Exhibit 10.3
WARRANT AGREEMENT
BETWEEN
NATIONSBANK, N.A.
AND
BREED TECHNOLOGIES, INC.
October 30, 1997
TABLE OF CONTENTS
ARTICLE 1 CERTAIN DEFINITIONS..........................................1
ARTICLE 2 ORIGINAL ISSUE OF WARRANTS...................................3
2.1 Form of Warrant Certificates.................................3
2.2 Legend.......................................................3
2.3 Delivery of the Warrants.....................................4
ARTICLE 3 EXERCISE OF WARRANTS.........................................4
3.1 Exercise of Warrants; Increase in Warrants...................4
3.2 Exercise Price...............................................5
3.3 Restrictions on Exercise; Expiration.........................5
3.4 Method of Exercise; Payment of Exercise Price................5
3.5 Dividends and Distributions..................................6
ARTICLE 4 ADJUSTMENTS..................................................6
4.1 Adjustments..................................................6
4.2 Below Market Price Issuances.................................8
4.3 Notice of Adjustment........................................10
4.4 Statements in the Warrants..................................10
4.5 Notice of Consolidation, Merger or Sale of Assets...........10
4.6 Fractional Interests........................................11
4.7 No Dilution or Impairment...................................11
ARTICLE 5 RESERVATION AND AUTHORIZATION OF COMMON SHARES,
ETC.........................................................11
5.1 Reservation and Authorization...............................11
5.2 Covenant Regarding Securities...............................11
5.3 Registration................................................12
5.4 S-3 Eligibility.............................................12
ARTICLE 6 WARRANT TRANSFER BOOKS: RESTRICTIONS ON TRANSFER............12
6.1 Transfer and Exchange.......................................12
6.2 Special Transfer Provisions.................................13
6.3 Surrender of a Warrant Certificate..........................13
ARTICLE 7 OPTIONS.....................................................13
7.1 Option to Redeem Warrants...................................13
ARTICLE 8 REGISTRATION RIGHTS.........................................14
8.1 Registration by the Corporation.............................14
8.2 Registration Procedures and Expenses........................14
8.3 Indemnification.............................................15
8.4 Conflicting Rights..........................................17
8.5 Termination.................................................17
8.6 Registration on Form S-3....................................17
ARTICLE 9 MISCELLANEOUS...............................................17
9.1 Loss or Mutilation..........................................17
9.2 Payment of Taxes............................................18
9.3 No Merger, Consolidation or Sale of Assets or the Corporation.18
9.4 Notices.....................................................18
9.5 Governing Law...............................................19
9.6 Assignment; Successors......................................19
9.7 Counterparts................................................19
9.8 Amendments..................................................19
9.9 Headings....................................................20
9.10 Third Party Beneficiaries...................................20
9.11 Severability................................................20
9.12 No Inconsistent Agreements..................................20
EXHIBIT A WARRANT CERTIFICATE.........................................22
WARRANT AGREEMENT
WARRANT AGREEMENT, dated as of October 30, 1997 (this "Agreement"), between
BREED TECHNOLOGIES, INC. a Delaware corporation (the "Corporation"), and
NATIONSBANK, N.A. ("NationsBank").
Pursuant to the terms of a Credit Agreement dated October 30, 1997,
NationsBank, N.A. as agent (the "Agent") and as a Lender has agreed to make
available to the Corporation loans of up to $900,000,000 (the "Loans") which
Loans are to be evidenced by Notes of the Corporation in favor of the Lenders
(the "Notes"). In order to induce NationsBank to agree to make the Loans, the
Corporation agreed to issue to NationsBank warrants (the "Warrants") exercisable
for Common Stock, $.01 par value per share of the Corporation (the "Common
Stock").
Initially, the Corporation is authorizing the issuance to NationsBank of
3,000,000 Warrants to purchase a total of 3,000,000 shares of Common Stock (the
"Warrant Shares") of the Corporation under the terms and conditions hereof,
which amount is subject to increase as provided herein. Each Warrant shall
entitle the holder thereof to purchase one share of Common Stock, subject to
adjustment as provided herein.
In consideration of the foregoing and of the agreements contained in the
Credit Agreement, and for the purpose of defining the terms and provisions of
the Warrants and Warrant Shares and the respective rights and obligations
thereunder of the Corporation and the Holder(s) (as defined herein), the
Corporation and NationsBank hereby agree as follows:
ARTICLE 1
CERTAIN DEFINITIONS
For all purposes of this Agreement, except as otherwise expressly provided:
(a) the terms defined in this Article 1 have the meanings assigned to them
in this Article, and include the plural as well as the singular; and
(b) the words "herein," "hereof" and "hereunder," and other words of
similar import, refer to this Agreement as a whole and not to any particular
article, section or other subdivision.
"Additional Warrants" has the meaning set forth in Section 3.1 hereof.
"Affiliate" means, as to any person, any other person which directly or
indirectly controls, or is under common control with, or is controlled by, such
person. For purposes of this definition, "control" (including, with correlative
meanings, the terms "controlling," "under common control with" and "controlled
by"), and as used with respect to any person, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of such person, whether through the ownership of voting
stock, by agreement or otherwise; provided, however, that beneficial ownership
of 5% or more of the voting stock of a person shall be deemed to be control.
"Appraised Market Value" shall mean the market value of the Common Stock as
agreed by the Corporation and the affected Holder(s) of the Warrants, or if the
Corporation and such Holder(s) cannot agree, as determined by a valuation by an
investment banking company suitable to the Corporation and such Holder(s). In
the event the parties cannot agree on an investment banking company to perform
the valuation described above, the Corporation and such Holder(s) shall each
select an investment banking company and the two investment banking companies so
selected shall select a third investment banking company which shall determine
the Appraised Market Value. In determining the Appraised Market Value of the
Common Stock, no discount shall be applied because the shares of Common Stock
held by the holders thereof (a) have not been registered under the
Securities Act, or (b) represent a minority interest in the Corporation. The
fees and expenses of the investment banking company or companies shall be borne
by the Corporation.
"Board of Directors" means the board of directors of the Corporation.
"Board Resolution" means a copy of a resolution certified by the Secretary
or any Assistant Secretary of the Corporation to have been duly adopted by the
Board of Directors.
"Business Day" means any day which is not a Saturday, Sunday or a day on
which banking institutions in the States of New York and Florida are not
authorized or obligated by law, executive order, regulation or governmental
decree to close.
"Commission" means the Securities and Exchange Commission.
"Common Stock" has the meaning set forth in the preamble hereto.
"Corporation" has the meaning set forth in the preamble hereto.
"Credit Agreement" has the meaning set forth in the preamble hereto.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Exercise Price" has the meaning set forth in Section 3.2 hereof.
"Expiration Date" means October 30, 2000.
"Holders" means the holders from time to time of the Warrants or Warrant
Shares issued upon exercise of the Warrants.
"Issue Date" means the date of the original issuance of the Warrants.
