EXHIBIT 4.8
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French Fragrances, Inc.
Warrants to Purchase
209,853 Shares of Common Stock
Warrant Agreement
Dated as of January 23, 2001
Mellon Investor Services LLC
Warrant Agent
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WARRANT AGREEMENT, dated as of January 23, 2001, between French
Fragrances, Inc., a Florida corporation (the "Company"), and Mellon Investor
Services LLC, as warrant agent (the "Warrant Agent").
WHEREAS, the Company will issue warrants (the "Warrants") to initially
purchase up to 209,853 shares of Common Stock, par value $.01 per share (the
"Common Stock"), of the Company (the Common Stock issuable on exercise of the
Warrants being referred to herein as the "Warrant Shares"), in connection with
the commitment by Credit Suisse First Boston, Cayman Islands Branch ("CSFB") and
Fleet Corporate Finance Inc. ("Fleet" and, together with CSFB, the "Initial
Holders") to purchase up to $160.0 million of Bridge Notes of the Company,
pursuant to a Fee Letter dated November 21, 2000 by and among CSFB, Fleet and
the Company. The Company shall issue 70% of the Warrants to CSFB and 30% of the
Warrants to Fleet.
WHEREAS, the Company desires the Warrant Agent to act on its behalf,
and the Warrant Agent is willing so to act in connection with the issuance of
Warrant Certificates (as defined) and other matters as provided herein.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
Section 1 Certain Definitions.
As used in this Agreement, the following terms shall have the
following respective meanings:
"Affiliate" of any Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such specified Person, whether
through the ownership of voting securities, by agreement or otherwise; provided
that beneficial ownership of 10% or more of the voting securities of a Person
shall be deemed to be control.
"Business Day" means any day other than a Legal Holiday.
"Commission" means the Securities and Exchange Commission.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holder" means a Person who is listed as the record owner of Warrants
or Warrant Shares.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue on
such payment for the intervening period.
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"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary or any Vice-President of such Person.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Company and the Warrant Agent in form and substance
reasonably acceptable to the Company and the Warrant Agent. The counsel may be
an employee of or counsel to the Company or any subsidiary of the Company.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof, including any subdivision or ongoing business of any such entity or
substantially all of the assets of any such entity, subdivision or business.
"Securities Act" means the Securities Act of 1933, as amended.
"Warrant Registration Rights Agreement" means the registration rights
agreement, dated as of January 23, 2001, between the Company and the Initial
Holders relating to the Warrants and the Warrant Shares.
Section 2 Appointment of Warrant Agent.
The Company hereby appoints the Warrant Agent to act as agent for the
Company in accordance with the instructions set forth hereinafter in this
Agreement, and the Warrant Agent hereby accepts such appointment.
Section 3 Issuance of Warrants; Warrant Certificates.
3.1 Form and Dating.
(a) General.
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The certificates evidencing the Warrants (the "Warrant Certificates")
to be delivered pursuant to this Agreement shall be in registered form only and
shall be substantially in the form set forth in Exhibit A attached hereto.
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The terms and provisions contained in the Warrants shall constitute,
and are hereby expressly made, a part of this Warrant Agreement. The Warrants
and the Warrant Shares are entitled to the benefits of the Warrant Registration
Rights Agreement. The Company and the Warrant Agent, by their execution and
delivery of this Warrant Agreement, expressly agree to such terms and provisions
and to be bound thereby. However, to the extent any provision of any Warrant
conflicts with the express provisions of this Warrant Agreement, the provisions
of this Warrant Agreement shall govern and be controlling.
3.2 Execution.
An Officer shall sign the Warrants for the Company by manual or
facsimile signature.
If the Officer whose signature is on a Warrant no longer holds that
office at the time a Warrant is countersigned, the Warrant shall nevertheless be
valid.
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A Warrant shall not be valid until countersigned by the manual or
facsimile signature of the Warrant Agent. The signature shall be conclusive
evidence that the Warrant has been properly issued under this Warrant Agreement.
The Warrant Agent shall, upon a written order of the Company signed by
an Officer, which shall names, addresses and delivery instructions (a "Warrant
Countersignature Order"), countersign Warrants for original issue up to the
number stated in the preamble hereto.
The Warrant Agent may appoint an agent acceptable to the Company to
countersign Warrants. Such an agent may countersign Warrants whenever the
Warrant Agent may do so. Each reference in this Warrant Agreement to a
countersignature by the Warrant Agent includes a countersignature by such agent.
Such an agent has the same rights as the Warrant Agent to deal with the Company
or an Affiliate of the Company.
3.3 Warrant Registrar.
The Company shall maintain an office or agency where Warrants may be
presented for registration of transfer or for exchange ("Warrant Registrar").
The Warrant Registrar shall keep a register of the Warrants and of their
transfer and exchange. The Company may appoint one or more co-Warrant
Registrars. The term "Warrant Registrar" includes any co-Warrant Registrar. The
Company may change any Warrant Registrar without notice to any holder. The
Company shall notify the Warrant Agent in writing of the name and address of any
agent not a party to this Warrant Agreement. If the Company fails to appoint or
maintain another entity as Warrant Registrar, the Warrant Agent shall act as
such. The Company or any of its subsidiaries may act as Warrant Registrar.
The Company initially appoints the Warrant Agent to act as the Warrant
Registrar with respect to the Warrants.
3.4 Holder Lists.
The Warrant Agent shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders. If the Warrant Agent is not the Warrant Registrar, the Company
shall promptly furnish to the Warrant Agent at such times as the Warrant Agent
may request in writing, a list in such form and as of such date as the Warrant
Agent may reasonably require of the names and addresses of the Holders.
3.5 Transfer and Exchange.
(a) The Warrant Agent shall from time to time, subject to the limitations of
Section 3.3 and Section 3.5(b) hereof, register the transfer of any outstanding
Warrant Certificates upon the records to be maintained by it for that purpose,
upon surrender thereof duly endorsed or accompanied (if so required by it) by a
written instrument or instruments of transfer in form satisfactory to the
Warrant Agent, 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 cancelled by the Warrant Agent. Cancelled Warrant Certificates shall
thereafter be disposed of by the Warrant Agent in its customary manner.
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(b) The Holders agree that prior to any proposed transfer of the
Warrants or of the Warrant Shares, if such transfer is not made pursuant to an
effective Registration Statement under the Securities Act, or an Opinion of
Counsel that the Warrant or Warrant Shares may be transferred without
registration under the Securities Act, the Holder will deliver to the Company an
executed certificate in the form attached as Exhibt B.
