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EXHIBIT 10.23
WARRANT PURCHASE AGREEMENT
BETWEEN
FIRST PREMIUM SERVICES, INC.
AND
INTERNATIONALE NEDERLANDEN (U.S.) FINANCE CORPORATION
DATED AS OF DECEMBER 30, 1992
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TABLE OF CONTENTS
SECTION PAGE
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1. Purchase and Sale of Warrants: Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Warrant Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3. Execution of Warrant Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
4. Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
5. Registration of Transfers and Exchanges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
6. Warrants; Exercise of Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
7. Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
8. Mutilated or Missing Warrant Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
9. Reservation of Warrant Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
10. Adjustment of Exercise Price and Number of Warrant Shares Issuable . . . . . . . . . . . . . . . . . . . 6
(a) Adjustment for Change in Capital Stock of the Issuer . . . . . . . . . . . . . . . . . . . . . . 6
(b) Adjustment for Common Stock Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(c) Adjustment for Convertible Securities Issue . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(d) Adjustment for Right, Option and Warrant Issues . . . . . . . . . . . . . . . . . . . . . . . . 9
(e) Current Market Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(f) Consideration Received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(g) Special Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(h) When No Adjustment Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(i) Notice of Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(j) Voluntary Reduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(k) Reorganization of the Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(l) When Issuance or Payment May Be Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(m) Adjustment in Number of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
11. Fractional Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
12. Put of Warrant Ownership; Disposition of Warrant Shares; Registration of Warrant Shares . . . . . . . . 15
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SECTION PAGE
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13. Notice to Warrant Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
14. Notices to the Issuer and Warrant Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
15. Cash Distributions and Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
16. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
17. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
18. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
19. Benefits of This Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
20. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
21. Amendments; Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
22. Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
23. Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
24. Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
25. Annual and Quarterly Reports; Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
26. Charter Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
27. Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
28. Purchaser Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
29. Automatic Extinguishment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Exhibit A - Form of Warrant Certificate
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WARRANT PURCHASE AGREEMENT
WARRANT PURCHASE AGREEMENT, dated as of December 30, 1992, between
FIRST PREMIUM SERVICES, INC., an Illinois corporation (the "Issuer"), and
INTERNATIONALE NEDERLANDEN (U.S.) FINANCE CORPORATION (the "Purchaser").
W I T N E S S E T H:
WHEREAS, the Issuer proposes to issue to the Purchaser warrants to
purchase certain common stock of the Issuer as hereinafter described (the
"Warrants"), which Warrants will initially be exercisable for 3,343 shares of
Class B Nonvoting Convertible Common Stock, $.01 par value per share (the
"Class B Common Stock"), of the Issuer, on the terms and conditions hereinafter
set forth; and
WHEREAS, the Purchaser and the Issuer desire to set forth the terms
and provisions of the Warrants and the conditions to the issuance and sale
thereof to the Purchaser; and
NOW, THEREFORE, in consideration of the premises and the agreements
herein set forth and as part of the consideration for the execution and
delivery to the Issuer by an affiliate of the Purchaser of its commitment
letter dated December 30, 1992 (the "Commitment Letter"), the parties hereto,
intending to be legally bound, hereby agree as follows:
1. PURCHASE AND SALE OF WARRANTS: CLOSING.
(a) The Issuer hereby agrees to sell to the Purchaser,
and the Purchaser agrees to purchase from the Issuer, Warrants to
purchase 3,343 shares of Class B Common Stock for an aggregate
purchase price of $1.00.
(b) The sale and purchase of the Warrants shall take
place at a closing (the "Closing") at the offices of Sullivan &
Worcester, 767 Third Avenue, New York, New York at 10:00 a.m. on or
before December 31, 1992 (the "Closing Date"). At the Closing, the
Issuer will deliver to the Purchaser Warrant Certificates (as defined
in Section 2) evidencing the Warrants to be purchased by the Purchaser
(in such permitted denomination or denominations as the Purchaser may
request and registered in its name or the name of its nominee), dated
the Closing Date, against payment, of the purchase price therefor by
certified or bank cashier's check or by wire transfer of immediately
available funds.
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2. WARRANT CERTIFICATES. The certificates evidencing the
Warrants (the "Warrant Certificates") to be delivered pursuant to this
Agreement shall be in registered form only and shall be in the form set forth
as Exhibit A attached hereto.
3. EXECUTION OF WARRANT CERTIFICATES. Warrant certificates shall
be signed on behalf of the Issuer by its Chairman of the Board or its President
or a Vice President and by its Secretary or an Assistant Secretary. Each such
signature upon the warrant certificates may be in the form of a facsimile
signature of the Chairman of the Board, President, Vice President, Secretary or
Assistant Secretary and may be printed or otherwise reproduced on the Warrant
Certificates and for that purpose the Issuer may adopt and use the facsimile
signature of any person who shall have been Chairman of the Board, President,
Vice President, Secretary or Assistant Secretary, notwithstanding the fact that
at the time the Warrant Certificates shall be delivered or disposed of such
person shall have ceased to hold such office.
In case any officer of the Issuer who shall have signed any of the
Warrant Certificates shall cease to be such officer before the Warrant
Certificates so signed shall have been disposed of by the Issuer, such Warrant
Certificates nevertheless may be delivered or disposed of as though such person
had not ceased to be such officer of the Issuer; and any Warrant Certificate
may be signed on behalf of the Issuer by any person who, at the actual date of
the execution of such Warrant Certificate, shall be a proper officer of the
Issuer to sign such Warrant Certificate although at the date of the execution
of this Agreement any such person was not such officer.
4. REGISTRATION. The Issuer shall number and register the
Warrant Certificates in a register as they are issued. The Issuer 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 all purposes and shall not be affected by any
notice to the contrary.
5. REGISTRATION OF TRANSFERS AND EXCHANGES. The Issuer shall
from time to time register the transfer of any outstanding Warrant Certificates
in a Warrant register to be maintained by the Issuer upon surrender of such
Warrant Certificates accompanied by a written instrument or instruments of
transfer in form reasonably satisfactory to the Issuer, duly executed by the
registered holder or holders thereof or by the duly appointed legal
representative thereof or by a duly authorized attorney. Upon any such
registration of transfer, a new Warrant Certificate shall be issued to the
transferee(s) and the surrendered Warrant Certificate shall be canceled and
disposed of by the Issuer.
If such transfer of Warrants is not made pursuant to an effective
Registration Statement under the Securities Act of 1933, as amended (the
"Act"), the Warrant holder will, if reasonably requested by the Issuer, deliver
to the Issuer an opinion of counsel, which may be counsel to the holder,
reasonably satisfactory in form, scope and substance to the Issuer, that the
Warrants may be sold publicly without registration under the Act, as well as:
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(1) an investment covenant reasonably satisfactory to the
Issuer signed by the proposed transferee;
(2) an agreement by such transferee to the impression of
the restrictive investment legend set forth below on the Warrant
Certificate; and
(3) an agreement by such transferee to be bound by the
provisions of: (a) this Agreement, and (b) the provisions of the
Stockholders Agreement, to be entered into pursuant to Section 27(vii)
of this Agreement, on or before February 28, 1993, among the Issuer,
the stockholders of the Issuer set forth on Exhibit A thereto and the
Purchaser (the "Stockholders Agreement");
provided that, the Purchaser may transfer the Warrants to an affiliate of the
Purchaser without providing the Issuer with an opinion of counsel.
The Warrant holders agree that each Warrant Certificate and each
certificate representing Warrant Shares will bear the following legend:
"The securities represented by this Certificate have not been
registered under the Securities Act of 1933, as amended. Said
securities may not be sold or transferred in the absence of
such registration or an exemption, or an opinion of counsel
(which may be counsel to the holder) as to an exemption, from
the registration provisions of said Act."
Warrant Certificates may be exchanged at the option of the holder(s)
thereof when surrendered to the Issuer at its office for another Warrant
Certificate or other Warrant Certificates of like tenor and representing in the
aggregate a like number of Warrants, including, without limitation, upon an
adjustment in the Exercise Price or in the number of Warrant Shares purchasable
upon exercise of this Warrant. Warrant Certificates surrendered for exchange
shall be canceled and disposed of by the Issuer.
