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EXHIBIT 4.1
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EXECUTION COPY
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WARRANT AGREEMENT
between
PSF HOLDINGS, L.L.C.
and
FLEET NATIONAL BANK
as Warrant Agent
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Dated as of September 17, 1996
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TABLEE OF CONTENTS
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ARTICLE 1 - DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 2 - ISSUANCE OF WARRANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.1. Initial Issuance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2. Initial Unit Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.3. Form of Warrant Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.4. Execution of Warrant Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.5. Countersignature of Warrant Certificates . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE 3 - EXERCISE PERIOD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE 4 - EXERCISE PRICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 5 - EXERCISE OF WARRANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5.1. Manner of Exercise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5.2. Cashless Exercise in the Event of Cash Tender Offer. . . . . . . . . . . . . . . . . . 6
5.3. When Exercise Effective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5.4. Delivery of Certificates, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.5. Fractional Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 6 - ADJUSTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
6.1. Adjustment of Exercise Price and the Number of Units of Interests . . . . . . . . . . 7
6.2. Interest-Splits, Combinations, etc . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6.3. Certain Combinations, Mergers, etc . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6.4. Issuance of Options or Convertible Securities . . . . . . . . . . . . . . . . . . . . 8
6.5. Issuance of Additional Units for less than Fair Value. . . . . . . . . . . . . . . . 10
6.6. Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.7. Certain Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.8. Consideration Received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.9. Deferral of Certain Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.10. Changes in Options and Convertible Securities . . . . . . . . . . . . . . . . . . . . 11
6.11. Expiration of Options and Convertible Securities . . . . . . . . . . . . . . . . . . . 11
6.12. Other Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.13. Calculation to Nearest Cent and One-hundredth of Unit . . . . . . . . . . . . . . . . 12
6.14. No Change in Warrant Terms on Adjustment . . . . . . . . . . . . . . . . . . . . . . . 12
6.15. Substantively Equivalent Actions Requiring Adjustment . . . . . . . . . . . . . . . . 12
ARTICLE 7 - CONSOLIDATION, MERGER, ETC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.1. Cancellation of Warrants upon Sale of the Company . . . . . . . . . . . . . . . . . . 12
7.2. Assumption of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE 8 - NO DILUTION OR IMPAIRMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE 9 - NOTICE OF ADJUSTMENTS; REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
9.1. Notice of Adjustment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
9.2. Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE 10 - NOTIFICATION OF CERTAIN EVENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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10.1. Corporate Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
10.2. Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE 11 - COMPLIANCE WITH LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 12 - PAYMENT OF TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 13 - LOSS OR MUTILATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 14 - WARRANT REGISTRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
14.1. Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
14.2. Transfer or Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
14.3. Valid and Enforceable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
14.4. Endorsement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
14.5. No Service Charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
14.6. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE 15 - WARRANT AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
15.1. Obligations Binding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
15.2. No Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
15.3. Instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
15.4. Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
15.5. Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
15.6. Agent Only . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
15.7. Right to Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
15.8. Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
15.9. Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
15.10. No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
15.11. Resignation; Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
15.12. Change of Warrant Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
15.13. Successor Warrant Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 16 - REMEDIES, ETC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
16.1. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
16.2. Warrant Holder Not Deemed a Member . . . . . . . . . . . . . . . . . . . . . . . . . . 22
16.3. Right of Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE 17 - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
17.1. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
17.2. Reservation and Authorization of Units; Registration with or Approval of
any Governmental Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
17.3. Governing Law and Consent to Forum . . . . . . . . . . . . . . . . . . . . . . . . . . 24
17.4. Benefits of this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
17.5. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
17.6. Agreement of Holders of Warrant Certificates . . . . . . . . . . . . . . . . . . . . . 25
17.7. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
17.8. Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
17.9. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
17.10. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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EXHIBITS AND SCHEDULES
Exhibit A: Form of Warrant Certificate
Schedule 2.1: Schedule of Warrants
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WARRANT AGREEMENT
THIS WARRANT AGREEMENT, is made and entered into as of September 17,
1996 (the "Agreement"), by and between PSF Holdings, L.L.C., a Delaware limited
liability company (the "Company"), and Fleet National Bank, a national banking
association, as Warrant Agent (the "Warrant Agent").
WITNESSETH:
WHEREAS, in connection with the financial restructuring of certain
predecessors in interest of the Company pursuant to the joint plan of
reorganization of PSF Finance L.P. and affiliated entities confirmed by order
of the United States Bankruptcy Court for the District of Delaware entered
September 6, 1996 (the "Plan"), the Company proposes to issue warrants which,
in the aggregate, are exercisable to purchase up to 2,048,192 Units (as defined
below), subject to adjustment as provided herein (the "Warrants").
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing to act, in connection with the
issuance, transfer, exchange, replacement and exercise of the Warrant
Certificates and other matters as provided herein; and
WHEREAS, the Company desires to enter into this Agreement to set forth
the terms and conditions of the Warrants and the rights of the holders thereof;
NOW, THEREFORE, in consideration of the foregoing premises and of the
mutual agreements set forth herein, and for the benefit of the Warrant holders,
the Company and the Warrant Agent hereby agree as follows:
ARTICLE 1
DEFINITIONS
As used herein, the terms set forth below shall have the respective
meanings set forth below. Capitalized terms used in this Agreement and not
defined herein shall have the respective meanings provided in the LLC
Agreement.
"Additional Units" means any Units issued or sold by the Company after
the date hereof, other than (i) Units issued upon exercise of the Warrants and
(ii) Units issued in connection with any employee or director incentive plan.
"Agreement" means this Warrant Agreement, as the same may be amended
or modified from time to time hereafter.
"Bankruptcy Code" means Xxxxx 00, Xxxxxx Xxxxxx Code.
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"Bankruptcy Court" means the United States Bankruptcy Court for the
District of Delaware.
"Business Day" or "Business Date" means any day other than a Saturday
or a Sunday or a day on which commercial banking institutions in New York City,
New York are authorized or required by law to be closed; provided that any
reference in this Agreement to "days" (unless Business Days are specified)
shall mean calendar days.
"Commission" means the Securities and Exchange Commission or any other
Federal agency at the time administering the Securities Act or the Exchange
Act, whichever is the relevant statute for the particular purpose.
"Company" means PSF Holdings, L.L.C., a Delaware limited liability
company.
"Convertible Securities" shall have the meaning provided in Section
6.4 hereof.
"Distribution" shall have the meaning provided in Section 6.4 hereof.
"Effective Date" has the meaning provided in the Plan.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any successor Federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be amended and in effect at the
time. Reference to a particular section of the Securities Exchange Act of
1934, as amended, shall include a reference to the comparable section, if any,
of any such successor Federal statute.
"Exercise Period" has the meaning provided in Article 3.
"Exercise Price" has the meaning provided in Article 4.
"Fair Value" means fair market value, as determined by an Investment
Banker; provided, however, that in the case of determinations under Section 5.5
"Fair Value" shall be determined by the Members acting in good faith.
"Holders" means the registered holders of the Warrants from time to
time.
"Investment Banker" means an independent investment banking firm not
regularly retained by the Company of recognized national standing which is (i)
selected by the Company and (ii) reasonably acceptable to the Majority Holders.
"LLC Agreement" means the amended and restated limited liability
company agreement of the Company dated as of September 17, 1996, as from time
to time in effect.