(c) The Holders agree that each certificate representing Warrants or
Warrant Shares will bear a legend in substantially the following form:
"The securities evidenced or constituted hereby have been acquired
for investment and have not been registered under the Securities
Act of 1933, as amended. Such securities may not be sold,
transferred, pledged or hypothecated unless the registration
provisions of said Act have been complied with or unless the
Company has received an opinion of counsel that such registration
is not required."
(d) Subject to the terms of this Agreement, Warrant Certificates may be
exchanged at the option of the holder(s) thereof, when surrendered to the
Warrant Agent at its office, designated for such purpose, which is currently
located at the address listed in Section 15 hereof, for another Warrant
Certificate or other Warrant Certificates of like tenor and representing in the
aggregate a like number of Warrants. Any Holder desiring to exchange a Warrant
Certificate shall deliver a written request to the Warrant Agent, and shall
surrender, duly endorsed or accompanied (if so required by the Warrant Agent) by
a written instrument or instruments of transfer in form satisfactory to the
Warrant Agent, the Warrant Certificate or Certificates to be so exchanged.
Warrant Certificates surrendered for exchange shall be cancelled by the Warrant
Agent. Such cancelled Warrant Certificates shall then be disposed of by such
Warrant Agent in its customary manner.
(e) The Warrant Agent is hereby authorized to countersign, in
accordance with the provisions of this Section 3.5 and of Section 3.2 hereof,
the new Warrant Certificates required pursuant to the provisions of this Section
3.5.
3.6 Replacement Warrants.
If any mutilated Warrant is surrendered to the Warrant Agent or the
Company and the Warrant Agent receives evidence to its satisfaction of the
destruction, loss or theft of any Warrant, the Company shall issue and the
Warrant Agent, upon receipt of a Warrant Countersignature Order, shall
countersign a replacement Warrant if the Warrant Agent's requirements are met.
If required by the Warrant Agent or the Company, an indemnity bond must be
supplied by the Holder that is sufficient in the judgment of the Warrant Agent
and the Company to protect the Company, the Warrant Agent and any agent for
purposes of the countersignature from any loss that any of them may suffer if a
Warrant is replaced. The Company may charge for its expenses in replacing a
Warrant.
Every replacement Warrant is an additional warrant of the Company
and shall be entitled to all of the benefits of this Warrant Agreement equally
and proportionately with all other Warrants duly issued hereunder.
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3.7 Temporary Warrants.
Until certificates representing Warrants are ready for delivery, the
Company may prepare and the Warrant Agent, upon receipt of a Warrant
Countersignature Order, shall issue temporary Warrants. Temporary Warrants
shall be substantially in the form of certificated Warrants but may have
variations that the Company considers appropriate for temporary Warrants and as
shall be reasonably acceptable to the Warrant Agent. Without unreasonable
delay, the Company shall prepare and the Warrant Agent shall countersign
definitive Warrants in exchange for temporary Warrants.
Holders of temporary Warrants shall be entitled to all of the
benefits of this Warrant Agreement.
3.8 Cancellation.
The Company at any time may deliver Warrants to the Warrant Agent for
cancellation. The Warrant Registrar and Warrant Paying Agent shall forward to
the Warrant Agent any Warrants surrendered to them for registration of transfer,
exchange or exercise. The Warrant Agent and no one else shall cancel all
Warrants surrendered for registration of transfer, exchange, exercise,
replacement or cancellation and shall destroy canceled Warrants (subject to the
record retention requirement of the Exchange Act) in its customary manner.
Certification of the destruction of all canceled Warrants shall be delivered to
the Company. The Company may not issue new Warrants to replace Warrants that
have been exercised or that have been delivered to the Warrant Agent for
cancellation.
Section 4 Terms of Warrants; Exercise of Warrants.
(a) Subject to the terms of this Agreement, each Holder shall have
the right, which may be exercised during the period commencing at the opening of
business on January 24, 2001 and until 5:00 p.m., New York City time on January
23, 2011 (the "Exercise Period"), to receive from the Company the number of
fully paid and nonassessable Warrant Shares which the holder may at the time be
entitled to receive on exercise of such Warrants and payment in cash of the
exercise price (the "Exercise Price") then in effect for such Warrant Shares by
wire transfer or by certified or official check payable to the order of the
Company; provided that Holders shall be able to exercise their Warrants only if
a registration statement relating to the Warrant Shares is then in effect, or
the exercise of such Warrants is exempt from the registration requirements of
the Securities Act, and such Warrant Shares are qualified for sale or exempt
from qualification under the applicable securities laws of the states in which
the various holders of the Warrants or other Persons to whom it is proposed that
the Warrant Shares be issued on exercise of the Warrants reside. Each Warrant
not exercised prior to 5:00 p.m., New York City time, on January 23, 2011 (the
"Expiration Date") shall become void and all rights thereunder and all rights in
respect thereof under this agreement shall cease as of such time. No adjustments
as to dividends will be made upon exercise of the Warrants.
(b) In order to exercise all or any of the Warrants represented by
a Warrant Certificate, the holder thereof must deliver to the Warrant Agent at
its office designated for such purpose set forth in Section 15 hereof the
Warrant Certificate and the form of election to purchase on the reverse thereof
duly and properly filled in and signed, which signature shall be medallion
guaranteed by an institution which is a member of a signature guarantee program
recognized by the Securities Transfer Association, and upon payment to the
Warrant Agent for the account of the Company of the Exercise Price, which is set
forth in the form of Warrant Certificate attached hereto as Exhibit A, for the
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number of
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Warrant Shares in respect of which such Warrants are then exercised. Payment of
the aggregate Exercise Price shall be made in cash, by wire transfer or by
certified or official bank check payable to the order of the Company.
(c) Subject to the provisions of Section 5 hereof, upon compliance
with clause (b) above, the Warrant Agent shall deliver or cause to be delivered
with all reasonable dispatch, to or upon the written order of the holder and in
such name or names as the Warrant holder may designate, a certificate or
certificates for the number of whole Warrant Shares issuable upon the exercise
of such Warrants or other securities or property to which such holder is
entitled hereunder, together with cash as provided in Section 9 hereof; provided
that if any consolidation, merger or lease or sale of assets is proposed to be
effected by the Company as described in Section 8(l) hereof, or a tender offer
or an exchange offer for shares of Common Stock shall be made, upon such
surrender of Warrants and payment of the Exercise Price as aforesaid, the
Warrant Agent shall, as soon as possible upon its receipt of notice and
instructions with respect thereto, but in any event not later than two Business
Days thereafter, deliver or cause to be delivered the full number of Warrant
Shares issuable upon the exercise of such Warrants in the manner described in
this sentence or other securities or property to which such holder is entitled
hereunder, together with cash as provided in Section 9 hereof. Such certificate
or certificates shall be deemed to have been issued and any Person so designated
to be named therein shall be deemed to have become a holder of record of such
Warrant Shares as of the date of the surrender of such Warrants and payment of
the Exercise Price.