6. WARRANTS; EXERCISE OF WARRANTS. Subject to the terms of this
Agreement, each Warrant holder shall have the right, which may be exercised at
any time on or after (1) the earliest of (i) December 31, 1995, (ii) the
effectiveness of a registration statement relating to a Stipulated Public
offering (as defined in the Put Agreement) of the Issuer, (iii) the occurrence
of an event of default under the Credit Agreement executed and delivered
pursuant to the Commitment Letter (as amended, modified, extended or replaced
from time to time, the "Credit Agreement"), (iv) any merger or consolidation of
the Issuer with or into any corporation or other entity that is not an
Affiliate (as defined in the Put Agreement) of the Issuer (v) any sale or other
disposition of all or substantially all of the assets of the Issuer not made in
the ordinary course of business of the Issuer and (vi) any sale or other
disposition by the Issuer of shares of Common Stock constituting more that 50%
of the number of shares of Common Stock then outstanding and prior to
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(2) December 31, 2004, to receive from the Issuer the number of fully paid and
nonassessable Warrant Shares which the holder may at the time be entitled to
receive on exercise of such warrants and payment of the Exercise Price then in
effect for such Warrant Shares. No adjustments as to dividends will be made
upon exercise of the Warrants. The term "Warrant Shares" shall mean shares of
Class B Common Stock issuable upon the exercise of each Warrant or such other
securities, property and cash which the warrant holders shall be entitled to
receive upon exercise of the Warrants pursuant to the provisions of Section 10,
including without limitation subsection (k) thereof. The Issuer represents and
warrants to the Purchaser that the number of shares for which the Warrants to
be purchased hereunder are exercisable on the date hereof equals 19.99% of the
issued and outstanding shares of Common Stock on a fully diluted basis, after
giving effect to the conversion of the 600 shares of Common Stock (the
"Deerpath Shares") legally and beneficially owned as of the date hereof by
Deerpath Investment Partners, Ltd. ("Deerpath") into Deerpath Warrants, as
required by Section 27(v) of this Agreement.
A Warrant may be exercised upon surrender to the Issuer at its office
designated for such purpose (the address of which is set forth in Section 14)
of the certificate or certificates evidencing the Warrants to be exercised with
the form of election to purchase attached thereto duly filled in and signed,
upon payment to the Issuer of the exercise price of $.02 per Warrant Share (the
"Exercise Price"), as adjusted as herein provided, for the number of Warrant
Shares in respect of which such Warrants are then exercised. Payment of the
aggregate Exercise Price shall be made in cash or by check payable to the order
of the Issuer.
Upon such surrender of Warrant Certificates and payment of the
Exercise Price, the Issuer shall issue and cause to be delivered with all
reasonable dispatch (and in any event within two business days) to or upon the
written order of the holder, and in the name of the Warrant holder or the
Warrant holder's nominee, a certificate or certificates for the number of full
Warrant Shares issuable upon the exercise of such Warrants together with such
other property (including cash) and securities as may then be deliverable upon
such exercise, including cash for fractional Warrant Shares as provided in
Section 11. Such certificate or certificates shall be deemed to have been
issued and the person so named therein shall be deemed to have become a holder
of record of such Warrant Shares as of the date of the surrender of such
Warrant Certificates and payment of the Exercise Price.
The Warrants shall be exercisable, at the election of the holders
thereof, either in full or from time to time in part, and, in the event that a
Warrant Certificate is exercised in respect of fewer than all of the Warrant
Shares issuable on such exercise at any time prior to the date of expiration of
the Warrants, a new Warrant Certificate evidencing the remaining Warrant or
Warrants will be issued and delivered pursuant to the provisions of this
Section and of Section 3.
All Warrant Certificates surrendered upon exercise of Warrants shall
be canceled and disposed of by the Issuer. The Issuer shall keep copies of
this Agreement and any notices received hereunder available for inspection
during normal business hours at its office. The Issuer
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will furnish, at its expense, copies of this Agreement and all such notices,
upon request, to any holder of any Warrant Certificates.
7. PAYMENT OF TAXES. The Issuer will pay all stamp and transfer
taxes in connection with the issuance, sale, delivery or transfer of the
Warrants hereunder, as well as all such stamp and transfer taxes attributable
to the initial issuance of Warrant Shares upon the exercise of Warrants and
payment of the Exercise Price.
8. MUTILATED OR MISSING WARRANT CERTIFICATES. In case any of the
Warrant Certificates shall be mutilated, lost, stolen or destroyed, the Issuer
shall issue, in exchange and substitution for and upon cancellation of the
mutilated Warrant Certificate, or in lieu of and substitution for the Warrant
Certificate lost, stolen or destroyed, a new Warrant Certificate of like tenor
and representing an equivalent number of Warrants.
9. RESERVATION OF WARRANT SHARES. The Issuer will at all times
reserve and keep available, free from preemptive or similar rights, out of the
aggregate of its authorized but unissued capital stock or its authorized and
issued capital stock held in its treasury, for the purpose of enabling it to
satisfy any obligation to issue Warrant Shares upon exercise of Warrants, (i)
the maximum number of shares of each class of capital stock constituting a part
of the Warrant shares which may then be deliverable upon the exercise of all
outstanding Warrants and (ii) the maximum number of shares of each class of
capital stock of the Issuer which may then be deliverable upon the conversion
into Class A Common Stock of the Issuer of all issued Warrant Shares. The
Issuer shall cause all Warrant Shares of each class of capital stock of the
Issuer or other securities of the Issuer reserved for issuance upon exercise of
the Warrants to be listed (or to be listed subject to notice of issuance) on
each securities exchange on which such shares of capital stock of the Issuer or
any such other securities are listed.
The Issuer or, if appointed, the transfer agent for shares of each
class of capital stock of the Issuer (the "Transfer Agent") and every,
subsequent transfer agent for any shares of the Issuer's capital stock issuable
upon the exercise of the Warrants will be irrevocably authorized and directed
at all times to reserve such number of authorized shares as shall be required
for such purpose. The Issuer will keep a copy of this Agreement on file with
the Transfer Agent and with every subsequent transfer agent for any shares of
the Issuer's capital stock issuable upon the exercise of the rights of purchase
represented by the Warrants or of the rights of conversion of the Warrant
Shares. The Issuer will furnish such Transfer Agent a copy of all notices of
adjustments, and certificates related thereto, transmitted to each holder
pursuant to Section 13.
The Issuer covenants that (i) all Warrant Shares which may be issued
upon exercise of Warrants will, upon issuance and payment of the Exercise Price
therefor, and (ii) all shares of capital stock of the Issuer which may be
issued upon the conversion of any issued Warrant Shares will, in each case, be
fully paid, nonassessable, free of preemptive or similar rights and free from
all taxes, liens, charges and security interests with respect to the issuance
thereof.
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10. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES
ISSUABLE. The Exercise Price and the number of Warrant Shares issuable upon
the exercise of each Warrant are subject to adjustment from time to time upon
the occurrence of the events enumerated in this Section. For purposes of this
Section, "Common Stock" means shares now or hereafter authorized of any class
of common stock of the Issuer and any other stock of the Issuer, however
designated, that has the right (subject to any prior rights of any class or
series of preferred stock) to participate in any distribution of the assets
upon voluntary or involuntary liquidation, dissolution or winding up or of the
earnings of the Issuer without limit as to per share amount. "Common Stock"
shall not include preferred or special stock.
(a) ADJUSTMENT FOR CHANGE IN CAPITAL STOCK OF THE ISSUER.
If the Issuer:
(1) pays a dividend or makes a distribution on
any class of its Common Stock in shares of any class of its
Common Stock;
(2) subdivides its outstanding shares of any
class of Common Stock into a greater number of shares;
(3) combines its outstanding shares of any class
of Common Stock into a smaller number of shares;
(4) makes a distribution on any class of its
Common Stock in shares of its capital stock other than Common
Stock; or
(5) issues by reclassification of any class of
its Common Stock any shares of its capital stock;
then the Exercise Price in effect immediately prior to such action
shall be proportionately adjusted so that the holder of any Warrant
thereafter exercised may receive the aggregate number and kind of
shares of capital stock of the Issuer which it would have owned
immediately following such action if such Warrant had been exercised
immediately prior to such action, as determined by the Board of
Directors of the Issuer in the good faith exercise of its reasonable
business judgment.
The adjustment shall become effective immediately after the
record date in the case of such a stock dividend or distribution and
immediately after the effective date in the case of a subdivision,
combination or reclassification.
If after an adjustment a holder of a Warrant upon exercise of
such Warrant may receive shares of two or more classes of capital
stock of the Issuer, the Board of Directors of the Issuer shall
determine in the good faith exercise of its reasonable business
judgment the allocation of the adjusted Exercise Price between the
classes of capital stock. After
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such allocation, the exercise privilege and the Exercise Price of each
class of capital stock shall thereafter be subject to adjustment on
terms comparable to those applicable to Common Stock in this Section.
Such adjustment shall be made successively whenever any event
listed above shall occur.
(b) ADJUSTMENT FOR COMMON STOCK ISSUE. If the Issuer
issues shares of Common Stock for a consideration per share less than
the Current Market Price per share on the date the Issuer fixes the
offering price of such additional shares, the Exercise Price shall be
adjusted in accordance with the following formula:
P
-
E, = E x 0 + M
-----
A
where:
E, = the adjusted Exercise Price.
E = the then current Exercise Price.
0 = the number of shares outstanding immediately prior to
the issuance of such additional shares.
P = the aggregate consideration received for the issuance
of such additional shares.
M = the Current Market Price per share on the date of
issuance of such additional shares.
A = the number of shares outstanding immediately after
the issuance of such additional shares.
The adjustment shall be made successively whenever any such
issuance is made, and shall become effective immediately after such
issuance.
The provisions of this subsection do not apply to:
(1) any of the transactions described in
subsection (a) or for which an adjustment has been made
pursuant to the provisions of subsection (c) or (d) of this
Section, or
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(2) the exercise of Warrants.
(c) ADJUSTMENT FOR CONVERTIBLE SECURITIES ISSUE. If the
Issuer issues any Convertible Securities (other than Convertible
Securities for which an adjustment has been made pursuant to the
provisions of subsection (d) of this Section), whether or not the
right to convert or exchange thereunder is immediately exercisable or
is conditioned upon the passage of time, the occurrence or non-
occurrence of some other event, or both, for a consideration per share
of Common Stock initially deliverable upon conversion or exchange of
such Convertible Securities less than the Current Market Price per
share on the date of issuance of such Convertible Securities, the
Exercise Price shall be adjusted in accordance with this formula:
P
-
E' = E x 0 + M
-----
0 + D
where:
E' = the adjusted Exercise Price.
E = the then current Exercise Price.
0 = the number of shares outstanding immediately prior to
the issuance of such securities.
P = the aggregate consideration received for the issuance
of such securities.
M = the Current Market Price per share on the date of
issuance of such securities.
D = the maximum number of shares deliverable upon
conversion or in exchange for such securities at the
Minimum Rate.
The term "Minimum Rate" means the lowest rate at which the Convertible
Securities can be converted into or exchanged for Common Stock,
regardless of whether that is the initial rate or is conditioned upon
the passage of time, the occurrence or nonoccurrence of some other
event, or both.
The adjustment shall be made successively whenever any such
issuance is made, and shall become effective immediately after such
issuance.
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If all of the Common Stock deliverable upon conversion or
exchange of such securities has not been issued when such securities
are no longer outstanding, then the Exercise Price shall promptly be
readjusted to the Exercise Price which would then be in effect had the
adjustment upon the issuance of such securities been made on the basis
of the actual number of shares of Common Stock issued upon conversion
or exchange of such securities.
(d) ADJUSTMENT FOR RIGHT, OPTION AND WARRANT ISSUES. If
the Issuer issues any rights, options or warrants (other than the
Warrants, the Deerpath Warrants and the Employee Options (as
hereinafter defined)) to subscribe for or purchase or otherwise
acquire Common Stock or Convertible Securities (the "Option
Securities"), then, upon the issuance of the Common Stock and/or
Convertible Securities deliverable upon the exercise of such Option
Securities or upon the conversion or exchange of such securities, an
adjustment shall be made pursuant to Section 10(b) on the basis of the
actual number of shares of Common Stock issued upon such exercise,
conversion or exchange of such Option Securities.
(e) CURRENT MARKET PRICE. In subsections (b), (c) and (d)
of this Section the Current Market Price per share of Common Stock on
any date is the average of the Quoted Prices of the Common Stock for
30 consecutive trading days commencing 45 trading days before the date
in question. The "Quoted Price" of the Common Stock for each day is
the last reported sales price of the Common Stock on such day as
reported by NASDAQ, National Market System, or, if the Common Stock is
listed on a securities exchange, the last reported sales price of the
Common Stock on such exchange (which shall be for consolidated trading
if applicable to such exchange) on such day, or if neither is so
reported or listed, the average of the last reported bid and asked
prices of the Common Stock on such day. In the absence of one or more
such quotations, the current Market Price shall be determined by the
Board of Directors of the Issuer in its reasonable business judgment
exercised in good faith and notice of such determination shall be
delivered to the Purchaser; provided, however, that during the 30-day
period following the date notice of such determination is received by
holders of the Warrants, such holders may object to such determination
by giving notice to the Issuer. If within such 30-day period, the
holders of a majority of the Warrants notify the Issuer of their
objection (the "Objection Notice") and such holders and the Issuer do
not agree upon the Current Market Price within fifteen (15) days
following receipt by the Issuer of the Objection Notice (the
"Negotiation Period"), then either the Issuer or a majority in
interest of the holders of the Warrants shall have the right to invoke
the following procedure:
1. The Issuer and the holders shall each submit
their determination of Current Market Price within ten (10)
days after the expiration of the Negotiation Period;
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2. Such determinations of Current Market Price
shall be submitted to one of the following investment banking
firms: Kidder Peabody & Co., Inc., The First-Boston Corp. and
Dillon Reade & Co., as selected by a majority in interest of
the holders of the Warrants within five (5) days after the
expiration of the Negotiation Period or if each of such
investment banking firms shall decline or fail to act, a
recognized investment banking firm of national reputation
selected by agreement of the Issuer and a majority in interest
of the holders of the Warrants (the firm so chosen, the
"Appraiser") for consideration; and
3. The Appraiser shall decide within twenty (20)
days of its selection but no earlier than ten (10) days of its
selection which of the determinations considered most closely
approximates Current Market Price, which decision shall be
final and binding on the Issuer and the holders of the
Warrants unless they agree in writing to settle their dispute
prior to the Appraiser's determination. Upon receipt of the
submission from both the Issuer and the representative of the
holders of the warrants of their determination of Contract
Value, the Appraiser shall promptly transmit the determination
of each party to the other party.
All costs of appraisal shall be borne by the party whose
determination was not selected by the Appraiser as the Current
Market Price and in the case of agreement subsequent to the
Appraiser's selection but prior to such determination, such
costs shall be divided equally.
(f) CONSIDERATION RECEIVED. For purposes of any
computation respecting consideration received pursuant to any
subsection of this Section, the following shall apply:
(1) in the case of the issuance of shares of
Common Stock for cash, the consideration shall be the amount
of such cash, after deduction for any commissions, discounts
or other expenses incurred by the Issuer for any underwriting
of the issue or otherwise in connection therewith;
(2) in the case of the issuance of shares of
Common Stock for a consideration consisting in whole or in
part of other than cash, the consideration other than cash
shall be deemed to be the fair market value thereof as
determined by the Board of Directors of the Issuer in the good
faith exercise of its reasonable business judgment, after
deduction for all expenses incurred by the Issuer in
connection therewith, provided that the Issuer agrees that in
no event will shares of capital stock of the Issuer be issued
in exchange for services;
(3) in the case of the issuance of Convertible
Securities or securities issuable upon the exercise of Option
Securities (other than the Deerpath Warrants
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and the Employee Options (as defined in paragraph (4) below)),
the aggregate consideration received therefor shall be deemed
to be the consideration received by the Issuer for the
issuance of such Convertible Securities, plus the
consideration, if any, received by the Issuer for the issuance
of such Option Securities, plus the additional minimum
consideration, if any, to be received by the Issuer upon the
conversion, exchange or exercise thereof (the consideration in
each case to be determined in the same manner as provided in
clauses (1) and (2) of this subsection); and
(4) in the case of (i) the warrants to purchase
an aggregate of 482 shares of Common Stock issued by the
Issuer to Deerpath, (ii) the warrants to purchase an aggregate
of 600 shares of Common Stock to be issued by the Issuer to
Deerpath as required by Section 27(v) of this Agreement (each,
a "Deerpath Warrant" and together, the "Deerpath Warrants")
and (iii) the options to purchase an aggregate of 2,300 shares
of Common Stock authorized for issuance to certain employees
of the Issuer (the "Employee Options"), the aggregate
consideration received therefor shall be deemed to be zero and
the issuance of shares pursuant to the Deerpath Warrants and
the Employee Options shall cause an adjustment to be made
pursuant to Section 10(b) of this Agreement.
(g) SPECIAL ADJUSTMENT. If the purchase price provided
for in any Option Securities, the additional consideration, if any,
payable upon the conversion or exchange of any Convertible Securities
or the rate at which any Convertible Securities are convertible into
or exchangeable for Common Stock shall change (other than under or by
reason of provisions designed to protect against dilution), the
Exercise Price or number of Warrant Shares purchasable upon the
exercise of the Warrants in effect at the time of such event shall
forthwith be readjusted to the Exercise Price or number of Warrant
Shares purchasable upon the exercise of the Warrants which would have
been in affect at such time had such Option Securities or Convertible
Securities outstanding at such time initially been granted, issued or
sold and the Exercise Price or number of Warrant Shares purchasable
upon the exercise of the Warrants initially adjusted as provided in
the applicable subsection of this Section, whichever was applicable,
except that the minimum amount of additional consideration payable and
the total maximum number of shares issuable shall be determined after
giving effect to such event (and any prior event or events).
(h) WHEN NO ADJUSTMENT REQUIRED. No adjustment need be
made for a change in the par value or absence of par value of any
Common Stock.
To the extent the Warrants become exercisable, in whole or in
part, for cash, no adjustment need be made thereafter as to the cash.
Interest shall not accrue on the cash.
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No adjustment in the Exercise Price need be made if (i) it
would reduce the Exercise Price below the then par value (provided
that the number of Warrant Shares for which this Warrant shall
thereafter be exercisable shall be computed as if such Exercise Price
had been so reduced) or (ii) the adjustment would require an increase
or decrease of less than .001% in the Exercise Price. Any adjustments
that are not made but deferred shall be carried forward and taken into
account in any subsequent adjustment.
(i) NOTICE OF ADJUSTMENT. Whenever the Exercise Price is
adjusted or the Issuer takes any action that would require (a) any
adjustment in (i) the Exercise Price or (ii) the number and type of
securities or other property constituting Warrant Shares purchasable
upon exercise of the Warrants or (b) the execution and delivery of a
supplemental Warrant Agreement, the Issuer shall provide the notices
required by Section 13.
(j) VOLUNTARY REDUCTION. The Issuer may reduce the
Exercise Price from time to time by any amount for any period of time
of at least 20 days (including, without limitation, permanently) if
the reduction is irrevocable during such period; provided, however,
that in no event may the Exercise Price be reduced to an amount less
than the par value of a share of Common Stock.
Whenever the Exercise Price is reduced, the Issuer shall mail
to Warrant holders, in the manner sat forth in Section 13, a notice of
such reduction at least 20 days before the date such reduction takes
effect. The notice shall state the reduced Exercise Price and the
period it will be in effect.
Any reduction of the Exercise Price under this subsection
(other than a permanent reduction) shall not change or adjust the
Exercise Price otherwise in effect for purposes of the other
subsections of this Section.
(k) REORGANIZATION OF THE ISSUER. In the event of any
capital reorganization, recapitalization or reclassification of the
capital stock of the Issuer, or consolidation, merger or amalgamation
of the Issuer with another entity, or the sale, lease, transfer,
conveyance or other disposition other than in the ordinary course of
business of all or substantially all of its assets to another entity
(any such occurrence being hereinafter referred to as a ("Major
Transaction"), then, as a condition to such Major Transaction, lawful
and adequate provision shall be made whereby (i) the holders of the
Warrant Certificates shall thereafter have the right to purchase and
receive upon exercise of the Warrant, on the basis and upon the terms
and conditions specified in this Agreement and in lieu of the Warrant
Shares purchasable and receivable upon the exercise of the rights
represented by the Warrants immediately prior to such Major
Transaction, such shares of stock, securities or assets as would be
issuable or payable with respect to or in exchange for the number of
Warrant Shares which would have been outstanding had this Warrant
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been exercised immediately prior to such Major Transaction, and (ii)
if such Major Transaction is part of a transaction with any person (or
any affiliate of such person) who shall previously have made a
purchase, tender or exchange offer which was accepted by the holders
of not less than twenty percent (20%) of the outstanding shares of
Common Stock, the holder of the Warrants shall have been given a
reasonable period of time (and, in no event, less than 30 days) to
elect to receive upon exercise of the Warrant, on the basis and upon
the terms and conditions specified in this Agreement and in lieu of
the Warrant Shares purchasable and receivable upon the exercise of the
rights represented by the Warrants immediately prior to such Major
Transaction, either (x) the stock, securities, cash or properties it
would have received pursuant to clause (i) or (y) stock, securities,
cash or properties of the nature or type issued to holders of the
common Stock in accordance with such purchase, tender or exchange
offer, or the equivalent thereof, in an amount which the holder of the
Warrants would have received had it held the number of shares of
Common Stock for which the Warrant was exercisable immediately prior
to such purchase, tender or exchange offer.
The Issuer shall not effect any such Major Transaction unless
prior to or simultaneously with the consummation thereof the successor
entity (if other than the Issuer) resulting from such consolidation,
merger or amalgamation or the entity purchasing or otherwise acquiring
such assets (i) shall enter into a supplemental Warrant Agreement,
containing provisions with respect to the rights and interests of the
holder of the Warrants (including without limitation provisions for
adjustment of the Exercise Price and of the number and type of
securities purchasable upon the exercise of the Warrants)
substantially identical to the provisions of this Agreement (which
supplemental Warrant Agreement shall be satisfactory in form, scope
and substance to a majority in interest of the holders of the warrants
and shall be mailed or delivered to the registered holders of the
Warrants in accordance with Section 14) and shall assume the
obligation to deliver to such holders such shares of stock, securities
or assets as, in accordance with the foregoing provisions, such
holders may be entitled to purchase (the "Substitute Securities") and
(ii) shall assume all of the obligations of the Issuer set forth in
the Put Agreement of even date herewith between the Issuer and the
Purchaser (the "Put Agreement") and the Registration Rights Agreement
of even date herewith between the Issuer and the Purchaser (the
"Registration Rights Agreement"), provided that such obligations
shall, following such assumption, apply to the Substitute Securities
rather than to the Warrants and the Warrant Shares. The foregoing
provisions of this paragraph shall similarly apply to successive Major
Transactions.
If the issuer of securities deliverable upon exercise of
Warrants under the supplemental Warrant Agreement is an affiliate of
the formed, surviving, transferee or lessee entity, such issuer shall
join in the supplemental Warrant Agreement.
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(l) WHEN ISSUANCE OR PAYMENT MAY BE DEFERRED. In any
case in which this Section shall require that an adjustment in the
Exercise Price be made effective as of a record date for a specified
event, the Issuer may elect to defer until the occurrence of such
event (i) issuing to the holder of any Warrant exercised after such
record date the Warrant Shares issuable upon such exercise over and
above the Warrant Shares issuable upon such exercise on the basis of
the Exercise Price prior to such adjustment and (ii) paying to such
holder any amount in cash in lieu of a fractional share pursuant to
Section 11; provided, however, that the Issuer shall deliver to such
holder a bill or other appropriate instrument evidencing such holder's
right to receive such additional Warrant Shares and cash upon the
occurrence of the event requiring such adjustment.
(m) ADJUSTMENT IN NUMBER OF SHARES. Upon each adjustment
of the Exercise Price pursuant to this Section, each Warrant
outstanding prior to the making of the adjustment in the Exercise
Price shall thereafter evidence the right to receive upon payment of
the adjusted Exercise Price that number of shares of Common Stock
(calculated to the nearest hundredth) obtained from the following
formula:
N, = N x E
-
E,
where:
N, = the adjusted number of Warrant Shares issuable upon
exercise of a Warrant by payment of the adjusted
Exercise Price.
N = the number or Warrant Shares previously issuable upon
exercise of a Warrant by payment of the Exercise
Price prior to adjustment.
E, = the adjusted Exercise Price.
E = the Exercise Price prior to adjustment.
Anything in this subsection or elsewhere in this Agreement to the
contrary notwithstanding, if, because of any limitation set forth in
subsection (h), no adjustment in the Exercise Price is made, the
provisions of this subsection shall nevertheless be given effect so as
to increase the adjusted number of warrant Shares as though E, in the
above formulas had actually been adjusted.
11. FRACTIONAL INTERESTS. The Issuer shall not be required to
issue fractional Warrant Shares on the Exercise of Warrants. If more than one
Warrant shall be presented for exercise in full at the same time by the same
holder, the number of full Warrant Shares which shall be issuable upon exercise
thereof shall be computed on the basis of the aggregate number of Warrant
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Shares purchasable on exercise of the Warrants so presented. If any fraction
of the Warrant Shares would, except for the provisions of this Section, be
issuable on the exercise of any Warrants (or specified portion thereof), the
Issuer shall pay an amount in cash equal to the Exercise Price on the day
immediately preceding the date the Warrant is presented for exercise,
multiplied by such fraction.
12. PUT OF WARRANT OWNERSHIP; DISPOSITION OF WARRANT SHARES;
REGISTRATION OF WARRANT SHARES. The put and call of the Warrant shall be
governed by the Put Agreement; ownership and disposition of the Warrants and
the Warrant Shares shall be subject to the Stockholders Agreement; and
registration of the Warrant Shares shall be governed by the Registration Rights
Agreement.
13. NOTICE TO WARRANT HOLDERS. Upon any adjustment of the
Exercise Price or number of Warrant Shares purchasable upon exercise of the
Warrants pursuant to Section 10, and as otherwise required by Section 10, the
Issuer shall promptly thereafter (i) cause to be filed with the Issuer a
certificate of the Chief Financial Officer of the Issuer setting forth the
Exercise Price and the number and type of securities or other property
constituting Warrant Shares after such adjustment and setting forth in
reasonable detail the method of calculation and the facts upon which such
calculations are based and setting forth the number and type of securities or
other property constituting Warrant Shares (or portion thereof) issuable after
such adjustment in the Exercise Price or number of Warrant Shares purchasable
upon exercise of the Warrants, upon exercise of a Warrant and payment of the
adjusted Exercise Price, and (ii) cause to be given to each of the registered
holders of the Warrant Certificates at its address appearing on the Warrant
register written notice of such adjustments by first-class mail, postage
prepaid. Where appropriate, such notice may be given in advance and included
as a part of the notice required to be mailed under the other provisions of
this Section.
In the event:
(a) the Issuer shall authorize the issuance to holders
(although not necessarily to all such holders) of shares of Common
Stock rights, options or warrants to subscribe for or purchase or
otherwise acquire shares of Common Stock or any other securities or
property (including securities of any other company) or of any other
subscription rights, options or warrants; or
(b) the Issuer shall authorize the payment of any
dividend or distribution to holders of shares of Common Stock of cash,
Common Stock or other securities or property (including securities of
any other company) of the Issuer; or
(c) of any capital reorganization, reclassification or
recapitalization of the capital stock of the Issuer, or any
amalgamation, consolidation or merger to which the Issuer is a party,
or of the sale, lease, conveyance, transfer or other disposition of
the
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properties and assets of the Issuer (other than in the ordinary course
of business) substantially as an entirety, or a purchase, tender or
exchange offer for shares of Common Stock or other securities
constituting part of the Warrant Shares (whether by the Issuer or some
other party); or
(d) of the voluntary or involuntary dissolution,
liquidation or winding up of the Issuer; or
(e) the Issuer proposes to take any action which would
require an adjustment of the Exercise Price or number of Warrant
Shares purchasable upon exercise of the Warrants pursuant to Section
10;
then the Issuer shall cause to be given to each of the registered holders of
the Warrant Certificates at his or its address appearing an the Warrant
register, at least 30 days (or 20 days in any case specified in clauses (a) or
(b) above) prior to the applicable record date hereinafter specified (or
promptly in the case of events for which there is no record date) by first
class mail, postage prepaid, a written notice stating (as applicable) (i) the
date as of which the holders of record of shares of Common Stock entitled to
receive any such rights, options, warrants or distribution are to be
determined, (ii) the initial expiration date set forth in any purchase, tender
or exchange offer for shares of Common Stock, or (iii) the date on which any
such consolidation, merger, sale, lease, conveyance, transfer, disposition,
dissolution, liquidation or winding up is expected to become effective or be
consummated, and the date as of which it is expected that holders of record of
shares of Common Stock or other securities constituting a part of the Warrant
Shares (or securities into which the Warrant Shares may be converted) shall be
entitled to exchange such shares or securities for securities or other
property, if any, deliverable upon such reclassification, recapitalization,
reorganization, consolidation, merger, amalgamation, sale, lease, conveyance,
transfer, disposition, dissolution, liquidation or winding up. The failure to
give the notice required by this Section or any defect therein shall not affect
the legality or validity of any distribution, right, option, warrant,
reorganization, recapitalization, reclassification, consolidation, merger,
amalgamation, sale, lease, conveyance, transfer, disposition, dissolution,
liquidation or winding up, or the vote upon any action.
The Issuer shall give to each Warrant holder written notice of any
determination to register any of its Common Stock at the same time that it
gives notice to holders of Registrable Securities (as defined in the
Registration Rights Agreement) pursuant to the Registration Rights Agreement.
The Issuer shall promptly deliver to each Warrant holder copies of all
reports and filings made with the Securities and Exchange Commission (the
"SEC") or furnished to the holders of its Common Stock or other securities
constituting a part of the Warrant Shares or into which Warrant Shares may be
converted.
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Nothing contained in this Agreement or in any of the Warrant
Certificates shall be construed as conferring upon the holders thereof the
right to vote or to consent as shareholders in respect of the meetings of
shareholders or the election of members of the Board of Directors of the Issuer
or any other matter, or any rights whatsoever as shareholders of the Issuer.
14. NOTICES TO THE ISSUER AND WARRANT HOLDERS. Any notice or
demand authorized by this Agreement to be given or made by the registered
holder of any Warrant Certificate to or on the Issuer shall be sufficiently
given or made when received at the office of the Issuer expressly designated by
the Issuer as its office for purposes of this Agreement (until the Warrant
holders are otherwise notified in accordance with this Section by the Issuer),
as follows:
First Premium Services, Inc.
520 Lake Cook Road
Suite 300
Deerfield, Illinois 60015-4926
Attention: Mr. James C. Knollenberg
with a copy to: Rudnick & Wolfe
203 North LaSalle Street
Suite 1900
Chicago, Illinois 60601
Attention: Michael B. Fischer, Esq.
Any notice pursuant to this Agreement to be given by the Issuer to the
registered holder(s) of any Warrant Certificate shall be sufficiently given
when received by such holder at the address appearing on the Warrant register
of the Issuer (until the Issuer is otherwise notified in accordance with this
Section by such holder).
15. CASH DISTRIBUTIONS AND DIVIDENDS. The Issuer shall not
declare or pay any dividends or make any distributions to the holders of its
Common Stock other than dividends payable in and distributions of Common Stock.
Notwithstanding the foregoing and without authorizing same, if the Issuer pays
a dividend or makes a distribution to the holders of its Common Stock of any
securities (other than Common Stock) or property (including cash and securities
of other companies) of the Issuer, or any rights, options or warrants to
purchase securities (other than Common Stock) or property (including securities
of other companies) of the Issuer, then, simultaneously with the payment of
such dividend or the making of such distribution, it will pay or distribute to
the holders of the Warrant Certificates an amount of property (including
without limitation cash) and/or securities (including without limitation
securities of other companies) of the Issuer as would have been received by
such holders had they exercised all of the Warrants (whether or not the
Warrants were then exercisable) immediately prior to the record date (or other
applicable date) used for determining stockholders of the Issuer entitled to
receive such dividend or distribution. Anything in subsection (d) of Section
10 to the contrary
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notwithstanding, no adjustment to the Exercise Price shall be made for any
distribution of Convertible Securities of the Issuer to the Warrant holders
pursuant to the provisions of this Section.
16. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Issuer or the holders shall bind and
inure to the benefit of their respective successors and assigns, including
those by operation of law, merger, consolidation or as otherwise provided in
Section 10(k).
17. TERMINATION. This Agreement shall terminate when all Warrants
have been exercised pursuant to this Agreement, have expired unexercised in
accordance with their terms or have been redeemed pursuant to the Put
Agreement.
18. GOVERNING LAW. THIS AGREEMENT AND EACH WARRANT CERTIFICATE
ISSUED HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE
STATE OF NEW YORK AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS OF SAID STATE.
19. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Issuer and the
registered holders of the Warrant Certificates any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Issuer and the registered holders of the Warrant
Certificates.
20. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each such counterpart shall for all purposes be deemed to be
an original, and all such counterparts shall together constitute one and the
same instrument.
21. AMENDMENTS; WAIVERS. No provision of this Agreement may be
amended or waived except by an instrument in writing signed by the party sought
to be bound; provided, however, that any amendment requested or waiver sought
from the Warrant holders of any provision of this Agreement which affects
warrant holders generally may be given by holders of at least sixty-six and
two-thirds percent (66-2/3%) of the Warrants outstanding and any waiver so
given shall be binding on all warrant holders; provided, however, that the
provisions of Section 6 with respect to the type of securities for which the
Warrants are exercisable may not be changed without the consent of each holder
of Warrants affected thereby. No failure or delay by any party in exercising
any right or remedy hereunder shall operate as a waiver thereof, nor shall a
waiver of a particular right or remedy on one occasion be deemed a waiver of
any other right or remedy or a waiver of the same right or remedy on any
subsequent occasion.
22. WAIVER OF JURY TRIAL. THE PURCHASER AND THE ISSUER HEREBY
KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHTS THEY
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MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION USED HEREON, OR
ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS AGREEMENT, THE WARRANTS OR
ANY OTHER DOCUMENT EXECUTED PURSUANT HERETO, OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE PURCHASER OR
THE ISSUER. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PURCHASER'S
ENTERING INTO THIS AGREEMENT.
23. JURISDICTION. The Issuer hereby agrees that any legal action
or proceeding against it with respect to this Agreement, the Warrants or any of
the documents delivered in connection herewith or therewith may be brought in
the courts of the State of New York or of the United States of America for the
Southern District of New York as any holder of the Warrants may elect, and, by
execution and delivery hereof, it accepts and consents for itself and in
respect of its property, generally and unconditionally, the jurisdiction of the
aforesaid courts and agrees that such jurisdiction shall be exclusive, unless
waived by a majority in interest of the holders of the Warrants in writing,
with respect to any action or proceeding brought by it against such holders.
The Issuer hereby irrevocably designates, appoints and empowers Prentice-Hall
Corporate Services, whose present address is 15 Columbus Circle, New York, New
York 10023 as its authorized agent to receive, for and on behalf of it and its
property, service of process in the State of New York when and as such legal
actions or proceedings may be brought in the courts of the State of New York or
of the United States of America for the Southern District of New York, and such
service of process shall be deemed complete upon the date of delivery thereof
to such agent, or upon the earliest of any other date permitted by applicable
law. It is understood that a copy of said process served on such agent will be
forwarded to the Issuer as soon as practicable, at is address set forth herein,
but its failure to receive such copy shall not affect in any way the service of
said process on said agent as the agent of the Issuer. The Issuer irrevocably
consents to the service of process out of any of the aforementioned courts in
any such action or proceeding by the mailing of the copies thereof by certified
mail, return receipt requested, postage prepaid, to it at its address set forth
herein, such service to become effective upon the earlier of (i) the date 10
calendar days after such mailing and (ii) any earlier date permitted by
applicable law. The Issuer agrees that it will at all times continuously
maintain an agent to receive service of process in the State of New York on
behalf of itself and its properties and in the event that, for any reason, the
agent named above or its successor shall no longer serve as its agent to
receive service of process in the State of New York on its behalf, it shall
promptly appoint a successor so to serve and shall advise the holders of the
Warrants thereof. The Issuer agrees that Sections 5-1401 and 5-1402 of the
General Obligations Law of the State of New York shall apply to this Agreement
and waives any right to stay or to dismiss any action or proceeding brought
before said courts on the basis of forum non conveniens. Nothing herein shall
affect the right of any holder of the warrants to bring proceedings against the
Issuer in the courts of any other jurisdiction or to serve process in any other
manner permitted by applicable law.
