the registered
holder(s) hereof as the absolute owner(s) of this Warrant Certificate
(notwithstanding any notation of ownership or other writing hereon made by
anyone), for the purpose of any exercise hereof, of any distribution to the
holder(s) hereof, and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary. Neither the
Warrants nor this Warrant Certificate entitles any holder hereof to any rights
of a stockholder of the Company.
PURCHASE FORM
The undersigned hereby irrevocably elects to exercise this Series C
Warrant, according to the terms and conditions hereof, to the extent of
purchasing __________ shares of Common Stock and hereby makes payment of
$________ in payment of the exercise price thereof. If the number of shares
shall not be all of the shares purchasable under this Warrant, then a new
Warrant Certificate for the balance remaining shall be issued in the name of the
undersigned or its assignee as indicated on the Assignment Form.
Dated:
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name:
(please typewrite or print in block letters)
Address:
Signature
Note: The signature must conform in all respects to
name of holder as specified on the face of this
Warrant Certificate
Signature Guaranteed:
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
Name:
(please typewrite or print in block letters)
Address:
its right to purchase __________ shares of Common Stock represented by this
Series C Warrant and does hereby irrevocably constitute and appoint __________
Attorney, to transfer the same on the books of the Company, with full power of
substitution in the premises.
Dated:
Signature:
Social Security or other identifying Note: The signature must
number of holder conform in all respects to
name of holder as specified on the
face of this Warrant Certificate
Signature Guaranteed:
