WARRANT AGREEMENT
between
EURONET SERVICES INC.
and
STATE STREET BANK AND TRUST COMPANY
Warrant Agent
_________________________
Dated as of June . , 1998
TABLE OF CONTENTS
PAGE
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1. Definitions 1
ARTICLE II
ORIGINAL ISSUE OF WARRANTS
Section 2.1. Form of Warrant Certificates 7
Section 2.2. Restrictive Legends 7
Section 2.3. Execution and Delivery of Warrant Certificates 8
Section 2.4. Loss or Mutilation 8
Section 2.5. CUSIP Number 9
ARTICLE III
EXERCISE PRICE; EXERCISE OF WARRANTS
Section 3.1. Exercise Price 9
Section 3.2. Exercise; Restrictions on Exercise 9
Section 3.3. Method of Exercise; Payment of Exercise Price 10
ARTICLE IV
ADJUSTMENTS
Section 4.1. Adjustments 12
Section 4.2. Decrease in Exercise Price. 17
Section 4.3. Notice of Adjustment 17
Section 4.4. Statement on Warrants 18
Section 4.5. Notice of Consolidation, Merger, Etc. 18
Section 4.6. Fractional Interests 18
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ARTICLE V
ARTICLE VWARRANT TRANSFER BOOKS; RESTRICTIONS ON TRANSFER
Section 5.1. Transfer and Exchange 19
Section 5.2. Registration, Registration of Transfer and Exchange 20
Section 5.3. Book-Entry Provisions for the Rule 144A Global Warrants 21
Section 5.4. Special Transfer Provisions 22
Section 5.5. Surrender of Warrant Certificates 25
ARTICLE VI
COVENANTS OF THE COMPANY
Section 6.1. Reservation and Authorization 25
Section 6.2. Filing and Effectiveness of Warrant Shares
Registration Statement 25
Section 6.3. Registration of Common Stock 26
Section 6.4. Blue Sky 27
Section 6.5. Accuracy of Disclosure 27
Section 6.6. Indemnity 27
Section 6.7. Expenses 28
ARTICLE VII
REMEDIES
Section 7.1. Liquidated Damages 28
Section 7.2. Remedies; No Waiver 29
ARTICLE VIII
THE WARRANT AGENT
Section 8.1. Duties and Liabilities 29
Section 8.2. Right to Consult Counsel 31
Section 8.3. Compensation; Indemnification 31
Section 8.4. No Restrictions on Actions 32
Section 8.5. Discharge or Removal; Replacement Warrant Agent 32
Section 8.6. Successor Warrant Agent 33
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ARTICLE IX
WARRANT HOLDERS
Section 9.1. Warrant Holder Not Deemed a Stockholder 33
Section 9.2. Right of Action 33
ARTICLE X
MISCELLANEOUS
Section 10.1. Money Deposited with the Warrant Agent 34
Section 10.2. Payment of Taxes 34
Section 10.3. No Merger, Consolidation or Sale of Assets of the Company 35
Section 10.4. Reports to Holders 35
Section 10.5. Notices 35
Section 10.6. Severability 35
Section 10.7. Binding Effect 36
Section 10.8. Third Party Beneficiaries 36
Section 10.9. Amendments 36
Section 10.10. Headings 36
Section 10.11. Governing Law 36
Section 10.12. Counterparts 37
EXHIBIT A Form of Warrant Certificate
EXHIBIT B Form of Legend for Global Warrants
EXHIBIT C Form of Legend for Warrants Issued as Part of a Unit
EXHIBIT D Form of Private Placement Legend
(iii)
WARRANT AGREEMENT
AGREEMENT (this "Agreement") dated as of June ., 1998 between Euronet
Services Inc. (the "Company"), a Delaware corporation, and State Street Bank and
Trust Company, Warrant Agent (the "Warrant Agent").
Pursuant to the terms of a Purchase Agreement dated June ., 1998 (the
"Purchase Agreement") among the Company on the one hand and Merrill Lynch
Capital Markets Bank Limited Frankfurt/Main Branch, Merrill Lynch & Co. and
Merrill Lynch, Pierce, Fenner & Smith Incorporated (together "Merrill Lynch"
or the "Underwriters"), the Company has agreed to issue and sell to the
Underwriters warrants (each, a "Warrant") entitling the holders thereof to
purchase an aggregate of . shares of common stock, par value $0.02 per share, of
the Company ("Common Stock"), subject to adjustment, as part of . units (the
"Units"), each Unit consisting of DM1,000 principal amount at maturity of .%
Senior Discount Notes due 2008 (the "Notes") to be issued pursuant to the
provisions of an Indenture dated as of June ., 1998 (as in effect on the date
hereof, the "Indenture") between the Company, as issuer, and the Warrant Agent
as trustee, and Warrants. Each Warrant will entitle the registered holder
thereof to purchase . Warrant Shares at an exercise price of . per share,
subject to adjustment. The Notes and the Warrants included in each Unit will be
separately transferable immediately upon the date of issuance ("Separability
Date").
In consideration of the foregoing and of the agreements contained in
the Purchase Agreement and for the purpose of defining the terms and provisions
of the Warrants and the respective rights and obligations thereunder of the
Company, the record holders thereof (the "Holders") and the Warrant Agent, the
Company and the Warrant Agent each hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1. Definitions. (a) As used in this Agreement, the
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following terms shall have the following meanings:
"Affiliate" means, with respect to any specified Person, (a) any other
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Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person or (b) any other Person that
owns, directly or indirectly, 10% or more of such specified Person's voting
Capital Stock or any director of any such specified Person or other Person.
For the purposes of this definition, "control," when used with respect to any
specified Person, means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing; provided that the
Initial Purchasers and their Affiliates shall be deemed not to be "Affiliates"
of the Company solely as a result of transactions contemplated hereby.
"Business Day" means any day which is not a Saturday, a Sunday, or any
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other day on which banking institutions in New York City are not required to be
open.
"Bylaws" means the bylaws of the Company, as the same may be amended
------
or restated from time to time.
"Common Stock" means the common stock, par value $0.002 per share, of
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the Company, and any other class or series of common equity equivalent shares of
the Company hereafter created.
"Commission" means the Securities and Exchange Commission.
----------
"Company Request" or "Company Order" means a written request or order
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signed in the name of the Company by its Chairman, its Chief Executive Officer,
its President, any Vice President, its Treasurer or an Assistant Treasurer, and
delivered to the Warrant Agent.
"Current Market Value" per share of Common Stock or any other security
--------------------
at any date means (i) if the security is not registered under the Exchange Act,
(a) the value of the security, determined in good faith by the Board of
Directors of the Company and certified in a resolution of the Board of Directors
of the Company, based on the most recently completed arm's-length transaction
between the Company and a Person other than an Affiliate of the Company and the
closing of which occurs on such date or shall have occurred within the six-month
period preceding such date, or (b) if no such transaction shall have occurred on
such date or within such six-month period, the fair market value of the security
as determined by a nationally or regionally recognized independent financial
expert (provided that, in the case of the calculation of Current Market Value
for determining the cash value of fractional shares, any such determination
within six months that is, in the good faith judgment of the Board of Directors
of the Company, a reasonable determination of value, may be utilized) or (ii)
(a) if the security is registered under the Exchange Act, the average of the
daily closing sales prices of the securities for the 20 consecutive trading days
immediately preceding such date, or (b) if the securities have been registered
under the Exchange Act for less than 20 consecutive trading days before such
date, then the average of the daily closing sales prices for all of the trading
days before such date for which closing sales prices are available, in the case
of each of (ii)(a) and (ii)(b), as certified to the Warrant Agent by the Chief
Executive Officer, President, any Vice President or the Chief Financial Officer
of the Company. The closing sales price for each such trading day shall be:
(A) in the case of a security listed or admitted to trading on any United States
national securities exchange or quotation system, the closing sales price,
regular way, on such day, or if no sale takes place on such day, the average of
the closing bid and asked prices on such day, (B) in the case of a security not
then listed or admitted to trading on any national securities exchange or
quotation system, the last reported sale price on such day, or if no sale takes
place on such day, the average of the closing bid and asked prices on such day,
as reported by a reputable quotation source designated by the Company, (C) in
the case of a security not then listed or admitted to trading on any
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national securities exchange or quotation system and as to which no such
reported sale price or bid and asked prices are available, the average of the
reported high bid and low asked prices on such day, as reported by a reputable
quotation service, or a newspaper of general circulation in the Borough of
Manhattan, City and State of New York, customarily published on each business
day, designated by the Company, or, if there shall be no bid and asked prices on
such day, the average of the high bid and low asked prices, as so reported, on
the most recent day (not more than 30 days prior to the date in question) for
which prices have been so reported and (D) if there are not bid and asked prices
reported during the 30 days prior to the date in question, the Current Market
Value shall be determined as if the securities were not registered under the
Exchange Act.
"DBC" means Deutsche Borse Clearing AG, its nominees and their
---
respective successors.
"DTC" means The Depository Trust Company, its nominees and their
---
respective successors.
"Event of Default" has the meaning set forth in the Indenture.
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"Exchange Act" means the United States Securities Exchange Act of
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1934, as amended.
"Expiration Date" means ., 2006.
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"Independent Financial Expert" means a nationally recognized United
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States investment banking firm that does not (and whose directors, officers,
employees and Affiliates do not) have a direct or indirect financial interest in
the Company or any of its Affiliates and is not (and none of whose directors,
officers, employees or Affiliates is) a promoter, director or officer of the
Company or any of its Affiliates.
"Interest Payment Date" shall have the meaning provided in the
---------------------
Indenture.
"Issue Date" means June ., 1998.
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"Person" means any individual, corporation, limited liability company,
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partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Prospectus" means the prospectus included in any Warrant Shares
----------
Registration Statement, as amended or supplemented by any prospectus supplement
with respect to the terms of the offering of any of the Warrants or Underlying
Securities covered by such Warrant Shares Registration Statement and by all
other amendments and supplements to the prospectus, including post-effective
amendments and all material incorporated by reference in such prospectus.
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"Public Equity Offering" shall have the meaning provided in the
----------------------
Indenture.
"Registrable Securities" means (i) Warrant Shares that are issuable
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upon exercise of Warrants, (ii) Warrant Shares that have been issued upon
exercise of Warrants, (iii) any securities issued or delivered to the holders of
Warrants as part of a distribution made by the Company on a pro rata basis to
holders of its Common Stock and (iv) any securities issued or issuable upon
exercise of the Warrants as a result of a Fundamental Transaction.
"Securities Act" means the United States Securities Act of 1933, as
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amended.
"Semiannual Accrual Date" shall have the meaning provided in the
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Indenture.
"Spread" means, with respect to any Warrant, the Current Market Value
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of the Common Shares subject to such Warrant, less the Exercise Price of such
Warrant, in each case as adjusted as provided herein.
"Underlying Securities" shall mean the Warrant Shares or other
---------------------
securities issuable or issued upon exercise of the Warrants.
"Value Report" means a report of an Independent Financial Expert
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stating the Current Market Value of the Warrant Shares and other securities or
property of the Company, if any, being valued as of any date and containing a
brief statement as to the nature and scope of the examination or investigation
upon which the determination of value was made and the method of valuation used.
"Warrant Registration Default" means, and shall be deemed to have
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occurred, if (i) on the Exercisability Date, the Warrant Shares Registration
Statement has not been declared effective by the Commission, or (ii) the
Commission shall have issued a stop order suspending the effectiveness of the
Warrant Shares Registration Statement, at a time when such Warrant Shares
Registration Statement is required to be kept effective by the Company pursuant
to the provisions of this Agreement.
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"Warrant Shares" means the Common Stock issuable upon exercise of the
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Warrants.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
Term Section
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Agent Members 5.3(a)
Agreement Preamble
Certificated Warrant 2.3
Company Preamble
Event Date 7.1(b)
Exercisability Date 3.2
Exercise Event 3.2
Exercise Price 3.1
Exercise Rate 4.1
Fundamental Transaction 4.1(h)
Global Warrant 2.3
Holders Recitals
Indemnified Party 6.5
Indenture Recitals
Merrill Lynch Recitals
Notes Recitals
Purchase Agreement Recitals
Separability Date Recitals
Surviving Person 4.1(h)
Suspension Period 6.4(b)(ii)
Transfer Agent 5.2
Initial Purchasers Recitals
Units Recitals
Warrant Recitals
Warrant Agent Preamble
Warrant Certificates 2.1
Warrant Register 5.1
Warrant Registration Damages 7.1
Warrant Shares Registration Statement 6.4
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ARTICLE II
ORIGINAL ISSUE OF WARRANTS
Section 2.1. Form of Warrant Certificates. Certificates representing
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the Warrants (the "Warrant Certificates") shall be in registered or bearer form
and substantially in the form attached hereto as Exhibit A. The Warrants sold
outside the United States shall be represented by a single, permanent global
Warrant in bearer form, deposited with DBC (the "DBC Global Warrant"), which
will represent the Warrants held by accountholders in DBC. All Warrants sold to
U.S. investors (and others requesting registered Warrants), will be represented
by one or more global registered Warrants deposited with a custodian for, and
registered in the name DTC or its nominee (the "DTC Global Warrant"). The
Warrant Certificates shall be dated the date on which countersigned by the
Warrant Agent 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 and such legends and endorsements typed, stamped, printed,
lithographed or engraved thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be required to
comply with any law or with any rule or regulation pursuant thereto, or to
conform to usage.
The terms and provisions contained in the form of Warrant Certificate
annexed hereto as Exhibit A shall constitute, and are hereby expressly made, a
part of this Agreement.
Section 2.2. Restrictive Legends. (a) Each Global Warrant shall
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bear the legend set forth in Exhibit B on the face thereof.
(b) Each Warrant Certificate shall bear the legend set forth in
Exhibit C on the face thereof.
Section 2.3. Execution and Delivery of Warrant Certificates. Warrant
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Certificates evidencing Warrants to purchase initially an aggregate of up to [
] shares of Common Stock may be executed, on or after the Issue Date, by the
Company and delivered to the Warrant Agent for countersignature, and the Warrant
Agent shall thereupon countersign and deliver such Warrant Certificates upon the
order and at the direction of the Company to the purchasers thereof on the date
of issuance. The Warrant Agent is hereby authorized to countersign and deliver
Warrant Certificates as required by this Section 2.3 or by Section 2.4, 3.3 or
5.3.
The Warrant Certificates shall be executed on behalf of the Company by
its Chief Executive Officer, President or any Vice President, either manually or
by facsimile signature printed thereon. The Warrant Certificates shall be
countersigned manually by the Warrant Agent and shall not be valid for any
purpose unless so countersigned. In case any officer of the Company whose
signature shall have been placed upon any of the Warrant Certificates shall
cease to be such officer of the Company before countersignature by the
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Warrant Agent and issuance and delivery thereof, such Warrant Certificates may,
nevertheless, be countersigned by the Warrant Agent and issued and delivered
with the same force and effect as though such person had not ceased to be such
officer of the Company.
Section 2.4. Loss or Mutilation. Upon receipt by the Company and the
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Warrant Agent of evidence satisfactory to them, in their reasonable discretion,
of the ownership and the loss, theft, destruction or mutilation of any Warrant
Certificate and of indemnity satisfactory to them and (in the case of
mutilation) upon surrender and cancellation thereof, then, in the absence of
notice to the Company or the Warrant Agent that the Warrants represented thereby
have been acquired by a bona fide purchaser, the Company shall execute and the
Warrant Agent shall countersign and deliver to the registered Holder of the
lost, stolen, destroyed or mutilated Warrant Certificate, in exchange for or in
lieu thereof, a new Warrant Certificate of the same tenor and for a like
aggregate number of Warrants. Upon the issuance of any new Warrant Certificate
under this Section 2.4, the Company may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and other expenses (including the reasonable fees and expenses of the
Warrant Agent and of counsel to the Company) in connection therewith. Every new
Warrant Certificate executed and delivered pursuant to this Section 2.4 in lieu
of any lost, stolen or destroyed Warrant Certificate shall constitute a
contractual obligation of the Company, whether or not the allegedly lost, stolen
or destroyed Warrant Certificates shall be at any time enforceable by anyone,
and shall be entitled to the benefits of this Agreement equally and
proportionately with any and all other Warrant Certificates duly executed and
delivered hereunder. The provisions of this Section 2.4 are exclusive and shall
preclude (to the extent lawful) all other rights or remedies with respect to the
replacement of mutilated, lost, stolen, or destroyed Warrant Certificates.
Section 2.5. CUSIP Number. The Company in issuing the Warrants may
----------- ------------
use a "CUSIP" number(s), and if so, the Warrant Agent shall use the CUSIP
number(s) in notices as a convenience to Holders; provided that any such notice
may state that no representation is made as to the correctness or accuracy of
the CUSIP number(s) printed in the notice or on the Warrants, and that reliance
may be placed only on the other identification numbers printed on the Warrants.
ARTICLE III
EXERCISE PRICE; EXERCISE OF WARRANTS
Section 3.1. Exercise Price. Each Warrant Certificate shall, when
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countersigned by the Warrant Agent, entitle the Holder thereof, subject to and
upon compliance with the provisions of this Agreement, to purchase initially one
share of Common Stock at an exercise price of . per Warrant Share (the "Exercise
Price"), subject to adjustment as provided in Sections 4.1 and 4.2 hereof.
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Section 3.2. Exercise; Restrictions on Exercise. Subject to the
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terms and conditions set forth herein, the Warrants shall be exercisable at any
time or from time to time after the date hereof (the "Exercisability Date");
provided, however, that Warrants may not be exercised (i) prior to the date on
which the Warrant Agent has received written notice from the Company that a
Warrant Shares Registration Statement has been declared effective with respect
to the Warrant Shares, (ii) at any time after the Warrant Agent has received
written notice from the Company or the Commission that a stop order issued by
the Commission suspending the effectiveness of such Warrant Shares Registration
Statement is in effect or (iii) during any Suspension Period permitted under
Section 6.2(b)(ii), provided that the Warrant Agent has received notice from the
Company of such Suspension Period. Any Warrants not exercised by 5:00 p.m., New
York City time, on the Expiration Date shall expire and all rights of the
Holders of such Warrants shall terminate. The Company shall give notice not less
than 90, and not more than 120, calendar days prior to the Expiration Date to
the Holders of all then outstanding Warrants to the effect that the Warrants
will terminate and become void as of the close of business on the Expiration
Date.
Additionally, pursuant to Section 4.1(h)(ii) hereof, the Warrants will
expire and all rights of the Holders of such Warrants shall terminate in the
event the Company merges or consolidates with or sells all or substantially all
of its property and assets to a Person (other than an Affiliate of the Company)
if the consideration payable to holders of shares of Common Stock in exchange
for their Common Stock in connection with such merger, consolidation or sale
consists solely of cash. The Company shall give the Warrant Agent written
notice of either of the events described in this paragraph immediately upon the
occurrence thereof.
Section 3.3. Method of Exercise; Payment of Exercise Price. (a)
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(i) Each Warrant may only be exercised in whole. In order to exercise all or
any of the Warrants represented by a Warrant Certificate, the Holder thereof
shall surrender for exercise the Warrant Certificate to the Warrant Agent at its
corporate trust office set forth in Section 10.5 hereof, with the subscription
form set forth in the Warrant Certificate (or a copy thereof furnished by the
Warrant Agent) duly executed, together with payment in full of the Exercise
Price then in effect for each Warrant Share or other securities or property
issuable upon exercise of the exercised Warrants; such payment shall be made, at
the option of the Holder, (x) in cash or by certified or official bank or bank
cashier's check payable to the order of the Company, (y) by surrendering
additional Warrants to the Warrant Agent having an aggregate Spread equal to the
aggregate Exercise Price of the Warrants being exercised or (z) a combination of
(x) and (y). All provisions of this Warrant Agreement shall be applicable with
respect to an exercise of a Warrant Certificate pursuant to (ii) above for less
than the full number of Warrants represented thereby. No payment or adjustment
shall be made on account of any dividends on the Common Stock issued upon
exercise of a Warrant.
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(ii) Upon receipt of the Warrant Certificate, the duly executed
Subscription Form and such payment, the Warrant Agent shall promptly notify the
Company in writing of such surrender.
(iii) All payments received upon exercise of Warrants shall be
delivered to the Company by the Warrant Agent as reasonably instructed in
writing by the Company. If fewer than all of the Warrants represented by a
Global Warrant are exercised, the Global Warrant shall not be surrendered to the
Warrant Agent in accordance with Section 3.3(a)(i) and the Warrant Agent shall
decrease or reflect on its records, as custodian for DTC, or its nominee, a
decrease in the aggregate number of Warrants represented by such Global Warrant
equal to the number of Warrants exercised.
(b) Upon exercise of any Warrants, following surrender of a Warrant
Certificate in conformity with the foregoing provisions, the Warrant Agent shall
instruct the Company to transfer promptly to or upon the written order of the
Holder of such Warrant Certificate appropriate evidence of ownership of any
Warrant Shares or the other securities or property (including money), if any, to
which such exercising Holder is then entitled, registered or otherwise placed in
such name or names as may be directed in writing by the Holder, and to deliver
such evidence of ownership and the other securities or property (including
money), if any, to the Person or Persons entitled to receive the same, together
with an amount in cash in lieu of any fraction of a share as provided in Section
4.6 hereof; provided that the Holder of such Warrant shall be responsible for
the payment of any transfer taxes required as the result of any change in
ownership of such Warrants or the issuance of Warrant Shares other than to the
registered owner of such Warrants and the Company may deduct such taxes from any
payment of money to be made and shall not be required to issue or deliver such
Warrant Shares (if such taxes are not deducted in full) unless and until the
Holder shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company and the Warrant Agent that such
tax has been paid.
(c) Upon exercise of a Warrant or Warrants, and after receipt of
evidence of payment of any taxes as desribed in Section 3.3(b), the Warrant
Agent is hereby authorized and directed to instruct any transfer agent of the
Warrant Shares (and all such transfer agents are hereby irrevocably authorized
to comply with all such instructions) in accordance with paragraph (b) of this
Section 3.3, to issue, transfer and deliver certificates for the necessary
number of Warrant Shares to which the Holder of the Warrant or Warrants may be
entitled. A Warrant shall be deemed to have been exercised immediately prior to
the close of business on the date of exercise, as provided in and in accordance
with paragraph (a) of this Section 3.3, of such Warrant 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 Company, 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, and the Company shall deliver to such Person,
the Warrant Shares and the other securities or property (including money), if
any. Without limiting the foregoing, if, at the date referred
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to above, the transfer books for the Warrant Shares or other securities
purchasable upon the exercise of the Warrants shall be closed, the certificates
for the Warrant Shares or other securities in respect of which such Warrants are
then exercised shall be issuable as of the date on which such books shall next
be opened, and until such date the Company shall be under no duty to deliver any
certificate for such Warrant Shares or other securities; provided that the
transfer books or records, unless required by law, shall not be closed at any
one time for a period longer than 20 calendar days.
ARTICLE IV
ADJUSTMENTS
Section 4.1. Adjustments. The number of Warrant Shares issuable
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upon exercise of each Warrant (the "Exercise Rate") shall be subject to
adjustment from time to time as follows:
(a) Stock Dividends; Stock Splits; Reverse Stock Splits;
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Reclassifications. In case the Company shall (i) pay a dividend or make any
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other distribution with respect to its Common Stock in shares of any class or
series of its capital stock, (ii) subdivide its outstanding Common Stock, (iii)
combine its outstanding Common Stock into a smaller number of shares or (iv)
issue any shares of its capital stock in a reclassification of its Common Stock
(other than a reclassification in connection with a merger, consolidation or
other business combination which will be governed by Section 4.1(h)), the
Exercise Rate immediately prior to the record date for such dividend or
distribution or the effective date of such subdivision, or combination or
reclassification shall be adjusted so that the Holder of each Warrant shall
thereafter be entitled to receive the kind and number of shares of Common Stock
or other securities of the Company which such Holder would have been entitled to
receive after the happening of any of the events described above had such
Warrant been exercised immediately prior to the happening of such event or any
record date with respect thereto. An adjustment made pursuant to this Section
4.1(a) shall become effective immediately after the effective date of such event
retroactive to the record date, if any, for such event.
(b) Rights; Options; Warrants. In case the Company shall issue
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rights, options, warrants or convertible or exchangeable securities (other than
a convertible or exchangeable security subject to Section 4.1(a)) to all holders
of its Common Stock, entitling them to subscribe for or purchase shares of
Common Stock at a price per share which is lower (at the record date for such
issuance) than the then Current Market Value per share of Common Stock, the
Exercise Rate thereafter shall be determined by multiplying the number of
Warrant Shares theretofore purchasable upon exercise of each Warrant by a
fraction, the numerator of which shall be the number of shares of Common Stock
outstanding immediately prior to the issuance of such rights, options, warrants
or convertible or exchangeable securities plus the number of additional shares
of Common Stock offered for subscription or purchase, and the denominator of
which shall be the
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number of shares of Common Stock outstanding immediately prior to the issuance
of such rights, options, warrants or convertible or exchangeable securities plus
the number of shares which the aggregate offering price of the total number of
shares of Common Stock so offered would purchase at the then Current Market
Value per share of Common Stock. Such adjustment shall be made whenever such
rights, options, warrants or convertible or exchangeable securities are issued,
and shall become effective retroactively immediately after the record date for
the determination of shareholders entitled to receive such rights, options,
warrants or convertible or exchangeable securities.
(c) Issuance of Common Stock at Lower Values. In case the Company
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shall, in a transaction in which Sections 4.1(a) and 4.1(b) are inapplicable,
issue or sell shares of Common Stock, or rights, options, warrants or
convertible or exchangeable securities containing the right to subscribe for or
purchase shares of Common Stock to affiliates, at a price per share of Common
Stock (determined in the case of such rights, options, warrants or convertible
or exchangeable securities, by dividing (A) the total amount receivable by the
Company in consideration of the issuance and sale of such rights, options,
warrants or convertible or exchangeable securities, plus the total
consideration, if any, payable to the Company upon exercise, conversion or
exchange thereof, by (B) the total number of shares of Common Stock covered by
such rights, options, warrants or convertible or exchangeable securities) that
is lower than the Current Market Value per share of Common Stock in effect
immediately prior to such sale or issuance, then the Exercise Rate thereafter
shall be determined by multiplying the number of Warrant Shares theretofore
purchasable upon exercise of such Warrant by a fraction, the numerator of which
shall be the number of shares of Common Stock outstanding immediately after such
sale or issuance and the denominator of which shall be the number of shares of
Common Stock outstanding immediately prior to such sale or issuance plus the
number of shares of Common Stock which the aggregate consideration received
(determined as provided below) for such sale or issuance would purchase at such
Current Market Value per share of Common Stock. Such adjustment shall be made
successively whenever any such sale or issuance is made. For purposes of this
Section 4.1(c), the shares of Common Stock which the holder of any such rights,
options, warrants or convertible or exchangeable securities shall be entitled to
subscribe for or purchase shall be deemed to be issued and outstanding as of the
date of such sale and issuance and the consideration received by the Company
therefor shall be deemed to be the consideration received by the Company for
such rights, options, warrants or convertible or exchangeable securities, plus
the consideration or premiums stated in such rights, options, warrants or
convertible or exchangeable securities to be paid for the shares of Common Stock
covered thereby.