(d) The Warrants shall be exercisable, at the election of the holders
thereof, either in full or from time to time in part. If less than all the
Warrants represented by a Warrant Certificate are exercised, such Warrant
Certificate shall be surrendered and a new Warrant Certificate of the same tenor
and for the number of Warrants which were not exercised shall be executed by the
Company and delivered to the Warrant Agent and the Warrant Agent shall
countersign the new Warrant Certificate, registered in such name or names as may
be directed in writing by the holder, and shall deliver the new Warrant
Certificate to the Person or Persons entitled to receive the same.
(e) All Warrant Certificates surrendered upon exercise of Warrants
shall be cancelled by the Warrant Agent. Such cancelled Warrant Certificates
shall then be disposed of by the Warrant Agent in a manner customary to the
Warrant Agent. The Warrant Agent shall account promptly to the Company with
respect to Warrants exercised and concurrently pay to the Company all monies
received by the Warrant Agent for the purchase of the Warrant Shares through the
exercise of such Warrants.
(f) The Warrant Agent shall keep copies of this Agreement and any
notices given or received hereunder available for inspection by the holders
during normal business hours at its office. The Company shall supply the Warrant
Agent from time to time with such numbers of copies of this Agreement as the
Warrant Agent may reasonably request.
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Section 5 Payment of Taxes.
The Company will pay all documentary stamp taxes attributable to the
initial issuance of Warrant Shares upon the exercise of Warrants; provided,
however, that the Company shall not be required to pay any tax or taxes which
may be payable in respect of any transfer involved in the issue of any Warrant
Certificates or any certificates for Warrant Shares in a name other than that of
the registered holder of a Warrant Certificate surrendered upon the exercise of
a Warrant, and the Company shall not be required to issue or deliver such
Warrant Certificates unless or until the Person or Persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
The Warrant Agent shall have no duty or obligation to take any action under any
section of this Agreement which requires the payment by a holder of a Warrant of
applicable taxes and governmental charges unless and until the Warrant Agent is
satisfied that all such taxes and/or charges have been paid.
Section 6 Reservation of Warrant Shares.
(a) The Company will at all times reserve and keep available, free
from preemptive rights, out of the aggregate of its authorized but unissued
Common Stock or its authorized and issued Common Stock held in its treasury, for
the purpose of enabling it to satisfy any obligation to issue Warrant Shares
upon exercise of Warrants, the maximum number of shares of Common Stock which
may then be deliverable upon the exercise of all outstanding Warrants.
(b) The Company or, if appointed, the transfer agent for the Common
Stock (the "Transfer Agent") and every subsequent transfer agent for any shares
of the Company's capital stock issuable upon the exercise of any of the rights
of purchase aforesaid will be irrevocably authorized and directed at all times
to reserve such number of authorized shares as shall be required for such
purpose. The Company will keep a copy of this Agreement on file with the
Transfer Agent and with every subsequent transfer agent for any shares of the
Company's capital stock issuable upon the exercise of the rights of purchase
represented by the Warrants. The Warrant Agent is hereby irrevocably authorized
to requisition from time to time from such Transfer Agent the stock certificates
required to honor outstanding Warrants upon exercise thereof in accordance with
the terms of this Agreement. The Company will supply such Transfer Agent with
duly executed certificates for such purposes and will provide or otherwise make
available any cash which may be payable as provided in Section 9 hereof. The
Company will furnish such Transfer Agent a copy of all notices of adjustments,
and certificates related thereto, transmitted to each holder pursuant to Section
11 hereof.
(c) The Company covenants that all Warrant Shares which may be issued
upon exercise of Warrants will, upon issue, be fully paid, nonassessable, free
of preemptive rights and free from all taxes, liens, charges and security
interests with respect to the issuance thereof.
Section 7 Obtaining Stock Exchange Listings.
The Company will from time to time take all action which may be
necessary so that the Warrant Shares, immediately upon their issuance upon the
exercise of Warrants, will be listed on the principal securities exchanges,
automated quotation systems or other markets within the United States of
America, if any, on which other shares of Common Stock are then listed, if any.
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Section 8 Adjustment of Exercise Price and Number of Warrant Shares
Issuable.
The Exercise Price and the number of Warrant Shares issuable upon the
exercise of each Warrant are subject to adjustment from time to time upon the
occurrence of the events enumerated in this Section 8. For purposes of this
Section 8, "Common Stock" means shares now or hereafter authorized of any class
of common stock of the Company and any other stock of the Company, however
designated, that has the right (subject to any prior rights of any class or
series of preferred stock) to participate in any distribution of the assets or
earnings of the Company without limit as to per share amount. The Exercise
Price will in no event be less than the par value of the Common Stock; provided,
however, the foregoing minimum Exercise Price shall not be applicable for
purposes of determining adjustments to the number of shares issuable upon
exercise of a Warrant pursuant to Section 8(o).
(a) Adjustment for Change in Capital Stock.
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If the Company (i) pays a dividend in shares of Common Stock or makes
a distribution on its Common Stock in shares of its Common Stock, (ii)
subdivides its outstanding shares of Common Stock into a greater number of
shares, (iii) combines its outstanding shares of Common Stock into a smaller
number of shares, (iv) makes a distribution on its Common Stock in shares of its
capital stock other than Common Stock or (v) issues by reclassification of its
Common Stock any shares of its capital stock, then the Exercise Price in effect
immediately prior to such action shall be proportionately adjusted so that the
holder of any Warrant thereafter exercised may receive the aggregate number and
kind of shares of capital stock of the Company which he would have owned
immediately following such action if such Warrant had been exercised immediately
prior to such action.
The adjustment shall become effective immediately after the record
date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or reclassification.
If, after an adjustment, a holder of a Warrant upon exercise of that Warrant may
receive shares of two or more classes of capital stock of the Company, the
Company shall determine, in good faith, the allocation of the adjusted Exercise
Price between the classes of capital stock. After such allocation, the exercise
privilege and the Exercise Price of each class of capital stock shall thereafter
be subject to adjustment on terms comparable to those applicable to Common Stock
in this Section 8. Such adjustment shall be made successively whenever any
event listed above shall occur.
(b) Adjustment for Rights Issue.