"Market Price" means the closing price of a share of Common Stock on the
principal national securities exchange (including the Nasdaq National Market) on
which the shares of Common Stock are listed or admitted to trading as reported
in The Wall Street Journal or, if not listed or admitted to trading on any
national securities exchange (including the Nasdaq National Market), the average
of the bid and asked prices in the over-the-counter market as furnished by
Nasdaq, or, if the shares of Common Stock are not publicly traded, the Appraised
Market Value.
"NationsBank" has the meaning set forth in the preamble hereto.
"Notes" has the meaning set forth in the preamble hereof.
"Private Placement Legend" means the legend in the form set forth in
Section 2.2 hereof.
"Registration Expenses" has the meaning set forth in Section 8.2 hereof.
"Registrable Securities" shall mean the Warrant Shares.
"Rights" means rights, options or warrants for the purchase of, or
securities convertible into or exchangeable for, Common Stock.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Warrants" have the meaning set forth in the preamble hereto.
"Warrant Certificates" have the meaning set forth in Section 2.1 hereof.
"Warrant Shares" have the meaning set forth in the preamble hereto.
ARTICLE 2 ORIGINAL ISSUE OF WARRANTS
2.1 Form of Warrant Certificates. Any certificate representing the Warrants
(a "Warrant Certificate"), the form of which is attached hereto as Exhibit A,
shall be detachable from this Agreement, the Credit Agreement and any Notes and
shall be dated the date on which it is signed by a duly authorized officer of
the Corporation and shall have such insertions as are appropriate or required or
permitted by this Agreement and may have such letters, numbers or other marks of
identification as the Corporation may deem appropriate and as are not
inconsistent with the provisions of this Agreement.
2.2 Legend. Each Warrant Certificate and, until registered or an exemption
from registration is available, each certificate representing securities
acquired upon exercise of the Warrants shall bear the following legend on the
face thereof:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT"). THE SECURITIES MAY NOT BE
SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT.
2.3 Delivery of the Warrants.
This Agreement authorizes the initial issuance of 3,000,000 Warrants which
amount is subject to increase as provided in Section 3.1. On the Closing Date
(as defined in the Credit Agreement), the Corporation shall issue to NationsBank
in connection therewith (but detachable therefrom) a Warrant Certificate for
3,000,000 Warrants.
If Additional Warrants become authorized under Section 3.1, the Corporation
shall promptly issue and deliver to NationsBank a Warrant Certificate for the
Additional Warrants.
ARTICLE 3 EXERCISE OF WARRANTS
3.1 Exercise of Warrants; Increase in Warrants.
(a) Subject to the limitations and adjustments as provided herein, on or
before the Expiration Date, the Warrants may be exercised on any Business Day as
to all or any portion of the Warrant Shares for which the Warrants are then
exercisable as follows: (a) as of the date of this Agreement and the issuance of
the Warrant Certificate, the number of Warrants which may be exercised pursuant
to this Agreement, and the number of Warrant Shares issuable
upon exercise of such Warrants, shall be 250,000; (b) in the event the
Corporation shall not have paid in full its Obligations (as defined in the
Credit Agreement) on or prior to January 27, 1998, the number of Warrants which
may be exercised pursuant to this Agreement, and the number of Warrant Shares
issuable upon exercise of such Warrants, shall be automatically increased to
1,000,000 effective as of January 27, 1998 unless the Corporation (i) shall have
furnished NationsBank a Plan (as defined in the Credit Agreement) and (ii) shall
be in receipt of not less than $300,000,000 of permanent capital [excluding
indebtedness] (over September 24, 1997 levels) on terms reasonably acceptable to
NationsBank; (c) in the event the Corporation shall not have paid in full its
Obligations (as defined in the Credit Agreement) (or if a binding commitment to
refinance and/or repay the obligations arising under the Credit Agreement does
not exist) on or prior to April 27, 1998, the number of Warrants which may be
exercised pursuant to this Agreement, and the number of Warrant Shares issuable
upon exercise of such Warrants, shall be automatically increased to 2,000,000
effective as of April 27, 1998; and (d) in the event the Corporation shall not
have paid in full its Obligations (as defined in the Credit Agreement) on or
prior to July 26, 1998, (or if a binding commitment to refinance and/or repay
the obligations arising under the Credit Agreement does not exist), the number
of Warrants which may be exercised pursuant to this Agreement, and the number of
Warrant Shares issuable upon exercise of such Warrants, will be automatically
increased to 3,000,000 effective as of July 26, 1998.
(b) If the Corporation shall not have paid in full its Obligations (as
defined in the Credit Agreement) on or prior to July 31, 1998, the number of
Warrants granted hereunder shall increase and the Holders shall be entitled to
immediately exercise and purchase under the terms of this Agreement an amount of
Warrant Shares equal to (x) 7.7% of all shares of Common Stock outstanding or
deemed outstanding on a fully diluted basis on July 31, 1998 less (y) 3,000,000
(the "Additional Warrants").
For purposes of calculating the number of shares of Common Stock
outstanding on July 31, 1998, the number of shares of Common Stock issuable in
connection with the exercise of conversion rights of the holders of (i) the
Corporation's Series A Preference shares (the "Series A Preference Shares") and
(ii) the Breed Capital Trust ____% Convertible Trust Preferred Securities (the
"Trust Preferred Securities") or if the Trust Preferred Securities have not been
issued then 4,000,000 shares of Common Stock issuable upon conversion of the
Corporation's Series B Preference Shares (the "Series B Preference Shares")
shall be deemed to be outstanding, whether or not such conversion rights are
then exercisable or have been exercised.
3.2 Exercise Price. Initially, the Warrant Certificates shall entitle the
Holders thereof, subject to the provisions of this Agreement, to purchase an
aggregate of 3,000,000 Warrant Shares at a per share purchase price (the
"Exercise Price") determined as follows, subject to adjustment as provided in
Article 4 hereof:
The Exercise Price for the 250,000 Warrant Shares exercisable as of the
date of this Agreement shall be $23.125. The Exercise Price for the remaining
Warrant Shares shall be the Market Price of the Common Stock on the day the
Warrants for such Warrant Shares become exercisable under the provisions of
Section 3.1.
The Exercise Price for any additional Warrant Shares to be subject to the
Additional Warrants shall be the Market Price of the Common Stock on July 31,
1998.
Once established for a number of Warrant Shares, the Exercise Price for
those shares shall not be adjusted by reason of any later increase in the total
number of Warrants which may be exercised by the Holders.
3.3 Restrictions on Exercise; Expiration. On or before the Expiration Date,
the Warrants may be exercised on any Business Day as to all or any portion of
the Warrant Shares. If any of the Warrants are not exercised by 5:00 p.m., New
York City time, on the Expiration Date, this Agreement and unexercised Warrants
shall expire and all rights of the Holders hereunder and thereunder shall
terminate unless otherwise provided herein or therein.