In case the Company shall issue and sell shares of Common Stock or
rights, options, warrants or convertible or exchangeable securities containing
the right to subscribe for or purchase shares of Common Stock for a
consideration consisting, in whole or in part, of property other than cash or
its equivalent, then in determining the "price per share of Common Stock" and
the "consideration" receivable by or payable to the Company for purposes of the
first sentence of this Section 4.1(c), the Board of Directors of the Company
shall determine, in good faith, the fair value of such property, which
determination shall be
11
evidenced by a resolution of the Board of Directors of the Company. In case the
Company shall issue and sell rights, options, warrants or convertible or
exchangeable securities containing the right to subscribe for or purchase shares
of Common Stock, together with one or more other securities as part of a unit at
a price per unit, then in determining the "price per share of Common Stock" and
the "consideration" receivable by or payable to the Company for purposes of the
first sentence of this Section 4.1(c), the Board of Directors of the Company
shall determine, in good faith, the fair value of the rights, options, warrants
or convertible or exchangeable securities then being sold as part of such unit,
which determination shall be evidenced by a resolution of the Board of Directors
of the Company.
(d) Distributions of Debt, Assets, Subscription Rights or Convertible
-----------------------------------------------------------------
Securities. In case the Company shall fix a record date for the making of a
- ----------
distribution to all holders of its Common Stock of evidences of its
indebtedness, assets (excluding cash dividends payable out of earnings and
profits arising after the date hereof) or securities (excluding those referred
to in subsections 4.1(a), 4.1(b) and 4.1(c) above), then in each case the
Exercise Rate thereafter shall be determined by multiplying the number of
Warrant Shares purchasable upon the exercise of such Warrant immediately prior
to such record date by a fraction, the numerator of which shall be the Current
Market Value per share of Common Stock immediately prior to the record date for
such distribution and the denominator of which shall be the Current Market Value
per share of Common Stock immediately prior to the record date for such
distribution less the then fair value (as determined in good faith by the Board
of Directors of the Company, which determination shall be evidenced by a
resolution of the Board of Directors of the Company) of the portion of the
assets, evidence of indebtedness, or securities so distributed applicable to one
share of Common Stock. Such adjustment shall be made whenever any such
distribution is made, and shall become effective on the date of distribution
retroactive to the record date for the determination of shareholders entitled to
receive such distribution.
(e) Expiration of Rights, Options and Conversion Privileges. Upon the
-------------------------------------------------------
expiration of any rights, options, warrants or conversion or exchange privileges
that have previously resulted in an adjustment hereunder, if any thereof shall
not have been exercised, the Exercise Rate shall, upon such expiration, be
readjusted and shall thereafter, upon any future exercise, be such as they would
have been had they been originally adjusted (or had the original adjustment not
been required, as the case may be) as if (i) the only shares of Common Stock so
issued were the shares of Common Stock, if any, actually issued or sold upon the
exercise of such rights, options, warrants or conversion or exchange rights and
(ii) such shares of Common Stock, if any, were issued or sold for the
12
consideration actually received by the Company upon such exercise plus the
consideration, if any, actually received by the Company for issuance, sale or
grant of all such rights, options, warrants or conversion or exchange rights
whether or not exercised; provided, however, that no such readjustment shall
have the effect of decreasing the number of Warrant Shares issuable upon
exercise of each Warrant by a number, in excess of the amount or number of the
adjustment initially made in respect to the issuance, sale or grant of such
rights, options, warrants or conversion or exchange rights.
(f) De Minimis Adjustments. No adjustment in the Exercise Rate shall
----------------------
be required unless such adjustment would require an increase or decrease of at
least one percent (1%) in the number of Warrant Shares purchasable upon the
exercise of each Warrant; provided, however, that any adjustments which by
reason of this Section 4.1(f) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
shall be made to the nearest one-thousandth of a share.
(g) 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 such
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
Warrant 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. Following any adjustment to the Exercise
Price pursuant to this Article IV, the amount payable, when adjusted, shall
never be less than the par value per share of Common Stock at the time of such
adjustment.
(h) Consolidation, Merger, Etc. (i) If the Company, in a single
--------------------------
transaction or through a series of related transactions, consolidates with or
merges with or into any other person or sells, assigns, transfers, leases,
conveys or otherwise disposes of all or substantially all of its properties and
assets to another person or group of affiliated persons or is a party to a
merger or binding share exchange which reclassifies or changes its outstanding
Common Stock (a "Fundamental Transaction"), as a condition to consummating any
such transaction the person formed by or surviving any such consolidation or
merger if other than the Company or the person to whom such transfer has been
made (the "Surviving Person") shall enter into a supplemental warrant agreement.
The supplemental warrant agreement shall provide (A) that the Holder of a
Warrant then outstanding may exercise it for the kind and amount of securities,
cash or other assets which such Holder could have received immediately after the
Fundamental Transaction if such Holder had exercised the Warrant immediately
before the effective date of the transaction (regardless of whether the Warrants
are then exercisable and without giving effect to the payment of the Exercise
Price through the surrender of additional Warrants), assuming (to the extent
applicable) that such Holder (x) was not a constituent persons or an affiliate
of a constituent person to such transaction, (y) made no election with respect
thereto and (z) was treated alike with the plurality of non-electing Holders,
and (B) that the
13
Surviving Person shall succeed to and be substituted for every right and
obligation of the Company in respect of the Warrant Agreement and the Warrants.
The Surviving Person shall mail to Holders of Warrants at the addresses
appearing on the Warrant Register a notice briefly describing the supplemental
warrant agreement. If the issuer of securities deliverable upon exercise of
Warrants is an affiliate of the Surviving Person, that issuer shall join in the
supplemental warrant agreement.
(ii) Notwithstanding the foregoing, if the Company enters into a
Fundamental Transaction with another person (other than a subsidiary of the
Company) and consideration is payable to holders of the shares of Common Stock
(or other securities or property) issuable or deliverable upon exercise of the
Warrants that are exercisable in exchange for their shares in connection with
such Fundamental Transaction which consists solely of cash, then the Holders of
Warrants shall be entitled to receive distributions on the date of such event on
an equal basis with holders of such shares (or other securities or property
issuable or deliverable upon exercise of the Warrants) as if the Warrants had
been exercised immediately prior to such event, less the Exercise Price
therefor. Upon receipt of such payment, if any, the rights of a Holder of a
Warrant shall terminate and cease and such Holder's Warrants shall expire. In
case of any such Fundamental Transaction, the Surviving Person shall deposit
promptly with the Warrant Agent the funds, if any, necessary to pay the Holders
of the Warrants. After receipt of such deposit from such Surviving Person or
the Company, and after receipt of surrendered Warrant Certificates, the Warrant
Agent shall make payment by delivering a check in such amount as is appropriate
to such Person or Persons as it may be directed in writing by the Holder
surrendering such Warrants.
(i) Adjustments at Discretion of the Board of Directors; When No
------------------------------------------------------------
Adjustment Required. In addition to the foregoing adjustments, the Board of
- -------------------
Directors of the Company may make any other adjustment to increase the Exercise
Rate or to decrease the Exercise Price as it may, in good faith, deem desirable
to protect the rights and benefits of Holders. Notwithstanding any other
provision of this Section 4.1, no adjustment in the Exercise Rate need be made
for a transaction referred to in subsections (a), (b), (c), (d) or (e) above (A)
pursuant to the exercise of the Warrants, (B) pursuant to any security
convertible into, or exchangeable or exercisable for, shares of Common Stock
outstanding as of the date of this Warrant Agreement, (C) upon the conversion,
exchange or exercise of any convertible, exchangeable or exercisable security as
to which the issuance thereof has previously been the subject of any required
adjustment pursuant to this Warrant Agreement and (D) upon the conversion,
exchange or exercise of options to acquire shares of Common Stock by officers,
directors or employees of the Company; provided that such options were issued
prior to the date of this Agreement and are exercised pursuant to the terms of
such options in existence on the date of this Agreement or the exercise price of
such options, at the time of issuance thereof, is at least equal to the then
Current Market Value of Common Stock underlying such options. 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) Selection of Independent Financial Expert. If the services of an
-----------------------------------------
Independent Financial Expert are required to determine the Current Market Value,
the Current Market Value shall be deemed to be equal to the value set forth in a
Value Report
14
as determined by an Independent Financial Expert, which shall be selected by the
Board of Directors not more than ten Business Days following the occurrence of
any event referred to in subsections 4.1(b), 4.1(c) or 4.1(d), and retained on
customary terms and conditions, using one or more valuation methods that the
Independent Financial Expert, in its best professional judgment, determines to
be most appropriate, but without giving effect to any discount for lack of
liquidity, the fact that the Company may have no class of equity securities
registered under the Exchange Act or the fact that the Warrant Shares and other
securities or property issuable upon exercise of the Warrants represent a
minority interest in the Company. Within two calendar days after such selection
of the Independent Financial Expert, the Company shall deliver to the Warrant
Agent a notice setting forth the name of such Independent Financial Expert. The
Company shall cause the Independent Financial Expert to deliver a Value Report
to the Company, and the Company shall deliver to the Warrant Agent, within 45
calendar days of the appointment of the Independent Financial Expert, a
certificate attaching the Value Report. The Warrant Agent shall have no duty
with respect to the Value Report of any Independent Financial Expert, except to
keep it on file and available for inspection by the Holders. The determination
as to Current Market Value in accordance with the provisions of this Section
4.1(j) shall be conclusive on all Persons.
Section 4.2. Decrease in Exercise Price. The Board of Directors of
------------ --------------------------
the Company, in its sole discretion, shall have the right at any time, or from
time to time, to decrease the Exercise Price of the Warrants, such reduction of
the Exercise Price to be effective for a period or periods to be determined by
it, but in no event for a period of less than 30 calendar days. Any exercise by
the Board of Directors of the Company of any rights granted in this Section 4.2
must be preceded by a written notice from the Company to each Holder of the
Warrants and to the Warrant Agent setting forth the reduction in the Exercise
Price, which notice shall be mailed at least 30 calendar days prior to the
effective date of such decrease in the Exercise Price of the Warrants. Any
reduction of the Exercise Price pursuant to provisions of this Section 4.2 shall
not alter or adjust the number of Warrant Shares or shares of other securities
issuable upon the exercise of the Warrants.
Section 4.3. Notice of Adjustment. Whenever the number of Warrant
------------ --------------------
Shares or other stock or property purchasable upon the exercise of each Warrant
or the Exercise Price is adjusted, as herein provided, the Company shall
promptly notify the Warrant Agent of such adjustment in writing and shall cause
the Warrant Agent promptly to mail, by first-class mail, postage prepaid, at the
expense of the Company, to each Holder notice of such adjustment or adjustments
and shall deliver to the Warrant Agent a certificate of a firm of independent
public accountants selected by the Board of Directors of the Company (who may be
the regular accountants employed by the Company or its independent auditors)
setting forth the number of Warrant Shares or other stock or property
purchasable upon the exercise of each Warrant and the Exercise Price after such
adjustment, setting forth a brief statement of the facts requiring such
adjustment and setting forth the computation by which such adjustment was made.
Such certificate shall be conclusive evidence of the correctness of such
adjustment. The Warrant Agent shall be entitled to conclusively rely on such
certificate and shall be under no duty or responsibility
15
with respect to any such certificate, except to exhibit the same, from time to
time, to any Holder desiring an inspection thereof during reasonable business
hours. The Warrant Agent shall not at any time be under any duty or
responsibility to any Holders to determine whether any facts exist which may
require any adjustment of the Exercise Price or the number of Warrant Shares or
other securities or property purchasable on exercise of the Warrants, or with
respect to the validity, nature or extent of any such adjustment when made, or
with respect to the method employed in making such adjustment, or the validity
or value (or the kind or amount) of any Warrant Shares or other securities or
property which may be purchasable on exercise of the Warrants. The Warrant
Agent shall not be responsible for any failure of the Company to make any cash
payment or to issue, transfer or deliver any Warrant Shares or stock
certificates or other common stock or properties upon the exercise of any
Warrant.
Section 4.4. Statement on Warrants. Irrespective of any adjustment
------------ ---------------------
in the Exercise Price or the Exercise Rate, 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 4.5. Notice of Consolidation, Merger, Etc. In case at any
------------ ------------------------------------
time after the Issue Date and prior to 5:00 p.m., New York City time, on the
Expiration Date, there shall be any (i) Fundamental Transaction (except a merger
or other reorganization in which the Company shall be the Surviving Person and
holders of Common Stock (or other securities or property purchasable upon
exercise of the Warrants) receive no consideration in respect of their shares)
or (ii) any other transaction contemplated by Section 4.1(h)(ii) above, then in
any one or more of such cases, the Company shall cause to be mailed to the
Warrant Agent and each Holder of a Warrant, at the earliest practicable time
(and, in any event, not less than 20 calendar days before any date set for
definitive action), notice of the date on which such transaction shall take
place. 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 the Common Stock and
other securities, money and other property deliverable upon exercise of the
Warrants. Such notice shall also specify the date as of which the holders of
record of the Common Stock or other securities or property issuable upon
exercise of the Warrants shall be entitled to exchange their shares for
securities, money or other property deliverable upon such reorganization, sale,
consolidation or merger, as the case may be.
Section 4.6. Fractional Interests. The Company shall not be
------------ --------------------
required to issue fractional shares of Common Stock on the exercise of Warrants.
If more than one Warrant shall be presented for exercise at the same time by the
same Holder, the number of Warrant Shares which shall be issuable upon such
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
4.6, be issuable on the exercise of any Warrant (or specified portion thereof),
the Company shall pay an amount in cash calculated by it to be equal to the then
Current Market Value per share of Common Stock multiplied by such fraction
computed to the
16
nearest whole cent. Notwithstanding anything contained in this Section 4.6, if
the Company is required to comply with laws or regulations in connection with
payment of cash in lieu of fractional shares, such laws or regulations shall
govern the making of such payment. The Company shall immediately notify the
Warrant Agent in writing if any such laws or regulations shall require the
Company to supplement or amend this Agreement or to modify or amend the
procedures or manner of such payment or any other provisions set forth herein
and the Warrant Agent shall not be responsible or liable for making any such
determination, complying with any such laws or regulations or for the failure of
the Company to so notify the Warrant Agent.
ARTICLE V
WARRANT TRANSFER BOOKS; RESTRICTIONS ON TRANSFER
Section 5.1. Transfer and Exchange. The Warrant Certificates shall
------------ ---------------------
be issued in global form only. The Company shall cause to be kept at the office
of the Warrant Agent a register (the "Warrant Register") in which, subject to
such reasonable regulations as it may prescribe, the Company shall provide for
the registration of Warrant Certificates and transfers or exchanges of Warrant
Certificates as herein provided. All Warrant Certificates issued upon any
registration of transfer or exchange of Warrant Certificates shall be the valid
obligations of the Company, evidencing the same obligations, and entitled to the
same benefit under this Agreement, as the Warrant Certificates surrendered for
such registration of transfer or exchange.
A Holder may transfer its Warrants only by complying with the terms of
this Agreement. No such transfer shall be effected until, and such transferee
shall succeed to the rights of a Holder only upon, final acceptance and
registration of the transfer by the Warrant Agent in the Warrant Register.
Prior to the registration of any transfer of Warrants by a Holder as provided
herein, the Company, the Warrant Agent, any agent of the Company or the Warrant
Agent may treat the Person in whose name the Warrants are registered as the
owner thereof for all purposes and as the Person entitled to exercise the rights
represented thereby, any notice to the contrary notwithstanding. Furthermore,
any Holder of a Global Warrant, shall, by acceptance of such Global Warrant,
agree that transfers of beneficial interests in such Global Warrant may be
effected only through a book-entry system maintained by the Holder of such
Global Warrant (or its agent), and that ownership of a beneficial interest in
the Warrants represented thereby shall be required to be reflected in a book
entry. When Warrants are presented to the Warrant Agent with a request to
register the transfer or to exchange them for an equal amount of Warrants of
other authorized denominations, the Warrant Agent shall register the transfer or
make the exchange in accordance with the provisions hereof.
Section 5.2. Registration, Registration of Transfer and Exchange.
----------- ---------------------------------------------------
Each Warrant shall initially be issued as part of a Unit consisting of $1,000
principal amount at maturity of Notes and . Warrants.
17
To permit registrations of transfers and exchanges, the Company shall
make available to the Warrant Agent a sufficient number of executed Warrant
Certificates to effect such registrations of transfers and exchanges. No
service charge shall be made to the Holder for any registration of transfer or
exchange of Warrants, but the Company may require from the transferring or
exchanging Holder payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable upon exchanges pursuant to Section 2.4 and
exchanges in respect of portions of Warrants not exercised and the Company may
deduct such taxes from any payment of money to be made and such transfer or
exchange shall not be consummated (if such taxes are not deducted in full)
unless or until the Holder shall have paid to the Company the amount of such tax
or shall have established to the satisfaction of the Company and the Warrant
Agent that such tax has been paid.
Section 5.3. Book-Entry Provisions. Members of, or participants in,
---------------------
DBC or DTC as the case may be ("Agent Members") shall have no rights under this
Agreement with respect to the Global Warrants, held on their behalf by DBC, DTC
or the Warrant Agent as their custodian, as the case may be, and DBC and DTC may
be treated by the Company, the Warrant Agent and any agent of the Company or the
Warrant Agent as the absolute owners of such Global Warrants for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Warrant Agent or any agent of the Company or the Warrant Agent from
giving effect to any written certification, proxy or other authorization
furnished by DBC or DTC or impair, as between DBC or DTC and their Agent
Members, the operation of customary practices governing the exercise of the
rights of a beneficial owner of any Warrants.
(b) Transfers of the Global Warrant shall be limited to transfers to
DBC or DTC, their successors or their respective nominees. Interests of
beneficial owners in the Global Warrants may be transferred in accordance with
the rules and procedures of DBC and DTC. If DBC or DTC, as the case may be, at
any time are unwilling, unable or ineligible to act as depositary or cease to be
a clearing agency under the relevant laws of Germany, in the case of DBC, or the
Exchange Act, in the case of DTC, and in such a case successor depositary is
appointed by the Company within 60 days, definitive Warrant certificates will be
transferred to owners of beneficial interests in the Global Warrants held by DBC
or DTC, as the case may be.
(c) Any beneficial interest in one of the Global Warrants that is
transferred to a Person who takes delivery in the form of an interest in the
other Global Warrant will, upon transfer, cease to be an interest in such Global
Warrant and become an interest in the other Global Warrant and, accordingly,
will thereafter be subject to all transfer restrictions, if any, and other
procedures applicable to beneficial interests in such other Global Warrant for
as long as it remains such an interest.
(d) In connection with the transfer of an entire Global Warrant to
beneficial owners pursuant to paragraph (b) of this Section, such Global Warrant
shall be deemed to be surrendered to the Warrant Agent for cancellation, and the
Company shall
18
execute, and the Warrant Agent shall countersign and deliver, to each beneficial
owner identified by DBC or DTC, as the case may be, in exchange for its
beneficial interest in such Global Warrant, the number of Warrants theretofore
represented by such Person's beneficial interest in such Global Warrant.
(e) The registered holder of the Global Warrants may grant proxies and
otherwise authorize any Person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Agreement or the Warrants.
Section 5.4 Records. The Warrant Agent shall retain copies of all
----------- -------
letters, notices and other written communications received pursuant to Section
5.3 hereof. The Company shall have the right to inspect and make copies of all
such letters, notices or other written communications at any reasonable time
upon the giving of reasonable written notice to the Warrant Agent.
Section 5.5. Surrender of Warrant Certificates. Any Warrant
------------ ---------------------------------
Certificate surrendered for registration of transfer, exchange or exercise of
the Warrants represented thereby shall, if surrendered to the Company, be
delivered to the Warrant Agent, and all Warrant Certificates surrendered or so
delivered to the Warrant Agent shall be promptly cancelled by the Warrant Agent
and shall not be reissued by the Company and, except as provided in this Article
V in case of an exchange or in Article III hereof in case of the exercise of
less than all the Warrants represented thereby or in case of a mutilated Warrant
Certificate, no Warrant Certificate shall be issued hereunder in lieu thereof.
The Warrant Agent shall deliver to the Company from time to time or otherwise
dispose of such cancelled Warrant Certificates as the Company may direct in
writing.
ARTICLE VI
COVENANTS OF THE COMPANY
Section 6.1. Reservation and Authorization. During the period
------------ -----------------------------
within which the Warrants may be exercised in accordance with this Agreement,
the Company will have authorized and reserved and will keep available for issue
upon exercise of Warrants as herein provided, such number of its authorized but
unissued shares of Common Stock or other securities of the Company deliverable
upon exercise of 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 of the Company to be delivered
to any Holder or to such Holder's order in accordance with this Agreement upon
the Warrant Agent's instruction for delivery upon the exercise of Warrants. The
Company shall use its best efforts to file and cause to be declared effective a
Warrant Shares Registration Statement with respect to the Warrant Shares and to
ensure that all such shares of Common Stock representing such shares will, at
all times, be duly approved for listing subject to official notice of issuance
on each securities exchange, if
19
any, on which such Common Stock is then listed. The Company covenants that all
shares of Common Stock or other securities of the Company that may be issued
upon the exercise of the Warrants will, upon issuance, be duly authorized,
validly issued, fully paid and nonassessable, and free from preemptive rights
and all taxes, liens, charges and security interests with respect to the issue
thereof.
Section 6.2. Filing and Effectiveness of Warrant Shares Registration
------------ -------------------------------------------------------
Statement. (a) The Company shall use its best efforts to file pursuant to Rule
- ---------
415 under the Securities Act and cause to be declared effective on or prior to
the Exercisability Date, a shelf registration statement on the appropriate form
(such shelf registration statement, including the Prospectus, any amendments and
supplements to such shelf registration statement, including post-effective
amendments, and all exhibits and all material incorporated by reference in such
registration statement being the "Warrant Shares Registration Statement")
covering the issuance of the Underlying Securities upon exercise of the
Warrants.
(b) (i) The Company shall use its best efforts to keep such Warrant
Shares Registration Statement continuously effective until the earlier of such
time as all Warrants have been exercised and the Expiration Date.
(ii) Notwithstanding the foregoing, the Company may suspend the use of
the Warrant Shares Registration Statement for a period not to exceed an
aggregate of 60 days in any twelve month period (any such period a "Suspension
Period") (i) an event or circumstance occurs and is continuing as a result of
which the Warrant Shares Registration Statement, any related prospectus or any
document incorporated therein by reference as then amended or supplemented or
proposed to be filed 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) the Company determines, in its
good faith judgment, that (A) the disclosure of such an 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 that has not yet been publicly disclosed, and disclosure at that
time would jeopardize the success of such transaction.
(iii) The Company will promptly notify the Warrant Agent in
writing (A) on the date that the Warrant Shares Registration Statement is
declared effective, (B) on any date that the Commission issues a stop order
suspending the effectiveness of such Warrant Shares Registration Statement, (C)
on any date that any such stop order ceases to be effective and (D) of the
commencement and termination of any Suspension Period. The Company will furnish
the Warrant Agent with current Prospectuses meeting the requirements of the
Securities Act and the rules and regulations of the Commission thereunder in
sufficient quantity to permit the Warrant Agent to deliver a Prospectus to each
Holder of a Warrant upon the exercise thereof.
20
(c) If reasonably requested by a selling holder or the managing
underwriter or agent, as the case may be, in connection with the offering of
Registrable Securities pursuant to the Warrant Shares Registration Statement,
the Company will prepare a prospectus supplement that complies with the
Securities Act and the rules and regulations of the SEC thereunder and that sets
forth the aggregate amount of the Registrable Securities being sold, the name or
names of any underwriters or agents participating in the offering, the price at
which the Registrable Securities are to be sold, any discounts, commissions or
other items constituting compensation, and such other information as the selling
holders or the managing underwriter or agent, as the case may be, and the
Company deem appropriate in connection with the offering of the Registrable
Securities.
Section 6.3. Piggy-Back Registration Rights. If the Company proposes
------------ ------------------------------
to file a Registration Statement with the SEC respecting an offering, whether
primary or secondary, of any equity securities of the Company, the Company shall
give written notice to all the Holders of Warrants or Registrable Common Stock
at least 30 days prior to the initial filing of the Registration Statement
relating to such offering. Each such Holder shall have the right, within 20
days after delivery of such notice, to request in writing that the Company
include all or a portion of such Holder's Registrable Common Stock in such
Registration Statement ("Piggyback Registration Rights"). The Company shall
include in the public offering all of the Registrable Common Stock that a Holder
has requested be included, unless the underwriter for the public offering or the
underwriter managing the public offering (in either case, the "managing
underwriter") delivers a notice (a "Cutback Notice") pursuant to Clause (b)(i)
or (b) (ii) below. The managing underwriter may deliver one or more Cutback
Notices at any time prior to the execution of the underwriting agreement for the
public offering.
(i) If the proposed public offering includes securities to be offered
for the account of the Company ("Company Shares"), the provisions of this Clause
(b)(i) shall be applicable if the managing underwriter delivers a Cutback Notice
stating that, in its opinion, the number of shares of Common Stock that selling
stockholders propose to sell therein, whether or not such selling stockholders
have the right to include shares therein (the "Other Shares"), plus the number
of shares of Registrable Common Stock that the Holders have requested to be sold
therein, plus the Company Shares, exceeds the maximum number of shares specified
by the managing underwriter in such Cutback Notice that may be distributed
without adversely affecting the price, timing or distribution of the Company
Shares. Such maximum number of shares that may be so sold, excluding the
Company Shares, are referred to as the "Includible Shares".