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If the Company distributes any rights, options or warrants to all
holders of its Common Stock entitling them for a period expiring within 45 days
after the record date mentioned below to purchase shares of Common Stock at a
price per share less than the Fair Value (as defined herein) per share on that
record date, the Exercise Price shall be adjusted in accordance with the
formula:
O + N x P
-----
E'= E x M
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O + N
where:
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E' = the adjusted Exercise Price.
E = the current Exercise Price.
O = the number of shares of Common Stock outstanding on the record
date.
N = the number of additional shares of Common Stock issued
pursuant to such rights, options or warrants.
P = the aggregate price per share of the additional shares.
M = the Fair Value per share of Common Stock on the record date.
The adjustment shall be made successively whenever any such rights,
options or warrants are issued and shall become effective immediately after the
record date for the determination of stockholders entitled to receive the
rights, options or warrants. If at the end of the period during which such
rights, options or warrants are exercisable, not all rights, options or warrants
shall have been exercised, the Exercise Price shall be immediately readjusted to
what it would have been if "N" in the above formula had been the number of
shares actually issued.
(c) Adjustment for Other Distributions.
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If the Company distributes to all holders of its Common Stock any of
its assets or debt securities or any rights or warrants to purchase debt
securities of the Company, the Exercise Price shall be adjusted in accordance
with the formula:
M - F
E'= E x ---------
M
where:
E' = the adjusted Exercise Price.
E = the current Exercise Price.
M = the Fair Value per share of Common Stock on the record date
mentioned below.
F = the fair market value on the record date of the assets,
securities, rights or warrants to be distributed in respect of
one share of Common Stock as determined in good faith by the
Board of Directors of the Company (the "Board of Directors").
The adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of stockholders entitled to receive the distribution.
This Section 8(c) does not apply to cash dividends or cash
distributions paid out of consolidated current or retained earnings as shown on
the books of the Company prepared in accordance
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with generally accepted accounting principles. Also, this Section 8(c) does not
apply to rights, options or warrants referred to in Section 8(b) hereof.
(d) Adjustment for Common Stock Issue.
---------------------------------
If the Company issues shares of Common Stock for a consideration per
share less than the Fair Value per share on the date the Company receives the
offering price of such additional shares, the Exercise Price shall be adjusted
in accordance with the formula:
P
---
E' = E x O + M
----------
A
where:
E' = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares outstanding immediately prior to the
issuance of such additional shares.
P = the aggregate consideration received for the issuance of
such additional shares.
M = the Fair Value per share on the date of issuance of such
additional shares.
A = the number of shares outstanding immediately after the
issuance of such additional shares.
The adjustment shall be made successively whenever any such
issuance is made, and shall become effective immediately after such issuance.
This subsection (d) does not apply to:
(1) any of the transactions described in subsections
(a), (b) and (c) of this Section 8,
(2) the exercise of Warrants, or the conversion or
exchange of other securities convertible into or exchangeable for shares of
Common Stock, the issuance of which caused an adjustment to be made under
Section 8(e),
(3) Common Stock upon the exercise of rights, options or
warrants issued to the holders of Common Stock, or
(4) Common Stock issued to shareholders of any Person
which merges into the Company, or with a subsidiary of the Company, in
proportion to their stock holdings of such Person immediately prior to such
merger, upon such merger.
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(e) Adjustment for Convertible Securities Issue.
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If the Company issues any securities convertible into or exchangeable
for shares of Common Stock (other than securities issued in transactions
described in subsections (b) and (c) of this Section 8) for a consideration per
share of Common Stock initially deliverable upon conversion or exchange of such
securities less than the Fair Value per share on the date of issuance of such
securities, the Exercise Price shall be adjusted in accordance with this
formula:
P
---
O + M
E'= E x --------
O + D
where:
E' = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares outstanding immediately prior to the
issuance of such securities.
P = the aggregate consideration received for the issuance of such
securities.
M = the Fair Value per share on the date of issuance of such
securities.
D = the maximum number of shares deliverable upon conversion or in
exchange for such securities at the initial conversion or
exchange rate.
The adjustment shall be made successively whenever any such issuance
is made, and shall become effective immediately after such issuance.
If all of the Common Stock deliverable upon conversion or exchange of
such securities have not been issued when such securities are no longer
outstanding, then the Exercise Price shall promptly be readjusted to the
Exercise Price which would then be in effect had the adjustment upon the
issuance of such securities been made on the basis of the actual number of
shares of Common Stock issued upon conversion or exchange of such securities.
This subsection (e) does not apply to convertible securities issued to
shareholders of any Person which merges into the Company, or with a subsidiary
of the Company, in proportion to their stock holdings of such Person immediately
prior to such merger, upon such merger.
(f) Consideration Received.
----------------------
For purposes of any computation respecting consideration received
pursuant to subsections (d) and (e) of this Section 8, the following shall
apply:
(1) in the case of the issuance of shares of Common Stock for
cash, the consideration shall be the amount of such cash, provided that in
no case shall any deduction be
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made for any commissions, discounts or other expenses incurred by the Company
for any underwriting or placement of the issue or otherwise in connection
therewith;
(2) in the case of the issuance of shares of Common Stock for a
consideration in whole or in part other than cash, the consideration other than
cash shall be deemed to be the fair market value thereof as determined in good
faith by the Board of Directors (irrespective of the accounting treatment
thereof), whose determination shall be conclusive, and described in a Board
resolution which shall be filed with the Warrant Agent;
(3) in the case of the issuance of securities convertible into or
exchangeable for shares of Common Stock, the aggregate consideration received
therefor shall be deemed to be the consideration received by the Company for the
issuance of such securities plus the additional minimum consideration, if any,
to be received by the Company upon the conversion or exchange thereof (the
consideration in each case to be determined in the same manner as provided in
clauses (1) and (2) of this subsection); and
(4) in the case of the issuance of shares of Common Stock pursuant
to rights, options or warrants which rights, options or warrants were originally
issued together with one or more other securities as part of a unit at a price
per unit, the consideration shall be deemed to be the fair value of such rights,
options or warrants at the time of issuance thereof as determined in good faith
by the Board of Directors whose determination shall be conclusive and described
in a Board resolution which shall be filed with the Warrant Agent plus the
additional minimum consideration, if any, to be received by the Company upon the
exercise, conversion or exchange thereof (as determined in the same manner as
provided in clauses (1) and (2) of this subsection).
(g) Fair Value.