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"Majority Holders" means the holders of Warrants exercisable for in
excess of 50% of the aggregate number of Units then purchasable upon exercise
of all Warrants then outstanding.
"MS Member" means Xxxxxx Xxxxxxx Group, Inc. or any Affiliate of
Xxxxxx Xxxxxxx Group, Inc. (other than Premium Holdings Corp.)
"Non-Sale Transaction" shall have the meaning provided in Section 6.3
hereof.
"Options" shall have the meaning provided in Section 6.4 hereof.
"Original Issue Date" has the meaning provided in Section 2.1.
"Plan" shall have the meaning provided in the recitals to this
Agreement.
"Public Offering" means any offering of Units to the public pursuant
to an effective registration statement under the Securities Act.
"Sale Transaction" means a transaction or series of related
transactions which, whether by consolidation, merger, business combination,
reorganization or sale of all or substantially all of the assets of the Company
(or of a successor to the Company pursuant to Section 6.3), effects a sale of
the Company (or of such successor to the Company) to a third party; provided
that a consolidation, merger, business combination, reorganization or sale of
all or substantially all assets shall be deemed to effect a sale of the Company
(or such successor to the Company) if 25% or less of the aggregate
consideration received by holders of Units with respect to their Units (or, in
the case of any such successor to the Company, of holders of equity interests
in the Company with respect to such interests) in connection with such
transaction or transactions consists of equity securities of the surviving
entity in the case of a consolidation, merger, business combination or
reorganization, or of the transferee in the case of a sale of all or
substantially all assets.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be amended and in effect at the time.
Reference to a particular section of the Securities Act of 1933, as amended,
shall include a reference to the comparable section, if any, of any such
successor Federal statute.
"Warrant Agent" means Fleet National Bank, and its successors
appointed pursuant to Article 16 hereof.
"Warrant Certificates" has the meaning provided in Section 2.3 and
shall include any Warrant Certificate issued upon partial exercise of the
Warrants represented by a Warrant Certificate.
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"Warrants" means the Warrants issued hereunder to purchase up to an
aggregate of 2,048,192 Units, subject to adjustment as provided herein, and
shall include any Warrants issued upon transfer of any such Warrants.
ARTICLE 2
ISSUANCE OF WARRANTS
2.1. Initial Issuance. On the date hereof (the "Original Issue
Date"), which is also the Effective Date, the Company shall, pursuant to the
Plan, deliver (i) to Premium Holdings Corp. and certain of its shareholders, as
reflected on Schedule 2.1, certificates representing Warrants to purchase an
aggregate of 532,530 Units; (ii) to PSF Finance Holdings, Inc., a certificate
representing Warrants to purchase 1,495,180 Units; and (iii) to Xxxxxxxx Farm,
Inc., a certificate representing Warrants to purchase 20,482 Units, in each case
subject to adjustment as provided herein.
2.2. Initial Unit Amount. The number of Units purchasable upon
exercise of the Warrants shall initially be one Unit per Warrant, subject to
adjustment from and after the Original Issue Date as provided in Article 6
hereof.
2.3. Form of Warrant Certificates. The certificates evidencing the
Warrants (the "Warrant Certificates") shall be evidenced by certificates
substantially in the form attached hereto as Exhibit A. Each Warrant
Certificate shall be dated as of the date on which it is countersigned by the
Warrant Agent, which shall be on the Original Issue Date or, in the event of a
division, exchange, substitution or transfer of any of the Warrants, on the date
of such event. The Warrant Certificate may have such further legends and
endorsements stamped, printed, lithographed or engraved thereon as the Company
may deem appropriate and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any law or with any rule or
regulation pursuant thereto or with any rule or regulation of any securities
exchange on which the Warrants may be listed.
2.4. Execution of Warrant Certificates. Warrant Certificates shall
be executed on behalf of the Company by its Chief Executive Officer, President,
any Vice President, its Treasurer, or its Secretary, or by any other officer of
the Company duly authorized by the members to perform such function, in each
case, either manually or by facsimile signature printed thereon. In case any
such officer of the Company whose signature shall have been placed upon any
Warrant Certificate shall cease to be such before countersignature by the
Warrant Agent or issuance and delivery thereof, such Warrant Certificate
nevertheless may be countersigned by the Warrant Agent and issued and delivered
with the same force and effect as though such Person had not ceased to be such a
duly authorized officer of the Company.
2.5. Countersignature of Warrant Certificates. Warrant Certificates
shall be manually countersigned by an authorized signatory of the Warrant Agent
and shall not be valid for any purpose unless so countersigned. Such
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manual countersignature shall constitute conclusive evidence of such
authorization. The Warrant Agent is hereby authorized to countersign, in
accordance with the provisions of this Section 2.5, and deliver any new Warrant
Certificates, as directed by the Company pursuant to Section 2.1 and as and
when required pursuant to the provisions of Articles 5, 13 and 14. Each
Warrant Certificate shall, when manually countersigned by an authorized
signatory of the Warrant Agent, entitle the registered holder thereof to
exercise the rights as the holder of the number of Warrants set forth thereon
(subject to the adjustments provided herein), subject to the provisions of this
Agreement.
ARTICLE 3
EXERCISE PERIOD
Each Warrant shall entitle the Holder thereof to purchase from the
Company one Unit (subject to the adjustments provided herein) (i) in the case
of a Holder which is not a MS Member, at any time during the ten year period
that commences on the Original Issue Date, and that terminates at 5:00 p.m.,
New York City time on the first Business Day after the tenth anniversary of the
Original Issue Date (the "Termination Date") and (ii) in the case of any Holder
which is a MS Member, at any time during the period that commences on January
1, 2000 and that terminates on the Termination Date, in each case, subject to
earlier cancellation of the Warrants as provided in Section 7.1 hereof (the
"Exercise Period"); provided that notwithstanding the foregoing, until the
Termination Date, the MS Members shall have the right to exercise the Warrants
in accordance with the provisions hereof in connection with, and immediately
prior to the consummation of, any (i) Sale Transaction, (ii) Non-Sale
Transaction or (iii) event which would cause an adjustment to the number of
Units purchasable upon the exercise of the Warrants or the Exercise Price under
Article 6, unless, in the case of clause (ii) or (iii) above, by exercising
such Warrants, compliance with the Investment Company Act of 1940 would become
materially more burdensome to such MS Member or any of its Affiliates.
ARTICLE 4
EXERCISE PRICES
The Exercise Price for the Warrants shall be $45.00 per Unit (subject
to adjustment pursuant to Article 6 hereof).
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ARTICLE 5
EXERCISE OF WARRANTS
5.1. Manner of Exercise. Subject to Article 3, a Warrant represented
by a Warrant Certificate may be exercised by the registered holder thereof
during normal business hours on any Business Day, by surrendering such Warrant
Certificate, with the subscription form set forth therein duly executed by such
holder, by hand or by mail at the office of the Warrant Agent as provided in
Section 17.1 or, if such exercise shall be in connection with an underwritten
Public Offering, at the location designated by the Company. Such Warrant
Certificate shall be accompanied by payment in respect of each Warrant that is
exercised, which shall be made by certified or official bank or bank cashier's
check payable in United States currency to the order of the Company. Such
payment shall be in an amount equal to the product of the number of Units
(subject to adjustment as provided herein) designated in such subscription form
multiplied by the original Exercise Price (subject to adjustment as provided
herein). Upon such surrender and payment, such holder shall thereupon be
entitled to receive the number of duly authorized, validly issued, fully paid
and nonassessable Units determined as provided in Articles 2 and 3, and as and
if adjusted pursuant to Article 6.
5.2. Cashless Exercise in the Event of Cash Tender Offer.
Notwithstanding the foregoing Section 5.1, cashless exercise shall be permitted
by all Holders in the event that a cash tender offer is made for all Units and
the Warrant Holder commits to tender; and in the case of such a cash tender
offer, each tendering Warrant Holder shall be entitled to receive, upon the
consummation thereof, an amount equal to the excess, if any, of the cash
consideration per Unit over the then applicable Exercise Price per Unit, in each
case, multiplied by the number of Units which the Holder would be entitled to
receive with respect to its tendered Warrants.
5.3. When Exercise Effective. Each exercise of any Warrant
pursuant to Section 5.1 shall be deemed to have been effected immediately prior
to the close of business on the Business Day on which the Warrant Certificate
representing such Warrant, duly executed, with accompanying payment shall have
been delivered as provided in Section 5.1, and at such time the Person or
Persons in whose name or names the certificate or certificates for Units shall
be issuable upon such exercise as provided in Section 5.4 shall be deemed to
have become the holder or holders of record thereof.
5.4. Delivery of Certificates, etc. (a) As promptly as practicable
after the exercise of any Warrant, and in any event within five Business Days
thereafter (or, if such exercise is in connection with an underwritten Public
Offering, concurrently with such exercise), the Company at its expense (other
than as to payment of transfer taxes which will be paid by the holder) will
cause the Warrant Agent to provide and deliver to such holder, or as such holder
may otherwise direct in writing (subject to Article 14),
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(i) an amended LLC Agreement evidencing the membership
interests in the Company after giving effect to such exercise, and
(ii) if less than all the Warrants represented by a Warrant
Certificate are exercised, a new Warrant Certificate or Certificates
of the same tenor and for the aggregate number of Warrants that were
not exercised, executed and countersigned in accordance with Sections
2.4 and 2.5.
(b) The Warrant Agent shall countersign any new Warrant Certificate,
register it in such name or names as may be directed in writing by such holder,
and shall deliver it to the person entitled to receive the same in accordance
with this Section 5.4. The Company, whenever required by the Warrant Agent,
will supply the Warrant Agent with Warrant Certificates executed on behalf of
the Company for such purpose.
5.5. Fractional Units. No fractional Units shall be issued upon
any exercise of Warrants. If more than one Warrant Certificate shall be
delivered for exercise at one time by the same holder, the number of full Units
that shall be issuable upon exercise shall be computed on the basis of the
aggregate number of Warrants exercised. As to any fraction of a Unit, the
Company shall pay a cash adjustment in respect thereto in an amount equal to the
product of (x) the Fair Value per Unit as of the Business Day next preceding the
date of such exercise multiplied by (y) such fraction of a Unit.
ARTICLE 6
ADJUSTMENTS
6.1. Adjustment of Exercise Price and the Number of Units of
Interests. The number of Units purchasable upon the exercise of Warrants and
the Exercise Price shall be subject to adjustment from time to time as follows:
6.2. Interest-Splits, Combinations, etc. In case the Company shall
hereafter (A) make a distribution of Units on Units, (B) subdivide its
outstanding Units, (C) combine outstanding Units into a smaller number of Units,
or (D) issue by reclassification of Units any other class of units of limited
liability membership interests in the Company, the number of Units for which
Warrants may be exercised in effect immediately prior to (i) the record date, in
the case of a distribution, and (ii) the date of such action in the case of a
subdivision, combination or issuance, shall be adjusted so that the Holder of
any Warrant thereafter exercised shall be entitled to receive the number of
Units (or number of units of such other class) which such Holder would have
owned immediately following such action had such Warrant been exercised
immediately prior thereto. In such event, the Exercise Price per Unit shall
also be increased or decreased, as necessary, such that the aggregate Exercise
Price payable for the Units as so adjusted shall equal the aggregate Exercise
Price payable for the Units prior to such adjustment. An adjustment made
pursuant to this paragraph shall become effective immediately after (i) the
record date, in the case of a distribution, or (ii) the
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effective date of any such subdivision, combination or issuance. If, as a
result of any adjustment made pursuant to this paragraph, the Holder of any
Warrant thereafter exercised shall become entitled to receive units of limited
liability membership interests in two or more classes of limited liability
membership interests in the Company, an Investment Banker shall determine the
allocation of the adjusted Exercise Price between or among such units of such
classes of such membership interests in the Company.
6.3. Certain Combinations, Mergers, etc. Other than in the case
of a Sale Transaction (as provided in Section 7.1), in the event of any
consolidation or merger of the Company with or into another entity (other than a
merger in which the Company is the continuing entity and which does not result
in any reclassification or change of the then outstanding Units) or of a
transfer of all or substantially all of the assets of the Company (any such
consolidation, merger, transfer or sale which does not constitute a Sale
Transaction being hereinafter referred to as a "Non-Sale Transaction"), in each
case, as a condition of such Non-Sale Transaction, the Company or such successor
or transferee entity, as the case may be, shall forthwith make lawful and
adequate provision whereby the Holder of each Warrant then outstanding shall
have the right thereafter to receive on exercise of such Warrant the kind and
amount of equity interests, other securities and property receivable upon such
consolidation or merger by a holder of Units immediately prior to such Non-Sale
Transaction. Such provisions shall include provision for adjustments which
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Article 6. The above provisions of this Section 6.3 shall similarly
apply to successive consolidations, mergers or transfers of all or substantially
all of the Company's assets which are Non-Sale Transactions.
6.4. Issuance of Options or Convertible Securities. In the event
the Company shall, at any time or from time to time after the date hereof,
issue, sell, distribute or fix a record date for the determination of holders of
any class of securities entitled to receive, or otherwise grant in any manner
(including by assumption) any rights to subscribe for or to purchase, or any
warrants or options for the purchase of, Additional Units or any securities
convertible into or exchangeable for Additional Units (any such rights, warrants
or options being herein called "Options" and any such convertible or
exchangeable securities being herein called "Convertible Securities") or any
Convertible Securities (other than upon exercise of any Options), whether or not
such Options or the rights to convert or exchange such Convertible Securities
are immediately exercisable, and the price per Unit at which the Units are
issuable upon the exercise of such Options or upon the conversion or exchange of
such Convertible Securities (determined by dividing (i) the aggregate amount, if
any, received or receivable by the Company as consideration for the issuance,
sale, distribution or granting of such Options or any such Convertible Security,
plus the minimum aggregate amount of additional consideration, if any, payable
to the Company upon the exercise of all such Options or the conversion of such
Convertible Securities, by (ii) the total maximum number of Units issuable upon
the exercise of all such Options or the conversion of such Convertible
Securities) shall be less than the Fair
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Value per Unit on either (i) the record date, in the case of a distribution of
such Options or Convertible Securities to Holders of any class of securities,
or (ii) the actual date, in the case of an issuance, sale, distribution or
granting of such Options or Convertible Securities to Persons other than
Holders of any class of securities (either case being herein called a
"Distribution") then, effective upon (i) the record date, in the case of a
Distribution to holders of any class of securities or (ii) the date of
Distribution in the case of any other Distribution, the Exercise Price shall be
reduced to the price (calculated to the nearest cent) determined by multiplying
the Exercise Price in effect immediately prior to such Distribution by a
fraction, (x) the numerator of which shall be the sum of (i) number of Units
outstanding immediately prior to such Distribution multiplied by the Fair Value
per Unit on the record date or the actual date of such Distribution, as the
case may be, plus (ii) the consideration, if any, received by the Company upon
such Distribution, and (y) the denominator of which shall be the product of (A)
the total number of Units outstanding immediately after such Distribution
multiplied by (B) the Fair Value per Unit on the record date or actual date of
such Distribution, as the case may be. For purposes of the foregoing, the
total maximum number of Units issuable upon exercise of all such Options or
upon the conversion or exchange of all such Convertible Securities or upon the
conversion or exchange of the total maximum amount of the Convertible
Securities issuable upon the exercise of all such Options shall be deemed to
have been issued as of the record date or actual date of such Distribution, as
the case may be, and thereafter shall be deemed to be outstanding and the
Company shall be deemed to have received as consideration therefor such price
per Unit, determined as provided above. Except as provided in Section 6.10, no
additional adjustment of the Exercise Price shall be made upon the actual
exercise of such Options or upon conversion or exchange of the Convertible
Securities or upon conversion of exchange of the Convertible Securities
issuable upon the exercise of any such Options.