3.4 Method of Exercise; Payment of Exercise Price.
(a) In order to exercise all or any of the Warrants, the Holder thereof
must provide written notice to the Corporation at its address set forth in
Section 9.4 hereof specifying the number of Warrants being exercised. Such
notice shall be accompanied by one or more Warrant Certificates representing not
less than the number of Warrants being exercised, together with payment in full
of the per share Exercise Price multiplied by the number of Warrant Shares to be
purchased pursuant to the exercise. The Exercise Price shall be payable, at the
option of the Holder, (i) by wire transfer, certified check, official bank check
or bank cashier's check payable to the order of the Corporation, or (ii) by the
surrender of Warrants exercisable for a number of shares having an aggregate
Market Price as of the date of surrender equal to the aggregate Exercise Price
of all Warrants covered thereby. If the number of Warrants being exercised is
less than the number of Warrants represented by the Warrant Certificate(s)
tendered in connection with the exercise, the Corporation shall issue new
Warrant Certificate(s) for the unexercised Warrants in accordance with
instructions contained in the notice of exercise and this Agreement.
(b) Upon exercise of any Warrant in conformity with the foregoing
provisions, the Corporation shall (i) transfer promptly to, or upon the written
order of the Holder of such Warrant, appropriate evidence of ownership of any
Warrant Shares or other securities or property (including money) to which it is
entitled, registered or otherwise placed in such name or names as may be
directed in writing by the Holder thereof, (ii) deliver such evidence of
ownership and any other securities or property (including money) to the person
or persons entitled to receive the same, and (iii) reissue, as the case may be,
a Warrant Certificate for any unexercised Warrants. A Warrant shall be deemed to
have been exercised immediately prior to the close of business on the date of
the surrender for exercise of the Warrant Certificate representing such Warrant
being exercised and, for all purposes of this Agreement, the person entitled to
receive any Warrant Shares or other securities or property deliverable upon such
exercise shall, as between such person and the Corporation, be deemed to be the
Holder of such Warrant Shares or other securities or property of record as of
the close of business on such date and shall be entitled to receive any Warrant
Shares or other securities or property (including money) to which such person
would have been entitled had such person been the record holder of such Warrant
Shares or other securities or property on such date.
3.5 Dividends and Distributions. For so long as any of the Warrants remain
outstanding and unexercised, the Corporation will, upon the declaration of a
cash dividend upon its Common Stock or other distribution to the holders of its
Common Stock (other than a dividend payable in shares of the Corporation's
Common Stock) and at least 20 days prior to the record date, notify the Holders
of such declaration, which notice will contain, at a minimum, the following
information: (i) the date of the declaration of the dividend or distribution,
(ii) the amount of such dividend or distribution, (iii) the record date of such
dividend or distribution, (iv) the payment date or distribution date of such
dividend or distribution, and (v) the Corporation's best estimate of the
frequency and amount of cash dividends or other distributions (other than a
dividend payable in shares of the Corporation's Common Stock) to be paid or made
in each of the succeeding three years.
ARTICLE 4 ADJUSTMENTS
4.1 Adjustments. The Exercise Price and the number of Warrant Shares
issuable upon exercise of each Warrant shall be subject to adjustment from time
to time as follows:
(a) Adjustments for Change in Common Stock. If the Corporation at any time
after the date hereof (i) declares a dividend payable in shares of the
Corporation's Common Stock, (ii) subdivides its outstanding shares of Common
Stock into a larger number of shares or (iii) combines its outstanding shares of
Common Stock into a smaller number of shares, the number and kind of Warrant
Shares issuable upon exercise of each Warrant, at the time of the record date
for such dividend or of the effective date of such subdivision or combination
shall be proportionately adjusted so that the Holder of any Warrant exercised
after such time shall be entitled to receive the
aggregate number and kind of shares of Common Stock which, if such Warrant
had been exercised immediately prior to such date, such Holder would have owned
upon such exercise and been entitled to receive by virtue of such dividend,
subdivision or combination. An adjustment made pursuant to this Section 4.1(a)
shall become effective immediately after the effective date of such subdivision
or combination. Such adjustment shall be made successively whenever any such
event shall occur.
If at any time, as a result of an adjustment made pursuant to this Section
4.1(a), the Holder of any Warrant thereafter exercised becomes entitled to
receive any securities other than shares of Common Stock, the number of such
other securities so receivable upon exercise of such Warrant shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Warrant Shares contained in
this Section 4.1, and the provisions of this Agreement with respect to the
Warrant Shares shall apply on like terms to any such other securities.
(b) De Minimis Adjustments. No adjustment in the Exercise Price or number
of Warrant Shares purchasable upon exercise of any Warrant pursuant to this
Section 4.1 or Section 4.2 below shall be required unless such adjustment would
require an increase or decrease of at least one-tenth of one percent in the
Exercise Price or number of Warrant Shares purchasable upon the exercise of each
Warrant, as the case may be; provided, however, that any adjustments which by
reason of this Section 4.1(b) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment.
(c) Adjustment of Exercise Price. Whenever the number of Warrant Shares
purchasable upon the exercise of each Warrant is adjusted, as herein provided,
the Exercise Price per Warrant Share payable upon exercise of each Warrant shall
be adjusted (calculated to the nearest $.0001) so that it shall equal the price
determined by multiplying such Exercise Price immediately prior to such
adjustment by a fraction, the numerator of which shall be the number of shares
purchasable upon the exercise of each Warrant immediately prior to such
adjustment, and the denominator of which shall be the number of shares so
purchasable immediately thereafter.
(d) Consolidation, Merger or Sale of Assets; Liquidation.
(i) Subject to the provisions of Section 4.1(d)(ii) below, in the event
that, at any time after the date of this Agreement, the Corporation consolidates
with, merges with or into, or sells, transfers or otherwise disposes of all or
substantially all of its property and assets to, any person, and in connection
therewith consideration is payable to holders of shares of Common Stock, the
Warrants shall remain subject to the terms and conditions set forth in this
Agreement and each Warrant shall, after such consolidation, merger or sale,
entitle the Holder thereof to receive, upon exercise, the number of shares of
capital stock or other securities or property (including cash) of the
Corporation, or of such person resulting from such consolidation or surviving
such merger or to which such sale shall be made, that would have been
distributable or payable on account of the shares of Common Stock (or other
securities or property purchasable upon exercise of the Warrants) if the
Warrants had been exercised immediately prior to such merger, consolidation or
sale (or, if applicable, any record date therefor); and, in any such case, the
provisions of this Agreement with respect to the rights and interests thereafter
of the Holders shall be appropriately adjusted by the Board of Directors, in
good faith, as evidenced by a Board Resolution, so as to be applicable, as
nearly as reasonably possible, to any shares of stock or other securities or any
property thereafter deliverable on the exercise of the Warrants.
(ii) Notwithstanding the provisions of Section 4.1(d)(i) above, (A) if the
Corporation consolidates with, merges with or into, or sells all or
substantially all of its property and assets to, any person, and consideration
is payable to holders of shares of Common Stock in exchange for their shares of
Common Stock in connection with such merger, consolidation or sale which
consists solely of cash, or (B) in the event of the dissolution, liquidation or
winding-up of the Corporation, then the Holders shall receive per share
distributions at the same time and on an equal basis with holders of shares of
Common Stock (or other
securities or property purchasable upon exercise of the Warrants) as if the
Warrants had been exercised immediately prior to such event (or, if applicable,
any record date therefor), less the per share Exercise Price. Upon receipt of
such payment, with respect to the Warrants in respect of which such payment was
received, the rights of the Holders shall terminate except as expressly provided
herein or in the Warrant Certificate and such Warrants shall expire. The Holders
shall promptly deliver such Warrant Certificates to the Corporation for
cancellation. In the case of any such merger, consolidation or sale of assets,
the surviving or acquiring person or, in the event of any dissolution,
liquidation or winding up of the Corporation, the Corporation, shall deposit
promptly on behalf of the Holders the funds, if any, necessary to pay the
Holders pursuant to this Section 4.1(d)(ii).
(e) Adjustments by Board. In addition to the foregoing adjustments, the
Board of Directors may make any other adjustment to increase the number of
Warrant Shares purchasable upon exercise of Warrants or to decrease the Exercise
Price as it may, in good faith, deem desirable to protect the rights and
benefits of the Holders hereunder.
(f) Further Adjustments. If a state of facts shall occur which, without
being specifically controlled by the provisions of this Section 4.1, would not
fairly protect the exercise rights of the Holders in accordance with the
essential intent and principles of such provisions, then the Board of Directors
of the Corporation shall make an adjustment in the application of such
provisions, in accordance with such essential intent and principles, so as to
protect such exercise rights.
4.2 Below Market Price Issuances.
(a) Subject to the provisions of Section 4.2(g) below, if the Corporation
shall issue (other than as provided in Section 4.1) or sell any shares of Common
Stock for a consideration per share less than the Market Price, then at the time
of such issuance or sale the Exercise Price shall be appropriately adjusted to
the number determined by multiplying the Exercise Price in effect immediately
prior to such issuance or sale by a fraction, the numerator of which shall be
the number of shares of Common Stock outstanding, whether issued or issuable
upon conversion or exercise, immediately prior to the issuance or sale of such
shares of Common Stock plus the number of such shares of Common Stock which the
aggregate consideration for such additional shares of Common Stock so issued or
sold would purchase at a consideration per share equal to the Market Price, and
the denominator of which shall be the number of shares of Common Stock
outstanding, whether issued or issuable upon conversion or exercise, immediately
prior to the issuance or sale of such shares of Common Stock plus the number of
shares of Common Stock so issued or sold.
(b) If the Corporation shall issue (other than as provided in Section 4.1)
or sell any Rights, and the consideration per share for which shares of Common
Stock may at any time thereafter be issuable pursuant to such Rights (when added
to the consideration per share of Common Stock, if any, received for such
Rights) shall be less than the Market Price, then the Exercise Price shall be
appropriately adjusted by the number determined by multiplying the Exercise
Price in effect immediately prior to such issuance or sale by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding,
whether issued or issuable upon conversion or exercise, immediately prior to the
issuance or sale of such Rights plus the number of additional shares of Common
Stock which the aggregate offering price of the total number of shares of Common
Stock so offered (when added to the consideration per share of Common Stock, if
any, received for such Rights) would purchase at the Market Price, and the
denominator of which shall be the number of shares of Common Stock outstanding,
whether issued or issuable upon conversion or exercise, immediately prior to the
issuance or sale of such Rights plus the number of additional shares of Common
Stock issuable upon exercise of such Rights.
(c) For the purposes of this Section 4.2, the date as of which the Market
Price shall be computed shall be the date of the issuance or sale of such shares
of Common Stock or Rights.
(d) No adjustment of the Exercise Price shall be made under this Section
4.2 upon the issuance of any shares of Common Stock which are issued pursuant to
the exercise of any Rights, if such adjustment shall previously have been made
upon the issuance of such Rights pursuant to this Section 4.2.
(e) If Rights (or any portion thereof) which shall have given rise to an
adjustment pursuant to this Section 4.2 shall have expired or terminated without
the exercise thereof, or if by reason of the terms of such Rights there shall
have been an increase or increases, with the passage of time or otherwise, in
the exercise or conversion price thereof, then the Exercise Price hereunder
shall be readjusted (but to no greater extent than originally adjusted) on the
basis of (i) eliminating from the computation of any shares of Common Stock
attributable to such Rights as shall have expired or terminated, and (ii)
treating the shares of Common Stock, if any, actually issued pursuant to the
previous exercise of such Rights as having been issued for the consideration
actually received and receivable therefor.
(f) (i) In any such case covered by this Section 4.2, in determining the
amount of consideration received by the Corporation for the Common Stock or
Rights if the consideration is in whole or in part consideration other than
cash, the amount of the consideration shall be deemed to be the fair value of
such consideration as reasonably determined by the Board of Directors of the
Corporation. If shares of Common Stock shall be issued as part of a unit with
Rights, then the amount of consideration for the Rights shall be deemed to be
the amount reasonably determined by the Board of Directors of the Corporation;
and (ii) in case any shares of Common Stock or Rights shall be issued in
connection with any merger or consolidation in which the Corporation is the
surviving corporation, the amount of consideration therefor shall be deemed to
be the fair value, as reasonably determined by the Board of Directors of the
Corporation, of such portion of the assets and business of the nonsurviving
corporation or corporations as the Board shall determine to be attributable to
such shares of Common Stock or Rights.
(g) Notwithstanding the foregoing provisions of this Section 4.2, the
provisions of this Section 4.2 shall not apply to (i) any issuance or sale of
Common Stock or Rights to any employee or other person providing services to the
Corporation as an element of such individual's compensation, (ii) any issuance
or sale of Common Stock in connection with any merger or consolidation or the
acquisition of the assets (other than cash or cash equivalents) of a person or
entity, (iii) the issuance or sale of Common Stock based upon the average
closing price of a share of Common Stock over a period not to exceed 30 trading
days and the average price so obtained is less than the Market Price on the date
of the issuance or sale of such shares of Common Stock, or (iv) any issuance or
sale of any Common Stock issuable upon the exercise of the Warrants or the
warrants issued pursuant to this Warrant Agreement.
(h) For purposes of this Section 4.2, that number of shares of Common Stock
issuable to (i) holders of Series A Preference Shares in excess of 4,883,227
shares, (ii) holders of Trust Preferred Securities in excess of the number of
shares of Common Stock initially issuable to such holders as at the date such
Trust Preferred Securities are issued and (iii) Series B Preference Shares in
excess of 4,000,000 shares shall be deemed to be shares issuable pursuant to
Rights for a consideration less than the Market Price.
4.3 Notice of Adjustment. Whenever the number of Warrant Shares or other
securities or property purchasable upon the exercise of each Warrant or the
Exercise Price is adjusted, as herein provided, the Corporation shall promptly
mail to the Holders a notice of such adjustment or adjustments, and shall
deliver to the Holders a certificate of a firm of independent public accountants
selected by the Board of Directors (who may be the regular accountants employed
by the Corporation) setting forth (i) the number of Warrant Shares or other
securities or property purchasable upon the exercise of each Warrant and the
Exercise Price after such adjustment, (ii) a brief statement of the facts
requiring such adjustment, and (iii) the computation by which such adjustment
was made.