If the managing underwriter delivers such Cutback Notice, the Company
shall be entitled to include all of the Company Shares in the public offering
and the requesting Holders shall be entitled to include in the public offering
up to their pro rata portion of the Includible Shares. The number of shares of
Registrable Common Stock entitled to be included in such registration statement
shall be allocated among requesting
21
Holders in proportion to the respective numbers of shares of Registrable Common
Stock that each Holder owns or has the right to acquire.
(ii) If the proposed Initial public offering is entirely a secondary
offering, the provisions of this Clause (b)(ii) shall be applicable if the
managing underwriter delivers a Cutback Notice stating that, in its opinion, the
aggregate number of shares of Registrable Common Stock and Other Shares proposed
to be sold therein exceeds the maximum number of shares (the "Includible
Secondary Shares") specified by the managing underwriter in such Cutback Notice
that may be distributed without adversely affecting the price, timing or
distribution of the Common Stock being distributed. If the managing underwriter
delivers such Cutback Notice, the requesting Holders shall be entitled to
include in the public offering up to their pro rata portion of the Includible
Secondary Shares. The number of shares of Registrable Common Stock included in
such Registration Statement shall be allocated pro rata among Holders as
described in Clause (b) (i).
(c) The underwriting agreement for any proposed public offering shall
provide that each requesting Holder shall have the right to sell either its
Warrants or its Registrable Common Stock to the underwriters and that the
underwriters shall purchase the Warrants or Registrable Common Stock after
exercise of the Warrants at the price paid by the underwriters for the Common
Stock (or if the underwriters purchase a security convertible into or
exchangeable for, or rights to purchase, Common Stock, then at the value per
share of Common Stock as determined by the managing underwriter at the time of
the offering) sold by the Company or selling stockholders (taking into account,
in the case of Warrants, the number of shares of Common Stock issuable upon
exercise of each Warrant) less, in the case of a purchase of Warrants, the
Exercise Price then in effect.
(d) If the managing underwriter requests that the participants in the
public offering grant the underwriters an over-allotment or "green shoe" option
for the purpose of covering over-allotments that may be made by the underwriters
in connection with such offering, then a portion of the shares proposed to be
sold by each Holder, which portion shall not exceed 15% and shall equal the
portion of the shares proposed to be sold by other sellers in the offering that
is applied to the same purpose, shall be made subject to such over-allotment
option, unless otherwise agreed in the underwriting agreement relating thereto.
(e) The provisions of this Section 6.3 shall not become applicable in
connection with a transaction in which a registration statement is filed by the
Company on Form S-4 or S-8 or any successor forms.
22
ARTICLE VII
REGISTRATION PROCEDURES
7.1. Covenants of the Company Applicable to All Registration
-------------------------------------------------------
Statements. This Section 7.1 applies to all Registration Statements filed by the
- ----------
Company and referred to in Article VI hereof. The securities covered by each
such Registration Statement are referred to as the "Registered Securities".
Each underwriter, agent, selling broker, dealer manager or similar securities
industry professional participating in any offering of the Registered Securities
is referred to as an "underwriter" or "agent" and any agreement entered into
with an underwriter or agent is referred to as an "underwriting or agency
agreement". In connection with each such registration, the Company covenants
with each Holder participating in such offering (each, a "selling holder") and
each underwriter or agent participating therein as follows:
(a) The Company will notify the selling holders and the managing
underwriter or agent, immediately, and confirm the notice in writing, (i) when
the Registration Statement, or any post-effective amendment to the Registration
Statement, shall have become effective, or any supplement to the Prospectus or
any amended Prospectus shall have been filed, (ii) of the receipt of any
comments from the SEC, (iii) of any request by the SEC to amend the Registration
Statement or amend or supplement the Prospectus or for additional information,
(iv) of the issuance by the SEC of any stop order suspending the effectiveness
of the Registration Statement or of any order preventing or suspending the use
of any preliminary prospectus, or of the suspension of the qualification of the
Registered Securities for offering or sale in any jurisdiction, or of the
institution or threatening of any proceedings for any of such purposes, (v) if
at any time when a prospectus is required by the Securities Act to be delivered
in connection with sales of the Registered Securities the representations and
warranties of the Company contemplated by Section 7.1(j) cease to be true and
correct and (vi) of the existence of any fact that results in the Registration
Statement, the Prospectus or any document incorporated therein by reference
containing an untrue statement of material fact or omitting to state a material
fact required to be stated therein or necessary to make any statement therein
not misleading.
(b) The Company will use every reasonable effort to prevent the
issuance of any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of any preliminary
prospectus and, if any such order is issued, to obtain the lifting thereof at
the earliest possible moment.
(c) The Company will not at any time file or make any amendment to the
Registration Statement, or any amendment of or supplement to the Prospectus
(including amendments of the documents incorporated by reference into the
Prospectus), of which the selling holders or the managing underwriter or agent
shall not have previously been advised and furnished a copy, or to which the
selling holders, the managing underwriter or agent or counsel for the selling
holders or counsel for the underwriters or agents shall reasonably object.
(d) The Company will furnish to each selling holder and to the
managing underwriter or agent, without charge, as many signed copies of the
Registration Statement (as originally filed) and of all amendments thereto,
whether filed before or after the
23
Registration Statement becomes effective, copies of all exhibits and documents
filed therewith, including documents incorporated by reference into the
Prospectus, and signed copies of all consents and certificates of experts, as
such selling holder or the managing underwriter or agent may reasonably request,
and will furnish to the managing underwriter, for each other underwriter
participating in an underwritten offering, one conformed copy of the
Registration Statement as originally filed and of each amendment thereto
(including documents incorporated by reference into the Prospectus but without
exhibits).
(e) The Company will deliver to each selling holder and each
underwriter or agent participating in such offering, without charge, as many
copies of each preliminary prospectus as such selling holder or such underwriter
or agent may reasonably request, and the Company hereby consents to the use of
such copies for purposes permitted by the Securities Act. The Company will
deliver to each selling holder and each underwriter or agent participating in
such offering, without charge, from time to time during the period when the
Prospectus is required to be delivered under the Securities Act, such number of
copies of the Prospectus (as supplemented or amended) as such selling holder or
such underwriter or agent may reasonably request.
(f) The Company will comply to the best of its ability with the
Securities Act and the rules and regulations of the SEC thereunder, and the
Exchange Act and the rules and regulations of the SEC thereunder so as to permit
the completion of the distribution of the Registered Securities in accordance
with the intended method or methods of distribution contemplated in the
Prospectus. If at any time when a prospectus is required by the Securities Act
to be delivered in connection with sales of the Registered Securities any event
shall occur or condition exist as a result of which it is necessary, in the
opinion of counsel for the selling holders, counsel for the underwriters or
agents or counsel for the Company, to amend the Registration Statement or amend
or supplement the Prospectus in order that the Prospectus will not include an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion any of such counsel, at any such time to
amend the Registration Statement or amend or supplement the Prospectus in order
to comply with the requirements of the Securities Act or the rules and
regulations of the SEC thereunder, the Company will promptly prepare and file
with the SEC, subject to Section 7.1(c), such amendment or supplement as may be
necessary to correct such untrue statement or omission or to make the
Registration Statement or the Prospectus comply with such requirements.
(g) The Company will use its best efforts, in cooperation with the
selling holders or the underwriters or agents, as the case may be, to qualify
the Registered Securities for offering and sale under the applicable securities
laws of such states and other jurisdictions as the selling holders or the
managing underwriter or agents, as the case may be, may designate; provided,
--------
however, that the Company shall not be obligated to file any general consent to
- -------
service of process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified or to subject
itself to taxation in respect of doing business in any jurisdiction in which it
is not otherwise so subject. The
24
Company will file such statements and reports as may be required by the laws of
each jurisdiction in which the Registered Securities have been qualified as
above provided.
(h) The Company will use its best efforts to effect the listing of the
Registered Securities covered by a Registration Statement on each securities
exchange on which similar securities issued by the Company are then listed if
requested by the holders of at least a majority of the Registered Securities, or
if requested by the managing underwriter.
(i) If any of the Registered Securities are debt securities, the
Company will use its best efforts to cause such Registered Securities to be
rated with Moody's Investors Services, Inc. and Standard & Poor's Corporation or
other appropriate rating agencies, if so requested by the holders of at least a
majority of such Registered Securities, or if requested by the managing
underwriter.
(j) The Company shall make such representations and warranties to the
selling holders and the underwriters or agents, if any, in form, substance and
scope as are customarily made by issuers to underwriters in primary underwritten
public offerings.
(k) On the effective day of the Registration Statement or, in the case
of an underwritten offering, on the date of delivery of the Registered
Securities sold pursuant thereto, the Company shall cause to be delivered to the
selling holders and the underwriters or agents, if any, opinions of counsel for
the Company, which counsel, and opinions (in form, scope and substance), shall
be reasonably satisfactory to counsel for the underwriters or agents, if any,
and counsel for the selling holders, covering the matters customarily covered in
opinions given to underwriters in primary underwritten public offerings.
(l) Immediately prior to the effectiveness of the Registration
Statement or, in the case of an underwritten offering, at the time of delivery
of any Registered Securities sold pursuant thereto, the Company shall cause to
be delivered to the selling holders and the underwriters or agents, if any,
letters from the Company's independent public accountants stating that such
accountants are independent public accountants with respect to the Company
within the meaning of the Securities Act and the applicable published rules and
regulations of the SEC thereunder, and otherwise in customary form and covering
such financial and accounting matters as are customarily covered by letters of
the independent public accountants delivered in connection with primary
underwritten public offerings.
(m) If the managing underwriter or agent so requests, the underwriting
or agency agreement shall set forth in full the provisions hereof relating to
covenants, registration expenses, lock-up agreements, indemnification and
contribution contained in this Article VII, with such changes therein as may be
agreed to by the managing underwriter or agent, the Company and the selling
holders.
25
(n) The Company shall deliver such documents and certificates as may
be requested by any selling holder or the underwriters or agents, if any, to
evidence compliance with Section 7.1(j) and with any customary conditions
contained in the underwriting or agency agreement, if any.
(o) The Company will make available for inspection by representatives
of the selling holders and the underwriters or agents participating in such
offering and any attorney or accountant retained by such selling holders or
underwriters or agents, all financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company's officers,
directors and employees to supply all information reasonably requested by any
such representative, underwriter or agent, attorney or accountant in connection
with the preparation of the Registration Statement; provided, however, that any
-------- -------
records, information or documents that are designated by the Company in writing
as confidential shall be kept confidential by each such person unless such
records, information or documents become part of the public domain through no
fault of such person or unless disclosure thereof is required by court or
administrative order.
(p) The Company will make generally available to its security holders
as soon as practicable, but not later than 45 days after the close of the period
covered thereby (or 90 days if such period is a fiscal year), an earnings
statement of the Company (in form complying with the provisions of Rule 158
under the rules and regulations of the SEC under the Securities Act), covering a
period of 12 months beginning after the effective date of the Registration
Statement but not later than the first day of the Company's fiscal quarter next
following such effective date.
(q) The Company will enter into such customary agreements, including a
customary underwriting or agency agreement with the underwriters or agents, if
any, and take all such other actions in connection with the offering in order to
expedite or facilitate the disposition of the Registered Securities.
7.2. Covenants of the Selling Holders. (a) Each selling holder
--------------------------------
shall use its best efforts to furnish to the Company such information regarding
the distribution of such Registered Securities as the Company may from time to
time reasonably request in writing.
(b) Each selling holder agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Section
7.1(a)(vi), such selling holder will forthwith discontinue the disposition of
its Registered Securities pursuant to the Registration Statement until such
selling holder's receipt of the copies of a supplemented or amended Prospectus
contemplated by Section 7.1(f), or until it is advised in writing by the Company
that the use of such Prospectus may be resumed. If the Company shall give any
such notice, the Company shall extend the period of time during which the
Company is required to keep the Registration Statement effective and usable by
the number of days during the period from the date of receipt of such notice to
the date when each selling holder of Registered Securities covered by such
Registration Statement either receives the copies of a supplemented or amended
Prospectus contemplated by
26
Section 7.1(f) or is advised in writing by the Company that the use of such
Prospectus may be resumed.
(c) Each selling holder agrees to make customary representations and
warranties to the Company and the underwriters or agents, if any, in form,
substance and scope as are customarily made by selling holders in underwritten
public offerings, but no selling holders, as such, shall be required to make any
representation or warranty as to the accuracy or completeness of the
Registration Statement (except as to written information furnished to the
Company by such selling holder expressly for use therein).