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24. SPECIFIC PERFORMANCE. The Issuer recognizes that the rights
of the holders of the Warrants under this Agreement are unique and,
accordingly, the holders of the Warrants shall, in addition to such other
remedies as may be available to any of them at law or in equity, have the right
to enforce their rights hereunder by actions for injunctive relief and specific
performance to the extent permitted by law. The Issuer agrees that monetary
damages would not be adequate compensation for any loss incurred by reason of a
breach by it of the provisions of this Agreement and hereby agrees to waive in
any action for specific performance the defense that a remedy at law would be
adequate. This Agreement is not intended to limit or abridge any rights of the
holders of the Warrants which may exist apart from this Agreement.
25. ANNUAL AND QUARTERLY REPORTS; OTHER INFORMATION. The Issuer
will deliver to each holder of Warrants and Warrant Shares:
(a) as soon as practicable after the end of each fiscal
year audited annual financial statements of the Issuer and after the
end of each quarter, unaudited quarterly financial statements of the
Issuer, including, in each case, a balance sheet, a statement of
operations, and a statement of cash flow of the Issuer for such year
or quarter, all prepared in accordance with generally accepted
accounting principles;
(b) as soon as available, copies of all documents (other
than any which have been granted confidential treatment) filed with
the SEC;
(c) as soon as available, copies of all reports and
financial and other information furnished to its shareholders; and
(d) until the consummation of the initial public offering
of any class of equity securities of the Issuer, such other financial
and other information as may, from time to time, be reasonably
requested by any such holder.
26. CHARTER PROVISIONS. So long as any Warrants or issued Warrant
Shares are outstanding, the Issuer's certificate of incorporation shall contain
the following provisions regarding the Class A Stock and the Class B Stock:
"FOURTH: NUMBER OF SHARES. The total number of shares of
stock which the Corporation shall have authority to issue is: ______
_________ (______) shares of capital stock (the "Capital Stock"), of
which ________________ (______) shall be designated Class A Voting
Common Stock, par value $.01 per share (herein called the "Class A
Common Stock"), ________________ (______) shall be designated Class B
Nonvoting Convertible Common Stock, par value $.01 per share (herein
called the "Class B Common Stock") [and ________________ (______)
shall be designated Preferred Stock, [no] par value [$______] per
share]. The Class A Common Stock and Class B Common Stock are
sometimes hereinafter jointly referred to as the Common Stock.
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All cross references in each subdivision of this ARTICLE refer
to other paragraphs in such subdivision unless otherwise indicated.
COMMON STOCK
Except as otherwise provided herein, all shares of Class A
Common stock and Class B Common Stock will be identical and will
entitle the holders thereof to the same rights and privileges.
(1) VOTING RIGHTS. Each share of Common Stock of the
corporation shall be equal in all respects to each other share of
Common Stock, except that the Class B Common Stock shall have no
voting power or voting rights with respect to any matter whatsoever
(except as maybe otherwise required by law). The holders of shares of
Class A Common Stock shall be entitled to one (1) vote for each share
of Common Stock held with respect to all matters as to which the Class
A Common Stock is entitled to be voted. Except as otherwise stated in
a Certificate of Designation designating any class or series of
Preferred Stock or as otherwise required by law, the holders of the
Class A Common Stock shall vote together with the holders of shares of
the Preferred Stock, and not separately by class, on any matter as to
which the Class A Common Stock is entitled to be voted.
(2) DIVIDENDS. The holders of the Common Stock shall be
entitled to receive such dividends (payable in cash, stock or
otherwise) as may be declared on the Common Stock by the Board of
Directors at any time or from time to time out of any funds legally
available therefor. When and as dividends are declared thereon,
whether payable in cash, property or securities of the Corporation,
the holders of Class A Common Stock and the holders of Class B Common
Stock will be entitled to share, ratably according to the number of
shares of Class A Common Stock or Class B Common Stock held by them,
in such dividends; provided that if dividends are declared which are
payable in shares of Class A Common Stock or Class B Common Stock,
dividends will be declared which are payable at the same rate on both
classes of Common Stock, and the dividends payable in shares of Class
A Common Stock will be payable to holders of Class A Common Stock, and
the dividends payable in shares of Class B Common Stock will be
payable to the holders of Class B Common Stock.
(3) LIQUIDATION RIGHTS. In the event of any liquidation,
dissolution or winding up of the Corporation, whether voluntary or
involuntary, after payment shall have been made to the holders of any
preferred stock pursuant to this ARTICLE, the holders of Class A
Common Stock and Class B Common Stock shall be entitled, to the
exclusion of the holders of preferred stock, to share, ratably
according to the number of shares of Class A Common Stock or Class B
Common Stock held by them, in the remaining assets of the Corporation
available for distribution to its stockholders.
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(4) CONVERSION OF CLASS B COMMON STOCK.
(i) At any time and from time to time, each record holder
of Class B Common Stock will be entitled to convert any and all of the
shares of such holder's Class B Common Stock into the same number of
shares of Class A Common Stock at such holder's election; provided
that each holder of Class B Common Stock shall only be entitled to
convert any share or shares of Class B Common Stock to the extent that
after giving effect to such conversion such holder or its affiliates
shall not directly or indirectly own, control or have power to vote a
greater quantity of securities of any kind issued by the corporation
than such holder and its affiliates are permitted to own, control or
have power to vote under any law or under any regulation, rule or
other requirement of any governmental authority at any time applicable
to such holder and its affiliates.
(ii) Each conversion of shares of Class B Common Stock
into shares of Class A Common Stock will be effected by the surrender
of the certificate or certificates representing the shares to be
converted at the principal office of the Corporation (or such other
office or agency of the Corporation as the Corporation may designate
by notice in writing to the holder or holders of the Class B Common
Stock) at any time during normal business hours, together with a
written notice by the holder of such Class B Common Stock stating that
such holder desires to convert the shares, or a stated number of the
shares, of Class B Common Stock represented by such certificate or
certificates into Class A Common Stock and that upon such conversion
such holder and its affiliates will not directly or indirectly own,
control or have tho power to vote a greater quantity of securities of
any kind issued by the Corporation than such holders and its
affiliates are permitted to own, control or have the power to vote
under any applicable law, regulation, rule or other governmental
requirement (and such statement will obligate the Corporation to issue
such Class A Common Stock). Such conversion will be deemed to have
been effected as of the close of business on the date on which such
certificate or certificates have been surrendered and such notice has
been received, and at such time the rights of the holder of the
converted Class B Common Stock as such holder will cease and the
person or persons in whose name or names the certificate or
certificates for shares of Class A Common Stock are to be issued upon
such conversion will be deemed to have become the holder or holders of
record of the shares of Class A Common Stock represented thereby.
(iii) Promptly after such surrender and the receipt of such
written notice, the Corporation will issue and deliver in accordance
with the surrendering holder's instructions (x) the certificate or
certificates for the Class A Common Stock issuable upon such
conversion and (y) a certificate representing any Class B Common Stock
which was represented by the certificate or certificates delivered to
the Corporation in connection with such conversion but which was not
converted.
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(iv) If the Corporation in any manner subdivides or
combines the outstanding shares of either Class A Common Stock or
Class B Common Stock, the outstanding shares of the other class will
be proportionately subdivided or combined.
(v) In the case of, and as a condition to, any capital
reorganization of, or any reclassification of the capital stock of,
the Corporation (other than a subdivision or combination of shares of
Class A Common Stock or Class B Common Stock into a greater or lesser
number of shares (whether with or without par value) or a change in
the par value of Class A Common Stock or Class B Common Stock or from
par value to no par value or from no par value to par value) or in the
case of, and as a condition to, the consolidation or merger of the
Corporation with or into another corporation (other than a merger in
which the Corporation is the continuing corporation and which does not
result in any reclassification of outstanding shares of Class A Common
Stock or Class B Common Stock), each share of Class B Common Stock
shall be convertible into the number of shares of stock or other
securities or property receivable upon such reorganization,
reclassification, consolidation or merger by a holder of the number of
shares of Class A Common Stock of the Corporation into which such
share of Class B Common Stock was convertible immediately prior to
such reorganization, reclassification, consolidation or merger; and,
in any such case, appropriate adjustment shall be made in the
application of the provisions set forth in this paragraph (4) with
respect to the rights and interests thereafter of the holders of Class
B Common Stock to the end that the provisions set forth in this
paragraph (4) (including provisions with respect to the conversion
rate) shall thereafter be applicable, as nearly as reasonably may be,
in relation to any shares of stock or other securities or property
thereafter deliverable upon the conversion of the shares of Class B
Common Stock.
(vi) Shares of Class B Common Stock which are converted
into shares of Class A Common Stock as provided herein shall not be
reissued.
(vii) The Corporation will at all times reserve and keep
available out of its authorized but unissued shares of Class A Common
Stock or its treasury shares, solely for the purpose of issuance upon
the conversion of the Class B Common Stock as provided in this
paragraph (4), such number of shares of Class A Common Stock as shall
then be issuable upon the conversion of all then outstanding shares of
Class B Common Stock (assuming that all such shares of Class B Common
Stock are held by persons entitled to convert such shares into Class A
Common Stock).