4.4 Statements in the Warrants. Notwithstanding any adjustment in the
Exercise Price or the number or kind of Warrant Shares purchasable upon the
exercise of the Warrants, the Warrant Certificates theretofore or thereafter
issued may continue to express the same price and number and kind of shares as
are stated in the Warrant Certificate initially issued pursuant to this
Agreement.
4.5 Notice of Consolidation, Merger or Sale of Assets. In the event that,
at any time after the date of this Agreement, and prior to 5:00 p.m., New York
City time, on the Expiration Date, there shall be any (a) consolidation or
merger involving the Corporation, or sale, transfer or other disposition of all
or substantially all of the Corporation's property and assets (except a merger
or other reorganization in which the Corporation shall be the surviving
corporation and holders of shares of Common Stock (or other securities or
property purchasable upon exercise of the Warrants) receive no consideration in
respect of their shares or property) or (b) any other transaction contemplated
by Section 4.1(d)(ii) above, then in any such case, the Corporation shall cause
to be mailed to the Holders, at the earliest practicable time (and, in any
event, not later than the later of (i) the date the proxy materials (if any) are
first distributed (or other notice is first given) to the Corporation's
shareholders regarding the proposed transaction, or (ii) 20 days before the
effective date (or record date, if earlier) of such proposed transaction),
notice of the date on which such reorganization, sale, consolidation, merger,
dissolution, liquidation or winding up or other such transaction shall take
place, as the case may be. Such notice shall also set forth such facts as shall
indicate the effect of such action (to the extent such effect may be known at
the date of such notice) on the Exercise Price and the kind and amount of
securities and property purchasable upon exercise of the Warrants. Such notice
shall also specify the date as of which the holders of record of the shares of
Common Stock or other securities or property purchasable upon exercise of the
Warrants shall be entitled to exchange their shares or other securities or
property for securities, money or other property deliverable upon such
reorganization, sale, consolidation, merger, dissolution, liquidation or winding
up or other such transaction, as the case may be.
4.6 Fractional Interests. In computing adjustments under this Article 4,
fractional interests in Common Stock shall be taken into account to the nearest
one-thousandth of a share. No fractional shares of Common Stock or scrip
representing fractional shares of Common Stock shall be issued upon any exercise
of the Warrants, but, in lieu thereof, there shall be paid an amount in cash
equal to the same fraction of the Market Price of a whole share of Common Stock
on the business day preceding the day of exercise.
4.7 No Dilution or Impairment. The Corporation shall not amend its
Certificate of Incorporation or participate in any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, for the purpose of avoiding or seeking to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Corporation, but will at all times, in good faith, assist in
carrying out all such actions as may be reasonably necessary or appropriate in
order to protect the rights of the holders of the Warrants against dilution or
other impairment.
ARTICLE 5 RESERVATION AND AUTHORIZATION OF COMMON SHARES, ETC.
5.1 Reservation and Authorization. The Corporation hereby represents and
warrants that it has reserved, and shall at all times hereafter reserve and keep
available, for issuance upon exercise of the Warrants such number of its duly
authorized but unissued shares of Common Stock or other securities of the
Corporation purchasable upon exercise of the Warrants as will be sufficient to
permit the exercise in full of all outstanding Warrants and will cause
appropriate evidence of ownership of such shares of Common Stock or other
securities to be delivered to the Holders of the Warrants upon their request for
delivery of such, and shall take such action as shall be necessary so that all
such shares of Common Stock or other securities shall, at all times, be duly
approved for listing, subject to official notice of issuance, on each securities
exchange, if any, on which such shares of Common Stock or other securities are
then listed.
5.2 Covenant Regarding Securities. The Corporation covenants that all
shares of Common Stock or other securities of the Corporation that may be issued
upon the exercise of the Warrants will, upon issuance, be (a) duly authorized,
validly issued, fully paid and nonassessable, (b) free from preemptive and any
other similar rights and (c) free from any taxes, liens, charges or security
interest with respect thereto.
5.3 Registration. If the Warrant Shares or any securities of the
Corporation issuable upon the exercise of the Warrants require registration
with, or approval of, any governmental authority (in addition to such as the
Corporation is required to obtain pursuant to Article 8 hereof), or the taking
of any other action (in addition to such as the Corporation is required to
obtain pursuant to Article 8 hereof), under the laws of the United States of
America or any state or political subdivision thereof, before such securities
may be validly offered or sold in compliance with such laws, then the
Corporation covenants that at its expense it will, in good faith and as
expeditiously as practicable, endeavor to secure and maintain such registration
or approval or to take such other action, as the case may be; provided, however,
that the Corporation will not be required to qualify generally to do business in
any jurisdiction where it is not then so qualified or to take any action that
would subject it to general service of process or to taxation in any such
jurisdiction where it is not then so subject.
5.4 S-3 Eligibility. The Corporation has represented to NationsBank that it
is currently eligible to register its securities for resale on Form S-3 under
the provisions of the Securities Act and hereby covenants that it will take all
action appropriate to maintain such eligibility at all times during the term of
this Agreement.
ARTICLE 6 WARRANT TRANSFER BOOKS: RESTRICTIONS ON TRANSFER
6.1 Transfer and Exchange.
(a) The Corporation shall keep and maintain at its office a register in
which, subject to such reasonable regulations as it may prescribe, the
Corporation shall provide for the registration of the Warrant Certificates on
the Corporation's records and transfers or exchanges of the Warrant Certificates
as herein provided.
(b) The Holders may transfer a Warrant Certificate by written notice to the
Corporation stating the name of the proposed transferee and otherwise complying
with the terms of this Agreement.
(c) Subject to Section 6.2(a) hereof, when a Warrant Certificate is
presented to the Corporation with a request to register the transfer of such
Warrant Certificate, the Corporation shall register the transfer or make the
exchange as requested if its requirements for such transactions and any
applicable requirements hereunder are satisfied. To permit registrations of
transfers and exchanges, the Corporation shall execute and deliver such Warrant
Certificate in accordance with the provisions hereof. No service charge shall be
made for any registration of transfer or exchange of the Warrants.
(d) Any Warrant Certificate when duly endorsed in blank shall be deemed
negotiable. The Holder of a Warrant Certificate duly endorsed in blank may be
treated by the Corporation and all other persons dealing therewith as the
absolute owner thereof for any purpose and as the person entitled to exercise
the rights represented thereby, any notice to the contrary notwithstanding; but
until such transfer on such register, the Corporation may treat the registered
Holder thereof as the owner for all purposes.
6.2 Special Transfer Provisions.
(a) By its acceptance of the Warrants represented by a Warrant Certificate
bearing the Private Placement Legend, each Holder of the Warrants acknowledges
the restrictions on transfer of the Warrants and Warrant Shares and agrees that
it will transfer the Warrants and Warrant Shares only in accordance with those
restrictions.