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In Sections 8(d) and (e) hereof, the "Fair Value" per security at any
date of determination shall be (1) in connection with a sale by the Company to a
party that is not an Affiliate of the Company in an arm's-length transaction (a
"Non-Affiliate Sale"), the price per security at which such security is sold and
(2) in connection with any sale by the Company to an Affiliate of the Company,
(a) the last price per security at which such security was sold in a Non-
Affiliate Sale within the three-month period preceding such date of
determination, or (b) if clause (a) is not applicable, the fair market value of
such security determined in good faith by (i) a majority of the Board of
Directors, including a majority of the Disinterested Directors, and approved in
a Board resolution delivered to the Warrant Agent or (ii) a nationally
recognized investment banking, appraisal or valuation firm, in each case, taking
into account, among all other factors deemed relevant by the Board of Directors
or such investment banking, appraisal or valuation firm, the trading price and
volume of such security on any national securities exchange or automated
quotation system on which such security is traded.
In Sections 8(b) and (c) hereof, the "Fair Value" per security at any
date of determination shall be (a) the last price per security at which such
security was sold by the Company in a Non-Affiliate Sale within the three-month
period preceding such date of determination or (b) if clause (a) is not
applicable, the fair market value of such security determined in good faith by
(i) a majority of the Board of Directors, including a majority of the
Disinterested Directors, and approved in a Board resolution delivered to the
Warrant Agent or (ii) a nationally recognized investment banking, appraisal or
valuation firm, in each case, taking into account, among all other factors
deemed relevant by the Board of Directors or such
12
investment banking, appraisal or valuation firm, the trading price and volume of
such security on any national securities exchange or automated quotation system
on which such security is traded.
For purposes of this Section 8(g), "Disinterested Director" means, in
connection with any issuance of securities that gives rise to a determination of
the Fair Value thereof, each member of the Board of Directors who is not an
officer, employee, director or other Affiliate of the party to whom the Company
is proposing to issue the securities giving rise to such determination.
(h) When De Minimis Adjustment May Be Deferred.
------------------------------------------
No adjustment in the Exercise Price need be made unless the adjustment
would require an increase or decrease of at least 1% in the Exercise Price. Any
adjustments that are not made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 8 shall be made
to the nearest cent or to the nearest 1/100th of a share, as the case may be, it
being understood that no such rounding shall be made under subsection (p).
(i) When No Adjustment Required.
---------------------------
(1) No adjustment need be made for a transaction referred to in
Section 8(a), (b), (c), (d), (e) or (f) hereof, if Holders are to
participate (without being required to exercise their Warrants) in the
transaction on a basis and with notice that the Board of Directors
determines to be fair and appropriate in light of the basis and notice on
which holders of Common Stock participate in the transaction. No adjustment
need be made for (i) rights to purchase Common Stock pursuant to a Company
plan for reinvestment of dividends or interest or (ii) a change in the par
value or no par value of the Common Stock. To the extent the Warrants
become convertible into cash, no adjustment need be made thereafter as to
the cash. Interest will not accrue on the cash. Without limiting any other
exception contained in this Section 8, and in addition thereto, no
adjustment will be made for: (i) exercises or conversions of any rights,
warrants, options, or convertible securities outstanding on the date
hereof; (ii) Common Stock issued to the Company's directors, employees or
consultants (or directors, employees or consultants of its subsidiaries)
under bona fide employee benefit plans adopted by the Board of Directors
and approved by the holders of Common Stock when required by law, if such
Common Stock would otherwise be covered by this Section 8 (but only to the
extent that the aggregate number of shares excluded by this Section 8 and
issued after the date of this Warrant Agreement shall not exceed 25% of the
Common Stock outstanding at the time of the adoption of each such plan,
exclusive of anti-dilution adjustments thereunder; or (iii) Common Stock
issued in a bona fide private placement through a placement agent which is
a member firm of the National Association of Securities Dealers, Inc.
(except to the extent that any discount from the current market price
attributable to restrictions on transferability of the Common Stock, as
determined in good faith by the Board of Directors and described in a Board
resolution which shall be filed with the Warrant Agent, shall exceed 15%)
or (iv) the issuance of shares of Common Stock pursuant to rights, options
or warrants which were originally issued in a Non-Affiliate Sale (as
defined below) together with one or more other securities as part of a unit
at a price per unit; (v) issuances of rights, warrants, options or
convertible securities as compensation in lieu of cash in connection with
any financing transaction including commercial bank facilities, bridge
financing commitments or arrangements or other issuances of primary debt
obligations or securities.
13
(j) Notice of Adjustment.
--------------------
Whenever the Exercise Price is adjusted, the Company shall provide the
notices required by Section 10 hereof.
(k) Reorganization of Company.
-------------------------
Immediately after the date hereof, if the Company consolidates or merges
with or into, or transfers or leases all or substantially all its assets to, any
Person, upon consummation of such transaction the Warrants shall automatically
become exercisable for the kind and amount of securities, cash or other assets
which the holder of a Warrant would have owned immediately after the
consolidation, merger, transfer or lease if the holder had exercised the Warrant
immediately before the effective date of the transaction. Concurrently with the
consummation of such transaction, the entity formed by or surviving any such
consolidation or merger if other than the Company, or the Person to which such
sale or conveyance shall have been made, shall enter into (i) a supplemental
Warrant Agreement so providing and further providing for adjustments which shall
be as nearly equivalent as may be practical to the adjustments provided for in
this Section 8(l) and (ii) a supplement to the Warrant Registration Rights
Agreement providing for the assumption of the Company's obligations thereunder.
If the issuer of securities deliverable upon exercise of Warrants under the
supplemental Warrant Agreement is an Affiliate of the formed, surviving,
transferee or lessee corporation, that issuer shall join in the supplemental
Warrant Agreement and Warrant Registration Rights Agreement. If this Section
8(l) applies, Sections 8(a), (b), (c), (d), (e) and (f) hereof do not apply.
(l) Company Determination Final.
---------------------------
Any determination that the Company or the Board of Directors or a
successor to the Company or its Board of Directors must make pursuant to Section
8(a), (b), (c), (d), (e), (f), (g), (h), (i) or (k) hereof is conclusive.
(m) Warrant Agent's Disclaimer.
--------------------------
The Warrant Agent has no duty to determine when an adjustment under
this Section 8 should be made, how it should be made or what it should be. The
Warrant Agent has no duty to determine whether any provisions of a supplemental
Warrant Agreement under Section 8(l) hereof are correct. The Warrant Agent
makes no representation as to the validity or value of any securities or assets
issued upon exercise of Warrants. The Warrant Agent shall not be responsible
for the Company's failure to comply with this Section 8.
(n) When Issuance or Payment May Be Deferred.