6.5. Issuance of Additional Units for less than Fair Value. In the
event that the Company at any time from and after the date hereof shall issue or
sell Additional Units without consideration or for consideration in an amount
per Additional Unit which is less than the Fair Value per Unit, then, and in
each such case, the Exercise Price shall be reduced, concurrently with such
issue or sale, to a price determined by multiplying such current Exercise Price
by a fraction (x) the numerator of which shall be the sum of (i) the number of
Units outstanding immediately prior to such issue or sale multiplied by the Fair
Value per Unit on the date of such issue or sale plus (ii) the aggregate
consideration, if any, received by the Company upon such issue or sale and (y)
the denominator of which shall be the product of (A) the total number of Units
outstanding after such issue or sale multiplied by (B) the Fair Value per Unit
on the date of such issue or sale; provided that any Additional Units issued in
a Public Offering shall be deemed to have been issued for Fair Value for
purposes hereof; and provided further, that any Additional Units issued upon
exercise or conversion of any Options or Convertible Securities provided under
Section 6.4 hereof shall not be the subject of any further adjustment under this
Section 6.5.
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6.6. Distributions. In the event the Company shall, at any time or
from time to time after the date hereof, take a record of the holders of its
Units for the purpose of entitling them to receive a dividend or other
distribution of cash, evidences of its indebtedness, other securities or other
property (other than Options or Convertible Securities, which are provided for
above), or any options, warrants or other rights to subscribe for or purchase
any of the foregoing, then the Exercise Price in effect as of a date
immediately prior to the record date shall be reduced, effective as of the
close of business on such record date, to a price (calculated to the nearest
cent) determined by multiplying the Exercise Price in effect prior to such
adjustment by a fraction, the numerator of which shall be the Fair Value per
Unit on the record date for such distribution minus the Fair Value of the
dividend or distribution applicable to one Unit and the denominator of which
shall be the Fair Value per Unit on the record date for such dividend or other
distribution.
6.7. Certain Distributions. If the Company shall make any
distribution payable in Options or Convertible Securities, then, for purposes
of the foregoing, such Options or Convertible Securities shall be deemed to
have been issued or sold without consideration.
6.8. Consideration Received. If any Units, Options or Convertible
Securities shall be issued, sold or distributed for a consideration other than
cash, the amount of the consideration other than cash received by the Company
shall be deemed to be the then Fair Value of such consideration. If any
Options shall be issued in connection with the issuance and sale of other
securities of the Company, together comprising one integral transaction in
which no specific consideration is allocated to such Options by the parties
thereto, such Options shall be deemed to have been issued without
consideration; provided, however, that, if such Options have an exercise price
equal to or greater than the Fair Value of the Units on the date of issuance of
such Options, then such Options shall be deemed to have been issued for
consideration equal to such exercise price.
6.9. Deferral of Certain Adjustments. No adjustment to the
Exercise Price (including the related adjustment to the number of Units
purchasable upon the exercise of each Warrant) shall be required hereunder
unless such adjustment, together with other adjustments carried forward as
provided below, would result in an increase or decrease of at least 1% of the
Exercise Price; provided that any adjustments which by reason of this Section
6.9 are not required to be made shall be carried forward and taken into account
in any subsequent adjustment.
6.10. Changes in Options and Convertible Securities. If the
exercise price provided for any Options, the additional consideration, if any,
payable upon the conversion or exchange of any Convertible Securities, or the
rate at which any Convertible Securities are convertible into or exchangeable
for Units shall change at any time (other than by reason of provisions designed
to protect against dilution upon an event which results in an equivalent,
related
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adjustment pursuant to this Article 6), the Exercise Price then in effect and
the number of Units purchasable upon the exercise of each Warrant shall
forthwith be readjusted (effective only with respect to any exercise of the
Warrant after such readjustment) to the Exercise Price and number of Units so
purchasable that would then be in effect had the adjustment made upon the
issuance, sale, distribution or granting of such Options or Convertible
Securities been made based upon such changed Exercise Price, additional
consideration or conversion rate, as the case may be, but only with respect to
such Options and Convertible Securities as then remain outstanding.
6.11. Expiration of Options and Convertible Securities. If, at any
time after any adjustment to the number of Units purchasable upon the exercise
of each Warrant shall have been made pursuant to any of Sections 6.4 or 6.10 or
this Section 6.11, any Options or Convertible Securities shall have expired
unexercised, the number of such Units so purchasable upon the exercise of any
unexercised Warrants shall, upon such expiration, be readjusted and shall
thereafter be such as they would have been had they been originally adjusted
(or had the original adjustment not been required, as the case may be) as if
(i) the only Units deemed to have been issued in connection with such Options
or Convertible Securities were the Units, if any, actually issued or sold upon
the exercise of such Options or Convertible Securities and (ii) such Units, 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, distribution or granting of all such
Options or Convertible Securities, whether or not exercised; provided that no
such readjustment shall have the effect of decreasing the number of such Units
so purchasable by an amount (calculated by adjusting such decrease to account
for all other adjustments made pursuant to this Article 6 following the date of
the original adjustment referred to above) in excess of the amount of the
adjustment initially made in respect of the issuance, sale, distribution or
granting of such Options or Convertible Securities.
6.12. Other Adjustments. In the event that at any time, as a result
of an adjustment made pursuant to this Article 6, the Holders shall become
entitled to receive any securities of the Company other than Units, thereafter
the number of such other securities so receivable upon exercise of the Warrants
and the Exercise Price applicable to such exercise shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Units contained in this
Article 6.
6.13. Calculation to Nearest Cent and One-hundredth of Unit. All
calculations under this Article 6 shall be made to the nearest cent or to the
nearest one-hundredth of a Unit, as the case may be.
6.14. No Change in Warrant Terms on Adjustment. Irrespective of any
adjustment in the Exercise Price or the number of Units (or any inclusion of
Options or Convertible Securities) issuable upon exercise, Warrants theretofore
or thereafter issued may continue to express the same prices and number of
Units as are stated in the similar Warrants issued on the Original
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Issue Date, and the Exercise Price and such number of Units issuable upon
exercise provided thereon shall be deemed to have been so adjusted.
