Exhibit 4.1
EXECUTION COPY
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INSILCO HOLDING CO.
Warrants to Purchase
62,400 Shares of Common Stock
WARRANT AGREEMENT
Dated as of November 9, 1998
NATIONAL CITY BANK
Warrant Agent
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WARRANT AGREEMENT, dated as of November 9, 1998 between
Insilco Holding Co., a Delaware corporation (the "Company"), and National City
Bank, as warrant agent (the "Warrant Agent").
WHEREAS, the Company proposes to issue warrants (the
"Warrants") to initially purchase up to an aggregate of 62,400 shares of Common
Stock, par value $.001 per share (the "Common Stock"), of the Company (the
Common Stock issuable on exercise of the Warrants being referred to herein as
the "Warrant Shares"), in connection with the offering (the "Offering") by
Insilco Corporation, the Company's wholly owned subsidiary ("Insilco"), of
120,000 Units (the "Units"), each consisting of $1,000 principal amount of
Insilco's 12% Senior Subordinated Notes due 2007 (the "Notes") and one Warrant,
each Warrant initially representing the right to purchase 0.52 of a Warrant
Share.
WHEREAS, the Company desires the Warrant Agent to act on
behalf of the Company, and the Warrant Agent is willing so to act in connection
with the issuance of Warrant Certificates (as defined) and other matters as
provided herein.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereto agree as follows:
Section 1. Certain Definitions.
As used in this Agreement, the following terms shall have the
following respective meanings:
"144A Global Warrant" means a global Warrant substantially in
the form of Exhibit A hereto bearing the Global Warrant Legend and the
Private Placement Legend and deposited with or on behalf of, and
registered in the name of, the Depositary or its nominee.
"Affiliate" of any Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect
common control with such Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms
"controlling," "controlled by" and "under common control with"), as
used with respect to any Person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the
management or policies of such specified Person, whether through the
ownership of voting securities, by agreement or otherwise; provided
that beneficial ownership of 10% or more of the voting securities of a
Person shall be deemed to be control.
"Applicable Procedures" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Warrant, the
rules and procedures of the Depositary.
"Business Day" means any day other than a Legal Holiday.
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"Closing Date" means the date hereof.
"Commission" means the Securities and Exchange Commission.
"Definitive Warrant" has the meaning given such term in
Section 3.1(b) hereof.
"Depositary" means, with respect to the Warrants issuable or
issued in whole or in part in global form, the Person specified in
Section 3.3 hereof as the Depositary with respect to the Warrants, and
any and all successors thereto appointed as Depositary hereunder and
having become such pursuant to the applicable provision of the
Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Global Warrants" means, individually and collectively, each
of the Restricted Global Warrants and the Unrestricted Global Warrants,
substantially, in the form of Exhibit A hereto issued in accordance
with Section 3.1(b) and 3.5 hereof.
"Global Warrant Legend" means the legend set forth in Section
3.5(g)(ii), which is required to be placed on all Global Warrants
issued under this Warrant Agreement.
"Holder" means a person who is listed as the record owner of
Warrants.
"Indenture" means the indenture, dated the date hereof,
between Insilco and Star Bank, N.A. as trustee relating to the Notes.
"Indirect Participant" means a Person who holds a beneficial
interest in a Global Warrant through a Participant.
"Initial Purchaser" means Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation.
"Institutional Accredited Investor" means an institution that
is an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act, which is not also a QIB.
"Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions in the City of New York, or at a place of payment,
are authorized by law, regulation or executive order to remain closed.
If a payment date is a Legal Holiday at a place of payment, payment may
be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue on such payment for the
intervening period.
"Officer" means, with respect to any Person, the Chairman of
the Board, the Chief Executive Officer, the President, the Chief
Operating Officer, the Chief Financial Officer,
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the Treasurer, any Assistant Treasurer, the Controller, the Secretary
or any Vice-President of such Person.
"Opinion of Counsel" means an opinion from legal counsel who
is reasonably acceptable to the Warrant Agent in form and substance
reasonably acceptable to the Warrant Agent. The counsel may be an
employee of or counsel to the Company, any subsidiary of the Company or
the Warrant Agent.
"Participant" means, with respect to the Depositary, a Person
who has an account with the Depositary.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision
thereof, including any subdivision or ongoing business of any such
entity or substantially all of the assets of any such entity,
subdivision or business.
"Private Placement Legend" means the legend set forth in
Section 3.5(g)(i)(A) to be placed on all Warrants issued under this
Warrant Agreement except where otherwise permitted by the provisions of
this Warrant Agreement.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"Registration Statement" as defined in the Warrant
Registration Rights Agreement or herein.
"Registrable Securities" shall mean the Warrants, the Warrant
Shares and any other securities issued or issuable with respect to the
Warrants or the Warrant Shares by way of a stock dividend or stock
split or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization; provided that a security
ceases to be a Registrable Security when it is no longer a Transfer
Restricted Security. The Registrable Securities are entitled to the
benefits of the Warrant Registration Rights Agreement.
"Restricted Definitive Warrant" means a Definitive Warrant
bearing the Private Placement Legend.
"Restricted Global Warrant" means a Global Warrant bearing the
Private Placement Legend.
"Rule 144" means Rule 144 promulgated under the Securities
Act.
"Rule 144A" means Rule 144A promulgated under the Securities
Act.
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"Securities Act" means the Securities Act of 1933, as amended.
"Separation Date" means the earliest of (i) 180 days after the
closing of the Offering, (ii) the date on which a registration
statement with respect to a registered exchange offer for the Notes is
declared effective under the Securities Act, (iii) the date a shelf
registration statement with respect to the Notes is declared effective
under the Securities Act, (iv) such date as Xxxxxxxxx, Lufkin &
Xxxxxxxx Securities Corporation in its sole discretion shall determine
and (v) the occurrence of a Change of Control (as defined in the
Indenture).
"Transfer Restricted Securities" shall mean (a) each Warrant
and Warrant Share held by an Affiliate of the Issuer and (b) each other
Warrant and Warrant Share until the earlier to occur of (i) the date on
which such Warrant or Warrant Share has been disposed of in accordance
with a Registration Statement (or the date on which such Warrant Share
is issued upon exercise of a Warrant in accordance with a Registration
Statement) and (ii) the date on which such Warrant or Warrant Share is
distributed to the public pursuant to Rule 144 under the Act.
"Trustee" means the trustee under the Indenture.
"Unrestricted Global Warrant" means a global Warrant
substantially in the form of Exhibit A attached hereto that bears the
Global Warrant Legend and that has the "Schedule of Exchanges of
Interests in the Global Warrant" attached thereto, and that is
deposited with or on behalf of and registered in the name of the
Depositary, representing Warrants that do not bear the Private
Placement Legend.
"Unrestricted Definitive Warrant" means one or more Definitive
Warrants that do not bear and are not required to bear the Private
Placement Legend.
"U.S. Person" means a U.S. person as defined in Rule 902(o)
under the Securities Act.
"Warrant Registration Rights Agreement" means the registration
rights agreement, dated as of November 9, 1998, by and among the
Company and the Initial Purchaser relating to the Warrants and the
Warrant Shares.
Section 2. Appointment of Warrant Agent.
The Company hereby appoints the Warrant Agent to act as agent
for the Company in accordance with the instructions set forth hereinafter in
this Agreement and the Warrant Agent hereby accepts such appointment.
Section 3. Issuance of Warrants; Warrant Certificates.
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3.1. Form and Dating.
(a) General.
The Warrants shall be substantially in the form of Exhibit A
hereto (the "Warrant Certificates"). The Warrants may have notations, legends or
endorsements required by law, stock exchange rule or usage. Each Warrant shall
be dated the date of the countersignature. The terms and provisions contained in
the Warrants shall constitute, and are hereby expressly made, a part of this
Warrant Agreement. The Company and the Warrant Agent, by their execution and
delivery of this Warrant Agreement, expressly agree to such terms and provisions
and to be bound thereby. However, to the extent any provision of any Warrant
conflicts with the express provisions of this Warrant Agreement, the provisions
of this Warrant Agreement shall govern and be controlling.
(b) Global Warrants.
Warrants issued in global form shall be substantially in the
form of Exhibit A attached hereto (including the Global Warrant Legend thereon
and the "Schedule of Exchanges of Interests in the Global Warrant" attached
thereto). Warrants issued in definitive form ("Definitive Warrants") shall be
substantially in the form of Exhibit A attached hereto (but without the Global
Warrant Legend thereon and without the "Schedule of Exchanges of Interests in
the Global Warrant" attached thereto). Each Global Warrant shall represent such
of the outstanding Warrants as shall be specified therein and each shall provide
that it shall represent the number of outstanding Warrants from time to time
endorsed thereon and that the number of outstanding Warrants represented thereby
may from time to time be reduced or increased, as appropriate, to reflect
exchanges and redemptions. Any endorsement of a Global Warrant to reflect the
amount of any increase or decrease in the number of outstanding Warrants
represented thereby shall be made by the Warrant Agent in accordance with
instructions given by the Holder thereof as required by Section 3.5 hereof.
3.2. Execution.
An Officer shall sign the Warrants for the Company by manual
or facsimile signature.
If the Officer whose signature is on a Warrant no longer holds
that office at the time a Warrant is countersigned, the Warrant shall
nevertheless be valid.
A Warrant shall not be valid until countersigned by the manual
signature of the Warrant Agent. The signature shall be conclusive evidence that
the Warrant has been properly issued under this Warrant Agreement.
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The Warrant Agent shall, upon a written order of the Company
signed by an Officer (a "Warrant Countersignature Order"), countersign Warrants
for original issue up to the number stated in the preamble hereto.
The Warrant Agent may appoint an agent acceptable to the
Company to countersign Warrants. Such an agent may countersign Warrants whenever
the Warrant Agent may do so. Each reference in this Warrant Agreement to a
countersignature by the Warrant Agent includes a countersignature by such agent.
Such an agent has the same rights as the Warrant Agent to deal with the Company
or an Affiliate of the Company.
3.3. Registrar.
The Company shall maintain an office or agency where Warrants
may be presented for registration of transfer or for exchange ("Warrant
Registrar"). The Warrant Registrar shall keep a register of the Warrants and of
their transfer and exchange. The Company may appoint one or more co-Warrant
Registrars. The term "Warrant Registrar" includes any co-Warrant Registrar. The
Company may change any Warrant Registrar without notice to any holder. The
Company shall notify the Warrant Agent in writing of the name and address of any
agent not a party to this Warrant Agreement. If the Company fails to appoint or
maintain another entity as Warrant Registrar, the Warrant Agent shall act as
such. The Company or any of its subsidiaries may act as Warrant Registrar.
The Company initially appoints The Depository Trust Company
("DTC") to act as Depositary with respect to the Global Warrants.
The Company initially appoints the Warrant Agent to act as the
Warrant Registrar with respect to the Warrants.
3.4. Holder Lists.
The Warrant Agent shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of all Holders. If the Warrant Agent is not the Warrant Registrar, the
Company shall promptly furnish to the Warrant Agent at such times as the Warrant
Agent may request in writing, a list in such form and as of such date as the
Warrant Agent may reasonably require of the names and addresses of the Holders.
3.5. Transfer and Exchange.
(a) Transfer and Exchange of Global Warrants.
A Global Warrant may not be transferred as a whole except by
the Depositary to a nominee of the Depositary, by a nominee of the Depositary to
the Depositary or to another nominee of the Depositary, or by the Depositary or
any such nominee to a successor Depositary or
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a nominee of such successor Depositary. All Global Warrants will be exchanged by
the Company for Definitive Warrants if (i) the Company delivers to the Warrant
Agent notice from the Depositary that it is unwilling or unable to continue to
act as Depositary or that it is no longer a clearing agency registered under the
Exchange Act and, in either case, a successor Depositary is not appointed by the
Company within 120 days after the date of such notice from the Depositary or
(ii) the Company in its sole discretion determines that the Global Warrants (in
whole but not in part) should be exchanged for Definitive Warrants and delivers
a written notice to such effect to the Warrant Agent. Upon the occurrence of
either of the preceding events in (i) or (ii) above, Definitive Warrants shall
be issued in such names as the Depositary shall instruct the Warrant Agent.
Global Warrants also may be exchanged or replaced, in whole or in part, as
provided in Sections 3.6 and 3.7 hereof. A Global Warrant may not be exchanged
for another Warrant other than as provided in this Section 3.5(a) or pursuant to
Section 3.5(c), however, beneficial interests in a Global Warrant may be
transferred and exchanged as provided in Section 3.5(b) or (c) hereof.
(b) Transfer and Exchange of Beneficial Interests in the
Global Warrants.