7.3. Registration Expenses. (a) The Company will pay and bear all
---------------------
costs and expenses incident to the performance of its obligations under this
Agreement with respect to each registration pursuant to Article VI, including:
(i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits), as originally filed and as
amended, any preliminary prospectuses and the Prospectus and any amendments or
supplements thereto, and the cost of furnishing copies thereof to the selling
holders or the underwriters or agents, as the case may be;
(ii) the preparation, printing and distribution of any underwriting or
agency agreement, certificates representing the Registered Securities, any Blue
Sky Survey and other documents relating to the performance of and compliance
with this Agreement;
(iii) the fees and disbursements of the Company's counsel and
accountants and the reasonable fees and disbursements of one counsel retained by
the selling holders pursuant to Section 7.4(b);
(iv) the fees and disbursements of the underwriters or agents
customarily paid by issuers or sellers of securities and the reasonable fees and
expenses of any special experts retained in connection with the Registration
Statement, but excluding underwriting discounts and commissions and transfer
taxes, if any;
(v) the qualification of the Registered Securities Stock under
applicable securities laws in accordance with Section 7.1(g) and any filing for
review of the offering with the National Association of Securities Dealers,
Inc., including filing fees and fees and disbursements of counsel for the
selling holders and the underwriters or agents, as the case may be, in
connection therewith, in connection with any Blue Sky Survey and in connection
with any reserve share program;
(vi) all fees and expenses incurred in connection with the listing, if
any, of any of the Registered Securities on any securities exchange pursuant to
Section 7.1(h); and
27
(vii) the fees charged by any rating agency in connection with the
rating, if any, of the Registered Securities pursuant to Section 7.1(i).
(b) In connection with the filing of each Registration Statement, the
Company will reimburse the selling holders for the reasonable fees and
disbursements of one firm of legal counsel, which shall be chosen by the holders
of at least a majority of the Registered Securities to be included in such
offering and shall be reasonably satisfactory to the Company.
(c) Each selling holder will pay and bear all costs and expenses
incident to the delivery of the Registered Securities to be sold by it,
including any stock transfer taxes payable upon the sale of such Registered
Securities to the purchaser thereof and any underwriting discounts or
commissions payable to underwriters or agents in connection therewith.
7.4. Indemnification. (a) In connection with each registration
---------------
pursuant to Article VI, the Company agrees to indemnify and hold harmless each
selling holder, each underwriter or agent participating in such offering, and
each person, if any, who controls any selling holder or any such underwriter or
agent within the meaning of Section 15 of the Securities Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of an untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any
amendment thereto), or the omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to make the statements therein
not misleading or arising out of an untrue statement of a material fact included
in any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any governmental
agency or body, commenced or threatened, or of any claim whatsoever based upon
any such untrue statement or omission, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever, as incurred (including
fees and disbursements of counsel chosen by the Company), reasonably incurred in
investigating, preparing or defending against any litigation, or investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such expense
is not paid under subparagraph (i) or (ii) above;
28
provided, however, that this indemnity does not apply to any loss, liability,
- -------- -------
claim, damage or expense to the extent arising out of an untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by any selling
holder or any underwriter or agent expressly for use in the Registration
Statement (or any amendment thereto), or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(b) Each selling holder agrees severally, and not jointly, to
indemnify and hold harmless the Company, its directors, each of its officers who
signed a Registration Statement, each underwriter or agent participating in such
offering and the other selling holders, and each person, if any, who controls
the Company, any such underwriter or agent and any other selling holder within
the meaning of Section 15 of the Securities Act, against any and all loss,
liability, claim, damage and expense described in the indemnity contained in
Section 7.4(a), as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such selling
holder expressly for use in the Registration Statement (or any amendment
thereto), or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto).
(c) The obligations of the Company under Section 7.5(a) and of the
selling holders under Section 7.5(b) to indemnify any underwriter or agent who
participates in an offering (or any person, if any, controlling such underwriter
or agent within the meaning of Section 15 of the Securities Act) shall be
conditioned upon the underwriting or agency agreement with such underwriter or
agent containing an agreement by such underwriter or agent to indemnify and hold
harmless the Company, its directors, each of its officers who signed a
Registration Statement, and each selling holder, and each person, if any, who
controls the Company or any such selling holder within the meaning of Section 15
of the Securities Act, against any and all loss, liability, claim, damage and
expense described in the indemnity contained in Section 7.5(a), as incurred, but
only with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or any amendment
thereto), or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by such underwriter or agent expressly for use in the
Registration Statement (or any amendment thereto), or any preliminary prospectus
or the Prospectus (or any amendment or supplement thereto).
(d) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve it from any liability which it may have otherwise than
on account of this indemnity agreement. An indemnifying party may participate
at its own expense in the defense of such action. In no event shall the
indemnifying party or parties be liable for the fees and expenses of more than
one counsel for the Company, its officer, directors and controlling persons as a
group,
29
for the selling holders and their controlling persons as a group, and for the
underwriters or agents and their controlling persons as a group, in connection
with any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances.
7.5. Contribution. (a) In order to provide for just and equitable
------------
contribution in circumstances under which the indemnity provided for in this
Article VII is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Company, the
selling holders and the underwriters or agents shall contribute to the aggregate
losses, liabilities, claims, damages and expenses of the nature contemplated by
such indemnity incurred by the Company, the selling holders and one or more of
the underwriters or agents, as incurred, in such proportions that (i) the
underwriters or agents are responsible for that portion represented by the
percentage that the underwriting discounts and commissions for the offering
appearing on the cover page of the Prospectus (or, if not set forth on the cover
page, that are applicable to the offering) bear to the initial public offering
price appearing on the cover page (or, if not set forth on the cover page, that
are applicable to the offering), (ii) each selling holder is responsible for the
net proceeds realized by such selling holder and (iii) the Company is
responsible for the balance.
(b) No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 7.5, each person, if any, who
controls an underwriter or agent within the meaning of Section 15 of the
Securities Act shall have the same rights to contribution as such underwriter or
agent, and each director of the Company, each officer of the Company who signed
a Registration Statement, and each person, if any, who controls the Company or a
selling holder within the meaning of Section 15 of the Securities Act shall have
the same rights to contribution as the Company or such selling holder, as the
case may be.
7.6. Representations, Warranties and Indemnities to Survive. The
------------------------------------------------------
indemnity and contribution agreements contained in this Section 7 and the
representations and warranties of the Company referred to in Section 7.1(j)
shall remain operative and in full force and effect regardless of (i) any
termination of any underwriting or agency agreement, (ii) any investigation made
by or on behalf of the selling holders, the Company or any underwriter or agent
or controlling person or (iii) the consummation of the sale or successive
resales of the Registered Securities.
7.7. Participation in Underwritten Offerings. No Holder may
---------------------------------------
participate in any underwritten offering hereunder unless:
(a) Such Holder executes a power of attorney appointing one or more
attorneys designated by the selling holders proposing to sell a majority of the
shares of Registrable Common Stock proposed to be sold by all selling holders.
Each such attorney shall be authorized, on customary terms, to execute the
underwriting agreement on behalf
30
of each selling holder and to otherwise act for the selling holders in
connection with the offering.
(b) Such Holder, through one of its powers of attorney, enters into an
underwriting agreement with the Company, the other selling holders, any selling
stockholders and the underwriters, which underwriting agreement shall comply
with the provisions of this Article III.
(c) Such Holder executes all questionnaires and other documents required by
such power of attorney or the underwriting agreement to be executed by such
Holder.
ARTICLE VIII
REMEDIES
Section 8.1. Liquidated Damages. (a) The Company and the
------------ ------------------
Underwriters agree that the Holders of the Warrants will suffer damages if a
Warrant Registration Default occurs and that it would not be feasible to
ascertain the extent of such damages with precision. Accordingly, if a Warrant
Registration Default occurs, then the Company agrees to pay, or cause to be
paid, to the Holder of each Warrant, as liquidated damages and not as a penalty
("Warrant Registration Damages"), cash in the amount of $0.03 per warrant per
week, or portion thereof, for the first 90-day period during which the Warrant
Registration Default continues beginning on the Exercisability Date in the case
of clause (i) of the definition of Warrant Registration Default, and on the date
of the order suspending effectiveness of the Warrant Shares Registration
Statement in the case of clause (ii) of the definition of Warrant Registration
Default. Such amount shall increase by $0.02 per warrant per week, or portion
thereof, at the beginning of each subsequent 90-day period during which a
Warrant Registration Default continues up to a maximum aggregate additional
amount of $0.07 per warrant per week. Upon the cure of all Warrant Registration
Defaults, such liquidated damages will cease to accrue.
(b) The Company shall notify the Warrant Agent in writing within three
Business Days after each and every date on which an event occurs in respect of
which liquidated damages are required to be paid (an "Event Date"). The Company
shall pay the liquidated damages due on the Warrants by depositing with the
Warrant Agent, in trust, for the benefit of the Holders thereof, on or before
the applicable Semiannual Accrual Date or Interest Payment Date specified below,
immediately available funds in sums sufficient to pay the Warrant Registration
Damages then due. All Warrant Registration Damages accrued, but not paid, on or
prior to any Semiannual Accrual Date or Interest Payment Date, as the case may
be, will be paid on such Semiannual Accrual Date or Interest Payment Date to the
Holders of record of Warrants on the close of business on the immediately
preceding June 15 or December 15, as the case may be. Each obligation to pay
Warrant Registration Damages shall be deemed to accrue on the applicable Event
Date. The parties hereto agree (for themselves and for the benefit of Holders
from time to time of
31
Warrants) that the Warrant Registration Damages provided for in this Section 8.1
constitute a reasonable estimate of the damages that may be incurred by Holders
of Warrants by reason of the occurrence of the failure of the Company to fulfill
its obligations to register the Warrant Shares.
Section 8.2. Remedies; No Waiver. Notwithstanding any other
----------- -------------------
provision of this Agreement, if a default occurs and is continuing, the Holders
of the Warrants may pursue any available remedy to enforce the performance of
any provision of this Agreement. A delay or omission by any Holder of a Warrant
in exercising, or a failure to exercise, any right or remedy arising out of a
default shall not impair the right or remedy or constitute a waiver of or
acquiescence in the default. All remedies are cumulative to the extent
permitted by law.
ARTICLE IX
THE WARRANT AGENT
Section 9.1. Duties and Liabilities. The Company hereby appoints
------------ ----------------------
the Warrant Agent to act as agent of the Company as set forth in this Agreement.
The Warrant Agent hereby accepts the agency established by this Agreement and
agrees to perform the same upon the terms and conditions herein set forth, by
all of which the Company and the Holders of Warrants, by their acceptance
thereof, shall be bound. The Warrant Agent shall not have any obligation
towards or relationship of agency or trust for the Holders, except as provided
in Section 8.1(b) and Section 11.1 hereof. The Warrant Agent shall not, by
countersigning Warrant Certificates or by any other act hereunder, be deemed to
make any representations as to the validity or authorization of the Warrants or
the Warrant Certificates (except as to its countersignature thereon) or of any
securities or other property delivered upon exercise of any Warrant, or as to
the accuracy of the computation of the Exercise Price or the number or kind or
amount of stock or other securities or other property deliverable upon exercise
of any Warrant, or as to the independence of any Independent Financial Expert or
the correctness of the representations of the Company made in the certificates
that the Warrant Agent receives or the validity, sufficiency or adequacy of any
offering materials. The Warrant Agent shall not be accountable for the use or
application by the Company of the proceeds of the exercise of any Warrant. The
Warrant Agent shall not have any duty to calculate or determine any adjustments
with respect to either the Exercise Price or the kind and amount of shares or
other securities or any property receivable by Holders upon the exercise of
Warrants required from time to time and the Warrant Agent shall have no duty or
responsibility in determining the accuracy or correctness of such calculation.
The Warrant Agent shall not (a) be liable for any recital or statement of fact
contained herein or in the Warrant Certificates or for any action taken,
suffered or omitted by it in good faith in the belief that any Warrant
Certificate or any other documents or any signatures are genuine or properly
authorized, (b) be responsible for any failure on the part of the Company to
comply with any of its covenants and obligations contained in this Agreement or
in the Warrant Certificates or
32
(c) be liable for any act or omission in connection with this Agreement except
for its own gross negligence or willful misconduct. The Warrant Agent is hereby
authorized to accept instructions with respect to the performance of its duties
hereunder from the Chief Executive Officer, President, any Vice President or the
Secretary or Treasurer of the Company and to apply to any such officer for
instructions (which instructions will be promptly given in writing when
requested) and the Warrant Agent shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with the instructions of
any such officer; however, in its discretion, the Warrant Agent may in lieu
thereof accept other evidence of such or may require such further or additional
evidence as it may deem reasonable. The Warrant Agent shall not be liable for
any action taken, or failure to take any action, with respect to any matter in
the event it requests instructions from the Company as to that matter and does
not receive such instructions within a reasonable period of time after the
request therefor.
The Warrant Agent may execute and exercise any of the rights and
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys, agents or employees, and the Warrant Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys, agents or employees, provided reasonable care has been exercised
in the selection and in the continued employment of any such attorney, agent or
employee. The Warrant Agent shall not be under any obligation or duty to
institute, appear in or defend any action, suit or legal proceeding in respect
hereof, unless first indemnified to its satisfaction, but this provision shall
not affect the power of the Warrant Agent to take such action as the Warrant
Agent may consider proper, whether with or without such indemnity. The Warrant
Agent shall promptly notify the Company in writing of any claim made or action,
suit or proceeding instituted against it arising out of or in connection with
this Agreement.
The Warrant Agent may rely and shall be fully protected in acting or
refraining from acting upon any certificate, notice, instruction, Warrant,
document or other writing believed by it to be genuine and to have been signed
or presented by the proper Person. The Warrant Agent need not investigate any
fact or matter stated in any such certificate, notice, instruction, Warrant,
document or other writing. The Warrant Agent shall not be liable for any action
that it takes or omits to take in good faith which it believes to be authorized
or within its rights or powers.