6.15. Substantively Equivalent Actions Requiring Adjustment. If at
any time the Company shall take any action with respect to the Units which is
the substantive equivalent of a transaction which would require an adjustment
under this Article 6, but which is not, by its literal terms, covered in any of
the foregoing Sections 6.1 through 6.14, then, notwithstanding the failure of
this Article 6 to expressly describe such transaction, the number of Units for
which the Warrants are exercisable and/or the Exercise Price shall be adjusted
in the same manner as would be required for a transaction which is provided for
in this Article 6 and which is the substantive equivalent of such transaction.
ARTICLE 7
CONSOLIDATION, MERGER, ETC.
7.1. Cancellation of Warrants upon Sale of the Company.
Notwithstanding any other provision of this Agreement, including, without
limitation, Article 3 or Section 6.3 hereof, in the event of a Sale
Transaction, then any Warrants which are not exercised prior to, or in
connection with, the consummation of such Sale Transaction shall be canceled
upon the consummation of such transaction, and the holders of such canceled
Warrants shall not be entitled to receive any property with respect to their
canceled Warrants.
7.2. Assumption of Obligations. The Company will not effect a
merger, consolidation or sale of all or substantially all of its assets, other
than a Sale Transaction, unless, prior to the consummation of such Non-Sale
Transaction, each Person (other than the Company) which may be required to
deliver any securities, cash or other property upon the exercise of the
Warrants as provided herein assumes, by written instrument delivered to the
Warrant Agent, with a copy delivered to each Holder, the obligations of the
Company under this Warrant Agreement and under each of the Warrants, including,
without limitation, the obligation to deliver such securities, cash or property
as may be required pursuant to Article 6 hereof.
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ARTICLE 8
NO DILUTION OR IMPAIRMENT
The Company will not, by amendment of the LLC Agreement or through any
consolidation, merger, reorganization, transfer of assets, dissolution,
issuance or sale of securities or any other voluntary action or omission, avoid
or seek to avoid the observance or performance of any of the terms of this
Agreement or any of the Warrants issued hereunder, but will at all times in
good faith observe and perform all such terms and take all such action as may
be necessary or appropriate in order to protect the rights of each holder of a
Warrant against dilution or other impairment of the kind provided herein;
provided, however, that, subject to compliance with the applicable provisions
of this Agreement, the Company shall not be prohibited by this Article 8 or by
any provision of this Agreement from making decisions providing for, inter
alia, any Sale Transaction or any other transaction which, in the judgment of
the members, is in the best interests of the Company and its members. Without
limiting the generality of the foregoing, the Company (a) will take all such
action as may be necessary or appropriate in order that the Company may validly
and legally issue fully paid and nonassessable Units upon the exercise of all
of the Warrants from time to time outstanding, (b) will not take any action
that results in any adjustment of the Units upon exercise of the Warrants if
the total number of Units issuable after the action upon the exercise of all of
the Warrants would exceed the total number of Units then authorized to be
issued by the LLC Agreement to the extent that the authorization of such
issuance is required to be so authorized, (c) will not issue any class of
membership interests that is preferred as to the distribution of assets upon
voluntary or involuntary dissolution, liquidation or winding-up, unless such
stock is sold for a cash consideration at least equal to the amount of such
preference upon voluntary or involuntary dissolution, liquidation or winding-up
and (d) use its best efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof as may be
necessary to enable the Company to perform its obligations under this
Agreement.
ARTICLE 9
NOTICE OF ADJUSTMENTS; REPORTS
9.1. Notice of Adjustment. Whenever the number of Units or other
interest or property issuable upon the exercise of each Warrant or the Exercise
Price is adjusted, as herein provided, the Company shall cause the Warrant
Agent promptly to mail by first class mail, postage prepaid, to each Holder,
and shall deliver to the Warrant Agent, a certificate of a firm of independent
public accountants selected by the Members (which may be the regular
accountants employed by the Company) setting forth the number of Units or other
securities issuable upon the exercise of each Warrant or the Exercise Price
after such adjustment, as applicable, setting forth a brief statement of the
facts requiring such adjustment and setting forth the computation by which such
adjustment was made (including a description of the basis on which Fair
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Value was determined, if applicable). 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 desiring an inspection thereof during reasonable business hours.
The Warrant Agent shall not at any time be under any duty or responsibility to
any Holders to determine whether any facts exist that may require any
adjustment of the number of Units (or other securities) issuable on exercise of
the Warrants or of the Exercise Price, 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 or the validity or value (of the kind or amount) of any
Units or other securities or any property which may be issuable on exercise of
the Warrants or which may be relevant to the determination of any such
adjustment. The Warrant Agent shall not be responsible for any failure of the
Company to make any payment or to issue, transfer or deliver any Units or to
deliver any documents or information or other interests or property upon the
exercise of any Warrant.
9.2. Reports. In each case of any adjustment or readjustment in
the Units issuable upon the exercise of the Warrants, the Company at its
expense will promptly compute such adjustment or readjustment after giving
effect to such, in accordance with the terms of this Agreement and shall
prepare a report setting forth such adjustment or readjustment and showing in
reasonable detail the method of calculation thereof and the facts upon which
such adjustment or readjustment is based. The Company will forthwith mail a
copy of each such report to the Warrant Agent, which shall promptly mail a copy
to each Holder. The Warrant Agent will cause the same to be available for
inspection at its office at the address provided under Section 17.1 during
normal business hours by any holder of a Warrant or any prospective purchaser
of a Warrant designated by the holder thereof.
ARTICLE 10
NOTIFICATION OF CERTAIN EVENTS
10.1. Corporate Action. In the event of:
(a) any taking by the Company of a record of the holders of Units for
the purpose of determining the holders thereof who are entitled to receive any
distribution of any kind, or any right to subscribe for, purchase or otherwise
acquire any units of interest of any class or any other securities or property,
or to receive any other right or interest of any kind; or
(b) (i) any capital reorganization of the Company, (ii) any
reclassification of the Units, (iii) any Non-Sale Transaction, (iv) any Sale
Transaction, or (v) an exchange offer for Units; or
(c) the voluntary or involuntary dissolution, liquidation, or winding
up of the Company,
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the Company shall cause to be filed with the Warrant Agent and mailed to each
Holder a notice specifying (x) the date or expected date on which any such
record is to be taken for the purpose of such distribution, rights, event,
transaction or amendment (or vote thereon) and the amount and character of any
such distribution, exchange, rights, or vote, or, if a record is not to be
taken, the date as of which the record holders of Units entitled to such
dividend, distribution, exchange or rights are to be determined, and the amount
and character of such dividend, distribution or rights, or (y) the date or
expected date on which any such reorganization, reclassification,
recapitalization, consolidation, merger, sale, transfer, exchange offer,
dissolution, liquidation or winding up is expected to become effective, and the
time, if any such time is to be fixed, as of which record holders of Units
shall be entitled to exchange their Units for the securities or other property
deliverable upon such reorganization, reclassification, recapitalization,
consolidation, merger, sale, transfer, exchange offer, dissolution, liquidation
or winding up and in the case of a Sale Transaction, the fact that such
transaction will result in the cancellation of the Warrants. Such notice shall
be delivered not less than 20 days prior to such date therein provided, in the
case of any such date referred to in clause (x) of the preceding sentence, and
not less than 30 days prior to such date therein provided, in the case of any
such date referred to in clause (y) of the preceding sentence. Failure to give
such notice within the time provided or any defect therein shall not affect the
legality or validity of any such action.