(b) Upon the transfer, exchange or replacement of a Warrant Certificate or
certificate representing Warrant Shares not bearing the Private Placement
Legend, the Corporation shall deliver a Warrant Certificate or stock certificate
that does not bear the Private Placement Legend. Upon the transfer, exchange or
replacement of a Warrant Certificate or certificate representing Warrant Shares
bearing the Private Placement Legend, the Corporation shall
deliver such Warrant Certificate or stock certificate bearing the Private
Placement Legend, unless such legend may be removed from a Warrant Certificate
or stock certificate as provided in the next sentence. The Private Placement
Legend may be removed from a Warrant Certificate or stock certificate if there
is delivered to the Corporation evidence satisfactory to the Corporation to
confirm that neither such legend nor the restrictions on transfer set forth
therein are required to ensure that transfers of such security will not violate
the registration and prospectus delivery requirements of the Securities Act or
applicable law; provided, however, that the Corporation shall not be required to
determine the sufficiency of any such evidence.
6.3 Surrender of a Warrant Certificate. Any Warrant Certificate surrendered
for registration of transfer, exchange or exercise of the Warrants represented
thereby shall be promptly canceled by the Corporation and shall not be reissued
by the Corporation and, except in case of mutilation or partial exercise of the
Warrants represented by such Warrant Certificate, no Warrant Certificate shall
be issued hereunder in lieu thereof.
ARTICLE 7 OPTIONS
7.1 Option to Redeem Warrants. The Corporation shall have the right to
redeem for cash all, but not less than all, outstanding exercisable Warrants and
Warrant Shares held by the Holders by the delivery of a notice of purchase not
less than 20 nor more than 45 days prior to the specified purchase date. The
purchase price per Warrant or Warrant Share shall be an amount equal to the
greater of (a) 135% of the Exercise Price (net of the respective Exercise Price)
or (b) the higher of the Market Price on the date of giving of notice and the
Business Day immediately preceding the specified closing date for such purchase.
ARTICLE 8 REGISTRATION RIGHTS
8.1 Registration by the Corporation. If at any time the Corporation
proposes to register any of its Common Stock under the Securities Act, whether
or not for sale for its own account (except with respect to registration
statements filed on Form S-4 or Form S-8 or any successor forms thereto), it
will give written notice to each Holder, at such Holder's address as it shall
appear upon the Warrant register, of its intention so to do. Upon the written
request of the Holders of not less than 50% of the Warrant Shares, given within
20 days after receipt of the Corporation's notice, the Corporation will use its
best efforts to cause all or a part of the Registrable Securities (in accordance
with the request of the Holders) to be included in the securities to be covered
by the registration statement proposed to be filed by the Corporation. The
Corporation shall not be required to include any Registrable Securities in such
registration statement unless the Holder thereof accepts the terms of the
underwriting as agreed upon between the Corporation (or other persons who have
the right to agree upon the underwriting terms relating to the offering) and the
underwriter(s) selected by the Corporation (or other persons who have the right
to select such underwriter). Notwithstanding any other provision of this Article
8, if the underwriter of such registration advises the Corporation in writing
with a copy to the Holders that marketing factors require a limitation of the
number of shares of Registrable Securities to be underwritten, the Corporation
shall so advise all Holders, and the number of securities including Registrable
Securities that may be included in such registration shall be apportioned pro
rata based on the number of shares requested to be included in such registration
by the Holders and by all other holders of securities participating in such
registration, including the holders of the Preference Shares and the Trust
Preferred Securities and the Common Stock related thereto (other than the
Corporation). The Corporation may, in its sole discretion and without the
consent of the Holders, withdraw any such registration statement and abandon the
proposed offering in which the Holders shall have requested to participate
pursuant to this Section 8.1.
8.2 Registration Procedures and Expenses.
(a) In connection with any registration of Registrable Securities under
this Article 8, the Holders of said
Registrable Securities will furnish in writing such information as is
reasonably requested by the Corporation or its underwriter or underwriters for
inclusion in the registration statement relating to such offering and such other
information and documentation as the Corporation or its underwriter or
underwriters may reasonably request and the Holders hereby agree to comply with
all requirements of the Securities Act or other laws applicable to them in
connection with the offer, sale, underwriting and distribution of its respective
Registrable Securities. The Holders participating in such registration shall not
be required to make any representations or warranties to or agreement with the
Corporation or the underwriters other than those relating to the Holder, its
Registrable Securities and information provided by it in writing for use in the
registration statement. In connection with the registration, the Corporation
will, as expeditiously as possible:
(i) take all actions, supply information and use its best efforts to obtain
all legal opinions, auditors' consents and comfort letters and experts'
computations that may be necessary or desirable to complete the registration
process;
(ii) furnish, at the request of the Holders, on the date that all or any
part of such Registrable Securities is delivered to the underwriters for sale
pursuant to such registration, an opinion dated such date of independent counsel
representing the Corporation for the purposes of such registration, addressed to
the Holders making such request, with respect to such legal matters relating to
the registration in connection with which such opinion is being given in the
same form mutatis, mutandis, as the opinion of such counsel given to
underwriters; and
(iii) notify the Holders of Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.
(b) All expenses incurred by the Corporation in complying with this Article
8, including, without limitation, all registration and filing fees, printing
expenses, fees and disbursements of counsel for the Corporation, auditors' fees
and blue sky fees and expenses ("Registration Expenses"), except for all
underwriting discounts and selling commissions applicable to the sales of the
Holders' Registrable Securities being included in the subject offering and all
fees and disbursements of counsel for the Holders of Registrable Securities
(including counsel designated by any such seller for a "due diligence"
investigation of the Corporation) shall be borne by the Corporation.
8.3 Indemnification.
(a) In the event of a registration of any of the Registrable Securities
under the Securities Act or under any state securities laws pursuant to this
Article 8, the Corporation will indemnify and hold harmless the sellers of such
Registrable Securities, each underwriter of such Registrable Securities, the
Holders and the transferors of the Registrable Securities or any portion thereof
to underwriters, and each other person, if any, who controls such seller,
transferor or underwriter within the meaning of Section 15 of the Securities Act
(each, an "Indemnified Party"), against any and all losses, claims, damages or
liabilities, joint or several, to which such seller, underwriter, Holder,
transferor or controlling person may become subject under the Securities Act and
under any state securities laws (or any successor law) or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of any material fact contained in any registration statement under which such
Registrable Securities shall have been registered under the Securities Act, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; and the Corporation
will reimburse such Indemnified Party
for any legal or any other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Corporation will not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in such registration statement, said
preliminary prospectus or said prospectus or said amendment or supplement in
reliance upon and in conformity with written information furnished to the
Corporation through an instrument executed by such Indemnified Party
specifically for inclusion in such registration statement, preliminary
prospectus, final prospectus, amendment or supplement thereto. Notwithstanding
the foregoing, the liability of any such Holder shall not exceed an amount equal
to the proceeds realized by each such Holder of Registrable Securities sold as
contemplated herein.