The Company will perform, execute, acknowledge and deliver or cause to
be performed, executed, acknowledged and delivered all such further acts,
instruments and assurances as are consistent with this Agreement and as may
reasonably be required by the Warrant Agent in order to enable it to carry out
or perform its duties under this Agreement.
The Warrant Agent shall act solely as agent of the Company hereunder.
The Warrant Agent shall not be liable except for the failure to perform such
duties as are specifically set forth herein, and no implied covenants or
obligations shall be read into this Agreement against the Warrant Agent, whose
duties and obligations shall be determined solely by the express provisions
hereof.
33
With respect to the identity of beneficial owners of interests in the
Global Warrant and the number of Warrants beneficially owned by any beneficial
owner, the Warrant Agent shall be entitled to conclusively rely on the records
of DTC and shall be fully protected in so relying.
Section 9.2. Right to Consult Counsel. The Warrant Agent may at any
------------ ------------------------
time consult with legal counsel acceptable to it (who may be legal counsel for
the Company), and the opinion or advice of such counsel shall be full and
complete authorization and protection to the Warrant Agent and the Warrant Agent
shall incur no liability or responsibility to the Company or to any Holder for
any action taken, suffered or omitted by it in good faith in accordance with the
opinion or advice of such counsel.
Section 9.3. Compensation; Indemnification. The Company agrees to
------------ -----------------------------
pay to the Warrant Agent from time to time compensation for all services
rendered by it hereunder as the Company and the Warrant Agent may agree in
writing from time to time, and to reimburse the Warrant Agent for reasonable
expenses and disbursements incurred in connection with the execution and
administration of this Agreement (including the reasonable fees and the expenses
of its counsel), and further agrees to indemnify the Warrant Agent for, and to
hold it harmless against, any claim, loss, liability or expense arising out of
or in connection with the acceptance and administration of this Agreement,
including the costs and expenses of defending itself against any such claim or
liability, except that the Company shall have no liability hereunder to the
extent that any such loss, liability or expense results from the Warrant Agent's
own gross negligence or willful misconduct. The obligations of the Company
under this Section 8.3 shall survive the exercise and the expiration of the
Warrants and the resignation or removal of the Warrant Agent. No provision of
this Agreement shall require the Warrant Agent to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder or in the exercise of any of its rights or powers if it shall
have reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
Section 9.4. No Restrictions on Actions. The Warrant Agent and any
------------ --------------------------
stockholder, director, officer or employee of the Warrant Agent may buy, sell or
deal in any of the Warrants or other securities of the Company or become
pecuniarily interested in transactions 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 the 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.
Section 9.5. Discharge or Removal; Replacement Warrant Agent.
------------ -----------------------------------------------
Except as otherwise provided in this Section 9.5, no resignation or removal of
the Warrant Agent and no appointment of a successor warrant agent shall become
effective until the acceptance of appointment by the successor warrant agent
provided herein. The Warrant Agent may resign from its position as such and be
discharged from all further duties and liabilities hereunder (except liabilities
arising as a result of the Warrant Agent's own gross negligence
34
or willful misconduct), after giving one month's prior written notice to the
Company. The Company may remove the Warrant Agent upon one month's prior written
notice specifying the date when such discharge shall take effect, and the
Warrant Agent shall thereupon in like manner be discharged from all further
duties and liabilities hereunder, except as aforesaid. The Warrant Agent or the
Company shall cause to be mailed (by first-class mail, postage prepaid) to each
Holder of a Warrant a copy of said notice of resignation or notice of removal,
as the case may be. Upon such resignation or removal the Company shall appoint
in writing a new warrant agent. If the Company shall fail to make such
appointment within a period of 30 calendar days after it has been notified in
writing of such resignation by the resigning Warrant Agent or after such
removal, then the resigning Warrant Agent or the Holder of any Warrant may apply
to any court of competent jurisdiction for the appointment of a new warrant
agent. Any new warrant agent, whether appointed by the Company or by such a
court, shall be a bank or trust company doing business under the laws of the
United States or any state thereof, in good standing and having a combined
capital and surplus of not less than $50,000,000. The combined capital and
surplus of any such new warrant agent shall be deemed to be the combined capital
and surplus as set forth in the most recent annual report of its condition
published by such warrant agent prior to its appointment, provided that such
reports are published at least annually pursuant to law or to the requirements
of a federal or state supervising or examining authority. After acceptance in
writing of such appointment by the new warrant agent, it shall be vested with
the same powers, rights, duties and responsibilities as if it had been
originally named herein as the Warrant Agent, without any further assurance,
conveyance, act or deed; however, the original Warrant Agent, upon payment of
its fees and expenses, shall in all events deliver and transfer to the successor
Warrant Agent all property, if any, at the time held hereunder by the original
Warrant Agent and if for any reason it shall be necessary or expedient to
execute and deliver any further assurance, conveyance, act or deed, the same
shall be done at the expense of the Company and shall be legally and validly
executed and delivered by the resigning or removed Warrant Agent. Not later than
the effective date of any such appointment, the Company shall file a notice
thereof with the resigning or removed Warrant Agent and shall forthwith cause a
copy of such notice to be mailed to each Holder of a Warrant. Failure to give
any notice provided for in this Section 9.5, however, or any defect therein,
shall not affect the legality or validity of the resignation of the Warrant
Agent or the appointment of a new warrant agent, as the case may be.
Section 9.6. Successor Warrant Agent. Any corporation into which
------------ -----------------------
the Warrant Agent or any successor warrant agent may be merged or converted, or
any corporation resulting from any consolidation to which the Warrant Agent or
any successor warrant agent shall be a party, and any corporation which acquires
substantially all of the corporate trust business of the Warrant Agent, shall be
a successor Warrant Agent under this Agreement without any further act, provided
that such corporation would be eligible for appointment as successor to the
Warrant Agent under the provisions of Section 9.5 hereof. Any such successor
Warrant Agent shall promptly cause notice of its succession as Warrant Agent to
be mailed (by first-class mail, postage prepaid) to each Holder of a Warrant.
35
ARTICLE X
WARRANT HOLDERS
Section 10.1. Warrant Holder Not Deemed a Stockholder. The Company
------------- ---------------------------------------
and the Warrant Agent may deem and treat the registered Holder(s) of the Warrant
Certificates as the absolute owner(s) thereof (notwithstanding any notation of
ownership or other writing thereon made by anyone), for the purpose of any
exercise thereof and for all other purposes, and neither the Company nor the
Warrant Agent nor any agent of the Company or the Warrant Agent shall be
affected by any notice to the contrary. Prior to the exercise of the Warrants,
no Holder of a Warrant Certificate, as such, shall be entitled to any rights of
a stockholder of the Company, including, without limitation, the right to vote
or to consent to any action of the stockholders, to receive dividends or other
distributions, to exercise any preemptive right or to receive any notice of any
meeting of stockholders and, except as otherwise provided in this Agreement,
shall not be entitled to receive any notice of any proceedings of the Company.
Section 10.2. Right of Action. All rights of action with respect to
------------- ---------------
this Agreement are vested in the Holders of the Warrants, and any Holder of any
Warrant, without the consent of the Warrant Agent or the Holder of any other
Warrant, may, on such Holder's own behalf and for such Holder's own benefit,
enforce, and may institute and maintain any suit, action or proceeding against
the Company suitable to enforce, or otherwise in respect of, such Holder's right
to exercise, exchange or tender for purchase such Holder's Warrants in the
manner provided in the Warrant Certificate representing his Warrants and in this
Agreement.
ARTICLE XI
MISCELLANEOUS
Section 11.1. Money Deposited with the Warrant Agent. The Warrant
------------- --------------------------------------
Agent shall not be required to pay interest on any moneys deposited pursuant to
the provisions of this Agreement except such as it shall agree in writing with
the Company to pay thereon. Any moneys, securities or other property which at
any time shall be deposited by the Company or on its behalf with the Warrant
Agent pursuant to this Agreement shall be and are hereby assigned, transferred
and set over to the Warrant Agent in trust for the purpose for which such
moneys, securities or other property shall have been deposited; but such moneys,
securities or other property need not be segregated from other funds, securities
or other property except to the extent required by law. The Warrant Agent shall
distribute any money deposited with it for payment and distribution to the
Holders by mailing by first-class mail a check in such amount as is required by
this Agreement to each such Holder at the address shown on the Warrant register
of the Company, or as it may be otherwise directed in writing by such Holder, in
accordance with
36
the terms and conditions hereof. Any money, securities or other property
deposited with the Warrant Agent for payment or distribution to the Holders that
remains unclaimed for two years after the date the money, securities or other
property was deposited with the Warrant Agent shall be delivered to the Company
upon its written request therefor.
Section 11.2. Payment of Taxes. All Warrant Shares or other
------------- ----------------
securities issuable upon the exercise of Warrants shall be validly issued, fully
paid and nonassessable, and the Company shall pay any stamp, registration, and
other similar 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 thereof or of
other securities deliverable upon exercise of Warrants (other than income taxes
imposed on the Holders). The Company shall not be required, however, to pay any
tax or other charge imposed in connection with any transfer involved in the
issue of any Warrant Share certificate 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 the exercise of a Warrant,
and in case of such transfer or payment, the Warrant Agent and the Company shall
not be required to issue any Warrant Shares certificate or stock certificate or
pay any cash until such tax or charge has been paid or it has been established
to the Warrant Agent's and the Company's satisfaction that no such tax or other
charge is due.
Section 11.3. No Merger, Consolidation or Sale of Assets of the
------------- -------------------------------------------------
Company. Except as otherwise provided herein, the Company 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 Company,
unless the Person resulting from such merger or consolidation, or such successor
of the Company, shall expressly assume, by supplemental agreement satisfactory
in form to the Warrant Agent and executed and delivered to the Warrant Agent,
the due and punctual performance and observance of each and every covenant and
condition of this Agreement to be performed and observed by the Company.
Section 11.4. Reports to Holders. The Company shall:
------------- ------------------
(a) file the reports (or copies of such portions of any of the
foregoing as the Commission may from time to time by rules and regulations
prescribe) required to be filed by it under the Securities Act and the
Exchange Act, and the rules, regulations and policies adopted by the
Commission thereunder in a timely manner in accordance with the
requirements of the Securities Act and the Exchange Act; or, if the Company
is not required to file information, documents or reports pursuant to
either of said Sections, then the Company will, upon the request of any
Holder or beneficial owner of Warrants, make available such information as
necessary to permit sales purusant to Rule 144A under the Securities Act;
and
(b) file with the Warrant Agent and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
37
additional information, documents and reports with respect to compliance by
the Company with the conditions and covenants of this Agreement as may be
required from time to time by such rules and regulations.
Section 11.5. Notices. All notices and other communications
------------- -------
provided for or permitted hereunder shall be made in writing by hand-delivery,
registered first-class mail, telex, telecopier, or any air courier (i) if to a
Holder of the Warrants, at the address of such Holder maintained by the Warrant
Agent, (ii) if to the Company, to Euronet Services Inc., Horvat u. 14-24, 1027
Budapest, Hungary, Attention: Jeffrey Newman and (iii) if to the Warrant Agent,
to ..
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; at the time
received, if mailed or sent by air courier; when answered back, if telexed; and
when receipt is acknowledged, by recipient's telecopy operator, if telecopied.
Section 11.6. Severability. If any one or more of the provisions
------------- ------------
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
Section 11.7. Binding Effect. This Agreement shall be binding upon
------------- --------------
and inure to the benefit of the Company and the Warrant Agent and their
respective successors and assigns, and the Holders from time to time of the
Warrants. Nothing in this Agreement is intended or shall be construed to confer
upon any Person, other than the Company, the Warrant Agent and the Holders of
the Warrants, any right, remedy or claim under or by reason of this Agreement or
any part hereof.
Section 11.8. Third Party Beneficiaries. The Holders shall be third
------------- -------------------------
party beneficiaries to the agreements made hereunder between the Company, on the
one hand, and the Warrant Agent, on the other hand, and each Holder 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
Holders hereunder.
Section 11.9. Amendments. The Company may, without the consent of
------------- ----------
the Holders of the Warrants, by supplemental agreement or otherwise, make any
changes or corrections in this Agreement that it shall have been advised by
counsel (a) are required to cure any ambiguity or to correct or supplement any
provision herein which may be defective or inconsistent with any other provision
herein or (b) add to the covenants and agreements of the Company for the benefit
of the Holders, or surrender any rights or power reserved to or conferred upon
the Company in this Agreement; provided that, in each case, such changes or
corrections shall not adversely affect the interests of the Holders in any
material respect. Amendments or supplements which do not meet the requirements
of the preceding sentence shall require the written consent of the Holders of a
majority of
38
the then outstanding warrants; provided, however, that the consent of each
Holder is required for any amendment or supplement pursuant to which the
Exercise Price would be increased or the Exercise Rate would be decreased (other
than pursuant to adjustments as provided in Article IV of this Agreement). The
Warrant Agent shall join with the Company in the execution and delivery of any
such supplemental agreements unless it affects the Warrant Agent's own rights,
duties or immunities hereunder, in which case the Warrant Agent may, but shall
not be required to, join in such execution and delivery.
Section 11.10. Headings. The headings in this Agreement are for
-------------- --------
convenience of reference only and shall not limit or otherwise affect the
meaning of any provision hereof.
Section 11.11. GOVERNING LAW. THIS AGREEMENT AND THE WARRANTS SHALL
-------------- -------------
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, UNITED STATES OF AMERICA.