10.2. Available Information. The Company shall promptly file with
the Warrant Agent, which shall deliver to the Holders, copies of its annual
reports and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may by rules and regulations
prescribe) that the Company is required to file with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act. If the Company is not required to
make such filings, the Company shall promptly deliver to the Warrant Agent,
which shall deliver to the Holders, copies of its audited annual financial
statements, its quarterly financial statements and any other reports and
financial statements that are provided to any holders of equity or debt
securities of the Company (other than bank debt) in their capacity as holders
of such securities.
ARTICLE 11
COMPLIANCE WITH LAW
The Company will use its best efforts, at its expense and on a
continual basis, to assure that all Units that may be issued upon exercise of
Warrants may be so issued and delivered without violation of any Federal or
state securities law or regulation, or any other law or regulation applicable
to the Company or any of its subsidiaries; provided that with respect to any
such exercise involving a sale or transfer of Warrants or any such securities
issuable upon such exercise, the Company shall have no obligation to register
such Warrants or securities except as provided in any registration agreement in
effect for the benefit of such Holders.
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ARTICLE 12
PAYMENT OF TAXES
The Company will pay any and all documentary stamp or similar issue
taxes payable to the United States of America or any State, or any political
subdivision or taxing authority thereof or therein, in respect of the issuance
or delivery of Units on exercise of Warrants; provided that the Company shall
not be required to pay any tax that may be payable in respect of any transfer
of a Warrant or any transfer involved in the issuance and delivery of Units in
a name other than that of the Holder of the Warrants to be exercised, and no
such issuance or delivery shall be made unless and until the person requesting
such issuance has paid to the Company the amount of any such tax or has
established, to the reasonable satisfaction of the Company, that such tax has
been paid.
ARTICLE 13
LOSS OR MUTILATION
Upon receipt by the Company and the Warrant Agent of evidence
reasonably satisfactory to them of the ownership of and the loss, theft,
destruction or mutilation of any Warrant Certificate and of an indemnity bond
reasonably satisfactory to them in form or amount, or (in the case of
mutilation) upon surrender and cancellation thereof, then, in the absence of
notice to the Company or the Warrant Agent that the Warrants represented
thereby have been acquired by a bona fide purchaser, the Company shall execute
and deliver to the Warrant Agent and, upon the Company's request, an authorized
signatory of the Warrant Agent shall manually countersign and deliver, to the
Holder of the lost, stolen, destroyed or mutilated Warrant Certificate, in
exchange for or in lieu thereof, a new Warrant Certificate of the same tenor
and for a like aggregate number of Warrants. Upon the issuance of any new
Warrant Certificate under this Article 13, the Company may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the reasonable
fees and expenses of the Warrant Agent) in connection therewith. Every new
Warrant Certificate executed and delivered pursuant to this Article 13 in lieu
of any lost, stolen or destroyed Warrant Certificate shall be entitled to the
same benefits of this Agreement equally and proportionately with any and all
other Warrant Certificates, whether or not the allegedly lost, stolen or
destroyed Warrant Certificate shall be at any time enforceable by anyone. The
provisions of this Article 13 are exclusive and shall preclude (to the extent
lawful) all other rights or remedies with respect to the replacement of
mutilated, lost, stolen or destroyed Warrant Certificates.
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ARTICLE 14
WARRANT REGISTRATION
14.1. Registration. The Warrant Certificates shall be issued in
registered form only and shall be registered in the names of the record holders
of the Warrant Certificates to whom they are to be delivered. The Company
shall maintain or cause to be maintained a register in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Warrants and of transfers or exchanges of Warrant Certificates
as provided in this Agreement. Such register shall be maintained at the office
of the Company or the Warrant Agent located at the respective address therefor
as provided in Section 17.1. Such register shall be open for inspection upon
notice at all reasonable times by the Warrant Agent and each Holder.
14.2. Transfer or Exchange. Subject to Section 2.1 hereof, at the
option of the holder, Warrant Certificates may be exchanged or transferred for
other Warrant Certificates for a like aggregate number of Warrants, upon
surrender of the Warrant Certificates to be exchanged at the office of the
Company or the Warrant Agent maintained for such purpose at the respective
address therefor as provided in Section 17.1, and upon payment of the charges
herein provided. Whenever any Warrant Certificates are so surrendered for
exchange or transfer, the Company shall execute, and an authorized signatory of
the Warrant Agent shall manually countersign and deliver, the Warrant
Certificates that the holder making the exchange is entitled to receive.
14.3. Valid and Enforceable. All Warrant Certificates issued upon
any registration of transfer or exchange of Warrant Certificates shall be the
valid obligations of the Company, evidencing the same obligations, and entitled
to the same benefits under this Agreement, as the Warrant Certificates
surrendered for such registration of transfer or exchange.
14.4. Endorsement. Every Warrant Certificate surrendered for
registration of transfer or exchange shall (if so required by the Company or
the Warrant Agent) be duly endorsed, or be accompanied by an instrument of
transfer substantially in the form attached to the Warrant Certificate and duly
executed by the Holder thereof or such Holder's officer or representative duly
authorized in writing.
14.5. No Service Charge. No service charge shall be made for any
registration of transfer or exchange of Warrant Certificates.
14.6. Cancellation. Any Warrant Certificate surrendered for
registration of transfer, exchange or the exercise of the Warrants represented
thereby shall, if surrendered to the Company, be delivered to the Warrant
Agent, and all Warrant Certificates surrendered or so delivered to the Warrant
Agent shall be promptly canceled by the Warrant Agent. Any such Warrant
Certificate shall not be reissued by the Company and, except as provided in
this Article 14 in case of an exchange or transfer, in Article 13 in case of a
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mutilated Warrant Certificate and in Article 5 in case of the exercise of less
than all the Warrants represented thereby, no Warrant Certificate shall be
issued hereunder in lieu thereof. The Warrant Agent shall deliver to the
Company from time to time or otherwise dispose of such canceled Warrant
Certificates in a manner reasonably satisfactory to the Company.
ARTICLE 15
WARRANT AGENT
15.1. Obligations Binding. The Warrant Agent undertakes the duties
and obligations imposed by this Agreement upon the terms and conditions set
forth in this Article 15. The Company, and the holders of Warrants by their
acceptance thereof, shall be bound by all of such terms and conditions.
15.2. No Liability. The Warrant Agent shall not by countersigning
Warrant Certificates or by any other act hereunder be accountable with respect
to or be deemed to make any representations as to the validity or authorization
of the Warrants or the Warrant Certificates (except as to its countersignature
thereon), as to the validity, authorization or value (or kind or amount) of any
Units or other property delivered or deliverable upon exercise of any Warrant,
or as to the purchase price of such Units, securities or other property. The
Warrant Agent shall not (i) be liable for any recital or statement of fact
contained herein or in the Warrant Certificates or for any action taken,
suffered or omitted by the Warrant Agent in good faith in the belief that any
Warrant Certificate or any other document or any signature is genuine or
properly authorized, (ii) be responsible for determining whether any facts
exist that may require any adjustment of the Exercise Price and/or the number
of Units purchasable upon exercise of Warrants, or with respect to the nature
or extent of any such adjustments when made, or with respect to the method of
adjustment employed, (iii) be responsible for any failure on the part of the
Company to issue, transfer or deliver any Units or other property upon the
surrender of any Warrant for the purpose of exercise or to comply with any
other of the Company's obligations contained in this Agreement or in the
Warrant Certificates or (iv) be liable for any act or omission in connection
with this Agreement except for its own bad faith, negligence or willful
misconduct.