----------------------------------------
In any case in which this Section 8 shall require that an adjustment
in the Exercise Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event (i)
issuing to the holder of any Warrant exercised after such record date the
Warrant Shares and other capital stock of the Company, if any, issuable upon
such exercise over and above the Warrant Shares and other capital stock of the
Company, if any, issuable upon such exercise on the basis of the Exercise Price
and (ii) paying to such holder any amount in cash in lieu of a fractional share
pursuant to Section 10 hereof; provided, however, that the Company shall
deliver to such holder a due bill
14
or other appropriate instrument evidencing such holder's right to receive such
additional Warrant Shares, other capital stock and cash upon the occurrence of
the event requiring such adjustment.
(o) Adjustment in Number of Shares.
------------------------------
Upon each adjustment of the Exercise Price pursuant to this
Section 8, each Warrant outstanding prior to the making of the adjustment in the
Exercise Price shall thereafter evidence the right to receive upon payment of
the adjusted Exercise Price that number of shares of Common Stock (calculated to
the nearest hundredth) obtained from the following formula:
N'= N x E
---
E'
where:
N' = the adjusted number of Warrant Shares issuable upon
exercise of a Warrant by payment of the adjusted Exercise
Price.
N = the number of 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.
(p) Form of Warrants.
----------------
Irrespective of any adjustments in the Exercise Price or the number or
kind of shares purchasable upon the exercise of the Warrants, Warrants
theretofore or thereafter issued may continue to express the same price and
number and kind of shares as are stated in the Warrants initially issuable
pursuant to this Agreement.
Section 9 Fractional Interests.
The Company shall not be required to issue fractional Warrant Shares
on the exercise of Warrants. If more than one Warrant shall be presented for
exercise in full at the same time by the same holder, the number of full Warrant
Shares which shall be issuable upon the exercise thereof shall be computed on
the basis of the aggregate number of Warrant Shares purchasable on exercise of
the Warrants so presented. If any fraction of a Warrant Share would, except for
the provisions of this Section 9, be issuable on the exercise of any Warrants
(or specified portion thereof), the Company shall pay an amount in cash equal to
the Fair Value per Warrant Share, as determined on the day immediately preceding
the date the Warrant is presented for exercise, multiplied by such fraction,
computed to the nearest whole U.S. cent. The Warrant Agent shall have no duty
or obligation under this Section 9 unless and until the Company has provided or
caused to be provided to the Warrant Agent sufficient cash necessary to satisfy
the Company's obligations with respect to fractional shares.
15
Section 10 Notices to Warrant Holders.
(a) Upon any adjustment of the Exercise Price pursuant to Section 8
hereof, the Company shall promptly thereafter (i) cause to be filed with the
Warrant Agent a certificate of a firm of independent public accountants of
recognized standing selected by the Board of Directors of the Company (who may
be the regular auditors of the Company) setting forth the Exercise Price after
such adjustment and setting forth in reasonable detail the method of calculation
and the facts upon which such calculations are based and setting forth the
number of Warrant Shares (or portion thereof) issuable after such adjustment in
the Exercise Price, upon exercise of a Warrant and payment of the adjusted
Exercise Price, which certificate shall be conclusive evidence of the
correctness of the matters set forth therein, and (ii) cause to be given to each
of the registered holders of Warrants at the address appearing on the Warrant
register for each such registered holder written notice of such adjustments by
first-class mail, postage prepaid. The Warrant Agent shall be fully protected in
relying on any such certificate and on any adjustment therein contained and
shall have no duty with respect to and shall not be deemed to have knowledge of
any adjustment unless and until it shall have received such certificate. Where
appropriate, such notice may be given in advance and included as a part of the
notice required to be mailed under the other provisions of this Section 10.
(b) In case:
-------
(i) the Company shall authorize the issuance to all holders of
shares of Common Stock of rights, options or warrants to subscribe for or
purchase shares of Common Stock or of any other subscription rights or
warrants;
(ii) the Company shall authorize the distribution to all holders of
shares of Common Stock of evidences of its indebtedness or assets (other
than dividends or cash distributions paid out of consolidated current or
retained earnings as shown on the books of the Company prepared in
accordance with generally accepted accounting principles or dividends
payable in shares of Common Stock or distributions referred to in Section
10(a) hereof);
(iii) of any consolidation or merger to which the Company is a party
and for which approval of any stockholders of the Company is required, or of the
conveyance or transfer of the properties and assets of the Company substantially
as an entirety, or of any reclassification or change of Common Stock issuable
upon exercise of the Warrants (other than a change in par value, or from par
value to no par value, or from no par value to par value, or as a result of a
subdivision or combination), or a tender offer or exchange offer for shares of
Common Stock; or
(iv) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then the Company shall cause to be filed with the Warrant Agent and shall cause
to be given to each of the registered holders of Warrants at its address
appearing on the Warrant register, at least 20 days (or 10 days in any case
specified in clauses (i) or (ii) above) prior to the applicable record date
hereinafter specified, or promptly in the case of events for which there is no
record date or for which earlier notice is not reasonably practicable or legally
advisable, by first-class mail, postage prepaid, a written notice stating (x)
the date as of which the holders of record of shares of Common Stock to be
entitled to receive any such rights, options, warrants or distribution are to be
determined, (y) the initial expiration date set forth in any tender offer or
exchange offer for shares of Common Stock, or (z) the date on which any such
consolidation, merger,
16
conveyance, transfer, dissolution, liquidation or winding up is expected to
become effective or consummated, and the date as of which it is expected that
holders of record of shares of Common Stock shall be entitled to exchange such
shares for securities or other property, if any, deliverable upon such
reclassification, consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding up. The failure to give the notice required by this
Section 11 or any defect therein shall not affect the legality or validity of
any distribution, right, option, warrant, consolidation, merger, conveyance,
transfer, dissolution, liquidation or winding up, or the vote upon any action.
(c) Nothing contained in this Agreement or in any of the Warrant
Certificates shall be construed as conferring upon the holders of Warrants the
right to vote or to consent or to receive notice as stockholders in respect of
the meetings of stockholders or the election of directors of the Company or any
other matter, or any rights whatsoever as stockholders of the Company.
Section 11 Merger, Consolidation or Change of Name of
Warrant Agent.
(a) Any Person into which the Warrant Agent may be merged or with
which it may be consolidated, or any Person resulting from any merger or
consolidation to which the Warrant Agent shall be a party, or any Person
succeeding to the business of the Warrant Agent, shall be the successor to the
Warrant Agent hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such Person
would be eligible for appointment as a successor warrant agent under the
provisions of Section 13 hereof. In case at the time such successor to the
Warrant Agent shall succeed to the agency created by this Agreement, and in case
at that time any of the Warrant Certificates shall have been countersigned but
not delivered, any such successor to the Warrant Agent may adopt the
countersignature of the original Warrant Agent; and in case at that time any of
the Warrant Certificates shall not have been countersigned, any successor to the
Warrant Agent may countersign such Warrant Certificates either in the name of
the predecessor Warrant Agent or in the name of the successor to the Warrant
Agent; and in all such cases such Warrant Certificates shall have the full force
and effect provided in the Warrant Certificates and in this Agreement.
(b) In case at any time the name of the Warrant Agent shall be changed
and at such time any of the Warrant Certificates shall have been countersigned
but not delivered, the Warrant Agent whose name has been changed may adopt the
countersignature under its prior name, and in case at that time any of the
Warrant Certificates shall not have been countersigned, the Warrant Agent may
countersign such Warrant Certificates either in its prior name or in its changed
name, and in all such cases such Warrant Certificates shall have the full force
and effect provided in the Warrant Certificates and in this Agreement.
Section 12 Warrant Agent.
The Warrant Agent undertakes only the duties and obligations expressly
imposed by this Agreement upon the following terms and conditions, by all of
which the Company and the holders of Warrants, by their acceptance thereof,
shall be bound:
(a) The statements contained herein and in the Warrant Certificates
shall be taken as statements of the Company and the Warrant Agent assumes
no responsibility for the correctness of any of the same except such as to
describe the Warrant Agent or action taken or to be taken by it. The
Warrant
17
Agent assumes no responsibility with respect to the distribution of the Warrant
Certificates except as herein otherwise provided.
(b) The Warrant Agent shall not be responsible for any failure of the
Company to comply with any of the covenants contained in this Agreement or in
the Warrant Certificates to be complied with by the Company.
(c) The Warrant Agent may consult at any time with counsel satisfactory to
it (who may be counsel for the Company) and the Warrant Agent shall incur no
liability or responsibility to the Company or to any holder of any Warrant
Certificate in respect of any action taken, suffered or omitted by it hereunder
in good faith and in accordance with the opinion or the advice of such counsel.
Whenever in the performance of its duties hereunder, the Warrant Agent is unsure
of any action it is required to take under this Agreement, the Warrant Agent
shall promptly seek clarification thereof from the Company, and the Warrant
Agent shall be fully protected and incur no liability in not taking any such
action prior to receiving a written response from the Company.
(d) The Warrant Agent shall incur no liability or responsibility to the
Company or to any holder of any Warrant Certificate for any action taken,
suffered or omitted in reliance on any Warrant Certificate, certificate of
shares, notice, resolution, waiver, consent, order, certificate, or other paper,
document or instrument believed by it to be genuine and to have been signed,
sent or presented by the proper party or parties.
(e) The Company agrees to pay to the Warrant Agent reasonable compensation
for all services rendered by the Warrant Agent in the execution and
administration of this Agreement, to reimburse the Warrant Agent for all
expenses, disbursements, taxes and governmental charges and other charges of any
kind and nature incurred by the Warrant Agent in the execution, preparation,
delivery, amendment, and administration of this Agreement. The Company shall
indemnify the Warrant Agent against any and all losses, liabilities, judgement,
damages, fines, penalties, claims, demands, settlements, costs or expenses
incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Warrant Agreement, including without
limitation the costs and expenses of enforcing this Warrant Agreement against
the Company and defending itself against any claim (whether asserted by the
Company or any Holder or any other Person) or liability in connection with the
exercise or performance of any of its powers or duties hereunder, except to the
extent any such loss, liability or expense may be attributable to its gross
negligence or bad faith (each as finally determined by a court of competent
jurisdiction). The Warrant Agent shall notify the Company promptly of any claim
for which it may seek indemnity. Failure by the Warrant Agent to so notify the
Company shall not relieve the Company of its obligations hereunder. The Company
shall defend the claim and the Warrant Agent shall cooperate in the defense. The
Warrant Agent may have separate counsel and the Company shall pay the reasonable
fees and expenses of such counsel. The Company need not pay for any settlement
made without its consent, which consent shall not be unreasonably withheld. The
costs and expenses incurred in enforcing the right of indemnification shall be
paid by the Company. The Company's indemnity obligations hereunder shall survive
the termination of this Agreement or the expiration of the Warrants.
(f) The Warrant Agent shall be under no obligation to institute any action,
suit or legal proceeding or to take any other action likely to involve expense
unless the Company or one or more registered holders of Warrants shall furnish
the Warrant Agent with reasonable security and indemnity for any costs and
expenses which may be incurred, but this provision shall not affect the power of
the Warrant Agent to take such action as it may consider proper, if it so
chooses, whether with or without any such
18
security or indemnity. All rights of action under this Agreement or under any of
the Warrants may be enforced by the Warrant Agent without the possession of any
of the Warrant Certificates or the production thereof at any trial or other
proceeding relative thereto, and any such action, suit or proceeding instituted
by the Warrant Agent shall be brought in its name as Warrant Agent and any
recovery of judgment shall be for the ratable benefit of the registered holders
of the Warrants, as their respective rights or interests may appear.
(g) The Warrant Agent, and any stockholder, director, officer or employee
of it, may buy, sell or deal in any of the Warrants or other securities of the
Company or become pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the Company or otherwise
act as fully and freely as though it were not Warrant Agent under this
Agreement. Nothing herein shall preclude the Warrant Agent from acting in any
other capacity for the Company or for any other legal entity.
(h) The Warrant Agent shall act hereunder solely as agent for the Company,
and its duties shall be determined solely by the provisions hereof. The Warrant
Agent shall not be liable for anything which it may do or refrain from doing in
connection with this Agreement except for its own gross negligence or bad faith
(each as finally determined by a court of competent jurisdiction).
Notwithstanding anything herein to the contrary, in no event shall the Warrant
Agent be liable for special, punitive, indirect, consequential or incidental
loss or damage of any kind whatsoever (including but not limited to lost
profits) even if the Warrant Agent has been advised of the likelihood of such
loss or damage. Any liability of the Warrant Agent under this Agreement shall be
limited to the amount of fees paid by the Company to the Warrant Agent.
(i) The Warrant Agent shall not at any time be under any duty or
responsibility to any holder of any Warrant Certificate to make or cause to be
made any adjustment of the Exercise Price or number of the Warrant Shares or
other securities or property deliverable as provided in this Agreement, or to
determine whether any facts exist which may require any of such adjustments, or
with respect to the nature or extent of any such adjustments, when made, or with
respect to the method employed in making the same. The Warrant Agent shall not
be accountable with respect to the validity or value or the kind or amount of
any Warrant Shares or of any securities or property which may at any time be
issued or delivered upon the exercise of any Warrant or with respect to whether
any such Warrant Shares or other securities will when issued be validly issued
and fully paid and nonassessable, and makes no representation with respect
thereto.
Section 13 Change of Warrant Agent.
If the Warrant Agent shall become incapable of acting as Warrant
Agent, the Company shall appoint a successor to such Warrant Agent. If the
Company shall fail to make such appointment within a period of 30 days after it
has been notified in writing of such incapacity by the Warrant Agent or by the
registered holder of a Warrant Certificate, then the registered holder of any
Warrant may apply to any court of competent jurisdiction for the appointment of
a successor to the Warrant Agent. Pending appointment of a successor to such
Warrant Agent, either by the Company or by such a court, the duties of the
Warrant Agent shall be carried out by the Company. The holders of a majority of
the unexercised Warrants shall be entitled at any time to remove the Warrant
Agent and appoint a successor to such Warrant Agent. Such successor to the
Warrant Agent need not be approved by the Company or the former Warrant Agent.
After appointment the successor to the Warrant Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Warrant Agent without
19
further act or deed; provided that the former Warrant Agent shall deliver and
transfer to the successor to the Warrant Agent any property at the time held by
it hereunder and execute and deliver any further assurance, conveyance, act or
deed necessary for the purpose. Failure to give any notice provided for in this
Section 13, however, or any defect therein, shall not affect the legality or
validity of the appointment of a successor to the Warrant Agent.
Section 14 Reports.
(a) Whether or not required by the rules and regulations of the Commission,
so long as any Warrants or the Warrant Shares are outstanding, the Company shall
furnish to the Warrant Agent and the holders of Warrants or Warrant Shares (i)
all quarterly and annual financial information that would be required to be
contained in a filing with the Commission on Forms 10-Q and 10-K if the Company
were required to file such Forms, including a "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and, with respect to
the annual information only, a report thereon by the Company's certified
independent accountants and (ii) all current reports that would be required to
be filed with the Commission on Form 8-K if the Company were required to file
such reports. In addition, whether or not required by the rules and regulations
of the Commission, the Company shall file a copy of all such information and
reports with the Commission for public availability (unless the Commission shall
not accept such a filing) and make such information available to securities
analysts and prospective investors upon request.
(b) The Company shall provide the Warrant Agent with a sufficient number of
copies of all such reports that the Warrant Agent may be required to deliver to
the holders of the Warrants and the Warrant Shares under this Section 14.
Section 15 Notices to Company and Warrant Agent.
Any notice or demand authorized by this Agreement to be given or made by
the Warrant Agent or by the registered holder of any Warrant to or on behalf of
the Company shall be sufficiently given or made when received if deposited in
the mail, first class or registered, postage prepaid, addressed (until another
address is filed in writing by the Company with the Warrant Agent) as follows:
French Fragrances, Inc.
14100 NW 60th Avenue
Miami Lakes, Florida 33014
Telecopier No.: (305) 818-8010
Attention: Oscar Marina, Esq.
With a copy to:
Weil Gotshal & Manges
767 Fifth Avenue
New York, New York 10153
Telephone No.: (212) 310-8000
Attention: Rod Miller, Esq.
20
In case the Company shall fail to maintain such office or agency or shall
fail to give such notice of the location or of any change in the location
thereof, presentations may be made and notices and demands may be served at the
principal office of the Warrant Agent.
Any notice pursuant to this Agreement to be given by the Company or by the
registered holder(s) of any Warrant to the Warrant Agent shall be sufficiently
given when and if deposited in the mail, first-class or registered, postage
prepaid, addressed (until another address is filed in writing by the Warrant
Agent with the Company) to the Warrant Agent as follows:
Mellon Investor Services LLC
1 Mellon Bank Center
500 Grant Street
Room 2122
Pittsburgh, PA 15258
Telecopier No.: (412) 236-8157
Attention: Relationship Manager
With a copy to:
Credit Suisse First Boston Corporation
227 Park Avenue
New York, New York 10172
Telephone No.: (212) 892-3000
Attention: Richard Beaudoin
With a copy to:
Latham & Watkins
885 Third Avenue
New York, New York 10122
Telephone No.: (212) 906-1200
Attention: Marc Jaffe, Esq.
Section 16 Supplements and Amendments.
The Company and the Warrant Agent may from time to time supplement or amend
this Agreement without the approval of any holders of Warrants in order to cure
any ambiguity or to correct or supplement any provision contained herein which
may be defective or inconsistent with any other provision herein, or to make any
other provisions in regard to matters or questions arising hereunder which the
Company and the Warrant Agent may deem necessary or desirable and which shall
not adversely affect the interests of the holders of Warrants as determined in
good faith by the Board of Directors of the Company or the Warrant Agent. Any
amendment or supplement to this Agreement that has an adverse effect on the
interests of the holders of Warrants shall require the written consent of the
holders of a majority of the then outstanding Warrants (excluding Warrants held
by the Company or any of its affiliates). The consent of each holder of Warrants
affected shall be required for any amendment pursuant to which the Exercise
Price would be increased or the number of Warrant Shares purchasable upon
exercise of Warrants would be decreased (other than pursuant to adjustments
provided in this Agreement).
21
Section 17 Successors.
All the covenants and provisions of this Agreement by or for the benefit of
the Company or the Warrant Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
Section 18 Termination.
This Agreement shall terminate at 5:00 p.m., New York City time on January
23, 2011. Notwithstanding the foregoing, this Agreement will terminate on any
earlier date if all Warrants have been exercised. The provisions of Section 12
shall survive such termination.
Section 19 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 and governed by the internal laws
of said State, without regard, however, to its conflicts of law provisions.
Section 20 Benefits of This Agreement.
Nothing in this Agreement shall be construed to give to any Person or
corporation other than the Company, the Warrant Agent and the registered holders
of Warrants any legal or equitable right, remedy or claim under this Agreement;
but this Agreement shall be for the sole and exclusive benefit of the Company,
the Warrant Agent and the registered holders of Warrants.
Section 21 Counterparts.
This Agreement may be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute but one and the same instrument.
[Signature Page Follows]
22
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
French Fragrances, Inc.
By: /s/ Oscar E. Marina
------------------------------------
Name: Oscar E. Marina
Title: Senior Vice President, General Counsel
and Secretary
Mellon Investor Services LLC, as Warrant Agent
By: /s/ Lawrence J. Schweiger
-------------------------------
Name: Lawrence J. Schweiger
Title: Assistant Vice President
23