Section 11.12. Counterparts. This Agreement may be executed in any
-------------- ------------
number of counterparts and by the parties hereto in separate counterparts, each
of which so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
39
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, and their respective corporate seals to be hereto affixed and
attested, all as of the day and year first above written.
EURONET SERVICES INC.
By
------------------------------------------
Name:
Title:
STATE STREET BANK & TRUST COMPANY,
Warrant Agent
By
------------------------------------------
Name:
Title:
40
Exhibit A
---------
FORM OF WARRANT CERTIFICATE
---------------------------
EURONET SERVICES INC.
CUSIP No.
----------
No. Certificate for Warrants
----- --------
WARRANTS TO PURCHASE
SHARES OF COMMON STOCK
This certifies that _______________, or its registered assigns, is the
owner of the number of Warrants set forth above or such other number as shall be
represented from time to time by this Warrant Certificate in accordance with the
terms of the within-mentioned Warrant Agreement, each of which represents the
right to purchase, on the date hereof (the "Exercisability Date") and on or
before the Expiration Date, provided that certain conditions set forth in the
Warrant Agreement have been satisfied, from Euronet Services Inc. (the
"Company"), a Delaware corporation, . Warrant Shares at an exercise price of .
per share, subject to adjustment, upon surrender hereof at the office of . or to
its successor as the warrant agent under the Warrant Agreement (any such warrant
agent being herein called the "Warrant Agent"), with the Subscription Form on
the reverse hereof (or a copy thereof furnished by the Warrant Agent) duly
executed, with signature guaranteed as therein specified, and simultaneous
payment in full (in cash or by certified or official bank or bank cashier's
check payable to the order of the Company, or through the surrender of
additional Warrants in accordance with the terms of the Warrant Agreement) of
the Exercise Price for the Warrant Share(s) as to which the Warrant(s)
represented by this Warrant Certificate are exercised, all subject to the terms
and conditions hereof and of the Warrant Agreement.
This Warrant Certificate is issued under and in accordance with a
Warrant Agreement dated as of June ., 1998 (the "Warrant Agreement"), between
the Company and
State Street Bank & Trust Company, Warrant Agent, 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 Warrant
Agreement is hereby incorporated herein by reference and made a part hereof.
Reference is hereby made to the Warrant Agreement for a full description of the
rights, limitations of rights, obligations, duties and immunities thereunder of
the Company and the Holders of the Warrants. The summary of the terms of the
Warrant Agreement contained in this Warrant Certificate is qualified in its
entirety by express reference to the Warrant Agreement. All terms used in this
Warrant Certificate that are defined in the Warrant Agreement shall have the
meanings assigned to them in the Warrant Agreement.
Copies of the Warrant Agreement are on file at the office of the
Warrant Agent and may be obtained by writing to the Warrant Agent at the
following address:
State Street Bank & Trust Company .
After the Exercisability Date, the Warrants may only be exercised if
(i) the Warrant Agent has received written notice from the Company that a
Registration Statement has been declared effective by the Commission with
respect to the Warrant Shares, (ii) the Warrant Agent has not received written
notice from the Company or the Commission that a stop order issued by the
Commission suspending the effectiveness of such Registration Statement is in
effect and (iii) the Warrant Agent has not received notice from the Company of
any Suspension Period permitted under Section 6.4(b)(ii) of the Warrant
Agreement.
A "Warrant Registration Default" shall be deemed to have occurred if
(i) on the Exercisability Date, the Warrant Shares Registration Statement has
not been declared effective by the Commission, or (ii) the Commission shall have
issued a stop order suspending the effectiveness of the Warrant Shares
Registration Statement, at a time when such Warrant Shares Registration
Statement is required to be kept effective by the Company pursuant to the
provisions of the Warrant Agreement.
If a Warrant Registration Default occurs, then the Company shall pay,
or cause to be paid, to the holder of each Warrant cash in the amount of $0.03
per week, or portion thereof, for the first 90-day period during which the
Warrant Registration Default continues. Such amount shall increase by $0.02 per
week, or portion thereof, at the beginning of each subsequent 90-day period
during which a Warrant Registration Default continues up to a maximum aggregate
additional amount of $0.07 per week. Such amount due shall be payable on each
Semiannual Accrual Date or Interest Payment Date, as the case may be, will be
paid to the Holders of record of Warrants on the close of business on the
immediately preceding June 15 or December 15 as the case may be.
The number of Warrant Shares purchasable upon the exercise of each
Warrant and the price per Warrant Share are subject to adjustment as provided in
the Warrant Agreement.
If the Company enters into a Fundamental Transaction, as a condition
to consummating such transaction, the Surviving Person (if other than the
Company) shall enter into a supplemental warrant agreement. The supplemental
warrant agreement shall provide (A) that the Holder of a Warrant then
outstanding may exercise it for the kind and amount of securities, cash or other
assets which such Holder could have received immediately after the Fundamental
Transaction if such Holder had exercised the Warrant immediately before the
effective date of the transaction (regardless of whether the Warrants are then
exercisable and without giving effect to the payment of the Exercise Price
through the surrender of additional Warrants), assuming (to the extent
applicable) that such Holder (x) was not a constituent persons or an affiliate
of a constituent person to such transaction,
A-2
(y) made no election with respect thereto and (z) was treated alike with the
plurality of non-electing Holders, and (B) that the Surviving Person shall
succeed to and be substituted for every right and obligation of the Company in
respect of the Warrant Agreement and the Warrants.
Notwithstanding the foregoing, if the Company enters into a
Fundamental Transaction with another person (other than a subsidiary of the
Company) and consideration is payable to holders of the shares of Capital Stock
(or other securities or property) issuable or deliverable upon exercise of the
Warrants that are exercisable in exchange for their shares in connection with
such Fundamental Transaction which consists solely of cash, then the Holders of
Warrants shall be entitled to receive distributions on the date of such event on
an equal basis with holders of such shares (or other securities issuable upon
exercise of the Warrants) as if the Warrants had been exercised immediately
prior to such event, less the Exercise Price therefor. Upon receipt of such
payment, if any, the rights of a Holder of a Warrant shall terminate and cease
and such Holder's Warrants shall expire.
As to any final fraction of a Warrant Share which the same Holder of
one or more Warrant Certificates would otherwise be entitled to purchase upon
exercise thereof in the same transaction, the Company shall pay the cash value
thereof determined as provided in the Warrant Agreement.
All Warrant Shares or other securities issuable by the Company upon
the exercise of Warrants shall be validly issued, fully paid and nonassessable,
and the Company shall pay all stamp, registration or other similar 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 such shares or of other
securities deliverable upon exercise of Warrants. The Company shall not be
required, however, to pay any tax or other charge imposed in connection with any
transfer involved in the issue of any Warrant Share certificate or other
securities or property issuable upon the exercise of the Warrants or in respect
of payment of cash to any Person other than the Holder of a Warrant Certificate
surrendered upon the exercise or repurchase of a Warrant, and in case of such
transfer or payment, the Warrant Agent and the Company may deduct such taxes
from any payment of money to be made and shall not be required to issue any
Warrant Shares certificate or stock certificate until such tax or charge has
been paid or it has been established to the Warrant Agent's and the Company's
satisfaction that no such tax or other charge is due.
Subject to the restrictions on transfer set forth in Article V of the
Warrant Agreement, this Warrant Certificate and all rights hereunder are
transferable by the registered Holder hereof, in whole or in part, on the
Warrant Register of the Company maintained by the Warrant Agent for such purpose
at its office in New York, New York, upon surrender of this Warrant Certificate
duly endorsed, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Warrant Agent duly executed, with signatures
guaranteed as specified in the attached Form of Assignment, by
A-3
the registered Holder hereof or his attorney duly authorized in writing and upon
payment of any necessary transfer tax or other governmental charge imposed upon
such transfer. Upon any partial transfer, the Company will issue and the Warrant
Agent will countersign and deliver to such Holder a new Warrant Certificate or
Certificates with respect to any portion not so transferred. Each taker and
Holder of this Warrant Certificate, by taking and holding the same, consents and
agrees that prior to the registration of transfer as provided in the Warrant
Agreement, the Company and the Warrant Agent and any agent of the Company or the
Warrant Agent may treat the person in whose name the Warrants are registered as
the absolute owner hereof for any purpose and as the Person entitled to exercise
the rights represented hereby, any notice to the contrary notwithstanding.
This Warrant Certificate may be exchanged at the office of the Warrant
Agent maintained for such purpose in New York, New York for Warrant Certificates
representing the same aggregate number of Warrants, each new Warrant Certificate
to represent such number of Warrants as the Holder hereof shall designate at the
time of such exchange.
Prior to the exercise of the Warrants represented hereby, the Holder
of this Warrant Certificate, as such, shall not be entitled to any rights of a
stockholder of the Company, including, without limitation, the right to vote or
to consent to any action of the stockholders, to receive dividends or other
distributions, to exercise any preemptive right or to receive any notice of
meetings of stockholders, and shall not be entitled to receive any notice of any
proceedings of the Company except as provided in the Warrant Agreement.
This Warrant Certificate shall be void and all rights evidenced hereby
shall cease on ., 2006, unless sooner terminated by the liquidation, dissolution
or winding-up of the Company or as otherwise provided in the Warrant Agreement
upon the consolidation or merger of the Company with, or sale of the Company to,
another Person.
A-4
This Warrant Certificate shall not be valid for any purpose until it
shall have been countersigned by the Warrant Agent.
Dated:
EURONET SERVICES INC.
By
--------------------------------------------
Name:
Title:
Countersigned:
State Street Bank and Trust Company,
Warrant Agent
By
---------------------------------------------
Authorized Signatory
A-5
FORM OF REVERSE OF WARRANT CERTIFICATE
SUBSCRIPTION FORM
(To be executed only upon exercise of Warrant)
To:
The undersigned irrevocably exercises _____________ of the Warrants
represented by the Warrant Certificate, each for the purchase of one Warrant
Share, subject to adjustment (the "Warrant Shares"), and herewith makes payment
of $______ (such payment being by cash or certified or official bank or bank
cashier's check payable to the order or at the direction of Euronet Services
Inc., or the exercise price may be paid by surrendering additional Warrants to
the Warrant agent having an aggregate Spread equal to the aggregate exercise
price of the Warrants being exercised), such amount being equal to the exercise
price of such Warrants, and on the terms and conditions specified in the within
Warrant Certificate and the Warrant Agreement therein referred to, surrenders
this Warrant Certificate and all right, title and interest therein to and
directs that the Warrant Shares deliverable upon the exercise of such Warrants
be registered or placed in the name and at the address specified below and
delivered thereto.
Dated:
------------------------------- -------------------------------------(1)
(Signature of Owner)
----------------------------------------
(Street Address)
----------------------------------------
(City) (State) (ZIP Code)
Signature Guaranteed By:
----------------------------------------
Secutirty and/or check to be issued to:
----------------------------------------
/1/ The signature must correspond with the name as written upon the face of the
within Warrant Certificate in every particular, without alteration or
enlargement or any change whatever, and must be guaranteed by a United
States or German national bank or trust company or by a member firm of any
United States or German national securities exchange.
A-6
Please insert social security or identifying number:
---------------------------
Name:
--------------------------------------------------------------------------
Street Address:
----------------------------------------------------------------
City, State and Zip Code:
------------------------------------------------------
A-7
FORM OF ASSIGNMENT
FOR VALUE RECEIVED the undersigned registered holder of the within
Warrant Certificate hereby sells, assigns, and transfers unto the Assignee(s)
named below (including the undersigned with respect to any Warrants constituting
a part of the Warrants evidenced by the within Warrant Certificate not being
assigned hereby) all of the right of the undersigned under the within Warrant
Certificate, with respect to the number of Warrants set forth below:
Name(s) of Assignee(s):
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Address:
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No. of Warrants:
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Please insert social security or other identifying number of assignee(s):
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and does hereby irrevocably constitute and appoint
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the undersigned's attorney to make such transfer on
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the books of maintained for the purposes, with full power of
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substitution in the premises.
A-8
Exhibit B to
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Warrant Agreement
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FORM OF LEGEND FOR GLOBAL WARRANTS
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Any Global Warrant authenticated and delivered hereunder shall bear a legend in
substantially the following form:
THIS WARRANT IS A GLOBAL WARRANT WITHIN THE MEANING OF THE WARRANT AGREEMENT
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS WARRANT IS NOT
EXCHANGEABLE FOR WARRANTS REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
WARRANT AGREEMENT, AND NO TRANSFER OF THIS WARRANT (OTHER THAN A TRANSFER OF
THIS WARRANT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE WARRANT AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
Exhibit C to
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Warrant Agreement
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FORM OF LEGEND FOR WARRANTS ISSUED AS PART OF A UNIT
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THE WARRANT EVIDENCED BY THIS CERTIFICATE IS INITIALLY ISSUED AS PART OF AN
ISSUANCE OF UNITS, EACH OF WHICH CONSISTS OF $1,000 PRINCIPAL AMOUNT AT MATURITY
OF .% SENIOR DISCOUNT NOTES DUE 2006 OF EURONET SERVICES INC. (THE "NOTES") AND
. WARRANTS. THE WARRANT EVIDENCED BY THIS CERTIFICATE MAY BE TRANSFERRED OR
EXCHANGED SEPARATELY FROM OR TOGETHER WITH, THE NOTES.