15.3. Instructions. The Warrant Agent is hereby authorized to
accept instructions with respect to the performance of its duties hereunder
from the Chief Executive Officer, President, any Vice President, the Secretary,
the Treasurer or any Assistant Treasurer of the Company and to apply to any
such officer for advice or instructions. The Warrant Agent shall not be liable
for any action taken, suffered or omitted by it in good faith in accordance
with the instructions of any such officer.
15.4. Agents. The Warrant Agent may execute and exercise any of the
rights and powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys, agents or employees, provided reasonable
care has been exercised in the selection and in the continued
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employment of any such attorney, agent or employee. The Warrant Agent shall
not be under any obligation or duty to institute, appear in, or defend any
action, suit or legal proceeding in respect hereof, but this provision shall
not affect the power of the Warrant Agent to take such action as the Warrant
Agent may consider proper. The Warrant Agent shall promptly notify the Company
in writing of any claim made or action, suit or proceeding instituted against
the Warrant Agent arising out of or in connection with this Agreement.
15.5. Cooperation. The Company will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further acts, instruments and assurances as may reasonably be required by
the Warrant Agent in order to enable the Warrant Agent to carry out or perform
its duties under this Agreement.
15.6. Agent Only. The Warrant Agent shall act solely as agent. The
Warrant Agent shall not be liable except for the performance of such duties as
are specifically set forth herein, and no implied covenants or obligations
shall be read into this Agreement against the Warrant Agent, whose duties and
obligations shall be determined solely by the express provisions hereof.
15.7. Right to Counsel. The Warrant Agent may at any time consult
with legal counsel satisfactory to it (who may be legal counsel for the
Company) and the Warrant Agent shall incur no liability or responsibility to
the Company or to any Warrant holder for any action taken, suffered or omitted
by the Warrant Agent in good faith in accordance with the opinion or advice of
such counsel.
15.8. Compensation. The Company agrees to pay the Warrant Agent
reasonable compensation for its services hereunder and to reimburse the Warrant
Agent for its reasonable expenses hereunder; and further agrees to indemnify
the Warrant Agent and hold it harmless against any and all liabilities,
including, but not limited to, judgments, costs and counsel fees, for anything
done, suffered or omitted by the Warrant Agent in the execution of its duties
and powers hereunder, except for any such liabilities that arise as a result of
the Warrant Agent's bad faith, negligence or willful misconduct.
15.9. Accounting. The Warrant Agent shall account promptly to the
Company with respect to Warrants exercised and concurrently pay to the Company
all moneys received by the Warrant Agent on behalf of the Company on the
purchase of Units through the exercise of Warrants.
15.10. No Conflict. The Warrant Agent may 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, and nothing herein shall preclude the
Warrant Agent from acting in any other capacity for the Company or for any
other legal entity; provided, however, that the Warrant Agent, in its capacity
as Warrant Agent, must refrain from buying, selling or dealing in the Warrants
and must refrain from allowing information received by it in its capacity as
Warrant Agent and not publicly available to be obtained from it by Fleet
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National Bank, other than in its capacity as Warrant Agent, or any stockholder,
director, officer or employee of the Warrant Agent and used for purposes of
buying, selling or dealing in the Warrants.
15.11. Resignation; Termination. The Warrant Agent may resign its
duties and be discharged from all further duties and liabilities hereunder
(except liabilities arising as a result of the Warrant Agent's negligence or
willful misconduct), after giving 30 days' prior written notice to the Company.
The Company may remove the Warrant Agent upon 30 days written notice, and the
Warrant Agent shall thereupon in like manner be discharged from all further
duties and liabilities hereunder, except as to liabilities arising as a result
of the Warrant Agent's bad faith, negligence or willful misconduct. The
Company shall cause to be mailed (by first class mail, postage prepaid) to each
registered holder of a Warrant at such holder's last address as shown on the
register of the Company, at the Company's expense, a copy of such notice of
resignation or notice of removal, as the case may be. Upon such resignation or
removal the Company shall promptly appoint in writing a new warrant agent who
shall be reasonably acceptable to the Majority Holders. If the Company shall
fail to make such appointment within a period of 30 days after it has been
notified in writing of such resignation by the resigning Warrant Agent or after
such removal, then the holder of any Warrant may apply to any court of
competent jurisdiction for the appointment of a new warrant agent. Pending
appointment of a successor to the Warrant Agent, either by the Company or by
such a court, the duties of the Warrant Agent shall be carried out by the
Company. Any successor warrant agent, whether appointed by the Company or by
such a court, shall be a corporation, incorporated under the laws of the United
States or of any State thereof and authorized under such laws to exercise
corporate trust powers, be subject to supervision and examination by Federal or
State authority, and have a combined stated capital and capital surplus of not
less than $50,000,000 as set forth in its most recent published annual report
of condition. After acceptance in writing of such appointment by the new
warrant agent it shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named herein as the Warrant
Agent, without any further assurance, conveyance, act or deed; but if for any
reason it shall be necessary or expedient to execute and deliver any further
assurance, conveyance, act or deed, the same shall be done at the expense of
the Company and shall be legally and validly executed and delivered by the
resigning or removed Warrant Agent. Not later than the effective date of any
such appointment the Company shall file notice thereof with the resigning or
removed Warrant Agent and shall forthwith cause a copy of such notice to be
mailed (by first class mail, postage prepaid) to each registered holder of a
Warrant at such holder's last address as shown on the register of the Company.
Failure to give any notice provided for in this Section 15.11, or any defect in
any such notice, shall not affect the legality or validity of the resignation
of the Warrant Agent or the appointment of a new warrant agent, as the case may
be.
15.12. Change of Warrant Agent. If at any time the name of the
Warrant Agent shall be changed and at such time any of the Warrant Certificates
shall have been countersigned but not delivered, the Warrant
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Agent may adopt the countersignature under its prior name and deliver Warrant
Certificates so countersigned; and if at that time any of the Warrant
Certificates shall not have been countersigned, the Warrant Agent may
countersign such Warrant Certificates either in its prior name or in its
changed name; and in all such cases such Warrant Certificates shall have the
full force and effect provided in the Warrant Certificates and this Agreement.
15.13. Successor Warrant Agent. Any corporation into which the
Warrant Agent or any new warrant agent may be merged or any corporation
resulting from any consolidation to which the Warrant Agent or any new warrant
agent shall be a party or any corporation succeeding to all or substantially
all the agency business of the Warrant Agent or any new warrant agent shall be
a successor Warrant Agent under this Agreement without any further act,
provided that such corporation would be eligible for appointment as a new
warrant agent under the provisions of Section 15.11 of this Article 15. The
Company shall promptly cause notice of the succession as Warrant Agent of any
such successor Warrant Agent to be mailed (by first class mail, postage
prepaid) to each registered holder of a Warrant at his last address as shown on
the register of the Company.
ARTICLE 16
REMEDIES, ETC.
16.1. Remedies. The Company stipulates that the remedies at law of
each holder of a Warrant in the event of any default or threatened default by
the Company in the performance of or compliance with any of the terms of this
Warrant Agreement are not and will not be adequate and that, to the fullest
extent permitted by law, such terms may be specifically enforced by a decree
for the specific performance of any agreement contained herein or by an
injunction against a violation of any of the terms hereof or otherwise.