(viii) The issuance of certificates for Class A Common Stock
upon conversion of Class B Common Stock will be made without charge to
the holders of such shares for any stamp, transfer or issuance tax in
respect thereof or other cost incurred by the Corporation in
connection with such conversion and the related issuance of Class A
Common Stock. The Corporation will not close its books against the
transfer of Class B
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Common Stock or of Class A Common Stock issued or issuable upon
conversion of Class B Common Stock in any manner which would interfere
with the timely conversion of Class B Common Stock."
Notwithstanding the foregoing and subject to Section 9 hereof, the Issuer may
from time to time amend its certificate of incorporation, without the consent
of the Warrant holders to increase the authorized number of shares of Common
Stock.
27. COVENANTS. The Issuer hereby covenants and agrees that,
except as Purchaser may otherwise agree in writing, the Issuer shall:
(i) CONTINUANCE OF BUSINESS, ETC. Not wind up, liquidate
or dissolve; not engage to a material extent in any line of business
other than those in which it is actively engaged on the date hereof;
maintain all rights, privileges and franchises necessary in the normal
conduct of its business; and conduct its business in compliance in all
material respects with all requirements of law (including
environmental laws and, with respect to all employee benefit plans,
the Employee Retirement Income Security Act of 1974, as amended).
(ii) TRANSACTIONS WITH AFFILIATES. Not enter into any
transaction, including, without limitation, the purchase, sale,
leasing or exchange of property, real or personal, or the rendering of
any service, with any person or entity affiliated with Issuer, except
in the ordinary course of, and pursuant to the reasonable requirements
of, its business and upon fair and reasonable terms non less favorable
than would be obtained in a comparable arms-length transaction with
any other person or entity not affiliated with Issuer.
(iii) OTHER OBLIGATIONS. Maintain all of its obligations
for borrowed money, including, without limitation, its obligations to
LaSalle National Bank under the Loan and Security Agreement, dated as
of June 26, 1991 and as amended to date and from time to time
hereafter, between the Issuer and LaSalle, as agent for itself and The
Daiwa Bank Limited, in a current status.
(iv) RESTRICTED PAYMENTS. Not purchase, redeem or retire
or make any dividend or distribution on account of any shares of the
capital stock of Issuer or issue any phantom stock or stock
appreciation rights, except fore redemption of the Initial Preferred
Stock (as defined in the Put Agreement) pursuant to the terms thereof.
(v) DEERPATH WARRANTS. On or before February 28, 1993,
convert the Deerpath Shares into, or exchange them for, Deerpath
Warrants exercisable not earlier than December 31, 1995 for not more
than 600 shares of Common Stock at an exercise price of not less than
$500 per share.
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28
(vi) DEERPATH PREFERRED STOCK. The rights, designations,
performances, redemption provisions and other terms of the Initial
Preferred Stock (as defined in the Put Agreement) shall be
satisfactory in form and substance to the Purchaser.
(vii) STOCKHOLDERS AGREEMENT. Enter into the Stockholders
Agreement on or before February 28, 1993.
(viii) REGISTRATION RIGHTS AGREEMENT. Enter into a
Registration Rights Agreement satisfactory in form and substance to
the Purchaser on or before February 28, 1993.
The covenants set forth in this Section 27 shall survive the exercise of the
Warrants and the termination of this Agreement and shall remain in full force
and effect until the expiration of the Put Agreement.
28. PURCHASER OPTION.
(a) In the event the Issuer issues additional shares of
Common Stock (other than shares issued upon the exercise of any
Warrant), it shall so notify the Purchaser in writing (the "Issuance
Notice") prior to accepting subscriptions for such stock. The
Purchaser shall be granted an option to subscribe for that number of
such additional shares of Common Stock not in excess of the number
obtained by multiplying (i) the total number of additional shares of
Common Stock issued by (ii) a fraction (a) the numerator of which is
the number of Warrant Shares for which the Warrants are exercisable at
the time of such issuance and (b) the denominator of which is the
total number of issued and outstanding shares of Common Stock prior to
such issuance. Such shares to be purchased by the Purchaser shall be
issued as Class B Common Stock if the Purchaser so requests.
(b) The Purchaser shall have a period of ten (10)
Business Days (as defined in the Put Agreement) from the date of
receipt of the Issuance Notice (the "Election Expiration Date") to
elect, by written notice to the Issuer (the "Response Notice"), to
subscribe or refrain from subscribing for any additional shares. If
the Purchaser elects to purchase additional shares it shall (i)
specify in the Response Notice the number of shares for which it
elects to subscribe, up to the maximum to which it shall be entitled
pursuant to paragraph (a) above, (ii) execute a subscription agreement
in the form customarily used by the issuer in accepting subscriptions
for its capital stock and (iii) make payment for such shares within
the time required by the Issuer. In the event the Purchaser does not
deliver a Response Notice to the Issuer on or prior to the Election
Expiration Date, the Purchaser shall be deemed to have elected to
refrain from subscribing for any additional shares.
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29
29. AUTOMATIC EXTINGUISHMENT. In the event the Purchaser shall
fail to execute and deliver the Credit Agreement on or before February 28,
1993, this Agreement shall automatically terminate without further action of
the parties hereto and shall become null and void nunc pro tunc.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, as of the day and year set above written.
FIRST PREMIUM SERVICES, INC.
By:_____________________________________
Name:________________________________
Title:_______________________________
Attest:________________________________
Secretary/Assistant Secretary
INTERNATIONALE NEDERLANDEN
(U.S.) FINANCE CORPORATION
By:_____________________________________
Name:________________________________
Title:_______________________________
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EXHIBIT A
(Form of Warrant Certificate]
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. SAID SECURITIES KAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION, OR AN OPINION
OF COUNSEL (WHICH MAY BE COUNSEL TO THE HOLDER) AS TO AN EXEMPTION, FROM THE
REGISTRATION PROVISIONS OF SAID ACT.
THE WARRANTS REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF A PUT
AGREEMENT, DATED AS OF DECEMBER 31, 1992 BY AND BETWEEN FIRST PREMIUM SERVICES,
INC. AND INTERNATIONALE NEDERLANDEN (U.S.) FINANCE CORPORATION.
_________ Warrants
Warrant Certificate
FIRST PREMIUM SERVICES, INC.
This Warrant Certificate certifies that INTERNATIONALE NEDERLANDEN
(U.S.) FINANCE CORPORATION, or registered assigns, in the registered holder of
the number of Warrants (the "Warrants") set forth above to purchase shares of
Class B Convertible Common Stock (the "Common Stock") of FIRST PREMIUM
SERVICES, INC., an Illinois corporation ("the Issuer"). Each Warrant entitles
the holder upon exercise to receive from the Issuer one fully paid and
nonassessable share of Class B Convertible Common Stock, $.01 par value, of the
Issuer (a "Warrant Share") at the initial exercise price (the "Exercise Price")
of $.02, payable in lawful money of the United States of America, upon
surrender of this warrant Certificate and payment of the Exercise Price at the
office of the Issuer designated for such purpose, subject to the conditions set
forth herein and in the Warrant Purchase Agreement hereinafter referred to.
The Exercise Price and number and type of Warrant Shares issuable upon exercise
of the Warrants are subject to adjustment upon the occurrence of certain
events, as set forth in the Warrant Purchase Agreement.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants, and are issued or to be issued pursuant to a
Warrant Purchase Agreement dated As of December 30, 1992 (the "Warrant
Agreement"), duly executed and delivered by the Issuer, which Warrant Agreement
is hereby incorporated by reference in and made a part of this instrument and
is hereby referred to for a description of the rights, obligations, duties and
immunities hereunder of the Issuer and the holders of the Warrants (the words
"holders" or "holder" meaning the
A-1
31
registered holders or registered holder). A copy of the Warrant Agreement may
be obtained by the holder hereof upon written request to the Issuer.
The holder of Warrants evidenced by this Warrant Certificate may
exercise such warrants under and pursuant to the terms and conditions of the
Warrant Agreement by Surrendering this Warrant Certificate, with the form of
election to purchase attached hereto (and by this reference made a part hereof)
properly completed and executed, together with payment of the Exercise Price in
cash or by check payable to the order of the Issuer at the office of the Issuer
designated for such purpose. In the event that upon any exercise of
Warrants-evidenced hereby the number of Warrants exercised shall be less than
the total number of Warrants evidenced hereby, there shall be issued by the
Issuer to the holder hereof or his or its registered assignee a new Warrant
Certificate evidencing the number of Warrants not exercised.
The warrant Agreement provides that upon the occurrence of certain
events the Exercise Price set forth on the face hereof may, subject to certain
conditions, be adjusted. If the Exercise Price is adjusted, the War-rant
Agreement provides that the number of shares of Common Stock issuable upon the
exercise of each Warrant shall be adjusted. No fractional shares of Common
Stock will be issued upon the exercise,of any Warrant, but the Issuer will pay
the cash value thereof determined as provided in the Warrant Agreement. No
adjustment shall be made for any cash dividends on any Common Stock issuable
upon exercise of this Warrant.
The warrant Agreement provides that upon exercise of the Warrants,.the
holder of Common Stock issued upon such exercise will be bound by and subject
to tho terms of that certain Stockholders Agreement dated as of ______________,
by and among the Issuer, (specify parties] and the Purchaser listed therein
(the "Stockholders Agreement"). By acceptance of this Warrant Certificate, the
holder hereof agrees that upon exercise of some or all of the Warrants
evidenced hereby, he or it will be bound by the Stockholders Agreement as a
Purchaser thereunder. A copy of the Stockholders Agreement may be obtained by
the holder hereof upon written request to the Issuer.
The holders of the Warrants are entitled to certain registration rights
with respect to the Common Stock issuable upon the exercise thereof. Said
registration rights are set forth in a Registration Rights Agreement dated as
of ______________________________, by and between the Issuer and the Purchaser
of the Warrants (the "Registration Rights Agreement"). By acceptance of this
Warrant Certificate, the holder hereof agree that upon exercise of some or all
of the Warrants evidenced hereby, he or it will be bound by the Registration
Rights Agreement as a Purchaser thereunder. A copy of the Registration Rights
Agreement may be obtained by the holder hereof upon written request to tho
Issuer.
The Warrants are subject to that certain Put Agreement, dated as of
___________________, by and among the Issuer, and the Purchaser of the Warrants
(the "Put Agreement"), pursuant to which the holder hereof possesses certain
rights to put the Warrants to the Issuer, all at the times
A-2
32
specified in, and pursuant to the terms and conditions set forth in the Put
Agreement. By acceptance of this Warrant Certificate, the holder hereof agrees
to be bound by the Put Agreement to the same extent as the Purchaser of the
Warrants. A copy of the Put Agreement may be obtained by the holder hereof
upon written request to the Issuer.
Warrant Certificates, when surrendered at the office of the Issuer by
the registered holder thereof in person or by legal representative or attorney
duly authorized in writing, may be exchanged, in the manner and subject to the
limitations provided in the Warrant Agreement, but without payment of any
service charge, for another Warrant Certificate or Warrant Certificates of like
tenor evidencing in the aggregate a like number of Warrants.
The Issuer may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing made hereon) for the purpose of any exercise hereof,
of any distribution to the holder(s) hereof and for all other purposes, and
the Issuer shall not be affected by any notice to the contrary. Neither the
Warrants nor this Warrant Certificate entitles any holder hereof to any rights
of a stockholder of the Issuer (other than the right to receive dividends and
distributions as sat forth in Section 15 of the Warrant Agreement).
IN WITNESS WHEREOF, First Premium Services, Inc. has caused this
Warrant Certificate to be signed by its duly authorized officers and has caused
its corporate seal to be affixed hereunto or imprinted hereon.
Dated:__________________________ 199__
FIRST PREMIUM SERVICES, INC.
By:_____________________________________
Name:________________________________
Title:_______________________________
Name:________________________________
Title:_______________________________
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33
FORM OF ELECTION TO PURCHASE
(TO BE EXECUTED UPON EXERCISE OF WARRANT)
The undersigned holder hereby represents that he or it is the
registered holder of this Warrant Certificate, and hereby irrevocably elects to
exercise the right, represented by this warrant Certificate, to receive shares
of Class B Convertible Common Stock, par value $.01 per share, of First Premium
Services, Inc., and herewith tenders payment for such shares to the order of
First Premium Services, Inc. in the amount of $_______________ in accordance
with the terms hereof. The undersigned request that a certificate for such
shares be registered in the name of the undersigned or his/its nominee
hereinafter set forth, and further that such certificate be delivered to the
undersigned at the address hereinafter set forth or to such other person or
entity as is hereinafter set forth. If said number of shares is less than all
of the shares of Common Stock purchasable hereunder, the undersigned requests
that a new Warrant Certificate representing the remaining balance of such
shares be registered in the name of the undersigned or his/its nominee
hereinafter set forth, and further that such certificate be delivered to the
undersigned at the address hereinafter set forth or to such other person or
entity as is hereinafter set forth.
Certificate to be registered as follows:
Name:______________________________________________
Address:___________________________________________
Certificate to be delivered as follows:
Name:______________________________________________
Address:___________________________________________
Date:________________________________ ______________________________________
(Signature must conform in all respects
to the name of the holder as specified
on the face of Warrant, unless Form of
Assignment has been executed)
Federal Taxpayer ID No. ________________
A-4
34
FORM OF ASSIGNMENT
(TO BE EXECUTED UPON TRANSFER OF WARRANT]
For value received, the undersigned registered holder of the enclosed
Warrant hereby sells, assigns and transfers unto _________________ the right
represented by such Warrant to purchase shares of Common Stock of First Premium
Services, Inc. to which such Warrant relates, and appoints ____________________
Attorney to make such transfer on the books of First Premium Services, Inc.
maintained for such purpose, with full power of substitution in the premises.
Date:________________________________
_________________________(Signature must conform in all respects
to name of holder as specified on the
face of warrant)
_______________________________________
(Street Address)
_______________________________________
(City, State, Zip Cods)
Assignee's Federal Taxpayer ID No.__________________________
A-5
35
EXECUTION COPY
AMENDMENT TO WARRANT PURCHASE AGREEMENT
AMENDMENT TO WARRANT PURCHASE AGREEMENT (this "Amendment"), dated as
of February 12, 1993, among FIRST PREMIUM SERVICES, INC. (the "Issuer") and
INTERNATIONALE NEDERLANDEN (U.S.) FINANCE N.V. ( the "Purchaser").
W I T N E S S E T H:
WHEREAS, the Issuer and the Purchaser are party to a Warrant Purchase
Agreement (the "Warrant Agreement"), dated as of December 30, 1992; and
WHEREAS, the Warrant Agreement contains certain inaccuracies which the
Issuer and the Purchaser desire to correct;
NOW, THEREFORE, IT IS AGREED:
Section 1. DEFINITIONS. Terms which are defined in the Warrant
Agreement shall have the same meanings when used herein unless otherwise
provided herein.
Section 2. AMENDMENTS TO WARRANT AGREEMENT. The Issuer and the
Purchaser hereby agree that the Warrant Agreement is hereby amended as follows:
(a) The first recital to the Warrant Agreement is hereby
amended by substituting for the figure "3,343" where it appears
therein the figure "3,342".
(b) Section 1(a) of the Agreement is hereby amended by
substituting for the figure "3,343" where it appears therein the
figure "3,342".
(c) Section 23 of the Agreement is hereby amended by
restating the second sentence thereof to read in its entirety as
follows:
"The Issuer hereby irrevocably designates, appoints and
empowers CT Corporation System, whose present address is 1633
Broadway, New York, New York 10019 as its authorized agent to
receive, for and on behalf of it and its property, service of
process in the State of New York when and as such legal
actions or proceedings may be brought in the courts of the
State of New York or of the United States of America for the
Southern District
36
of New York, and such service of process shall be deemed
complete upon the date of delivery thereof to such agent, or
upon the earliest of any other date permitted by applicable
law."
Section 3. REPRESENTATIONS. The Issuer represents to the Purchaser
that it has the power to execute, deliver and perform this Amendment and to
perform the Warrant Agreement as modified hereby; this Amendment and the Warrant
Agreement as modified hereby are the valid and legally binding obligations of
the Issuer, enforceable in accordance with their respective terms; provided,
however, that this representation with respect to enforceability is limited by
bankruptcy, insolvency, and other similar laws of general application relating
to or affecting the enforcement of creditors' rights and by general principles
of equity.
Section 4. LIMITATIONS. The amendments set forth above are limited
precisely as written and shall not be deemed to be (a) a consent to, or
waiver or modification of, any other term or condition of the Warrant Agreement
or any of the documents referred to therein or (b) prejudice any right or rights
which the Purchaser may now have or may have in the future under or in
connection with the Warrant Agreement or any of the documents referred to
therein. Except as expressly modified hereby, the terms and provisions of the
Warrant Agreement are and shall remain in full force and effect and the
Purchaser hereby reconfirms its obligations thereunder. The term "Agreement"
wherever the same is utilized in the Warrant Agreement shall be deemed, on and
after the date hereof, to mean the Agreement as amended hereby.
Section 5. COUNTERPARTS. This Amendment may be executed by the
parties hereto in several counterparts, each of which shall be deemed to
be an original and all of which shall constitute together but one and the same
agreement.
Section 6. GOVERNING LAW. THIS AMENDMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.
Section 7. DESCRIPTIVE HEADINGS, ETC. The descriptive headings of
the several Sections of this Amendment are inserted for convenience only and
shall not be deemed to affect the meaning or construction of any of the
provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered by their respective duly authorized officers as
of the date first above written.
FIRST PREMIUM SERVICES, INC.
By:_____________________________________
Name:
Title:
INTERNATIONAL NEDERLANDEN (U.S.)
FINANCE CORPORATION N.V.
By:_____________________________________
Name:
Title:
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