(b) In the event of any registration of any Registrable Securities under
the Securities Act pursuant to this Article 8, each seller of such Registrable
Securities (other than any underwriter or dealer purchasing Warrant Shares), and
the holder of the Warrants, as transferors of Registrable Securities, jointly
and severally, will indemnify and hold harmless the Corporation, each person, if
any, who controls the Corporation within the meaning of Section 15 of the
Securities Act, each officer of the Corporation who signs the registration
statement and each director of the Corporation against any and all such losses,
claims, damages, or liabilities arising out of or based upon any untrue
statement or alleged untrue statement in or omission or alleged omission from
any such registration statement, prospectus, amendment or supplement, if the
untrue statement or omission or alleged untrue statement or omission in respect
of which such loss, claim, damage or liability is asserted was made in reliance
upon and in conformity with information furnished in writing to the Corporation
by or on behalf of such seller or transferor specifically for inclusion in such
registration statement, preliminary prospectus, final prospectus, amendment or
supplement thereto; and such seller or transferor will reimburse the Corporation
or such indemnified party for any legal or any other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that, if any losses,
claims, damages or liabilities arise out of or are based upon an untrue
statement, alleged untrue statement, omission or alleged omission contained in
any preliminary prospectus which did not appear in the final prospectus, such
seller or transferor shall not have any such liability with respect thereto to
the Corporation, any person who controls the Corporation within the meaning of
Section 15 of the Securities Act, any officer of the Corporation who signed the
registration statement or any director of the Corporation if the Corporation or
any person on their behalf delivered a copy of the preliminary prospectus to the
person alleging such losses, claims, damages or liabilities and failed to
deliver a copy of the final prospectus, as amended or supplemented if it has
been amended or supplemented, to such person at or prior to the written
confirmation of the sale to such person.
(c) Payments in respect of indemnifications required by this Section 8.3
shall be made by periodic payments during the course of the investigation or
defense, as and when bills are received or expenses incurred. Any party which
proposes to assert the right to be indemnified under this Section 8.3 will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim is to be made against
an indemnifying party under this Section 8.3, notify each such indemnifying
party of the commencement of such action, suit or proceeding, enclosing a copy
of all papers served, but the omission so to notify such indemnifying party of
any such action, suit or proceeding shall not relieve it from any liability
which it may have to any indemnified party otherwise than under this Section
8.3. In case any such action, suit or proceeding shall be brought against any
indemnified party and it shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate in, and, to the
extent that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof with counsel reasonably satisfactory to
such indemnified party, and after notice from such indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof except as provided in the next sentence. The
indemnified party shall have the right to employ its own counsel in any such
action, but the fees and expenses of such counsel shall be at the expense of
such indemnified party, when and as incurred, unless (i) the employment of
counsel by such indemnified party has been authorized by the indemnifying party,
(ii) the
indemnified party shall have received a written opinion from independent
counsel that there may be a conflict of interest between the indemnifying party
and the indemnified party in the conduct of the defense of such action (in which
case the indemnifying party shall not have the right to direct the defense of
such action on behalf of the indemnified party) or (iii) the indemnifying party
shall not in fact have employed counsel to assume the defense of such action. An
indemnifying party shall not be liable for any settlement of any action or claim
effected without its consent. In no event shall an indemnifying party be
required to pay for more than one counsel for an indemnified party, exclusive of
local counsel.
8.4 Conflicting Rights. The Corporation shall not, without the prior
written consent of the Holders of not less than 50% of the Warrant or Warrant
Shares (assuming exercise of all Warrants), grant any rights to any persons to
register any shares of capital stock or other securities of the Corporation if
such right is senior to the rights of the Holders hereunder.
8.5 Termination. The registration rights granted under this Article 8 shall
terminate with respect to any Holder on the date on which the Holder may sell
the Warrants or Warrant Shares without restriction pursuant to Rule 144(k)
promulgated under the Securities Act.
8.6 Registration on Form S-3. At any time prior to two years after the
Expiration Date, the Holder shall have the unlimited right (but no more
frequently than once each six months) to require the Corporation to promptly
register the Warrant Shares on Form S-3. The Corporation will include in the
Form S-3 Registration Statement such information as any underwriters may
reasonably request for marketing reasons. If at the time of sale, only Warrant
Shares are being offered, any underwriters selected in connection with such sale
shall be acceptable to the Selling Holders. The Corporation shall keep the
Holder advised of the initiation of such registration and its effectiveness and
shall take all steps appropriate to maintain such effectiveness for a period of
24 months.
ARTICLE 9 MISCELLANEOUS
9.1 Loss or Mutilation. Upon receipt by the Corporation of (a) evidence
satisfactory to it of the ownership, and the loss, theft, destruction or
mutilation, of any Warrant Certificate and (b) of indemnity satisfactory to it
or, in the case of mutilation, upon surrender and cancellation of the mutilated
Warrant Certificate, then, the Corporation shall execute and deliver to the
registered Holder of the lost, stolen, destroyed or mutilated Warrant
Certificate, in exchange for or in lieu thereof, a new Warrant Certificate of
the same tenor and for a like aggregate number of Warrant Shares. Upon the
issuance of any new Warrant Certificate under this Section 9.1, the Corporation
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and other expenses
in connection therewith. Every new Warrant Certificate executed and delivered
pursuant to this Section in lieu of any lost, stolen or destroyed Warrant
Certificate shall constitute a contractual obligation of the Corporation,
whether or not the allegedly lost, stolen or destroyed Warrant Certificate shall
be at any time enforceable by anyone, and shall be entitled to the benefits of
this Agreement. The provisions of this Section 9.1 are exclusive and shall
preclude (to the extent lawful) all other rights or remedies with respect to the
replacement of the mutilated, lost, stolen, or destroyed Warrant Certificate.
9.2 Payment of Taxes. The Corporation shall pay any taxes and other
governmental charges that may be imposed under the laws of the United States of
America or any political subdivision or taxing authority thereof or therein in
respect of the issue or delivery of Warrant Shares or of other securities or
property deliverable upon exercise of the Warrants (other than income taxes
imposed on the Holders). The Corporation shall not be required, however, to pay
any tax or other charge imposed in connection with any transfer involved in the
issue of any certificate for Warrant Shares or other securities or property
issuable upon the exercise of the Warrants or payment of cash to any person
other than the Holder of a Warrant Certificate surrendered upon exercise of the
Warrants and in case of such transfer or payment, the Corporation shall not be
required to issue any stock certificate or pay any cash
until such tax or charge has been paid or it has been established to the
Corporation's satisfaction that no such tax or charge is due.
9.3 No Merger, Consolidation or Sale of Assets or the Corporation. Except
as otherwise provided herein, the Corporation will not merge into or consolidate
with any other person, or sell or otherwise transfer its property, assets and
business substantially as an entirety to a successor of the Corporation, unless
the person resulting from such merger or consolidation, or such successor of the
Corporation, shall expressly assume, by supplemental agreement satisfactory in
form to the Holders and executed and delivered to the Holders, the due and
punctual performance and observance of each and every covenant and condition of
this Agreement to be performed and observed by the Corporation.
9.4 Notices. Any notice, demand or delivery authorized by this Agreement
shall be in writing and shall be delivered by hand or overnight courier service,
mailed or set by facsimile as follows:
To the Corporation:
BREED Technologies, Inc.