16.2. Warrant Holder Not Deemed a Member. Prior to the exercise of
the Warrants represented thereby no holder of a Warrant Certificate, as such,
shall be entitled to any rights as a Member of the Company, including, but not
limited to, any management rights, the right to vote, the right to share in
profits or losses and distributions from the Company, to exercise any
preemptive right or to receive any notice of meetings of Members, and no such
holder shall be entitled to receive notice of any proceedings of the Company
except as provided in this Agreement. Nothing contained in this Agreement
shall be construed as imposing any liabilities on such holder to purchase any
securities or as a Member of the Company, whether such liabilities are asserted
by the Company or by creditors or Members of the Company or otherwise.
16.3. Right of Action. All rights of action in respect of this
Agreement are vested in the registered holders of the Warrants. Any registered
holder of any Warrant, without the consent of the Warrant Agent or the
registered holder of any other Warrant, may in such holder's own behalf and for
such holder's own benefit enforce, and may institute and maintain any
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suit, action or proceeding against the Company suitable to enforce, or
otherwise in respect of, such holder's right to exercise such holder's Warrants
in the manner provided in the Warrant Certificate representing such Warrants
and the Company's obligations under this Agreement and the Warrants.
ARTICLE 17
MISCELLANEOUS
17.1. Notices. Any notice, demand or delivery authorized by this
Agreement shall be sufficiently given or made if hand delivered, with receipt
acknowledged, or sent by first class mail, postage prepaid, addressed to any
registered holder of a Warrant at such holder's last known address appearing on
the register of the Company, or by telecopy with transmission confirmed, and to
the Company or the Warrant Agent as follows:
If to the Company, to it at:
PSF Holdings, L.L.C.
Xxxxxxx 00 Xxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Chief Financial Officer
Telephone: 000-000-0000
Facsimile: 000-000-0000
If to the Warrant Agent:
Fleet National Bank
Corporate Trust Operations,
CT/MO/0224
000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Reorg. Dept.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or such other address as shall have been furnished in writing, in accordance
with this Section 17.1, to the party giving or making such notice, demand or
delivery.
17.2. Reservation and Authorization of Units; Registration with or
Approval of any Governmental Authority. From and after the Original Issue Date,
at any time that it is necessary for Units to be reserved for issuance in order
for Units to be issuable upon exercise of the Warrants, the Company shall at all
times reserve and keep available for issue upon the exercise of Warrants such
number of its authorized but unissued Units as will be sufficient to permit the
exercise in full of all outstanding Warrants. All such reserved Units, if any,
which shall be so issuable, when issued upon exercise of any Warrant and payment
therefor in accordance with the terms of
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such Warrant, shall be duly and validly issued and fully paid and
nonassessable. Before taking any action which would result in an adjustment in
the number of Units for which each Warrant is exercisable or in the Exercise
Price, the Company shall obtain all such authorizations or exemptions thereof,
or consents thereto, as may be necessary from any public from any public
regulatory body or bodies having jurisdictions thereof. If any Units are
required to be reserved for issuance upon exercise of Warrants and such
reserved Units require registration or qualification with any governmental
authority or other governmental approval or filing under any federal or state
law before such Units may be so issued, the Company will in good faith and as
expeditiously as possible and at its expense endeavor to cause such Units to be
duly registered.
17.3. Governing Law and Consent to Forum. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THE COMPANY AND THE PARTIES
EACH HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY NEW YORK STATE COURT
SITTING IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE CITY OF NEW
YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT, AND EACH IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY PERSON TO SERVE PROCESS
IN ANY MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST THE COMPANY IN ANY OTHER JURISDICTION.
17.4. Benefits of this Agreement. This Agreement shall be binding
upon and inure to the benefit of the Company and the Warrant Agent and their
respective successors and assigns, and the registered and beneficial holders
from time to time of the Warrants and of holders of the Units, where
applicable. Nothing in this Agreement is intended or shall be construed to
confer upon any other person, any right, remedy or claim under or by reason of
this Agreement or any part hereof.
17.5. Indemnification. In the event that any Holder of Warrants is
named as a party in any litigation in which the Company and/or its members are
named as defendants, and in which such Holder, as a holder of Warrants, is
sought to be held liable as a member of the Company, then the Company agrees to
pay such Holders' reasonable expenses in connection with such litigation,
including attorneys' fees and costs and disbursements; provided that such
obligation of the Company hereunder shall apply solely to the defense of any
such claim that the Holder is liable as a member. The Company shall not be
required to pay the fees and expenses of more than one counsel for all Holders
in any such litigation and, in the event that the Company has retained counsel
to defend the members in such litigation, the Company shall have the option to
use the same counsel to defend such Holders in the litigation. Any amounts
which the Company is obligated to pay under this Section 17.5 shall be
recoverable only from the assets of the Company and not from any assets of its
members. Notwithstanding anything to the contrary in this Section 17.5, the
Company shall not be liable hereunder to the extent that any litigation or
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expenses resulting from the same are found by final judgment of a court of
competent jurisdiction to have resulted from such Holder's gross negligence,
bad faith or willful misconduct. In the event of any dispute as to the
Company's obligation to pay any legal fees or expenses hereunder, the Company
may pay or reimburse attorneys' fees of a Holder as incurred, if such Person
executes an undertaking to repay the amount so paid or reimbursed if there is a
final determination by a court of competent jurisdiction that such Indemnified
Person is not entitled to indemnification under this Section 17.5.
17.6. Agreement of Holders of Warrant Certificates. Every holder of
a Warrant Certificate, by accepting the same, covenants and agrees with the
Company, the Warrant Agent and with every other holder of a Warrant Certificate
that the Warrant Certificates are transferable on the registry books of the
Warrant Agent only upon the terms and conditions set forth in this Agreement,
and the Company and the Warrant Agent may deem and treat the person in whose
name the Warrant Certificate is registered as the absolute owner for all
purposes whatsoever and neither the Company nor the Warrant Agent shall be
affected by any notice to the contrary.
17.7. Counterparts. This Agreement may be executed in any number of
counterparts and each such counterpart shall for all purposes be deemed to be
an original, and all such counterparts shall together constitute but one and
the same instrument.
17.8. Amendments. This Agreement may not be modified or amended or
the provisions hereof waived without the prior written consent of the Company
and the holders of Warrants exercisable for 66 2/3% or more of the aggregate
number of Units then purchasable upon exercise of all Warrants then
outstanding.
17.9. Severability. Wherever possible, each provision of this
Agreement shall be interpreted so as to be effective and consistent with
applicable law, but if any provision of this Agreement is determined to be
invalid or prohibited by applicable law, the Agreement shall be construed such
that, to the extent practicable, so as to give effect to any portion of such
provision which is not invalid or so prohibited, and such provision and this
Agreement shall remain valid and enforceable except to the extent of such
invalidity or prohibition.
17.10. Headings. The table of contents hereto and the descriptive
headings of the several sections hereof are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Warrant
Agreement to be duly executed, as of the day and year first above written.
PSF Holdings, L.L.C.
By: /s/ X.X. Xxxxxxxxx
-------------------------
Name:
Title:
Fleet National Bank
By: /s/ Xxxx X. Xxxxx
-------------------------
Name: Xxxx X. Xxxxx
Title: Vice President
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