The transfer and exchange of beneficial interests in the
Global Warrants shall be effected through the Depositary, in accordance with the
provisions of this Warrant Agreement and the Applicable Procedures. Beneficial
interests in the Restricted Global Warrants shall be subject to restrictions on
transfer comparable to those set forth herein to the extent required by the
Securities Act. Transfers of beneficial interests in the Global Warrants also
shall require compliance with either subparagraph (i) or (ii) below, as
applicable, as well as one or more of the other following subparagraphs, as
applicable:
(i) Transfer of Beneficial Interests in the Same Global
Warrant. Beneficial interests in any Restricted Global Warrant may be
transferred to Persons who take delivery thereof in the form of a
beneficial interest in the same Restricted Global Warrant in accordance
with the transfer restrictions set forth in the Private Placement
Legend. Beneficial interests in any Unrestricted Global Warrant may be
transferred to Persons who take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Warrant. No written
orders or instructions shall be required to be delivered to the Warrant
Registrar to effect the transfers described in this Section 3.5(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests
in Global Warrants. In connection with all transfers and exchanges of
beneficial interests that are not subject to Section 3.5(b)(i) above,
the transferor of such beneficial interest must deliver to the Warrant
Registrar either (A) (1) a written order from a Participant or an
Indirect Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to credit or cause to be
credited a beneficial interest in another Global Warrant in an amount
equal to the beneficial interest to be transferred or exchanged and (2)
instructions given in accordance with the Applicable Procedures
containing information regarding the Participant account to be credited
with such increase or (B) (1) a written order from a Participant or an
Indirect Participant given to the Depositary in
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accordance with the Applicable Procedures directing the Depositary to
cause to be issued a Definitive Warrant in an amount equal to the
beneficial interest to be transferred or exchanged and (2) instructions
given by the Depositary to the Warrant Registrar containing information
regarding the Person in whose name such Definitive Warrant shall be
registered. Upon effectiveness of the Registration Statement (as
defined in the Warrant Registration Rights Agreement) by the Company in
accordance with Section 3.5(f) hereof, the requirements of this Section
3.5(b)(ii) shall be deemed to have been satisfied upon receipt by the
Warrant Registrar of a certification required by the Company in
connection with such Registration Statement delivered by the Holder of
such beneficial interests in the Restricted Global Warrants. Upon
satisfaction of all of the requirements for transfer or exchange of
beneficial interests in Global Warrants contained in this Agreement and
the Warrants or otherwise applicable under the Securities Act, the
Warrant Agent shall adjust the principal amount of the relevant Global
Warrant(s) pursuant to Section 3.5(h) hereof.
(iii) (intentionally omitted)
(iv) Transfer and Exchange of Beneficial Interests in a
Restricted Global Warrant for Beneficial Interests in the Unrestricted
Global Warrant. A beneficial interest in any Restricted Global Warrant
may be exchanged by any holder thereof for a beneficial interest in an
Unrestricted Global Warrant or transferred to a Person who takes
delivery thereof in the form of a beneficial interest in an
Unrestricted Global Warrant if the exchange or transfer complies with
the requirements of Section 3.5(b)(ii) above and:
(A) such transfer is effected pursuant to the
Registration Statement in accordance with the Warrant
Registration Rights Agreement; or
(B) the Warrant Registrar receives the following:
(1) if the holder of such beneficial
interest in a Restricted Global Warrant proposes to
exchange such beneficial interest for a beneficial
interest in an Unrestricted Global Warrant, a
certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (1)(a)
thereof; or
(2) if the holder of such beneficial
interest in a Restricted Global Warrant proposes to
transfer such beneficial interest to a Person who
shall take delivery thereof in the form of a
beneficial interest in an Unrestricted Global
Warrant, a certificate from such holder in the form
of Exhibit B hereto, including the certifications in
item (3) thereof;
and, in each such case (other than a transfer pursuant to Rule 144) set
forth in this subparagraph (B), if the Warrant Registrar so requests or
if the Applicable Procedures so require, an Opinion of Counsel in form
reasonably acceptable to the Warrant Registrar to
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the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B)
above at a time when an Unrestricted Global Warrant has not yet been
issued, the Company shall issue and, upon receipt of an Warrant
Countersignature Order in accordance with Section 3.2 hereof, the
Warrant Agent shall countersign one or more Unrestricted Global
Warrants in the number equal to the number of beneficial interests
transferred pursuant to subparagraph (B) above.
(c) Transfer and Exchange of Beneficial Interests for
Definitive Warrants.
(i) Beneficial Interests in Restricted Global Warrants to
Restricted Definitive Warrants. If any holder of a beneficial interest
in a Restricted Global Warrant proposes to exchange such beneficial
interest for a Restricted Definitive Warrant or to transfer such
beneficial interest to a Person who takes delivery thereof in the form
of a Restricted Definitive Warrant, then, upon receipt by the Warrant
Registrar of the following documentation:
(A) if the holder of such beneficial interest in a
Restricted Global Warrant proposes to exchange such beneficial
interest for a Restricted Definitive Warrant, a certificate
from such holder in the form of Exhibit C hereto, including
the certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred
to a QIB in accordance with Rule 144A under the Securities
Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (1) thereof;
(C) if such beneficial interest is being transferred
to an Institutional Accredited Investor in reliance on an
exemption from the registration requirements of the Securities
Act other than those listed in subparagraph (B) above, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications, certificates and Opinion of
Counsel required by item (2) thereof, if applicable; or
(D) if such beneficial interest is being transferred
to the Company or any of its Subsidiaries, a certificate to
the effect set forth in Exhibit B hereto, including the
certifications in item (2)(b) thereof,
the Warrant Agent shall cause, in accordance with the standing
instructions and procedures existing between the Depositary and the
Warrant Agent, the number of Warrants represented by the Global Warrant
to be reduced by the number of Warrants to be represented by the
Definitive Warrant pursuant to Section 3.5(h) hereof, and the
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Company shall execute and the Warrant Agent shall countersign and
deliver to the Person designated in the instructions a Definitive
Warrant in the appropriate amount. Any Definitive Warrant issued in
exchange for a beneficial interest in a Restricted Global Warrant
pursuant to this Section 3.5(c) shall be registered in such name or
names as the holder of such beneficial interest shall instruct the
Warrant Registrar through instructions from the Depositary and the
Participant or Indirect Participant. The Warrant Agent shall deliver
such Definitive Warrants to the Persons in whose names such Warrants
are so registered. Any Definitive Warrant issued in exchange for a
beneficial interest in a Restricted Global Warrant pursuant to this
Section 3.5(c)(i) shall bear the Private Placement Legend and shall be
subject to all restrictions on transfer contained therein.
(ii) Beneficial Interests in Restricted Global Warrants to
Unrestricted Definitive Warrants. A holder of a beneficial interest in
a Restricted Global Warrant may exchange such beneficial interest for
an Unrestricted Definitive Warrant or may transfer such beneficial
interest to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Warrant only if:
(A) such transfer is effected pursuant to the
Registration Statement in accordance with the Warrant
Registration Rights Agreement; or
(B) the Warrant Registrar receives the following:
(1) if the holder of such beneficial
interest in a Restricted Global Warrant proposes to
exchange such beneficial interest for a Definitive
Warrant that does not bear the Private Placement
Legend, a certificate from such holder in the form of
Exhibit C hereto, including the certifications in
item (1)(b) thereof; or
(2) if the holder of such beneficial
interest in a Restricted Global Warrant proposes to
transfer such beneficial interest to a Person who
shall take delivery thereof in the form of a
Definitive Warrant that does not bear the Private
Placement Legend, a certificate from such holder in
the form of Exhibit B hereto, including the
certifications in item (3) thereof;
and, in each such case (other than a transfer pursuant to Rule
144) set forth in this subparagraph (B), if the Warrant
Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable
to the Warrant Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
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(iii) Beneficial Interests in Unrestricted Global Warrants to
Unrestricted Definitive Warrants. If any holder of a beneficial
interest in an Unrestricted Global Warrant proposes to exchange such
beneficial interest for a Definitive Warrant or to transfer such
beneficial interest to a Person who takes delivery thereof in the form
of a Definitive Warrant, then, upon satisfaction of the conditions set
forth in Section 3.5(b)(ii) hereof, the Warrant Agent shall cause the
amount of the applicable Global Warrant to be reduced accordingly
pursuant to Section 3.5(h) hereof, and the Company shall execute and
the Warrant Agent shall countersign and deliver to the Person
designated in the instructions a Definitive Warrant in the appropriate
principal amount. Any Definitive Warrant issued in exchange for a
beneficial interest pursuant to this Section 3.5(c)(iii) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct
the Warrant Registrar through instructions from the Depositary and the
Participant or Indirect Participant. The Warrant Agent shall deliver
such Definitive Warrants to the Persons in whose names such Warrants
are so registered. Any Definitive Warrant issued in exchange for a
beneficial interest pursuant to this Section 3.5(c)(iii) shall not bear
the Private Placement Legend.
(d) Transfer and Exchange of Definitive Warrants for
Beneficial Interests.
(i) Restricted Definitive Warrants to Beneficial Interests in
Restricted Global Warrants. If any Holder of a Restricted Definitive
Warrant proposes to exchange such Warrant for a beneficial interest in
a Restricted Global Warrant or to transfer such Restricted Definitive
Warrants to a Person who takes delivery thereof in the form of a
beneficial interest in a Restricted Global Warrant, then, upon receipt
by the Warrant Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive
Warrant proposes to exchange such Warrant for a beneficial
interest in a Restricted Global Warrant, a certificate from
such Holder in the form of Exhibit C hereto, including the
certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Warrant is being
transferred to a QIB in accordance with Rule 144A under the
Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (1)
thereof; or
(C) if such Restricted Definitive Warrant is being
transferred to the Company or any of its Subsidiaries, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (2)(b) thereof, the
Warrant Agent shall cancel the Restricted Definitive Warrant
and increase or cause to be increased the amount of the
appropriate Restricted Global Warrant.
(ii) Restricted Definitive Warrants to Beneficial Interests in
Unrestricted Global Warrants. A Holder of a Restricted Definitive
Warrant may exchange such
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Warrant for a beneficial interest in an Unrestricted Global Warrant or
transfer such Restricted Definitive Warrant to a Person who takes
delivery thereof in the form of a beneficial interest in an
Unrestricted Global Warrant only if:
(A) such transfer is effected pursuant to the
Registration Statement in accordance with the Registration
Rights Agreement; or
(B) the Warrant Registrar receives the following:
(1) if the Holder of such Definitive
Warrants proposes to exchange such Warrants for a
beneficial interest in the Unrestricted Global
Warrant, a certificate from such Holder in the form
of Exhibit C hereto, including the certifications in
item (1)(c) thereof; or
(2) if the Holder of such Definitive
Warrants proposes to transfer such Warrants to a
Person who shall take delivery thereof in the form of
a beneficial interest in the Unrestricted Global
Warrant, a certificate from such Holder in the form
of Exhibit B hereto, including the certifications in
item (3) thereof;
and, in each such case (other than a transfer pursuant to Rule
144) set forth in this subparagraph (C), if the Warrant
Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable
to the Warrant Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs in this
Section 3.5(d)(ii), the Warrant Agent shall cancel the Definitive
Warrants and increase or cause to be increased the aggregate principal
amount of the Unrestricted Global Warrant.
(iii) Unrestricted Definitive Warrants to Beneficial Interests
in Unrestricted Global Warrants. A Holder of an Unrestricted Definitive
Warrant may exchange such Warrant for a beneficial interest in an
Unrestricted Global Warrant or transfer such Definitive Warrants to a
Person who takes delivery thereof in the form of a beneficial interest
in an Unrestricted Global Warrant at any time. Upon receipt of a
request for such an exchange or transfer, the Warrant Agent shall
cancel the applicable Unrestricted Definitive Warrant and increase or
cause to be increased the amount of one of the Unrestricted Global
Warrants.
If any such exchange or transfer from a Definitive Warrant to a
beneficial interest is effected pursuant to subparagraphs (ii)(B) or
(iii) above at a time when an Unrestricted
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Global Warrant has not yet been issued, the Company shall issue and,
upon receipt of an Warrant Countersignature Order in accordance with
Section 3.2 hereof, the Warrant Agent shall countersign one or more
Unrestricted Global Warrants in the number equal to the number of
beneficial interests of Definitive Warrants so transferred.
(e) Transfer and Exchange of Definitive Warrants for
Definitive Warrants.
Upon request by a Holder of Definitive Warrants and such
Holder's compliance with the provisions of this Section 3.5(e), the Warrant
Registrar shall register the transfer or exchange of Definitive Warrants. Prior
to such registration of transfer or exchange, the requesting Holder shall
present or surrender to the Warrant Registrar the Definitive Warrants duly
endorsed or accompanied by a written instruction of transfer in form
satisfactory to the Warrant Registrar duly executed by such Holder or by its
attorney, duly authorized in writing. In addition, the requesting Holder shall
provide any additional certifications, documents and information, as applicable,
required pursuant to the following provisions of this Section 3.5(e).
(i) Restricted Definitive Warrants to Restricted Definitive
Warrants. Any Restricted Definitive Warrant may be transferred to and
registered in the name of Persons who take delivery thereof in the form
of a Restricted Definitive Warrant if the Warrant Registrar receives
the following:
(A) if the transfer will be made pursuant to Rule
144A under the Securities Act, then the transferor must
deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (1) thereof;
(B) if the transfer will be made pursuant to any
other exemption from the registration requirements of the
Securities Act, then the transferor must deliver a certificate
in the form of Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (2)
thereof, if applicable.
(ii) Restricted Definitive Warrants to Unrestricted Definitive
Warrants. Any Restricted Definitive Warrant may be exchanged by the
Holder thereof for an Unrestricted Definitive Warrant or transferred to
a Person or Persons who take delivery thereof in the form of an
Unrestricted Definitive Warrant if:
(A) any such transfer is effected pursuant to the
Registration Statement in accordance with the Warrant
Registration Rights Agreement; or
(B) the Warrant Registrar receives the following:
(1) if the Holder of such Restricted
Definitive Warrants proposes to exchange such
Warrants for an Unrestricted Definitive
14
Warrant, a certificate from such Holder in the form
of Exhibit C hereto, including the certifications in
item (1)(d) thereof; or
(2) if the Holder of such Restricted
Definitive Warrants proposes to transfer such
Warrants to a Person who shall take delivery thereof
in the form of an Unrestricted Definitive Warrant, a
certificate from such Holder in the form of Exhibit B
hereto, including the certifications in item (3)
thereof;
and, in each such case (other than a transfer pursuant to Rule
144) set forth in this subparagraph (C), if the Warrant
Registrar so requests, an Opinion of Counsel in form
reasonably acceptable to the Company to the effect that such
exchange or transfer is in compliance with the Securities Act
and that the restrictions on transfer contained herein and in
the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.
(iii) Unrestricted Definitive Warrants to Unrestricted
Definitive Warrants. A Holder of Unrestricted Definitive Warrants may
transfer such Warrants to a Person who takes delivery thereof in the
form of an Unrestricted Definitive Warrant. Upon receipt of a request
to register such a transfer, the Warrant Registrar shall register the
Unrestricted Definitive Warrants pursuant to the instructions from the
Holder thereof.
(f) Registration Statement.
Upon the effectiveness of the Registration Statement and sales
of Warrants in connection therewith in accordance with the Warrant Registration
Rights Agreement, the Company shall issue and, upon receipt of a Warrant
Countersignature Order in accordance with Section 3.2, the Warrant Agent shall
countersign (i) one or more Unrestricted Global Warrants in an amount equal to
the amount of the beneficial interests in the Restricted Global Warrants sold
under such Registration Statement and (ii) Definitive Warrants in an amount
equal to the amount of the beneficial interests of the Restricted Definitive
Warrants sold under such Registration Statement. Concurrently with the issuance
of such Warrants, the Warrant Agent shall cause the amount of the applicable
Restricted Global Warrants to be reduced accordingly, and the Company shall
execute and the Warrant Agent shall countersign and deliver to the Persons
designated by the Holders of Definitive Warrants so accepted Definitive Warrants
in the appropriate amount.
(g) Legends.
The following legends shall appear on the face of all Global
Warrants and Definitive Warrants issued under this Warrant Agreement unless
specifically stated otherwise in the applicable provisions of this Warrant
Agreement.
(i) Private Placement Legend.
15
(A) Except as permitted by subparagraph (B) below,
each Global Warrant and each Definitive Warrant (and all
Warrants issued in exchange therefor or substitution thereof)
shall bear the legend in substantially the following form:
"THIS WARRANT (OR ITS PREDECESSOR) AND THE WARRANT
SHARES TO BE ISSUED UPON ITS EXERCISE HAVE NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR
TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS
SET FORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF OR
OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) (A "QIB") OR (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1),(2), (3)
OR (7) OF REGULATION D UNDER THE SECURITIES ACT (AN "IAI"),
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE
TRANSFER THIS WARRANT OR THE WARRANT SHARES EXCEPT (A) TO THE
COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (C) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (D) TO
AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE WARRANT
AGENT A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE TRANSFER OF THIS SECURITY (THE FORM
OF WHICH CAN BE OBTAINED FROM THE WARRANT AGENT) AND AN
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (E) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION
OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (F) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND
16
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THIS SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
THE WARRANT AGREEMENT CONTAINS A PROVISION REQUIRING
THE WARRANT AGENT TO REFUSE TO REGISTER ANY TRANSFER OF THIS
SECURITY IN VIOLATION OF THE FOREGOING.
(B) Notwithstanding the foregoing, any Global Warrant
or Definitive Warrant issued pursuant to subparagraphs
(b)(iv), (c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii),
(e)(iii) or (f) to this Section 3.5 (and all Warrants issued
in exchange therefor or substitution thereof) shall not bear
the Private Placement Legend.
(C) Any Warrant Shares issued pursuant to an exercise
of Warrants bearing a Private Placement Legend shall, unless
such exercise is pursuant to a Registration Statement or
unless the Company determines that the Holder thereof is
otherwise entitled to have the Private Placement Legend
removed, bear a Private Placement Legend.
(ii) Global Warrant Legend. Each Global Warrant shall bear a
legend in substantially the following form:
"THIS GLOBAL WARRANT IS HELD BY THE DEPOSITARY (AS
DEFINED IN THE WARRANT AGREEMENT GOVERNING THIS WARRANT) OR
ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE WARRANT AGENT MAY MAKE SUCH
NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 3.5 OF
THE WARRANT AGREEMENT, (II) THIS GLOBAL WARRANT MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 3.5(A)
OF THE WARRANT AGREEMENT, (III) THIS GLOBAL WARRANT MAY BE
DELIVERED TO THE WARRANT AGENT FOR CANCELLATION PURSUANT TO
SECTION 3.8 OF THE WARRANT AGREEMENT AND (IV) THIS GLOBAL
WARRANT MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE
PRIOR WRITTEN CONSENT OF THE COMPANY."
(iii) Unit Legend. Each Warrant issued prior to the Separation
Date shall bear a legend in substantially the following form:
"THE WARRANTS EVIDENCED BY THIS CERTIFICATE ARE
INITIALLY ISSUED AS PART OF AN ISSUANCE OF UNITS (THE
"UNITS"),
17
EACH OF WHICH CONSIST OF $1,000 PRINCIPAL AMOUNT OF THE 12%
SENIOR SUBORDINATED NOTES DUE 2007 OF INSILCO CORPORATION.
(THE "NOTES") AND ONE WARRANT (THE "WARRANTS") INITIALLY
ENTITLING THE HOLDER THEREOF TO PURCHASE 0.52 OF A SHARE, PAR
VALUE $0.001 PER SHARE, OF INSILCO HOLDING CO. COMMON STOCK.
PRIOR TO THE EARLIEST TO OCCUR OF (I) 180 DAYS AFTER
THE CLOSING OF THE OFFERING OF THE UNITS, (II) THE DATE ON
WHICH A REGISTRATION STATEMENT WITH RESPECT TO A REGISTERED
EXCHANGE OFFER FOR THE NOTES IS DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (III) THE DATE A SHELF REGISTRATION STATEMENT
WITH RESPECT TO THE NOTES IS DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (IV) SUCH DATE AS XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION IN ITS SOLE DISCRETION SHALL DETERMINE
AND (V) THE OCCURRENCE OF A CHANGE OF CONTROL (AS DEFINED IN
THE INDENTURE GOVERNING THE NOTES), THE WARRANTS EVIDENCED BY
THIS CERTIFICATE MAY NOT BE TRANSFERRED OR EXCHANGED
SEPARATELY FROM, BUT MAY BE TRANSFERRED OR EXCHANGED ONLY
TOGETHER WITH, THE NOTES.
(h) Cancellation and/or Adjustment of Global Warrants.
At such time as all beneficial interests in a particular
Global Warrant have been exercised or exchanged for Definitive Warrants or a
particular Global Warrant has been exercised, redeemed, repurchased or canceled
in whole and not in part, each such Global Warrant shall be returned to or
retained and canceled by the Warrant Agent in accordance with Section 3.8
hereof. At any time prior to such cancellation, if any beneficial interest in a
Global Warrant is exercised or exchanged for or transferred to a Person who will
take delivery thereof in the form of a beneficial interest in another Global
Warrant or for Definitive Warrants, the amount of Warrants represented by such
Global Warrant shall be reduced accordingly and an endorsement shall be made on
such Global Warrant by the Warrant Agent or by the Depositary at the direction
of the Warrant Agent to reflect such reduction; and if the beneficial interest
is being exchanged for or transferred to a Person who will take delivery thereof
in the form of a beneficial interest in another Global Warrant, such other
Global Warrant shall be increased accordingly and an endorsement shall be made
on such Global Warrant by the Warrant Agent or by the Depositary at the
direction of the Warrant Agent to reflect such increase.
18
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Warrant Agent shall countersign Global
Warrants and Definitive Warrants upon the Company's order or at the
Warrant Registrar's request.
(ii) No service charge shall be made to a holder of a
beneficial interest in a Global Warrant or to a holder of a Definitive
Warrant for any registration of transfer or exchange, but the Company
may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith .
(iii) All Global Warrants and Definitive Warrants issued upon
any registration of transfer or exchange of Global Warrants or
Definitive Warrants shall be the duly authorized, executed and issued
warrants for Common Stock of the Company, not subject to any preemptive
rights, and entitled to the same benefits under this Warrant Agreement,
as the Global Warrants or Definitive Warrants surrendered upon such
registration of transfer or exchange.
(iv) Prior to due presentment for the registration of a
transfer of any Warrant, the Warrant Agent, and the Company may deem
and treat the Person in whose name any Warrant is registered as the
absolute owner of such Warrant for all purposes and none of the Warrant
Agent, or the Company shall be affected by notice to the contrary.
(v) The Warrant Agent shall countersign Global Warrants and
Definitive Warrants in accordance with the provisions of Section 3.2
hereof.
(j) Facsimile Submissions to Warrant Agent.
All certifications, certificates and Opinions of Counsel
required to be submitted to the Warrant Registrar pursuant to this Section 3.5
to effect a registration of transfer or exchange may be submitted by facsimile.
All references to Exhibits B and C herein shall include any other form of
certificate containing comparable certifications approved by the Company).
Notwithstanding anything herein to the contrary, as to any
certificates and/or certifications delivered to the Warrant Registrar pursuant
to this Section 3.5, the Warrant Registrar's duties shall be limited to
confirming that any such certifications and certificates delivered to it are
substantially in the form of Exhibits B and C attached hereto. The Warrant
Registrar shall not be responsible for confirming the truth or accuracy of
representations made in any such certifications or certificates. As to any
Opinions of Counsel delivered pursuant to this Section 3.5, the Warrant
Registrar may rely upon, and be fully protected in relying upon, such opinions.
19
3.6. Replacement Warrants.
If any mutilated Warrant is surrendered to the Warrant Agent
or the Company and the Warrant Agent receives evidence to its satisfaction of
the destruction, loss or theft of any Warrant, the Company shall issue and the
Warrant Agent, upon receipt of a Warrant Countersignature Order, shall
countersign a replacement Warrant if the Warrant Agent's requirements are met.
If required by the Warrant Agent or the Company, an indemnity bond must be
supplied by the Holder that is sufficient in the judgment of the Warrant Agent
and the Company to protect the Company, the Warrant Agent, any Agent and any
agent for purposes of the countersignature from any loss that any of them may
suffer if a Warrant is replaced. The Company may charge for its expenses in
replacing a Warrant.
Every replacement Warrant is an additional warrant of the
Company and shall be entitled to all of the benefits of this Warrant Agreement
equally and proportionately with all other Warrants duly issued hereunder.
3.7. Temporary Warrants.
Until certificates representing Warrants are ready for
delivery, the Company may prepare and the Warrant Agent, upon receipt of a
Warrant Countersignature Order, shall issue temporary Warrants. Temporary
Warrants shall be substantially in the form of certificated Warrants but may
have variations that the Company considers appropriate for temporary Warrants
and as shall be reasonably acceptable to the Warrant Agent. Without unreasonable
delay, the Company shall prepare and the Warrant Agent shall countersign
definitive Warrants in exchange for temporary Warrants.
Holders of temporary Warrants shall be entitled to all of the
benefits of this Warrant Agreement.
3.8. Cancellation.
Subject to Section 3.5(h) hereof, the Company at any time may
deliver Warrants to the Warrant Agent for cancellation. The Warrant Registrar
and Warrant Paying Agent shall forward to the Warrant Agent any Warrants
surrendered to them for registration of transfer, exchange or exercise. The
Warrant Agent and no one else shall cancel all Warrants surrendered for
registration of transfer, exchange, exercise, replacement or cancellation and
shall destroy canceled Warrants (subject to the record retention requirement of
the Exchange Act). Certification of the destruction of all canceled Warrants
shall be delivered to the Company. The Company may not issue new Warrants to
replace Warrants that have been exercised or that have been delivered to the
Warrant Agent for cancellation.
20
SECTION 4. SEPARATION OF WARRANTS; TERMS OF WARRANTS; EXERCISE
OF WARRANTS.
(a) The Notes and Warrants will not be separately transferable
until the Separation Date. Subject to the terms of this Agreement, each Warrant
holder shall have the right, which may be exercised during the period commencing
at the opening of business on the Separation Date and until 5:00 p.m., New York
City time on August 15, 2007 (the "Exercise Period"), to receive from the
Company the number of fully paid and nonassessable Warrant Shares which the
holder may at the time be entitled to receive on exercise of such Warrants and
payment of the exercise price (the "Exercise Price") as set forth below in cash,
by wire transfer or by certified or official check payable to the order of the
Company, in each case, equal to the Exercise Price then in effect for such
Warrant Shares; provided that holders shall be able to exercise their Warrants
only if a registration statement relating to the such exercise is then in
effect, or the exercise of such Warrants is exempt from the registration
requirements of the Securities Act of 1933, as amended (the "Securities Act")
and such holder delivers to the Company such notices as the Company shall
reasonably request in connection therewith, and such securities are qualified
for sale or exempt from qualification under the applicable securities laws of
the states in which the various holders of the Warrants or other persons to whom
it is proposed that the Warrant Shares be issued on exercise of the Warrants
reside. Each holder may exercise its right, during the Exercise Period, to
receive Warrant Shares on a net basis, such that, without the exchange of any
funds, the holder will receive such number of Warrant Shares equal to the
product of (A) the number of Warrant Shares for which such Warrant is
exercisable as of the date of exercise (if the Exercise Price were being paid in
cash) and (B) the Cashless Exercise Ratio. The Cashless Exercise Ratio shall
equal a fraction the numerator of which is the Market Value (as defined below)
per share of Common Stock minus the Exercise Price per share as of the date of
exercise and the denominator of which is the Market Value per share on the date
of exercise. Each Warrant not exercised prior to 5:00 p.m., New York City time,
on August 15, 2007 (the "Expiration Date") shall become void and all rights
thereunder and all rights in respect thereof under this agreement shall cease as
of such time. No adjustments as to dividends will be made upon exercise of the
Warrants.
The "Market Value" per share of Common Stock as of any date
shall equal (i) if Common Stock is primarily traded on a securities exchange,
the last sale price on such securities exchange on the trading day immediately
prior to the date of determination, or if no sales occurred on such day, the
mean between the closing "bid" and "asked" prices on such day, (ii) if the
principal market for Common Stock is in the over-the-counter market, the closing
sale price on the trading day immediately prior to the date of the
determination, as published by the National Association of Securities Dealers
Automated Quotation System or similar organization, or if such price is not so
published on such day, the mean between the closing "bid" and "asked" prices, if
available, on such day, which prices may be obtained from any reputable pricing
service, broker or dealer, and (iii) if neither clause (i) nor clause (ii) is
applicable, the fair market value on the date of determination of Common Stock
as determined in good faith by the Board of Directors of the Company.
21
(b) In order to exercise all or any of the Warrants
represented by a Warrant Certificate, the holder thereof must deliver to the
Warrant Agent at its corporate trust office set forth in Section 15 hereof the
Warrant Certificate and the form of election to purchase on the reverse thereof
duly filled in and signed, which signature shall be medallion guaranteed by an
institution which is a member of a Securities Transfer Association recognized
signature guarantee program, and upon payment to the Warrant Agent for the
account of the Company of the Exercise Price, which is set forth in the form of
Warrant Certificate attached hereto as Exhibit A, as adjusted as herein
provided, for the number of Warrant Shares in respect of which such Warrants are
then exercised. Payment of the aggregate Exercise Price shall be made (i) in
cash, by wire transfer or by certified or official bank check payable to the
order of the Company or (ii) on a net basis in the manner provided in Section
4(a) hereof.
(c) Subject to the provisions of Section 5 hereof, upon
compliance with clause (b) above, the Warrant Agent shall deliver or cause to be
delivered with all reasonable dispatch, to or upon the written order of the
holder and in such name or names as the Warrant holder may designate, a
certificate or certificates for the number of whole Warrant Shares issuable upon
the exercise of such Warrants or other securities or property to which such
holder is entitled hereunder, together with cash as provided in Section 9
hereof; provided that if any consolidation, merger or lease or sale of assets is
proposed to be effected by the Company as described in Section 8(m) hereof, or a
tender offer or an exchange offer for shares of Common Stock shall be made, upon
such surrender of Warrants and payment of the Exercise Price as aforesaid, the
Warrant Agent shall, as soon as possible, but in any event not later than two
business days thereafter, deliver or cause to be delivered the full number of
Warrant Shares issuable upon the exercise of such Warrants in the manner
described in this sentence or other securities or property to which such holder
is entitled hereunder, together with cash as provided in Section 9 hereof. Such
certificate or certificates shall be deemed to have been issued and any person
so designated to be named therein shall be deemed to have become a holder of
record of such Warrant Shares as of the date of the surrender of such Warrants
and payment of the Exercise Price.
(d) The Warrants shall be exercisable, at the election of the
holders thereof, either in full or from time to time in part. If less than all
the Warrants represented by a Warrant Certificate are exercised, such Warrant
Certificate shall be surrendered and a new Warrant Certificate of the same tenor
and for the number of Warrants which were not exercised shall be executed by the
Company and delivered to the Warrant Agent and the Warrant Agent shall
countersign the new Warrant Certificate, registered in such name or names as may
be directed in writing by the holder, and shall deliver the new Warrant
Certificate to the Person or Persons entitled to receive the same.
(e) All Warrant Certificates surrendered upon exercise of
Warrants shall be cancelled by the Warrant Agent. Such cancelled Warrant
Certificates shall then be disposed of by the Warrant Agent in a manner
satisfactory to the Company. The Warrant Agent shall account promptly to the
Company with respect to Warrants exercised and concurrently pay to the
22
Company all monies received by the Warrant Agent for the purchase of the Warrant
Shares through the exercise of such Warrants.
(f) The Warrant Agent shall keep copies of this Agreement and
any notices given or received hereunder available for inspection by the holders
during normal business hours at its office. The Company shall supply the Warrant
Agent from time to time with such numbers of copies of this Agreement as the
Warrant Agent may request.
SECTION 5. PAYMENT OF TAXES.
The Company will pay all documentary stamp taxes attributable
to the initial issuance of Warrant Shares upon the exercise of Warrants;
provided that the Company shall not be required to pay any tax or taxes which
may be payable in respect of any transfer involved in the issue of any Warrant
Certificates or any certificates for Warrant Shares in a name other than that of
the registered holder of a Warrant Certificate surrendered upon the exercise of
a Warrant, and the Company shall not be required to issue or deliver such
Warrant Certificates unless or until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
SECTION 6. RESERVATION OF WARRANT SHARES.
(a) The Company will at all times reserve and keep available,
free from preemptive rights, out of the aggregate of its authorized but unissued
Common Stock or its authorized and issued Common Stock held in its treasury, for
the purpose of enabling it to satisfy any obligation to issue Warrant Shares
upon exercise of Warrants, the maximum number of shares of Common Stock which
may then be deliverable upon the exercise of all outstanding Warrants.
(b) The Company or, if appointed, the transfer agent for the
Common Stock (the "Transfer Agent") and every subsequent transfer agent for any
shares of the Company's capital stock issuable upon the exercise of any of the
rights of purchase aforesaid will be irrevocably authorized and directed at all
times to reserve such number of authorized shares as shall be required for such
purpose. The Company will keep a copy of this Agreement on file with the
Transfer Agent and with every subsequent transfer agent for any shares of the
Company's capital stock issuable upon the exercise of the rights of purchase
represented by the Warrants. The Warrant Agent is hereby irrevocably authorized
to requisition from time to time from such Transfer Agent the stock certificates
required to honor outstanding Warrants upon exercise thereof in accordance with
the terms of this Agreement. The Company will supply such Transfer Agent with
duly executed certificates for such purposes and will provide or otherwise make
available any cash which may be payable as provided in Section 9 hereof. The
Company will furnish such Transfer Agent a copy of all notices of adjustments,
and certificates related thereto, transmitted to each holder pursuant to Section
11 hereof.
23
(c) Before taking any action which would cause an adjustment
pursuant to Section 8 hereof to reduce the Exercise Price below the then par
value (if any) of the Warrant Shares, the Company will take any corporate action
which may, in the opinion of its counsel (which may be counsel employed by the
Company), be necessary in order that the Company may validly and legally issue
fully paid and nonassessable Warrant Shares at the Exercise Price as so
adjusted.
(d) The Company covenants that all Warrant Shares which may be
issued upon exercise of Warrants will, upon issue, be fully paid, nonassessable,
free of preemptive rights and free from all taxes, liens, charges and security
interests with respect to the issuance thereof.
SECTION 7. OBTAINING STOCK EXCHANGE LISTINGS.
The Company will from time to time take all action which may
be necessary so that the Warrant Shares, immediately upon their issuance upon
the exercise of Warrants, will be listed on the principal securities exchanges,
automated quotation systems or other markets within the United States of
America, if any, on which other shares of Common Stock are then listed, if any.
SECTION 8. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF
WARRANT SHARES ISSUABLE.
The Exercise Price and the number of Warrant Shares issuable
upon the exercise of each Warrant are subject to adjustment from time to time
upon the occurrence of the events enumerated in this Section 8. For purposes of
this Section 8, "Common Stock" means shares now or hereafter authorized of any
class of common stock of the Company and any other stock of the Company, however
designated, that has the right (subject to any prior rights of any class or
series of preferred stock) to participate in any distribution of the assets or
earnings of the Company without limit as to per share amount.
(a) Adjustment for Change in Capital Stock.
If the Company (i) pays a dividend or makes a distribution on
its Common Stock in shares of its Common Stock, (ii) subdivides its outstanding
shares of Common Stock into a greater number of shares, (iii) combines its
outstanding shares of Common Stock into a smaller number of shares, (iv) makes a
distribution on its Common Stock in shares of its capital stock other than
Common Stock or (v) issues by reclassification of its Common Stock any shares of
its capital stock, then the Exercise Price in effect immediately prior to such
action shall be proportionately adjusted so that the holder of any Warrant
thereafter exercised may receive the aggregate number and kind of shares of
capital stock of the Company which he would have owned immediately following
such action if such Warrant had been exercised immediately prior to such action.
24
The adjustment shall become effective immediately after the
record date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or reclassification.
If, after an adjustment, a holder of a Warrant upon exercise of it may receive
shares of two or more classes of capital stock of the Company, the Company shall
determine, in good faith, the allocation of the adjusted Exercise Price between
the classes of capital stock. After such allocation, the exercise privilege and
the Exercise Price of each class of capital stock shall thereafter be subject to
adjustment on terms comparable to those applicable to Common Stock in this
Section 8. Such adjustment shall be made successively whenever any event listed
above shall occur.
(b) Adjustment for Rights Issue.
If the Company distributes any rights, options or warrants to
all holders of its Common Stock entitling them for a period expiring within 45
days after the record date mentioned below to purchase shares of Common Stock at
a price per share less than the Fair Value (as defined herein) per share on that
record date, the Exercise Price shall be adjusted in accordance with the
formula:
O + N x P
-----
E' = E x M
----------------
O + N
where:
E' = the adjusted Exercise Price.
E = the current Exercise Price.
O = the number of shares of Common Stock outstanding on the record
date.
N = the number of additional shares of Common Stock to be issued
pursuant to
such rights, options or warrants.
P = the price per share of the additional shares.
M = the Fair Value per share of Common Stock on the record date.
The adjustment shall be made successively whenever any such
rights, options or warrants are issued and shall become effective immediately
after the record date for the determination of stockholders entitled to receive
the rights, options or warrants. If at the end of the period during which such
rights, options or warrants are exercisable, not all rights, options or warrants
shall have been exercised, the Exercise Price shall be immediately readjusted to
what it would have been if "N" in the above formula had been the number of
shares actually issued.
25
(c) Adjustment for Other Distributions.
If the Company distributes to all holders of its Common Stock
any of its assets or debt securities or any rights or warrants to purchase debt
securities, assets or other securities of the Company, the Exercise Price shall
be adjusted in accordance with the formula:
M - F
E' = E x ---------------
M
where:
E' = the adjusted Exercise Price.
E = the current Exercise Price.
M = the Fair Value per share of Common Stock on the
record date mentioned below.
F = the fair market value on the record date of the
assets, securities, rights or warrants to be
distributed in respect of one share of Common Stock
as determined in good faith by the Board of Directors
of the Company (the "Board of Directors").
The adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of stockholders entitled to receive the distribution.
This Section 8(c) does not apply to cash dividends or cash
distributions paid out of consolidated current or retained earnings as shown on
the books of the Company prepared in accordance with generally accepted
accounting principles. Also, this Section 8(c) does not apply to rights, options
or warrants referred to in Section 8(b) hereof.
(d) Adjustment for Common Stock Issue.
If the Company issues shares of Common Stock for a
consideration per share less than the Fair Value per share on the date the
Company fixes the offering price of such additional shares, the Exercise Price
shall be adjusted in accordance with the formula:
P
----
E' = E x O + M
-----------
A
where:
26
E' = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares outstanding immediately prior
to the issuance of such additional shares.
P = the aggregate consideration received for the
issuance of such additional shares.
M = the Fair Value per share on the date of issuance of such
additional shares.
A = the number of shares outstanding immediately after the issuance
of such additional shares.
The adjustment shall be made successively whenever any such
issuance is made, and shall become effective immediately after such issuance.
This subsection (d) does not apply to:
(1) any of the transactions described in
subsections (a), (b) and (c) of this Section 8,
(2) the exercise of Warrants or any other rights,
options or warrants to purchase Common Stock outstanding on the date
hereof, or the conversion or exchange of other securities convertible
or exchangeable for Common Stock the issuance of which caused an
adjustment to be made under Section 8(e),
(3) Common Stock issued to the Company's employees
(or employees of its subsidiaries) under bona fide employee benefit
plans adopted by the Board of Directors and approved by the holders of
Common Stock when required by law, if such Common Stock would otherwise
be covered by this subsection (d) (but only to the extent that the
aggregate number of shares excluded hereby and issued after the date of
this Warrant Agreement shall not exceed 5% of the Common Stock
outstanding at the time of the adoption of each such plan, exclusive of
anti-dilution adjustments thereunder),
(4) Common Stock issued to shareholders of any person
which merges into the Company, or with a subsidiary of the Company, in
proportion to their stock holdings of such person immediately prior to
such merger, upon such merger, provided that if such person is an
Affiliate of the Company, the Board of Directors shall have obtained a
fairness opinion from a nationally recognized investment banking,
appraisal or valuation firm, which is not an Affiliate of the Company,
stating that the consideration received in such merger is fair to the
Company from a financial point of view, or
(5) the issuance of shares of Common Stock pursuant
to rights, options or warrants which were originally issued in a
Non-Affiliate Sale (as defined below) together with one or more other
securities as part of a unit at a price per unit.
27
(e) Adjustment for Convertible Securities Issue.
If the Company issues any securities convertible into or
exchangeable for Common Stock (other than securities issued in transactions
described in subsections (b) and (c) of this Section 8) for a consideration per
share of Common Stock initially deliverable upon conversion or exchange of such
securities less than the Fair Value per share on the date of issuance of such
securities, the Exercise Price shall be adjusted in accordance with this
formula:
P
-----
O + M
E' = E x ----------------
O + D
where:
E' = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares outstanding immediately prior
to the issuance of such securities.
P = the aggregate consideration received for the issuance of such
securities.
M = the Fair Value per share on the date of issuance of
such securities.
D = the maximum number of shares deliverable upon conversion or in
exchange for such securities at the initial conversion or
exchange rate.
The adjustment shall be made successively whenever any such
issuance is made, and shall become effective immediately after
such issuance.
If all of the Common Stock deliverable upon conversion or
exchange of such securities have not been issued when such securities are no
longer outstanding, then the Exercise Price shall promptly be readjusted to the
Exercise Price which would then be in effect had the adjustment upon the
issuance of such securities been made on the basis of the actual number of
shares of Common Stock issued upon conversion or exchange of such securities.
This subsection (e) does not apply to convertible securities
issued to shareholders of any person which merges into the Company, or with a
subsidiary of the Company, in proportion to their stock holdings of such person
immediately prior to such merger, upon such merger, provided that if such person
is an Affiliate of the Company, the Board of Directors shall have obtained a
fairness opinion from a nationally recognized investment banking, appraisal or
valuation firm, which is not an Affiliate of the Company, stating that the
consideration received in such merger is fair to the Company from a financial
point of view.
28
(f) Consideration Received.
For purposes of any computation respecting consideration
received pursuant to subsections (d), and (e) of this Section 8, the following
shall apply:
(1) in the case of the issuance of shares of Common
Stock for cash, the consideration shall be the amount of such cash,
provided that in no case shall any deduction be made for any
commissions, discounts or other expenses incurred by the Company for
any underwriting of the issue or otherwise in connection therewith;
(2) in the case of the issuance of shares of Common
Stock for a consideration in whole or in part other than cash, the
consideration other than cash shall be deemed to be the fair market
value thereof as determined in good faith by the Board of Directors
(irrespective of the accounting treatment thereof), whose determination
shall be conclusive, and described in a Board resolution which shall be
filed with the Warrant Agent;
(3) in the case of the issuance of securities
convertible into or exchangeable for shares, the aggregate
consideration received therefor shall be deemed to be the consideration
received by the Company for the issuance of such securities plus the
additional minimum consideration, if any, to be received by the Company
upon the conversion or exchange thereof (the consideration in each case
to be determined in the same manner as provided in clauses (1) and (2)
of this subsection); and
(4) in the case of the issuance of shares of Common
Stock pursuant to rights, options or warrants which rights, options or
warrants were originally issued together with one or more other
securities as part of a unit at a price per unit, the consideration
shall be deemed to be the fair value of such rights, options or
warrants at the time of issuance thereof as determined in good faith by
the Board of Directors whose determination shall be conclusive and
described in a Board resolution which shall be filed with the Warrant
Agent plus the additional minimum consideration, if any, to be received
by the Company upon the exercise, conversion or exchange thereof (as
determined in the same manner as provided in clauses (1) and (2) of
this subsection).
29
(g) Fair Value.
In Sections 8(d) and (e) hereof, the "Fair Value" per security
at any date of determination shall be (1) in connection with a sale by the
Company to a party that is not an Affiliate of the Company in an arm's-length
transaction (a "Non-Affiliate Sale"), the price per security at which such
security is sold and (2) in connection with any sale by the Company to an
Affiliate of the Company, (a) the last price per security at which such security
was sold in a Non-Affiliate Sale within the three-month period preceding such
date of determination or (b) if clause (a) is not applicable, the fair market
value of such security determined in good faith by (i) a majority of the Board
of Directors, including a majority of the Disinterested Directors, and approved
in a Board resolution delivered to the Warrant Agent or (ii) a nationally
recognized investment banking, appraisal or valuation firm, which is not an
Affiliate of the Company, in each case, taking into account, among all other
factors deemed relevant by the Board of Directors or such investment banking,
appraisal or valuation firm, the trading price and volume of such security on
any national securities exchange or automated quotation system on which such
security is traded. Notwithstanding the foregoing, any sale to Xxxxxxxxx, Xxxxxx
& Xxxxxxxx Securities Corporation (or any successor thereto) pursuant to an
underwritten public offering registered under the Securities Act shall be deemed
to be and treated as a Non-Affiliate Sale.
In Sections 8(b) and (c) hereof, the "Fair Value" per security
at any date of determination shall be (a) the last price per security at which
such security was sold by the Company in a Non-Affiliate Sale within the
three-month period preceding such date of determination or (b) if clause (a) is
not applicable, the fair market value of such security determined in good faith
by (i) a majority of the Board of Directors, including a majority of the
Disinterested Directors, and approved in a Board resolution delivered to the
Warrant Agent or (ii) a nationally recognized investment banking, appraisal or
valuation firm, which is not an Affiliate of the Company, in each case, taking
into account, among all other factors deemed relevant by the Board of Directors
or such investment banking, appraisal or valuation firm, the trading price and
volume of such security on any national securities exchange or automated
quotation system on which such security is traded.
For purposes of this Section 8(g), "Disinterested Director"
means, in connection with any issuance of securities that gives rise to a
determination of the Fair Value thereof, each member of the Board of Directors
who is not an officer, employee, director or other Affiliate of the party to
whom the Company is proposing to issue the securities giving rise to such
determination.
For purposes of this Section 8(g), "Affiliate" of any
specified Person means (A) any other Person directly or indirectly controlling
or controlled by or under direct or indirect common control with such specified
Person and (B) any director, officer or employee of such specified person. For
purposes of this definition "control" (including, with correlative meanings, the
terms "controlling," "controlled by" and "under common control with") as used
with respect
30
to any Person, shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement or otherwise.
(h) When De Minimis Adjustment May Be Deferred.
No adjustment in the Exercise Price need be made unless the
adjustment would require an increase or decrease of at least 1% in the Exercise
Price. Any adjustments that are not made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 8
shall be made to the nearest cent or to the nearest 1/100th of a share, as the
case may be, it being understood that no such rounding shall be made under
subsection (p).
(i) When No Adjustment Required.
No adjustment need be made for a transaction referred to
Section 8(a), (b), (c), (d), (e) or (f) hereof, if Warrant holders are to
participate (without being required to exercise their Warrants) in the
transaction on a basis and with notice that the Board of Directors determines to
be fair and appropriate in light of the basis and notice on which holders of
Common Stock participate in the transaction. No adjustment need be made for (i)
rights to purchase Common Stock pursuant to a Company plan for reinvestment of
dividends or interest or (ii) a change in the par value or no par value of the
Common Stock. To the extent the Warrants become convertible into cash, no
adjustment need be made thereafter as to the cash. Interest will not accrue on
the cash.
(j) Notice of Adjustment.
Whenever the Exercise Price is adjusted, the Company shall
provide the notices required by Section 10 hereof.
(k) Notice of Certain Transactions.
If (i) the Company takes any action that would require an
adjustment in the Exercise Price pursuant to Section 8(a), (b), (c), (d), (e) or
(f) hereof and if the Company does not arrange for Warrant holders to
participate pursuant to Section 8(i) hereof, (ii) the Company takes any action
that would require a supplemental Warrant Agreement pursuant to Section 8(l)
hereof or (iii) there is a liquidation or dissolution of the Company, then the
Company shall mail to Warrant holders a notice stating the proposed record date
for a dividend or distribution or the proposed effective date of a subdivision,
combination, reclassification, consolidation, merger, transfer, lease,
liquidation or dissolution. The Company shall mail the notice at least 15 days
before such date. Failure to mail the notice or any defect in it shall not
affect the validity of the transaction.
31
(l) Reorganization of Company.
Immediately after the date hereof, if the Company consolidates
or merges with or into, or transfers or leases all or substantially all its
assets to, any person, upon consummation of such transaction the Warrants shall
automatically become exercisable for the kind and amount of securities, cash or
other assets which the holder of a Warrant would have owned immediately after
the consolidation, merger, transfer or lease if the holder had exercised the
Warrant immediately before the effective date of the transaction. Concurrently
with the consummation of such transaction, the corporation formed by or
surviving any such consolidation or merger if other than the Company, or the
person to which such sale or conveyance shall have been made, shall enter into
(i) a supplemental Warrant Agreement so providing and further providing for
adjustments which shall be as nearly equivalent as may be practical to the
adjustments provided for in this Section 8(l) and (ii) a supplement to the
Warrant Registration Rights Agreement providing for the assumption of the
Company's obligations thereunder. The successor Company shall mail to Warrant
holders a notice describing the supplemental Warrant Agreement and Warrant
Registration Rights Agreement. If the issuer of securities deliverable upon
exercise of Warrants under the supplemental Warrant Agreement is an affiliate of
the formed, surviving, transferee or lessee corporation, that issuer shall join
in the supplemental Warrant Agreement and Warrant Registration Rights Agreement.
If this Section 8(l) applies, Sections 8(a), (b), (c), (d), (e) and (f) hereof
do not apply.
(m) Company Determination Final.
Any determination that the Company or the Board of Directors
must make pursuant to Section 8(a), (c), (d), (e), (f), (g), (h) or (i) hereof
is conclusive.
(n) Warrant Agent's Disclaimer.
The Warrant Agent has no duty to determine when an adjustment
under this Section 8 should be made, how it should be made or what it should be.
The Warrant Agent has no duty to determine whether any provisions of a
supplemental Warrant Agreement under Section 8(l) hereof are correct. The
Warrant Agent makes no representation as to the validity or value of any
securities or assets issued upon exercise of Warrants. The Warrant Agent shall
not be responsible for the Company's failure to comply with this Section 8.
32
(o) When Issuance or Payment May Be Deferred.
In any case in which this Section 8 shall require that an
adjustment in the Exercise Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event (i) issuing to the holder of any Warrant exercised after such record date
the Warrant Shares and other capital stock of the Company, if any, issuable upon
such exercise over and above the Warrant Shares and other capital stock of the
Company, if any, issuable upon such exercise on the basis of the Exercise Price
and (ii) paying to such holder any amount in cash in lieu of a fractional share
pursuant to Section 10 hereof; provided that the Company shall deliver to such
holder a due xxxx or other appropriate instrument evidencing such holder's right
to receive such additional Warrant Shares, other capital stock and cash upon the
occurrence of the event requiring such adjustment.
(p) Adjustment in Number of Shares.
Upon each adjustment of the Exercise Price pursuant to this
Section 8, each Warrant outstanding prior to the making of the adjustment in the
Exercise Price shall thereafter evidence the right to receive upon payment of
the adjusted Exercise Price that number of shares of Common Stock (calculated to
the nearest hundredth) obtained from the following formula:
N' = N x E
---
E'
where:
N' = the adjusted number of Warrant Shares issuable upon
exercise of a Warrant by payment of the adjusted
Exercise Price.
N = the number or Warrant Shares previously issuable
upon exercise of a Warrant by payment of the Exercise
Price prior to adjustment.
E' = the adjusted Exercise Price.
E = the Exercise Price prior to adjustment.
(q) Form of 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 price and
number and kind of shares as are stated in the Warrants initially issuable
pursuant to this Agreement.
SECTION 9. FRACTIONAL INTERESTS.
33
The Company shall not be required to issue fractional Warrant
Shares on the exercise of Warrants. If more than one Warrant shall be presented
for exercise in full at the same time by the same holder, the number of full
Warrant Shares which shall be issuable upon the exercise thereof shall be
computed on the basis of the aggregate number of Warrant Shares purchasable on
exercise of the Warrants so presented. If any fraction of a Warrant Share would,
except for the provisions of this Section 9, be issuable on the exercise of any
Warrants (or specified portion thereof), the Company shall pay an amount in cash
equal to the Fair Value per Warrant Share, as determined on the day immediately
preceding the date the Warrant is presented for exercise, multiplied by such
fraction, computed to the nearest whole U.S. cent.
SECTION 10. NOTICES TO WARRANT HOLDERS.
(a) Upon any adjustment of the Exercise Price pursuant to
Section 8 hereof, the Company shall promptly thereafter (i) cause to be filed
with the Warrant Agent a certificate of a firm of independent public accountants
of recognized standing selected by the Board of Directors of the Company (who
may be the regular auditors of the Company) setting forth the Exercise Price
after such adjustment and setting forth in reasonable detail the method of
calculation and the facts upon which such calculations are based and setting
forth the number of Warrant Shares (or portion thereof) issuable after such
adjustment in the Exercise Price, upon exercise of a Warrant and payment of the
adjusted Exercise Price, which certificate shall be conclusive evidence of the
correctness of the matters set forth therein, and (ii) cause to be given to each
of the registered holders of Warrants at the address appearing on the Warrant
register for each such registered holder written notice of such adjustments by
first-class mail, postage prepaid. Where appropriate, such notice may be given
in advance and included as a part of the notice required to be mailed under the
other provisions of this Section 10.
(b) In case:
(i) 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;
(ii) the Company shall authorize the distribution to all
holders of shares of Common Stock of evidences of its indebtedness or
assets (other than dividends or cash distributions paid out of
consolidated current or retained earnings as shown on the books of the
Company prepared in accordance with generally accepted accounting
principles or dividends payable in shares of Common Stock or
distributions referred to in Section 10(a) hereof);
(iii) of any consolidation or merger to which the Company is a
party and for which approval of any stockholders of the Company is
required, or of the conveyance or transfer of the properties and assets
of the Company substantially as an entirety, or of any reclassification
or change of Common Stock issuable upon exercise of the Warrants (other
34
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;
(iv) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company; or
(v) the Company proposes to take any action (other than
actions of the character described in Section 8(a) hereof) which would
require an adjustment of the Exercise Price pursuant to Section 8
hereof;
then the Company shall cause to be filed with the Warrant Agent and shall cause
to be given to each of the registered holders of Warrants at his address
appearing on the Warrant register, at least 20 days (or 10 days in any case
specified in clauses (i) or (ii) above) 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 (x)
the date as of which the holders of record of shares of Common Stock to be
entitled to receive any such rights, options, warrants or distribution are to be
determined, (y) the initial expiration date set forth in any tender offer or
exchange offer for shares of Common Stock, or (z) the date on which any such
consolidation, merger, conveyance, transfer, dissolution, liquidation or winding
up is expected to become effective or consummated, and the date as of which it
is expected that holders of record of shares of Common Stock shall be entitled
to exchange such shares for securities or other property, if any, deliverable
upon such reclassification, consolidation, merger, conveyance, transfer,
dissolution, liquidation or winding up. The failure to give the notice required
by this Section 11 or any defect therein shall not affect the legality or
validity of any distribution, right, option, warrant, consolidation, merger,
conveyance, transfer, dissolution, liquidation or winding up, or the vote upon
any action.
(c) Nothing contained in this Agreement or in any of the
Warrant Certificates shall be construed as conferring upon the holders of
Warrants the right to vote or to consent or to receive notice as stockholders in
respect of the meetings of stockholders or the election of directors of the
Company or any other matter, or any rights whatsoever as stockholders of the
Company.
SECTION 11. MERGER, CONSOLIDATION OR CHANGE OF NAME OF
WARRANT AGENT.
(a) Any corporation into which the Warrant Agent may be merged
or with which it may be consolidated, or any corporation resulting from any
merger or consolidation to which the Warrant Agent shall be a party, or any
corporation succeeding to the business of the Warrant Agent, shall be the
successor to the Warrant Agent hereunder without the execution or filing of any
paper or any further act on the part of any of the parties hereto, provided that
such corporation would be eligible for appointment as a successor warrant agent
under the provisions
35
of Section 13 hereof. In case at the time such successor to the Warrant Agent
shall succeed to the agency created by this Agreement, and in case at that time
any of the Warrant Certificates shall have been countersigned but not delivered,
any such successor to the Warrant Agent may adopt the countersignature of the
original Warrant Agent; and in case at that time any of the Warrant Certificates
shall not have been countersigned, any successor to the Warrant Agent may
countersign such Warrant Certificates either in the name of the predecessor
Warrant Agent or in the name of the successor to the Warrant Agent; and in all
such cases such Warrant Certificates shall have the full force and effect
provided in the Warrant Certificates and in this Agreement.
(b) In case at any time the name of the Warrant Agent shall be
changed and at such time any of the Warrant Certificates shall have been
countersigned but not delivered, the Warrant Agent whose name has been changed
may adopt the countersignature under its prior name, and in case at that time
any of the Warrant Certificates shall not have been countersigned, the Warrant
Agent may countersign such Warrant Certificates either in its prior name or in
its changed name, and in all such cases such Warrant Certificates shall have the
full force and effect provided in the Warrant Certificates and in this
Agreement.
SECTION 12. WARRANT AGENT.
The Warrant Agent undertakes the duties and obligations
imposed by this Agreement upon the following terms and conditions, by all of
which the Company and the holders of Warrants, by their acceptance thereof,
shall be bound:
(a) The statements contained herein and in the Warrant
Certificates shall be taken as statements of the Company and the Warrant Agent
assumes no responsibility for the correctness of any of the same except such as
describe the Warrant Agent or action taken or to be taken by it. The Warrant
Agent assumes no responsibility with respect to the distribution of the Warrant
Certificates except as herein otherwise provided.
(b) The Warrant Agent shall not be responsible for any failure
of the Company to comply with any of the covenants contained in this Agreement
or in the Warrant Certificates to be complied with by the Company.
(c) The Warrant Agent may consult at any time with counsel
satisfactory to it (who may be counsel for the Company) and the Warrant Agent
shall incur no liability or responsibility to the Company or to any holder of
any Warrant Certificate in respect of any action taken, suffered or omitted by
it hereunder in good faith and in accordance with the opinion or the advice of
such counsel.
(d) The Warrant Agent shall incur no liability or
responsibility to the Company or to any holder of any Warrant Certificate for
any action taken in reliance on any Warrant Certificate, certificate of shares,
notice, resolution, waiver, consent, order, certificate, or other
36
paper, document or instrument believed by it to be genuine and to have been
signed, sent or presented by the proper party or parties.
(e) The Company agrees to pay to the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent in the execution of
this Agreement, to reimburse the Warrant Agent for all expenses, taxes and
governmental charges and other charges of any kind and nature incurred by the
Warrant Agent in the execution of this Agreement and to indemnify the Warrant
Agent and save it harmless against any and all liabilities, including judgments,
costs and counsel fees, for anything done or omitted by the Warrant Agent in the
execution of this Agreement except as a result of its negligence or bad faith.
(f) The Warrant Agent shall be under no obligation to
institute any action, suit or legal proceeding or to take any other action
likely to involve expense unless the Company or one or more registered holders
of Warrants shall furnish the Warrant Agent with reasonable security and
indemnity for any costs and expenses which may be incurred, but this provision
shall not affect the power of the Warrant Agent to take such action as it may
consider proper, whether with or without any such security or indemnity. All
rights of action under this Agreement or under any of the Warrants may be
enforced by the Warrant Agent without the possession of any of the Warrant
Certificates or the production thereof at any trial or other proceeding relative
thereto, and any such action, suit or proceeding instituted by the Warrant Agent
shall be brought in its name as Warrant Agent and any recovery of judgment shall
be for the ratable benefit of the registered holders of the Warrants, as their
respective rights or interests may appear.
(g) The Warrant Agent, and any stockholder, director, officer
or employee of it, may buy, sell or deal in any of the Warrants or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Warrant Agent
under this Agreement. Nothing herein shall preclude the Warrant Agent from
acting in any other capacity for the Company or for any other legal entity.
(h) The Warrant Agent shall act hereunder solely as agent for
the Company, and its duties shall be determined solely by the provisions hereof.
The Warrant Agent shall not be liable for anything which it may do or refrain
from doing in connection with this Agreement except for its own negligence or
bad faith.
(i) The Warrant Agent shall not at any time be under any duty
or responsibility to any holder of any Warrant Certificate to make or cause to
be made any adjustment of the Exercise Price or number of the Warrant Shares or
other securities or property deliverable as provided in this Agreement, or to
determine whether any facts exist which may require any of such adjustments, or
with respect to the nature or extent of any such adjustments, when made, or with
respect to the method employed in making the same. The Warrant Agent shall not
be accountable with respect to the validity or value or the kind or amount of
any Warrant Shares or of any securities or property which may at any time be
issued or delivered upon the exercise of
37
any Warrant or with respect to whether any such Warrant Shares or other
securities will when issued be validly issued and fully paid and nonassessable,
and makes no representation with respect thereto.
SECTION 13. CHANGE OF WARRANT AGENT.
If the Warrant Agent shall become incapable of acting as
Warrant Agent, the Company shall appoint a successor to such Warrant Agent. If
the Company shall fail to make such appointment within a period of 30 days after
it has been notified in writing of such incapacity by the Warrant Agent or by
the registered holder of a Warrant Certificate, then the registered holder of
any Warrant may apply to any court of competent jurisdiction for the appointment
of a successor to the Warrant Agent. Pending appointment of a successor to such
Warrant Agent, either by the Company or by such a court, the duties of the
Warrant Agent shall be carried out by the Company. The holders of a majority of
the unexercised Warrants shall be entitled at any time to remove the Warrant
Agent and appoint a successor to such Warrant Agent. Such successor to the
Warrant Agent need not be approved by the Company or the former Warrant Agent.
After appointment the successor to the Warrant Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Warrant Agent without further act or deed; provided that the former
Warrant Agent shall deliver and transfer to the successor to the Warrant Agent
any property at the time held by it hereunder and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Failure to
give any notice provided for in this Section 13, however, or any defect therein,
shall not affect the legality or validity of the appointment of a successor to
the Warrant Agent.
SECTION 14. REPORTS.
(a) Whether or not required by the rules and regulations of
the Commission, so long as any Warrants or the Warrant Shares are outstanding,
the Company shall furnish to the Warrant Agent and the holders of Warrants or
Warrant Shares (i) all quarterly and annual financial information that would be
required to be contained in a filing with the Commission on Forms 10-Q and 10-K
if the Company were required to file such Forms, including a "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and,
with respect to the annual information only, a report thereon by the Company's
certified independent accountants and (ii) all current reports that would be
required to be filed with the Commission on Form 8-K if the Company were
required to file such reports. In addition, whether or not required by the rules
and regulations of the Commission, the Company shall file a copy of all such
information and reports with the Commission for public availability (unless the
Commission shall not accept such a filing) and make such information available
to securities analysts and prospective investors upon request.
(b) The Company shall provide the Warrant Agent with a
sufficient number of copies of all such reports that the Warrant Agent may be
required to deliver to the holders of the Warrants and the Warrant Shares under
this Section 14.
38
SECTION 15. REGISTRATION.
.
Holders shall be able to exercise their Warrants only if a
registration statement relating to such exercise is then in effect, or the
exercise of such Warrants is exempt from the registration requirements of the
Securities Act, and such securities are qualified for sale or exempt from
qualification under the applicable securities laws of the states in which the
various holders of the Warrants or other persons to whom it is proposed that the
Warrant Shares be issued on exercise of the Warrants reside.
(a) The Company shall prepare and cause to be filed within 120
days of the issuance date of the Warrants with the Commission pursuant to Rule
415 under the Securities Act a shelf registration statement (the "Registration
Statement") on the appropriate form relating to the offer and sale by the
Company of the Warrant Shares to the holders of Warrants upon exercise of the
Warrants.
(b) The Company shall use its reasonable best efforts to cause
such Registration Statement to be declared effective by the Commission on or
before 150 days from the date of issuance of the Warrants.
(c) The Company shall use its reasonable best efforts to keep
the Registration Statement continuously effective under the Securities Act in
order to permit the prospectus included therein to be lawfully delivered by the
Company to the holders exercising the Warrants until the earlier of (i) two
years following the first date as of which no Warrants remain outstanding and
(ii) if all of the Warrants expire unexercised, the Expiration Date; provided
that, except as provided below with respect to any Black Out Period (as defined
herein), the Company shall be deemed not to have used its reasonable best
efforts to keep the Registration Statements effective during the requisite
period if it voluntarily takes any action that would result in it not being able
to offer and sell the Warrant Shares upon exercise of the Warrants during that
period, unless such action is required by applicable law. Notwithstanding the
foregoing, the Company shall not be required to amend or supplement the
Registration Statement, any related prospectus or any document incorporated
therein by reference, for a period (a "Black Out Period") not to exceed, for so
long as this Agreement is in effect, an aggregate of 60 days in any calendar
year, in the event that (i) an event occurs and is continuing as a result of
which the Registration Statements, any related prospectus or any document
incorporated therein by reference as then amended or supplemented would, in the
Company's good faith judgment, contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
and (ii)(A) the Company determines in its good faith judgment that the
disclosure of such event at such time would have a material adverse effect on
the business, operations or prospects of the Company or (B) the disclosure
otherwise relates to a material business transaction which has not yet been
publicly disclosed; provided, further, that such Black Out Period shall be
extended for any period, not to exceed an aggregate of 30 days in any calendar
year, during which the Commission is reviewing any proposed amendment or
supplement to the Registration Statement,
39
any related prospectus or any document incorporated therein by reference which
has been filed by the Company; and provided, further, that no Black Out Period
may be in effect during the three months prior to the Expiration Date.
(d) The Company shall cause the Registration Statement and the
related prospectus and any amendment or supplement thereto, as of the effective
date of the Registration Statement, amendment or supplement, (i) to comply in
all material respects with the applicable requirements of the Securities Act and
the rules and regulations of the Commission and (ii) not to contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(e) The Company shall give prompt written notice to the
holders of the Warrants, the Initial Purchaser and the Warrant Agent of (i) the
effectiveness of the Registration Statement or any post-effective amendment
thereto, (ii) the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statements or the initiation or threatening of
any proceedings for that purpose, (iii) the receipt by the Company or its legal
counsel of any notification with respect to the suspension of the qualification
of the Warrant Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, (iv) the happening of any event
that requires the Company to make changes in the Registration Statements or the
prospectus in order to make the statements therein not misleading and (v) the
commencement and termination of any Black Out Period.
(f) The Company shall use its reasonable best efforts to
prevent the issuance or obtain the withdrawal of any order suspending the
effectiveness of the Registration Statements at the earliest possible time.
(g) Upon the occurrence of any event contemplated by Section
15(e)(iv) or (v) hereof (subject to the last sentence of Section 15(c) hereof)
the Company shall promptly prepare a post-effective amendment to the
Registration Statement or a supplement to the related prospectus or file any
other required document so that, as thereafter delivered to holders of the
Warrants, the prospectus will not contain an untrue statement of a material fact
or omit to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading and will
contain the current information required by the Securities Act.
(h) Not later than the effective date of the Registration
Statements, the Company will provide a CUSIP number for the Warrant Shares and
provide the Warrant Agent with printed certificates for the Warrant Shares in a
form eligible for deposit with the Depository Trust Company.
(i) The Company will comply with all rules and regulations of
the Commission to the extent and so long as they are applicable to the
Registration Statement.
40
(j) The Company shall register or qualify or cooperate with
the holders in connection with the registration or qualification of the Warrant
Shares for offer and sale by the Company upon exercise of the Warrants under the
securities or blue sky laws of such states of the United States as any holder
reasonably requests and do any and all other acts or things necessary or
advisable to enable such offer and sale in such jurisdictions; provided that the
Company shall not be required to (i) qualify to do business in any jurisdiction
in which it is not then so qualified or (ii) take any action which would subject
it to general service of process or to taxation in any jurisdiction in which it
is not then so subject.
(k) The Company shall bear all expenses incurred by it in
connection with the performance of its obligations under this Section 15.
(l) The Company acknowledges and agrees that any remedy at law
for breach of any provision of this Section 15 will be inadequate and that, in
addition to any other remedies that the holder may have, the holders shall be
entitled to the remedy of specific performance to ensure the Company performs
its obligations under this Section 15. The election of any one or more remedies
by the holders hereunder shall not constitute a waiver of the right to pursue
other available remedies.
(m) No person is entitled to include any securities of the
Company held by such person in, or to have such securities registered under, the
Registration Statement.
SECTION 16. NOTICES TO COMPANY AND WARRANT AGENT.
Any notice or demand authorized by this Agreement to be given
or made by the Warrant Agent or by the registered holder of any Warrant to or on
the Company shall be sufficiently given or made when received if deposited in
the mail, first class or registered, postage prepaid, addressed (until another
address is filed in writing by the Company with the Warrant Agent) as follows:
Insilco Holding Co.
000 Xxxxx Xxxxx X.
Xxx 0000
Xxxxxx, Xxxx 00000
Telephone: (000) 000-0000
Attention: Xxxxxxx X. Xxxx, Esq.
With a copy to:
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
41
Attention: Xxxxxxx Xxxxxxxxx, Xx, Esq.
In case the Company shall fail to maintain such office or
agency or shall fail to give such notice of the location or of any change in the
location thereof, presentations may be made and notices and demands may be
served at the principal office of the Warrant Agent.
Any notice pursuant to this Agreement to be given by the
Company or by the registered holder(s) of any Warrant to the Warrant Agent shall
be sufficiently given when and if deposited in the mail, first-class or
registered, postage prepaid, addressed (until another address is filed in
writing by the Warrant Agent with the Company) to the Warrant Agent as follows:
National City Bank
Corporate Trust Administration
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Telephone: (000) 000-0000
Attention: J. Xxxx Xxxxxxx
SECTION 17. SUPPLEMENTS AND AMENDMENTS.
The Company and the Warrant Agent may from time to time
supplement or amend this Agreement without the approval of any holders of
Warrants 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 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 in any way materially adversely
affect the interests of the holders of Warrants. Any amendment or supplement to
this Agreement that has a material adverse effect on the interests of the
holders of Warrants shall require the written consent of the holders of a
majority of the then outstanding Warrants (excluding Warrants held by the
Company or any of its affiliates). The consent of each holder of Warrants
affected shall be required for any amendment pursuant to which the Exercise
Price would be increased or the number of Warrant Shares purchasable upon
exercise of Warrants would be decreased (other than pursuant to adjustments
provided in this Agreement).
SECTION 18. SUCCESSORS.
All the covenants and provisions of this Agreement by or for
the benefit of the Company or the Warrant Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.
SECTION 19. TERMINATION.
42
This Agreement shall terminate at 5:00 p.m., New York City
time on August 15, 2007. Notwithstanding the foregoing, this Agreement will
terminate on any earlier date if all Warrants have been exercised. The
provisions of Section 12 shall survive such termination.
SECTION 20. GOVERNING LAW.
This Agreement and each Warrant Certificate issued hereunder
shall be deemed to be a contract made under the laws of the State of New York
and for all purposes shall be construed in accordance with the internal laws of
said State.
SECTION 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
registered holders of Warrants any legal or equitable right, remedy or claim
under this Agreement; but this Agreement shall be for the sole and exclusive
benefit of the Company, the Warrant Agent and the registered holders of
Warrants.
SECTION 22. COUNTERPARTS.
This Agreement may be executed in any number of counterparts
and each of such counterparts shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute but one and the
same instrument.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above written.
INSILCO HOLDING CO.
By:
------------------------------------
Name:
Title:
NATIONAL CITY BANK, as Warrant Agent
By:
------------------------------------
Name:
Title:
EXHIBIT A
[Form of Warrant Certificate]
[Face]
Unit Legend. Each Warrant issued prior to the Separation Date
shall bear the following legend (the "Unit Legend") on the face thereof:
THE WARRANTS EVIDENCED BY THIS CERTIFICATE ARE INITIALLY
ISSUED AS PART OF AN ISSUANCE OF UNITS (THE "UNITS"), EACH OF WHICH CONSIST OF
$1,000 PRINCIPAL AMOUNT AT MATURITY OF THE 12% SENIOR SUBORDINATED NOTES DUE
2007 OF INSILCO CORPORATION. (THE "NOTES") AND ONE WARRANT (THE "WARRANTS")
INITIALLY ENTITLING THE HOLDER THEREOF TO PURCHASE 0.52 OF A SHARE, PAR VALUE
$0.001 PER SHARE, OF INSILCO HOLDING CO. COMMON STOCK.
PRIOR TO THE EARLIEST TO OCCUR OF (I) 180 DAYS AFTER THE
CLOSING OF THE OFFERING OF THE UNITS, (II) THE DATE ON WHICH A REGISTRATION
STATEMENT WITH RESPECT TO A REGISTERED EXCHANGE OFFER FOR THE NOTES IS DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (III) THE DATE A SHELF REGISTRATION
STATEMENT WITH RESPECT TO THE NOTES IS DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (IV) SUCH DATE AS XXXXXXXXX, XXXXXX & XXXXXXXX SECURITIES CORPORATION IN
ITS SOLE DISCRETION SHALL DETERMINE AND (V) THE OCCURRENCE OF A CHANGE OF
CONTROL (AS DEFINED IN THE INDENTURE GOVERNING THE NOTES), THE WARRANTS
EVIDENCED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED OR EXCHANGED SEPARATELY
FROM, BUT MAY BE TRANSFERRED OR EXCHANGED ONLY TOGETHER WITH, THE NOTES.
Private Placement Legend: Each Warrant issued pursuant to an
exemption from the registration requirements of the Securities Act shall bear
the following legend (the "Private Placement Legend") on the face thereof
THIS WARRANT (OR ITS PREDECESSOR) AND THE WARRANT SHARES TO BE
ISSUED UPON ITS EXERCISE HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO,
OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT
SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE
HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB") OR (B)
2
IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(A)(1),(2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT (AN "IAI"),
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS
WARRANT OR THE WARRANT SHARES EXCEPT (A) TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (C) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (D) TO AN IAI THAT, PRIOR TO
SUCH TRANSFER, FURNISHES THE WARRANT AGENT A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS SECURITY (THE
FORM OF WHICH CAN BE OBTAINED FROM THE WARRANT AGENT) AND AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION,
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND.
THE WARRANT AGREEMENT CONTAINS A PROVISION REQUIRING
THE WARRANT AGENT TO REFUSE TO REGISTER ANY TRANSFER OF THIS
SECURITY IN VIOLATION OF THE FOREGOING.
Global Warrant Legend: Each Global Warrant shall bear the following
legend (the "Global Warrant Legend") on the face thereof:
THIS GLOBAL WARRANT IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
WARRANT AGREEMENT GOVERNING THIS WARRANT) OR ITS NOMINEE IN CUSTODY FOR THE
BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON
UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE WARRANT AGENT MAY MAKE SUCH
NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 3.5 OF THE WARRANT
AGREEMENT, (II) THIS GLOBAL WARRANT MAY BE EXCHANGED IN WHOLE BUT NOT IN PART
PURSUANT TO SECTION 3.5(A) OF THE WARRANT AGREEMENT, (III) THIS GLOBAL WARRANT
MAY BE DELIVERED TO THE WARRANT AGENT FOR CANCELLATION PURSUANT TO SECTION 3.8
OF THE WARRANT AGREEMENT AND (IV) THIS
3
GLOBAL WARRANT MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR
WRITTEN CONSENT OF THE COMPANY.
1
No. ___________ ___Warrants
CUSIP No. ________
Warrant Certificate
INSILCO HOLDING CO.
This Warrant Certificate certifies that its registered
assigns, is the registered holder of Warrants expiring August 15, 2007 (the
"Warrants") to purchase Common Stock, par value $.001 (the "Common Stock"), of
Insilco Holding Co., a Delaware corporation (the "Company"). Each Warrant
entitles the registered holder upon exercise at any time from 9:00 a.m. on the
Separation Date referred to below (the "Exercise Date") until 5:00 p.m. New York
City Time on August 15, 2007, to receive from the Company 0.52 fully paid and
nonassessable shares of Common Stock (the "Warrant Shares") at the initial
exercise price (the "Exercise Price") of $45.00 per share payable upon surrender
of this Warrant Certificate and payment of the Exercise Price at the office or
agency of the Warrant Agent, but only subject to the conditions set forth herein
and in the Warrant Agreement referred to on the reverse hereof. Notwithstanding
the foregoing, Warrants may be exercised without the exchange of funds pursuant
to the net exercise provisions of Section 4 of the Warrant Agreement. The
Exercise Price and number of Warrant Shares issuable upon exercise of the
Warrants are subject to adjustment upon the occurrence of certain events set
forth in the Warrant Agreement.
The holder of this Warrant by the acceptance hereof agrees
that upon the occurrence of any Special Redemption (as defined in the Indenture)
of the Notes, it shall deliver to the Company for cancellation one Warrant for
each $1,000 principal amount of Notes being redeemed from such holder, which
Warrants shall be deemed canceled upon redemption of such Notes pursuant to the
Special Redemption.
"Separation Date"shall mean the earliest of (i) May 8, 1999,
(ii) the date on which a registration statement with respect to a registered
exchange offer for the Notes is declared effective under the Securities Act,
(iii) the date a shelf registration statement with respect to the Notes is
declared effective under the Securities Act, (iv) such date as Xxxxxxxxx, Lufkin
& Xxxxxxxx Securities Corporation in its sole discretion shall determine and (v)
the occurrence of a Change of Control (as defined in the Indenture governing the
Notes).
No Warrant may be exercised after 5:00 p.m., New York City
Time on August 15, 2007, and to the extent not exercised by such time such
Warrants shall become void.
Reference is hereby made to the further provisions of this
Warrant Certificate set forth on the reverse hereof and such further provisions
shall for all purposes have the same effect as though fully set forth at this
place.
2
This Warrant Certificate shall not be valid unless
countersigned by the Warrant Agent, as such term is used in the Warrant
Agreement.
This Warrant Certificate shall be governed by and construed in
accordance with the internal laws of the State of New York.
3
IN WITNESS WHEREOF, Insilco Holding Co. has caused this
Warrant Certificate to be signed below.
Dated: November 9, 1998
INSILCO HOLDING CO.
By:
--------------------------------
Name:
Title:
Countersigned:
NATIONAL CITY BANK
as Warrant Agent
By:
-------------------------------
Authorized Signature
[Reverse of Warrant Certificate]
The Warrants evidenced by this Warrant Certificate are part of
a duly authorized issue of Warrants expiring at 5:00 p.m. New York City time on
August 15, 2007 entitling the holder on exercise to receive shares of Common
Stock, and are issued or to be issued pursuant to a Warrant Agreement dated as
of November 9, 1998 (the "Warrant Agreement"), duly executed and delivered by
the Company to National City 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.
Warrants may be exercised at any time on or after the
Separation Date and on or before 5:00 p.m. New York City time on August 15,
2007; provided that holders shall be able to exercise their Warrants only if a
registration statement relating to the Warrants Shares is then in effect, or the
exercise of such Warrants is exempt from the registration requirements of the
Securities Act of 1933, as amended (the "Securities Act"), and such securities
are qualified for sale or exempt from qualification under the applicable
securities laws of the states in which the various holders of the Warrants or
other persons to whom it is proposed that the Warrant Shares be issued on
exercise of the Warrants reside. The Company has agreed pursuant to the Warrant
Agreement and a Warrant Registration Rights Agreement dated as of November 9,
1998 (the "Warrant Registration Rights Agreement") to file within 120 days after
the issuance of the Warrants and use its reasonable best efforts to make
effective on or before 150 days after such date a shelf registration statement
on the appropriate form under the Securities Act, and to use its reasonable best
efforts to keep such registration statement continuously effective, subject to
certain exceptions, under the Securities Act in order to permit the resale of
the Warrants and Warrant Shares by the holders thereof and the issuance of
Warrants Shares upon exercise of Warrants resold pursuant to an effective
Registration Statement, subject to certain exceptions, until the earlier of (i)
two years following the first date as of which no Warrants remain outstanding
and (ii) if all of the Warrants expire unexercised, the Expiration Date.
In order to exercise all or any of the Warrants represented by
this Warrant Certificate, the holder must deliver to the Warrant Agent at its
New York corporate trust office set forth in Section 19 of the Warrant Agreement
this Warrant Certificate and the form of election to purchase on the reverse
hereof duly filled in and signed, which signature shall be medallion guaranteed
by an institution which is a member of a Securities Transfer Association
recognized signature guarantee program, and upon payment to the Warrant Agent
for the account of the Company of the Exercise Price, as adjusted as provided in
the Warrant Agreement, for the
A-1
number of Warrant Shares in respect of which such Warrants are then exercised.
Notwithstanding the foregoing, Warrants may be exercised without the exchange of
funds pursuant to the net exercise provisions of Section 4 of the Warrant
Agreement. No adjustment shall be made for any dividends on any Common Stock
issuable upon exercise of this Warrant.
The Warrant Agreement provides that upon the occurrence of
certain events the Exercise Price set forth on the face hereof may, subject to
certain conditions, be adjusted. If the Exercise Price is adjusted, the Warrant
Agreement provides that the number of shares of Common Stock issuable upon the
exercise of each Warrant shall be adjusted. No fractions of a share of Common
Stock will be issued upon the exercise of any Warrant, but the Company will pay
the cash value thereof determined as provided in the Warrant Agreement.
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) thereof as the absolute owner(s) of this Warrant
Certificate (notwithstanding any notation of ownership or other writing hereon
made by anyone), for the purpose of any exercise hereof, of any distribution to
the holder(s) hereof, and for all other purposes, and neither the Company nor
the Warrant Agent shall be affected by any notice to the contrary. Neither the
Warrants nor this Warrant Certificate entitles any holder hereof to any rights
of a stockholder of the Company.
A-2
[Form of Election to Purchase]
(To Be Executed Upon Exercise Of Warrant)
The undersigned hereby irrevocably elects to exercise the
right, represented by this Warrant Certificate, to receive _____________ shares
of Common Stock and herewith tenders payment for such shares to the order of
INSILCO HOLDING CO., in the amount of $__________ in accordance with the terms
hereof unless the holder is exercising Warrants pursuant to the net exercise
provisions of Section 4 of the Warrant Agreement in which case the holder shall
receive such number of Warrant Shares equal to the product of (A) the number of
Warrant Shares for which this Warrant Certificate is exercisable as of the date
of exercise (if the Exercise Price were being paid in cash) and (B) the Cashless
Exercise Ratio (as defined in the Warrant Agreement). The undersigned requests
that a certificate for such shares be registered in the name of _______________,
whose address is __________________ and that such shares be delivered to
___________, whose address is ____________________________. If said number of
shares is less than all of the shares of Common Stock purchasable hereunder, the
undersigned requests that a new Warrant Certificate representing the remaining
balance of such shares be registered in the name of ______________________,
whose address is ____________________, and that such Warrant Certificate be
delivered to whose address is ____________________.
-------------------------------
Signature
Date:
-------------------------------
Signature Guaranteed
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Warrant Agent, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Warrant Agent in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A-3
SCHEDULE OF EXCHANGES OF INTERESTS OF GLOBAL WARRANTS
The following exchanges of a part of this Global Warrant have been made:
Number of
Amount of Amount of Warrants in this
decrease in increase in Global Warrant Signature of
Number of Number of following such authorized
Date of warrants in this Warrants in this decrease or officer of
Exchange Global Warrant Global Warrant increase Warrant Agent
---------------------------------------------------------------------------------------
A-4
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Insilco Holding Co.
000 Xxxxx Xxxxx X.
Xxx 0000
Xxxxxx, Xxxx 00000
National City Bank
Corporate Trust Administration
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Re: Warrants
Reference is hereby made to the Warrant Agreement, dated as of
November 9, 1998 (the "Warrant Agreement"), between Insilco Holding Co., as
issuer (the "Company"), and National City Bank, as warrant agent. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Warrant Agreement.
___________________, (the "Transferor") owns and proposes to
transfer the Warrant[s] or interest in such Warrant[s] specified in Annex A
hereto, in the principal amount at maturity of $___________ in such Warrant[s]
or interests (the "Transfer"), to ___________________________ (the
"Transferee"), as further specified in Annex A hereto. In connection with the
Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [ ] Check if Transferee will take delivery of a beneficial
interest in the 144A Global Warrant or a Definitive Warrant Pursuant to Rule
144A. The Transfer is being effected pursuant to and in accordance with Rule
144A under the United States Securities Act of 1933, as amended (the "Securities
Act"), and, accordingly, the Transferor hereby further certifies that the
beneficial interest or Definitive Warrant is being transferred to a Person that
the Transferor reasonably believed and believes is purchasing the beneficial
interest or Definitive Warrant for its own account, or for one or more accounts
with respect to which such Person exercises sole investment discretion, and such
Person and each such account is a "qualified institutional buyer" within the
meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and
such Transfer is in compliance with any applicable blue sky securities laws of
B-1
any state of the United States. Upon consummation of the proposed Transfer in
accordance with the terms of the Warrant Agreement, the transferred beneficial
interest or Definitive Warrant will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the 144A Global Warrant
and/or the Definitive Warrant and in the Warrant Agreement and the Securities
Act.
2. [ ] Check and complete if Transferee will take delivery of
a beneficial interest in a Definitive Warrant pursuant to any provision of the
Securities Act other than Rule 144A. The Transfer is being effected in
compliance with the transfer restrictions applicable to beneficial interests in
Restricted Global Warrants and Restricted Definitive Warrants and pursuant to
and in accordance with the Securities Act and any applicable blue sky securities
laws of any state of the United States, and accordingly the Transferor hereby
further certifies that (check one):
(a) [ ] such Transfer is being effected pursuant to and in accordance
with Rule 144 under the Securities Act;
or
(b) [ ] such Transfer is being effected to the Company or a subsidiary
thereof;
or
(c) [ ] such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with
the prospectus delivery requirements of the Securities Act;
or
(d) [ ] such Transfer is being effected to an Institutional Accredited
Investor and pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 144A or Rule 144,
and the Transferor hereby further certifies that it has not engaged in
any general solicitation within the meaning of Regulation D under the
Securities Act and the Transfer complies with the transfer restrictions
applicable to beneficial interests in a Restricted Global Warrant or
Restricted Definitive Warrants and the requirements of the exemption
claimed, which certification is supported by (1) a certificate executed
by the Transferee in the form of Exhibit D to the Warrant Agreement and
(2) if the Company requests, an Opinion of Counsel provided by the
Transferor or the Transferee (a copy of which the Transferor has
attached to this certification), to the effect that such Transfer is in
compliance with the Securities Act. Upon consummation of the
B-2
proposed transfer in accordance with the terms of the Warrant
Agreement, the transferred beneficial interest or Definitive Warrant
will be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the IAI Global Warrant and/or the
Definitive Warrants and in the Warrant Agreement and the Securities
Act.
3. [ ] Check if Transferee will take delivery of a beneficial
interest in an Unrestricted Global Warrant or of an Unrestricted Definitive
Warrant.
(a) [ ] Check if Transfer is pursuant to Rule 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the
Securities Act and in compliance with the transfer restrictions
contained in the Warrant Agreement and any applicable blue sky
securities laws of any state of the United States and (ii) the
restrictions on transfer contained in the Warrant Agreement and the
Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Warrant Agreement, the
transferred beneficial interest or Definitive Warrant will no longer be
subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Global Warrants, on
Restricted Definitive Warrants and in the Warrant Agreement.
(b) [ ] Check if Transfer is Pursuant to Other Exemption. (i) The
Transfer is being effected pursuant to and in compliance with an
exemption from the registration requirements of the Securities Act
other than Rule 144 or Rule 144A and in compliance with the transfer
restrictions contained in the Warrant Agreement and any applicable blue
sky securities laws of any State of the United States and (ii) the
restrictions on transfer contained in the Warrant Agreement and the
Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Warrant Agreement, the
transferred beneficial interest or Definitive Warrant will not be
subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Global Warrants or
Restricted Definitive Warrants and in the Warrant Agreement.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company.
----------------------------------------
[Insert Name of Transferor]
By:
------------------------------------
B-3
Name:
Title:
Dated:
------------------------
B-4
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [ ] a beneficial interest in the 000X Xxxxxx Xxxxxxx, or
(b) [ ] a Restricted Definitive Warrant.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [ ] a beneficial interest in the:
(i) [ ] IAI Global Warrant, or
(iv) [ ] Unrestricted Global Warrant; or
(b) [ ] a Restricted Definitive Warrant; or
(c) [ ] an Unrestricted Definitive Warrant,
in accordance with the terms of the Warrant Agreement.
B-5
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Insilco Holding Co.
000 Xxxxx Xxxxx X.
Xxx 0000
Xxxxxx, Xxxx 00000
National City Bank
Corporate Trust Administration
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Re: Warrants
(CUSIP ____________)
Reference is hereby made to the Warrant Agreement, dated as of
November 9, 1998 (the "Warrant Agreement"), between Insilco Holding Co., as
issuer (the "Company"), and National City Bank, as warrant agent. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Warrant Agreement.
__________________________, (the "Owner") owns and proposes to
exchange the Warrant[s] or interest in such Warrant[s] specified herein, in the
amount of $____________ in such Warrant[s] or interests (the "Exchange"). In
connection with the Exchange, the Owner hereby certifies that:
1. Exchange of Restricted Definitive Warrants or Beneficial
Interests in a Restricted Global Warrant for Unrestricted Definitive Warrants or
Beneficial Interests in an Unrestricted Global Warrant
(a) [ ] Check if Exchange is from beneficial interest in a Restricted
Global Warrant to beneficial interest in an Unrestricted Global
Warrant. In connection with the Exchange of the Owner's beneficial
interest in a Restricted Global Warrant for a beneficial interest in an
Unrestricted Global Warrant in an equal principal amount, the Owner
hereby certifies (i) the beneficial interest is being acquired for the
Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the
C-1
transfer restrictions applicable to the Global Warrants and pursuant to
and in accordance with the United States Securities Act of 1933, as
amended (the "Securities Act"), (iii) the restrictions on transfer
contained in the Warrant Agreement and the Private Placement Legend are
not required in order to maintain compliance with the Securities Act
and (iv) the beneficial interest in an Unrestricted Global Warrant is
being acquired in compliance with any applicable blue sky securities
laws of any state of the United States.
(b) [ ] Check if Exchange is from beneficial interest in a Restricted
Global Warrant to Unrestricted Definitive Warrant. In connection with
the Exchange of the Owner's beneficial interest in a Restricted Global
Warrant for an Unrestricted Definitive Warrant, the Owner hereby
certifies (i) the Definitive Warrant is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to the Restricted
Global Warrants and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Warrant
Agreement and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the Definitive
Warrant is being acquired in compliance with any applicable blue sky
securities laws of any state of the United States.
(c) [ ] Check if Exchange is from Restricted Definitive Warrant to
beneficial interest in an Unrestricted Global Warrant. In connection
with the Owner's Exchange of a Restricted Definitive Warrant for a
beneficial interest in an Unrestricted Global Warrant, the Owner hereby
certifies (i) the beneficial interest is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to Restricted
Definitive Warrants and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the
Warrant Agreement and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the
beneficial interest is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
(d) [ ] Check if Exchange is from Restricted Definitive Warrant to
Unrestricted Definitive Warrant. In connection with the Owner's
Exchange of a Restricted Definitive Warrant for an Unrestricted
Definitive Warrant, the Owner hereby certifies (i) the Unrestricted
Definitive Warrant is being acquired for the Owner's own account
without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive
Warrants and pursuant to and in accordance with the Securities Act,
(iii) the restrictions on transfer contained in the Warrant Agreement
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the Unrestricted Definitive
Warrant
C-2
is being acquired in compliance with any applicable blue sky securities
laws of any state of the United States.
2. Exchange of Restricted Definitive Warrants or Beneficial
Interests in Restricted Global Warrants for Restricted Definitive Warrants or
Beneficial Interests in Restricted Global Warrants
(a) [ ] Check if Exchange is from beneficial interest in a Restricted
Global Warrant to Restricted Definitive Warrant. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global
Warrant for a Restricted Definitive Warrant in a number equal to the
number of beneficial interests exchanged, the Owner hereby certifies
that the Restricted Definitive Warrant is being acquired for the
Owner's own account without transfer. Upon consummation of the proposed
Exchange in accordance with the terms of the Warrant Agreement, the
Restricted Definitive Warrant issued will continue to be subject to the
restrictions on transfer enumerated in the Private Placement Legend
printed on the Restricted Definitive Warrant and in the Warrant
Agreement and the Securities Act.
(b) Check if Exchange is from Restricted Definitive Warrant to
beneficial interest in a Restricted Global Warrant. In connection with
the Exchange of the Owner's Restricted Definitive Warrant for a
beneficial interest in the 000X Xxxxxx Xxxxxxx, in a number equal to
the number of beneficial interests exchanged, the Owner hereby
certifies (i) the beneficial interest is being acquired for the Owner's
own account without transfer and (ii) such Exchange has been effected
in compliance with the transfer restrictions applicable to the
Restricted Global Warrants and pursuant to and in accordance with the
Securities Act, and in compliance with any applicable blue sky
securities laws of any state of the United States. Upon consummation of
the proposed Exchange in accordance with the terms of the Warrant
Agreement, the beneficial interest issued will be subject to the
restrictions on transfer enumerated in the Private Placement Legend
printed on the relevant Restricted Global Warrant and in the Warrant
Agreement and the Securities Act.
C-3
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company.
---------------------------------------------
[Insert Name of Transferor]
By:
-----------------------------------------
Name:
Title:
Dated:
--------------------------
C-4
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Insilco Holding Co.
000 Xxxxx Xxxxx X.
Xxx 0000
Xxxxxx, Xxxx 00000
National City Bank
Corporate Trust Administration
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Re: Warrants
Reference is hereby made to the Warrant Agreement, dated as of
November 9, 1998 (the "Warrant Agreement"), between Insilco Holding Co., as
issuer (the "Company"), and National City Bank, as warrant agent. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Warrant Agreement.
In connection with our proposed purchase of____________
Definitive Warrants, we confirm that:
1. We understand that any subsequent transfer of the Warrants
or any interest therein is subject to certain restrictions and conditions set
forth in the Warrant Agreement and the undersigned agrees to be bound by, and
not to resell, pledge or otherwise transfer the Warrants or any interest therein
except in compliance with, such restrictions and conditions and the United
States Securities Act of 1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Warrants have
not been registered under the Securities Act, and that the Warrants and any
interest therein may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, that if we should sell the Warrants or any
interest therein, we will do so only (A) to the Company or any subsidiary
thereof, (B) in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined therein), (C) to an institutional
"accredited investor" (as defined below) that, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. broker-dealer) to you and to the
D-1
Company a signed letter substantially in the form of this letter and, if
requested by the Company, an Opinion of Counsel in form reasonably acceptable to
the Company to the effect that such transfer is in compliance with the
Securities Act, (D) pursuant to the provisions of Rule 144(k) under the
Securities Act or (E) pursuant to an effective registration statement under the
Securities Act, and we further agree to provide to any person purchasing the
Definitive Warrant or beneficial interest in a Global Warrant from us in a
transaction meeting the requirements of clauses (A) through (D) of this
paragraph a notice advising such purchaser that resales thereof are restricted
as stated herein.
3. We understand that, on any proposed resale of the Warrants
or beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Warrants purchased by
us will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Warrants,
and we and any accounts for which we are acting are each able to bear the
economic risk of our or its investment.
5. We are acquiring the Warrants or beneficial interest
therein purchased by us for our own account or for one or more accounts (each of
which is an institutional "accredited investor") as to each of which we exercise
sole investment discretion.
We agree not to engage in any hedging transactions with
regard to the Warrants unless such hedging transactions are in compliance with
the Securities Act.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.
---------------------------------------------
[Insert Name of Transferor]
By:
-----------------------------------------
Name:
Title:
D-2
Dated:
--------------------------
D-3
EXHIBIT E
FORM OF WARRANT REGISTRATION RIGHTS AGREEMENT
E-1