5300 Old Tampa Highway
Lakeland, Florida 33811
Attention: General Counsel
Telephone No. 941-668-6000
To NationsBank:
NationsBank, N.A.
400 N. Ashley Drive, 2nd Floor
Tampa, Florida 33602
Attention: Global Finance
Telecopy: (813) 224-5948
Attention: Joseph J. Troy
With a copy to:
NationsBank, N.A.
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
Telecopy: (704) 386-9923
or such other address or telecopy number as shall have been furnished to
the party giving or making such notice, demand or delivery. Any notice that is
sent in a manner provided herein shall have been duly given when sent.
9.5 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA WITHOUT GIVING EFFECT TO
CONFLICTS OF LAW PRINCIPLES THEREOF.
9.6 Assignment; Successors. Subject to Section 6.2(a) hereof, this
Agreement may be assigned by NationsBank to any Affiliate at any time upon
written notice. This Agreement shall be binding upon and inure to the benefit of
the Corporation and the Holders and their respective successors and assigns, and
the Holders from time to time of the
Warrants. Nothing in this Agreement is intended or shall be construed to
confer upon any person, other than the Corporation, and the Holders, any right,
remedy or claim under or by reason of this Agreement or any part hereof.
9.7 Counterparts. This Agreement may be executed manually or by facsimile
in any number of counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
9.8 Amendments. Any provision of this Agreement or the Warrant Certificate
may be amended or waived if, but only if, such amendment or waiver is in writing
and is signed by the Corporation and the Holders of a majority in interest of
the issued or issuable Warrant Shares; provided, however, if any amendment
adversely affects the Exercise Price or the number of Warrant Shares issued upon
exercise of any Warrant, then the Holders of all the issued or issuable Warrant
Shares must sign the amendment.
9.9 Headings. The descriptive headings of the several Sections of this
Agreement are inserted for convenience only and shall not control or affect the
meaning or construction of any of the provisions hereof.
9.10 Third Party Beneficiaries. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Corporation, on the
one hand, and NationsBank, on the other hand, and the Holders shall have the
right to enforce such agreements directly to the extent it deems such
enforcement necessary or advisable to protect its rights or the rights of the
Holder hereunder.
9.11 Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of the parties
shall be enforceable to the fullest extent permitted by law.
9.12 No Inconsistent Agreements. Except as provided in Section 8.4, the
Corporation has not, as of the date hereof, entered into, nor shall it, on or
after the date hereof, enter into, any agreement that is inconsistent with the
rights granted to the Holders herein or that otherwise conflicts with the
provisions hereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed, as of the date first above written
BREED TECHNOLOGIES, INC.
By:
Name:
Title:
NATIONSBANK, N.A.
By:
Name: Miles C. Dearden III
Title:Senior Vice President
EXHIBIT A
WARRANT CERTIFICATE
THE WARRANTS EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 (THE"SECURITIES ACT"). THE WARRANTS MAY NOT BE SOLD,
TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE WARRANTS UNDER THE SECURITIES ACT OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
No. 1
Warrants to purchase an aggregate of __________shares of Common Stock
WARRANT TO PURCHASE COMMON STOCK
This certifies that _______________________ (the "Holder") or its assigns,
is the owner of ___________________ Warrants to purchase shares of Common Stock
("Common Stock") of BREED Technologies, Inc. (the "Corporation"). Each Warrant
initially entitles the holder thereof (the "Holder") to purchase from the
Corporation one share of Common Stock at the purchase price (the "Exercise
Price") set forth in the Agreement (as defined below), subject to the terms and
conditions hereof and of the Agreement. In order to exercise the Warrants
represented by this Warrant Certificate, the registered Holder hereof must
surrender this Warrant Certificate at the office of Corporation as set forth in
the Agreement or to its successor.
This Warrant Certificate is issued under and in accordance with a Warrant
Agreement dated October __, 1997 by and between NationsBank, N.A. and the
Corporation (the "Agreement"), and is subject to the terms and provisions
contained therein, to all of which terms and provisions the Holder of this
Warrant Certificate consents by acceptance hereof. The Agreement is hereby
incorporated herein by reference and made a part hereof. Reference is hereby
made to the Agreement for a full description of the rights, limitations of
rights, obligations, duties and immunities thereunder of the Corporation and the
Holder of the Warrants. The summary or the terms of the Agreement contained in
this Warrant Certificate is qualified in its entirety by express reference to
the Agreement. All terms used in this Warrant Certificate that are defined in
the Agreement shall have the meanings assigned to them in the Agreement.
Copies of the Agreement are on file at the office of the Corporation and
may be obtained by writing to the Corporation requesting the same.
The number of shares of Common Stock purchasable upon the exercise of the
Warrants and the Exercise Price are subject to adjustment as provided in the
Agreement.
In the event the Corporation merges or consolidates with, or sells all or
substantially all of its assets to, another person, the Holder of the Warrants
will, upon exercise, be entitled to receive the number of shares of stock or
other securities or the amount of money or other property to be received by
holders on Common Stock on an equal basis with holders of Common Stock, as if
the Warrants had been exercised immediately prior to such transaction.
All shares of Common Stock issuable by the Corporation upon the exercise of
the Warrants shall be validly issued, fully paid and nonassessable. The
Corporation shall pay any taxes and other governmental charges that may be
imposed under the laws of the United States of America or any political
subdivision or taxing authority thereof or therein in respect of the issue or
delivery of the Warrant Shares or of other securities or property deliverable
upon exercise of the Warrants (other than income taxes imposed on the Holder).
The Corporation shall not be required, however, to pay any tax or other charge
imposed in connection with any transfer involved in the issue of any
certificate for Warrant Shares or other securities or property issuable
upon the exercise of the Warrants or payment of cash to any person other than
the Holder of a Warrant Certificate surrendered upon exercise of a Warrant and,
in case of such transfer or payment, the Corporation shall not be required to
issue any stock certificate or pay any cash until such tax or charge has been
paid or it has been established to the Corporation's satisfaction that no such
tax or charge is due.
Subject to the requirements set forth in the Agreement and the restrictions
on transfer set forth above, this Warrant Certificate and all rights hereunder
shall be transferable by the registered Holder hereof on the register of the
Corporation maintained by the Corporation for such purpose at its office upon
surrender of this Warrant Certificate duly endorsed, or accompanied by a written
instrument of transfer in form satisfactory to the Corporation duly executed, by
the registered Holder hereof or such Holder's attorney duly authorized in
writing and upon payment of any necessary transfer tax or other governmental
charge imposed upon such transfer. Upon any partial transfer the Corporation
will issue and deliver to such Holder a new Warrant Certificate with respect to
any portion not so transferred.
This Warrant Certificate shall be void and all exercise rights evidenced
hereby shall cease on October __, 200_.
This Warrant Certificate and the Agreement are subject to amendment as
provided in the Agreement.
Dated:_______________, 1997.
BREED TECHNOLOGIES, INC.
By:
Name:
Title: