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EXHIBIT 4.4
EXECUTION COPY
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WARRANT AGREEMENT
Dated as of March 13, 1996
by and between
EXIDE ELECTRONICS GROUP, INC.
and
AMERICAN BANK NATIONAL ASSOCIATION,
as Warrant Agent
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WARRANT AGREEMENT
TABLE OF CONTENTS***
Page
SECTION 1. Appointment of Warrant Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 2. Issuance of Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 3. Warrant Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 4. Execution of Warrant Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 5. Transfers of Warrants Prior to the Separation of Warrants and Notes; Separation of Warrants and Notes . . 3
SECTION 6. Registration and Countersignature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 7. Registration of Transfers and Exchanges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(a) Transfer and Exchange of Definitive Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(b) Restrictions on Exchange or Transfer of a Definitive Warrant for a Beneficial Interest in a
Global Warrant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(c) Transfer and Exchange of Global Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(d) Exchange of a Beneficial Interest in a Global Warrant for a Definitive Warrant . . . . . . . . . . . 6
(e) Restrictions on Transfer and Exchange of Global Warrants . . . . . . . . . . . . . . . . . . . . . . 7
(f) Countersigning of Definitive Warrants in Absence of Depositary . . . . . . . . . . . . . . . . . . . 7
(g) Legends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(h) Cancellation of Global Warrant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(i) Obligations with Respect to Transfers and Exchanges of Warrants. . . . . . . . . . . . . . . . . . . 9
SECTION 8. Terms of Warrants; Exercise of Warrants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 9. Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 10. Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 11. Mutilated or Missing Warrant Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 12. Reservation of Warrant Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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*** This Table of Contents does not constitute a part of this Agreement or
have any bearing upon the interpretation of any of its terms or provisions.
(i)
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SECTION 13. Obtaining Stock Exchange Listings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 14. Adjustment of Exercise Price and Number of Warrant Shares Issuable . . . . . . . . . . . . . . . . . . . 12
(a) Adjustment for Change in Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(b) Adjustment for Rights Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(c) Adjustment for Other Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(d) Adjustment for Common Stock Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(e) Adjustment for Convertible Securities Issue . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(f) Current Market Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(g) Consideration Received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(h) When De Minimis Adjustment May Be Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(i) When No Adjustment Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(j) Notice of Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(k) Voluntary Reduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(l) Notice of Certain Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(m) Reorganization of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(n) The Company Determination Final . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(o) Warrant Agent's Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(p) When Issuance or Payment May Be Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(q) Adjustment in Number of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(r) Form of Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 15. No Dilution or Impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 17. Notices to Warrant Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 18. Merger, Consolidation or Change of Name of Warrant Agent . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 19. Warrant Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 20. Registration Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 21. Change of Warrant Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 22. Notices to the Company and Warrant Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 23. Rule 144A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 24. Supplements and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 25. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 26. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 27. Governing Law; Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(ii)
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SECTION 28. Benefits of this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 29. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 30. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
EXHIBIT A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
EXHIBIT B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
(iii)
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WARRANT AGREEMENT dated as of March 13, 1996 between Exide
Electronics Group, Inc., a Delaware corporation (the "Company") and American
Bank National Association, as warrant agent (the "Warrant Agent").
WHEREAS, the Company has entered into a purchase agreement,
dated March 7, 1996 with Donaldson, Lufkin & Jenrette Securities Corporation,
J.P. Morgan Securities Inc. and NationsBanc Capital Markets, Inc. (the "Initial
Purchasers") in which the Company has agreed to sell to the Initial Purchasers
125,000 Units consisting of $125,000,000 principal amount of 11 1/2% Senior
Subordinated Notes due 2006 (the "Notes") and warrants, as hereinafter
described (the "Warrants"), to purchase up to an aggregate of 643,750 shares of
common stock, par value $0.01 per share (the "Common Stock"), of the Company
(the Common Stock issuable upon exercise of the Warrants being referred to
herein as the "Warrant Shares"). The Notes will be issued under an indenture
to be dated as of March 13, 1996 (the "Indenture"), between the Company and
American Bank National Association, as trustee (the "Trustee"). Each Warrant
entitles the holder of the Warrant upon exercise to receive from the Company,
as adjusted as provided herein, 5.15 fully paid and nonassessable shares of
Common Stock of the Company at the Exercise Price (as defined herein); and
WHEREAS, the Warrants and the Notes shall not be separately
transferable until the earliest to occur of (i) June 11, 1996 (ii) such date as
Donaldson, Lufkin & Jenrette Securities Corporation may in their discretion,
deem appropriate (but in no event earlier than 10 days after the Issue Date (as
defined in the Indenture)), (iii) in the event a Change of Control (as defined
in the Indenture) occurs, the date the Company mails notice thereof to holders
of Notes and (iv) the date on which the Exchange Offer Registration Statement
(as defined in the Indenture) is declared effective (the "Separation Date");
and
WHEREAS, the Company desires the Warrant Agent to act on
behalf of the Company, and the Warrant Agent is willing so to act, in
connection with the issuance of Warrant Certificates 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. 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 2. Issuance of Warrants. Warrants shall be
originally issued in connection with the issuance of the Units and shall not be
separately transferable from the Notes until on or after the Separation Date as
provided in Section 5 hereof.
SECTION 3. Warrant Certificates. The Warrants will be issued
in global form (the "Global Warrants"), substantially in the form of Exhibit A
(including footnotes 1 and 2 thereto) and in definitive form (the "Definitive
Warrants"), substantially in the form of Exhibit A (not including footnotes 1
and 2 thereto). Each Global Warrant shall represent such of the outstanding
Warrants as shall be specified therein and each shall provide that it shall
represent the aggregate amount of outstanding Warrants from time to time
endorsed thereon and that the aggregate amount of outstanding Warrants
represented thereby may from time to time be reduced or increased, as
appropriate. Any endorsement of a Global Warrant to reflect the amount of any
increase or decrease in the amount of outstanding Warrants represented thereby
shall be made by the Warrant Agent and the depositary with respect to the
Global Warrants (the "Depositary") in accordance with instructions given by the
holder thereof. The Depository Trust Company shall act as the Depositary until
a successor shall be appointed by the Company and the
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Warrant Agent. Upon request, a holder may receive from the Depositary and the
Warrant Agent separate Definitive Warrants as set forth in Section 5 below.
Any certificates (the "Warrant Certificates") evidencing the Global Warrants or
the Definitive Warrants to be delivered pursuant to this Agreement shall be
substantially in the form set forth in Exhibit A attached hereto.
SECTION 4. Execution of Warrant Certificates. Warrant
Certificates shall be signed on behalf of the Company by its Chairman of the
Board, Chief Executive Officer, Chief Financial Officer, President or Vice
President and Secretary or an Assistant Secretary. Each such signature upon
the Warrant Certificates may be in the form of a facsimile signature of the
present or any future Chairman of the Board, Chief Executive Officer, Chief
Financial Officer, President or Vice President and Secretary or Assistant
Secretary and may be imprinted or otherwise reproduced on the Warrant
Certificates and for that purpose the Company may adopt and use the facsimile
signature of any person who shall have been Chairman of the Board, Chief
Executive Officer, Chief Financial Officer, President or Vice President and
Secretary or Assistant Secretary, notwithstanding the fact that at the time the
Warrant Certificates shall be countersigned and delivered or disposed of he or
she shall have ceased to hold such office. The seal of the Company may be in
the form of a facsimile thereof and may be impressed, affixed, imprinted or
otherwise reproduced on the Warrant Certificates.
In case any officer of the Company who shall have signed any
of the Warrant Certificates shall cease to be such officer before the Warrant
Certificates so signed shall have been countersigned by the Warrant Agent, or
disposed of by the Company, such Warrant Certificates nevertheless may be
countersigned and delivered or disposed of as though such person had not ceased
to be such officer of the Company; and any Warrant Certificate may be signed on
behalf of the Company by any person who, at the actual date of the execution of
such Warrant Certificate, shall be a proper officer of the Company to sign such
Warrant Certificate, although at the date of the execution of this Warrant
Agreement any such person was not such officer.
Warrant Certificates shall be dated the date of
countersignature by the Warrant Agent.
SECTION 5. Transfers of Warrants Prior to the Separation of
Warrants and Notes; Separation of Warrants and Notes. Notwithstanding the
provisions of Section 7 hereof, on or after the Separation Date, the registered
holder of a Warrant certificate containing a Warrant Legend may surrender such
Warrant certificate accompanied 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 to the Warrant Agent,
at its corporate trust office in City of St. Paul, State of Minnesota (the
"Warrant Agent Office") for the exchange of such Warrant containing a Warrant
Legend, in whole or in part, for a new Warrant certificate or certificates not
containing the first paragraph of the Warrant Legend (such surrender and
exchange being referred to herein as a "Separation" and the related Warrants
being referred to as "Separated").
Until the Separation Date, no Warrant may be sold, assigned or
otherwise transferred to any person unless simultaneously with such transfer,
the Warrant Agent receives confirmation from the Trustee for the Notes that the
holder thereof has requested a transfer to the same transferee of one Warrant
(subject to an adjustment under Section 14 hereof) for each $1,000 principal
amount of Notes so transferred. In connection with the foregoing, upon
original issuance (if prior to the Separation Date) and, thereafter until
Separation, the Warrant certificates will bear the following legend:
THE WARRANTS EVIDENCED BY THIS CERTIFICATE ARE NOT
TRANSFERABLE SEPARATELY FROM THE NOTES ORIGINALLY SOLD AS A UNIT WITH
SUCH WARRANTS UNTIL THE EARLIEST TO OCCUR OF (I) 90 DAYS AFTER THE
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ISSUANCE OF THE UNITS, (II) SUCH DATE AS DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION MAY IN ITS DISCRETION, DEEM APPROPRIATE (BUT IN
NO EVENT EARLIER THAN 10 DAYS AFTER THE ISSUE DATE (AS DEFINED IN THE
INDENTURE RELATING TO THE NOTES)), (III) IN THE EVENT A CHANGE OF
CONTROL (AS DEFINED IN THE INDENTURE RELATING TO THE NOTES) OCCURS,
THE DATE THE COMPANY MAILS NOTICE THEREOF TO HOLDERS OF NOTES AND (IV)
THE DATE ON WHICH THE EXCHANGE OFFER REGISTRATION STATEMENT (AS
DEFINED IN THE INDENTURE RELATING TO THE NOTES) IS DECLARED EFFECTIVE
(THE "SEPARATION DATE").
THE COMMON STOCK, PAR VALUE $0.01, OF THE COMPANY (THE "COMMON
STOCK") FOR WHICH THIS WARRANT IS EXERCISABLE MAY NOT BE OFFERED OR
SOLD IN THE UNITED STATES ABSENT REGISTRATION UNDER THE SECURITIES AND
EXCHANGE ACT OF 1933, AS AMENDED (THE "EXCHANGE ACT") AND ANY
APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION FROM
REGISTRATION REQUIREMENTS. ACCORDINGLY, NO WARRANT HOLDER SHALL BE
ENTITLED TO EXERCISE SUCH HOLDER'S WARRANTS AT ANY TIME UNLESS, AT THE
TIME OF EXERCISE, (i) A REGISTRATION STATEMENT UNDER THE EXCHANGE ACT
RELATING TO THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF
THIS WARRANT (THE "WARRANT SHARES") HAS BEEN FILED WITH, AND DECLARED
EFFECTIVE BY, THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC"), AND
NO STOP ORDER SUSPENDING THE EFFECTIVENESS OF SUCH REGISTRATION
STATEMENT HAS BEEN ISSUED BY THE SEC OR (ii) THE ISSUANCE OF THE
WARRANT SHARES IS PERMITTED PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE EXCHANGE ACT.
SECTION 6. Registration and Countersignature. The Warrant
Agent, on behalf of the Company, shall number and register the Warrant
Certificates in a register as they are issued by the Company.
Warrant Certificates shall be manually countersigned by the
Warrant Agent and shall not be valid for any purpose unless so countersigned.
The Warrant Agent shall, upon written instructions of the Chairman of the
Board, Chief Executive Officer, President, Vice President or the Chief
Financial Officer of the Company, initially countersign and deliver Warrants
entitling the holders thereof to purchase not more than the number of Warrant
Shares referred to above in the first recital hereof and shall countersign and
deliver Warrants as otherwise provided in this Agreement.
The Company and the Warrant Agent may deem and treat the
registered holder(s) of the Warrant Certificates as the absolute owner(s)
thereof (notwithstanding any notation of ownership or other writing thereon
made by anyone), for all purposes, and neither the Company nor the Warrant
Agent shall be affected by any notice to the contrary.
SECTION 7. Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Definitive Warrants. When
Definitive Warrants are presented to the Warrant Agent with a request:
(i) to register the transfer of the Definitive Warrants; or
(ii) to exchange such Definitive Warrants for an equal number of
Definitive Warrants of other authorized denominations,
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the Warrant Agent shall register the transfer or make the exchange as requested
if its requirements for such transactions are met; provided, however, that the
Definitive Warrants presented or surrendered for registration of transfer or
exchange:
(x) shall be duly endorsed or accompanied by a written instruction
of transfer in form satisfactory to the Warrant Agent, duly
executed by the holder thereof or by his attorney, duly
authorized in writing; and
(y) in the case of Registrable Securities (as defined below), such
request shall be accompanied by the following additional
information and documents, as applicable:
(A) if such Registrable Security is being delivered to
the Warrant Agent by a holder for registration in the
name of such holder, without transfer, a
certification from such holder to that effect (in
substantially the form of Exhibit B hereto);
(B) if such Registrable Security is being transferred (1)
to a "qualified institutional buyer" (as defined in
Rule 144A under the Securities Act of 1933, as
amended (the "Securities Act")) in accordance with
Rule 144A under the Securities Act or (2) pursuant to
an exemption from registration in accordance with
Rule 144 under the Securities Act (and based on an
opinion of counsel if the Company so requests) or (3)
pursuant to an effective registration statement under
the Securities Act, a certification to that effect
(in substantially the form of Exhibit B hereto);
(C) if such Registrable Security is being transferred to
an institutional "accredited investor," within the
meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act pursuant to a private placement
exemption from the registration requirements of the
Securities Act, a certification to that effect (in
substantially the form of Exhibit B hereto) and a
certification from the applicable transferee;
(D) if such Registrable Security is being transferred
pursuant to an exemption from registration in
accordance with Rule 904 under the Securities Act
(and based on an opinion of counsel if the Company so
requests), a certification to that effect (in
substantially the form of Exhibit B hereto); or
(E) if such Registrable Security is being transferred in
reliance on another exemption from the registration
requirements of the Securities Act (and based on an
opinion of counsel if the Company so requests), a
certification to that effect (in substantially the
form of Exhibit B hereto).
The term "Registrable Securities" means the Warrants,
Warrant Shares and any other securities issued or issuable with
respect to the Warrants or the Warrant Shares by way of a stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or
otherwise until such date as such security (i) is effectively
registered under the Securities Act and disposed of in accordance with
a registration statement or (ii) is distributed to the public pursuant
to Rule 144 under the Securities Act.
(b) Restrictions on Exchange or Transfer of a Definitive
Warrant for a Beneficial Interest in a Global Warrant. A Definitive Warrant
may not be exchanged for a beneficial interest in a Global Warrant except upon
satisfaction of the requirements set forth below. Upon receipt by the Warrant
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Agent of a Definitive Warrant, duly endorsed or accompanied by appropriate
instruments of transfer, in form satisfactory to the Warrant Agent, together
with:
(A) if such Definitive Warrant is a Registrable Security,
certification from the holder thereof (in
substantially the form of Exhibit B hereto) to the
effect that such Definitive Warrant is being
transferred by such holder to a "qualified
institutional buyer" (as defined in Rule 144A under
the Securities Act) in accordance with Rule 144A
under the Securities Act who wishes to take delivery
thereof in the form of a beneficial interest in a
Global Warrant; and
(B) whether or not such Definitive Warrant is a
Registrable Security, written instructions directing
the Warrant Agent to make, or to direct the
Depositary to make, an endorsement on the Global
Warrant to reflect an increase in the number of
Warrants and Warrant Shares represented by the Global
Warrant,
then the Warrant Agent shall cancel such Definitive Warrant and cause, or
direct the Depositary to cause, in accordance with the standing instructions
and procedures existing between the Depositary and the Warrant Agent, the
number of Warrants and Warrant Shares represented by the Global Warrant to be
increased accordingly. If no Global Warrants are then outstanding, the Company
shall issue and the Warrant Agent shall countersign a new Global Warrant
representing the appropriate number of Warrants and Warrant Shares.
(c) Transfer and Exchange of Global Warrants. The
transfer and exchange of Global Warrants or beneficial interests therein shall
be effected through the Depositary, in accordance with this Warrant Agreement
and the procedures of the Depositary therefor.
(d) Exchange of a Beneficial Interest in a Global Warrant
for a Definitive Warrant.
(i) Any person having a beneficial interest in a Global Warrant
may upon request exchange such beneficial interest for a
Definitive Warrant. Upon receipt by the Warrant Agent of
written instructions or such other form of instructions as is
customary for the Depositary from the Depositary or its
nominee on behalf of any person having a beneficial interest
in a Global Warrant and, in the case of a Registrable
Security, the following additional information and documents
(all of which may be submitted by facsimile):
(A) if such beneficial interest is being delivered to the
person designated by the Depositary as being the
beneficial owner, a certification to that effect (in
substantially the form of Exhibit B hereto);
(B) if such beneficial interest is being transferred (1)
to a "qualified institutional buyer" (as defined in
Rule 144A under the Securities Act) in accordance
with Rule 144A under the Securities Act or (2)
pursuant to an exemption from registration in
accordance with Rule 144 under the Securities Act
(and based on an opinion of counsel if the Company so
requests) or (3) pursuant to an effective
registration statement under the Securities Act, a
certification to that effect (in substantially the
form of Exhibit B hereto);
(C) if such beneficial interest is being transferred to
any institutional "accredited investor," within the
meaning of Rule 501(a)(1), (2), (3) and (7) under the
Securities Act pursuant to a private placement
exemption from the registration
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requirements of the Securities Act, a certification
to that effect (in substantially the form of Exhibit
B hereto) and a certification from the applicable
transferee;
(D) if such beneficial interest is being transferred
pursuant to an exemption from registration in
accordance with Rule 904 under the Securities Act
(and based on an opinion of counsel if the Company so
requests), a certification to that effect (in
substantially the form of Exhibit B); or
(E) if such beneficial interest is being transferred in
reliance on another exemption from the registration
requirements of the Securities Act (and based on an
opinion of counsel if the Company so requests), a
certification to that effect (in substantially the
form of Exhibit B hereto),
then the Warrant Agent shall cause, in accordance with the
standing instructions and procedures existing between the
Depositary and Warrant Agent, the number of Warrants and
Warrant Shares represented by the Global Warrant to be reduced
and, following such reduction, the Company shall execute and
the Warrant Agent shall countersign and deliver to the
transferee a Definitive Warrant.
(ii) Definitive Warrants issued in exchange for a beneficial
interest in a Global Warrant pursuant to this Section 7(d)
shall be registered in such names as the Depositary, pursuant
to instructions from its direct or indirect participants or
otherwise, shall instruct the Warrant Agent. The Warrant
Agent shall deliver such Definitive Warrants to the persons in
whose names such Warrants are so registered.
(e) Restrictions on Transfer and Exchange of Global
Warrants. Notwithstanding any other provisions of this Warrant Agreement
(other than the provisions set forth in subsection (f) of this Section 7), a
Global Warrant may not be transferred as a whole except by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary
or another nominee of the Depositary or by the Depositary or any such nominee
to a successor Depositary or a nominee of such successor Depositary.
(f) Countersigning of Definitive Warrants in Absence of
Depositary. If at any time:
(i) the Depositary for the Global Warrants notifies the Company
that the Depositary is unwilling or unable to continue as
Depositary for the Global Warrants and a successor Depositary
for the Global Warrants is not appointed by the Company within
90 days after delivery of such notice; or
(ii) the Company, in its sole discretion, notifies the Warrant
Agent in writing that it elects to cause the issuance of
Definitive Warrants under this Warrant Agreement,
then the Company shall execute, and the Warrant Agent, upon written
instructions signed by two officers of the Company, shall countersign and
deliver Definitive Warrants, in an aggregate number equal to the number of
Warrants represented by Global Warrants, in exchange for such Global Warrants.
(g) Legends.
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(i) Except for any Registrable Security sold or transferred
(including any Registrable Security represented by a Global
Warrant) as discussed in clause (ii) below, each Warrant
Certificate evidencing the Global Warrants and the Definitive
Warrants (and all Warrants issued in exchange therefor or
substitution thereof) and each certificate representing the
Warrant Shares shall bear a legend in substantially the
following form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY
WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED
HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED
HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A)
SUCH NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (1) (a) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (b) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT,
(c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904
UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE
COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B)
THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE
SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS
SET FORTH IN (A) ABOVE."
(ii) Upon any sale or transfer of a Registrable Security (including
any Registrable Security represented by a Global Warrant)
pursuant to an effective registration statement under the
Securities Act, pursuant to Rule 144 under the Securities Act
or pursuant to an opinion of counsel reasonably satisfactory
to the Company that no legend is required:
(A) in the case of any Registrable Security that is a
Definitive Warrant, the Warrant Agent shall permit
the holder thereof to exchange such Registrable
Security for a Definitive Warrant that does not bear
the legend set forth in clause (i) above and rescind
any restriction on the transfer of such Registrable
Security; and
(B) in the case of any Registrable Security represented
by a Global Warrant, such Registrable Security shall
not be required to bear the legend set forth in
clause (i)
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above but shall continue to be subject to the
provisions of Section 7(c) hereof; provided, however,
that with respect to any request for an exchange of a
Registrable Security that is represented by a Global
Warrant for a Definitive Warrant that does not bear
the legend set forth in clause (i) above, which
request is made in reliance upon Rule 144 (and based
upon an opinion of counsel if the Company so
requests), the holder thereof shall certify in
writing to the Warrant Agent that such request is
being made pursuant to Rule 144 (such certification
to be substantially in the form of Exhibit B hereto).
(h) Cancellation of Global Warrant. At such time as all
beneficial interests in Global Warrants have either been exchanged for
Definitive Warrants, redeemed, repurchased or cancelled, all Global Warrants
shall be returned to or retained and cancelled by the Warrant Agent.
(i) Obligations with Respect to Transfers and Exchanges
of Warrants.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Warrant Agent is hereby
authorized to countersign, in accordance with the provisions
of Section 6 and this Section 7, Definitive Warrants and
Global Warrants as required pursuant to the provisions of this
Section 7.
(ii) All Definitive Warrants and Global Warrants issued upon any
registration of transfer or exchange of Definitive Warrants or
Global Warrants shall be the valid obligations of the Company,
entitled to the same benefits under this Warrant Agreement, as
the Definitive Warrants or Global Warrants surrendered upon
such registration of transfer or exchange.
(iii) Prior to due presentment for registration of transfer of any
Warrant, the Warrant Agent and the Company may deem and treat
the person in whose name any Warrant is registered as the
absolute owner of such Warrant and neither the Warrant Agent,
nor the Company shall be affected by notice to the contrary.
(iv) No service charge shall be made to a holder for any
registration, transfer or exchange.
SECTION 8. Terms of Warrants; Exercise of Warrants. Subject
to the terms of this Agreement, each Warrant holder shall have the right, which
may be exercised on or after the Separation Date until 5:00 p.m., New York, New
York time on March 15, 2006 (the "Expiration Date"), to exercise each Warrant
and receive from the Company the number of fully paid and nonassessable Warrant
Shares which the holder may at the time be entitled to receive on exercise of
such Warrants and payment of the Exercise Price (as herein defined) then in
effect for such Warrant Shares; provided, however, that no Warrant holder shall
be entitled to exercise such holder's Warrants at any time unless, at the time
of exercise, (i) a registration statement under the Securities Act, relating to
the Warrant Shares has been filed with, and declared effective by, the
Securities and Exchange Commission (the "SEC"), and no stop order suspending
the effectiveness of such registration statement has been issued by the SEC or
(ii) the issuance of the Warrant Shares is permitted pursuant to an exemption
from the registration requirements of the Securities Act; and provided,
further, that if the Company or a holder of Warrants reasonably believes that
the exercise of any Warrant requires prior compliance with the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the rules and
regulations thereunder, any such exercise shall be contingent upon such prior
compliance. Each Warrant, when exercised will entitle the holder thereof to
purchase 5.15 fully paid and nonassessable shares of Common Stock at the
Exercise Price. Each Warrant not exercised prior to the Expiration Date shall
become void and all rights thereunder and all rights in respect thereof under
this
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Agreement shall cease as of such time. No adjustments as to dividends will be
made upon exercise of the Warrants.
The Warrants may be exercised by surrendering to the Company
the Warrant Certificates evidencing the Warrants to be exercised with the
accompanying form of election to purchase properly completed and executed,
together with payment of the Exercise Price. Payment of the Exercise Price may
be made (i) on or after the Separation Date (A) by tendering Notes having a
principal amount at the time of tender equal to the Exercise Price, (B) by
tendering Warrants having a fair market value equal to the Exercise Price or
(C) by any combination of Notes or Warrants or (ii) after March 16, 1997, in
addition to the methods described above in clause (i), (A) in the form of cash
or by certified or official bank check payable to the order of the Company or
(B) by any combination of cash, Notes or Warrants. For purposes of clause
(i)(B) above, the fair market value of the Warrants shall be determined as
follows: (A) to the extent the Common Stock is publicly traded and listed on
the Nasdaq National Market or a national securities exchange, the fair market
value shall be equal to the greater of (1) the difference between (a) the
average closing price as quoted on the Nasdaq National Market of the Common
Stock for each of the ten trading days immediately prior to the exercise date
(or, if the Common Stock is listed on a national securities exchange, the
average closing price as reported on such national securities exchange during
such ten trading day period) and (b) the Exercise Price, and (2) zero; or (B)
to the extent the Common Stock is not publicly traded, or otherwise is not
listed on a national securities exchange, the fair market value shall be equal
to the value per share as determined in good faith by the Board of Directors of
the Company.
If Notes are surrendered in payment of the Exercise Price, the
Warrant Agent shall deliver such Notes to the Company and the Company shall
deliver such Notes to the Trustee (as defined in the Indenture) for
cancellation and the Trustee shall notify the Company in writing whether such
Notes were in good form and, if such Notes were in good form the Company shall
notify the Warrant Agent in writing that the Company has received full and
proper payment of the Exercise Price.
Subject to the provisions of Section 10 hereof, upon such
surrender of Warrants and payment of the Exercise Price, the Company shall
issue and 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 full Warrant Shares
issuable upon the exercise of such Warrants together with cash as provided in
Section 16 hereof; provided, however, that if any consolidation, merger or
lease or sale of assets is proposed to be effected by the Company as described
in subsection (m) of Section 14 hereof, or a tender offer or an exchange offer
for shares of Common Stock of the Company shall be made, upon such surrender of
Warrants and payment of the Exercise Price as aforesaid, the Company shall, as
soon as possible, but in any event not later than two business days thereafter,
issue and cause to be delivered the full number of Warrant Shares issuable upon
the exercise of such Warrants in the manner described in this sentence together
with cash as provided in Section 16 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. No fractional shares shall be issued upon exercise of any
Warrants in accordance with Section 16 hereof. The Company will pay to the
holder of the Warrant at the time of exercise an amount in cash equal to the
current market value of any such fractional share of Common Stock less a
corresponding fraction 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 (in whole shares)
and, in the event that a certificate evidencing Warrants 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 certificate
evidencing the remaining Warrant or Warrants will
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14
be issued, and the Warrant Agent is hereby irrevocably authorized to
countersign and to deliver the required new Warrant Certificate or Certificates
pursuant to the provisions of this Section and of Section 4 hereof, and the
Company, whenever required by the Warrant Agent, will supply the Warrant Agent
with Warrant Certificates duly executed on behalf of the Company for such
purpose.
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 Company in accordance with applicable law.
The Warrant Agent shall account promptly to the Company with respect to
Warrants exercised and concurrently pay to the Company all monies or surrender
to the Company all Notes received by the Warrant Agent for the purchase of the
Warrant Shares through the exercise of such Warrants.
The Warrant Agent shall keep copies of this Agreement and any
notices given or received hereunder available for inspection by the holders
during normal business hours at its office. The Company shall supply the
Warrant Agent from time to time with such numbers of copies of this Agreement
as the Warrant Agent may request.
SECTION 9. Reports. So long as any of the Warrants remain
outstanding, the Company shall cause copies of all quarterly and annual
financial reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the SEC may by rules and
regulations prescribe) that the Company is required to file with the SEC
pursuant to Section 13 or 15(d) of the Exchange Act ("SEC Reports") to be filed
with the Warrant Agent and mailed to the holders of Warrants, in each case,
within 15 days after filing with the SEC. If the Company is not subject to the
requirements of Section 13 or 15(d) of the Exchange Act, the Company shall
nevertheless continue to cause SEC Reports, comparable to those that it would
be required to file pursuant to Section 13 or 15(d) of the Exchange Act if it
were then subject to the requirements of either such Section, to be so filed
with the SEC for public availability (unless the SEC will not accept such a
filing) and with the Warrant Agent and mailed to the holders of Warrants, in
each case, within the same time periods as would have applied (including under
the preceding sentence) had the Company then been subject to the requirements
of Section 13 or 15(d) of the Exchange Act. The Company shall make all such
information available to investors, securities analysts and broker-dealers who
request it in writing.
SECTION 10. Payment of Taxes. No service charge shall be
made to any holder of a Warrant for any exercise, exchange or registration of
transfer of Warrant Certificates, and the Company will pay all documentary
stamp taxes attributable to the initial issuance of Warrant Shares upon the
exercise of Warrants or to any separation; 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.
SECTION 11. Mutilated or Missing Warrant Certificates. If
any of the Warrant Certificates shall be mutilated, lost, stolen or destroyed,
the Company may in its discretion issue and the Warrant Agent may countersign,
in exchange and substitution for and upon cancellation of the mutilated Warrant
Certificate, or in lieu of and in substitution for the Warrant Certificate
lost, stolen or destroyed, a new Warrant Certificate of like tenor and
representing an equivalent number of Warrants, but only upon receipt of
evidence satisfactory to the Company and the Warrant Agent of such loss, theft
or destruction of such Warrant Certificate and indemnity and security therefor,
if requested, also satisfactory to them.
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Applicants for such substitute Warrant Certificates shall also comply with such
other reasonable regulations and pay such other reasonable charges as the
Company or the Warrant Agent may prescribe.
SECTION 12. Reservation of Warrant Shares. 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 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.
The Company or 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 16 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 17 hereof.
Before taking any action which would cause an adjustment
pursuant to Section 14 hereof to reduce the Exercise Price below the then par
value (if any) of the Warrant Shares, the Company will take all corporate
action necessary, in the opinion of its counsel (which may be counsel employed
by the Company), in order that the Company may validly and legally issue fully
paid and nonassessable Warrant Shares at the Exercise Price as so adjusted.
The Company covenants that all Warrant Shares which may be
issued upon exercise of Warrants will be, upon payment of the Exercise Price
and issuance thereof, fully paid, nonassessable, free of preemptive rights and
free from all taxes, liens, charges and security interests with respect to the
issue thereof.
SECTION 13. Obtaining Stock Exchange Listings. The Company
shall also from time to time take all action necessary so that the Warrant
Shares, immediately upon their issuance upon the exercise of Warrants, will be
listed on the Nasdaq National Market or such other principal securities
exchanges, interdealer quotation systems and markets within the United States
of America, if any, on which other shares of Common Stock are then listed or
quoted.
SECTION 14. 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 14. For
purposes of this Section 14, "Common Stock" means the Common Stock and any
other stock of the Company, however designated, for which the Warrants may be
exercisable.
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(a) Adjustment for Change in Capital Stock.
If the Company:
(1) pays a dividend or makes a distribution on
its Common Stock in shares of its Common Stock;
(2) subdivides its outstanding shares of Common
Stock into a greater number of shares;
(3) combines its outstanding shares of Common
Stock into a smaller number of shares;
(4) makes a distribution on its Common Stock in
shares of its capital stock other than Common Stock; or
(5) issues by reclassification of its Common
Stock any shares of its capital stock,
then the Exercise Price and the number and kind of shares of
capital stock of the Company issuable upon the exercise of a Warrant (as 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 may
receive shares of two or more classes or series of capital stock of the
Company, the Company shall determine the allocation of the adjusted Exercise
Price between the classes or series of capital stock. After such allocation,
the exercise privilege and the Exercise Price of each class or series of
capital stock shall thereafter be subject to adjustment on terms comparable to
those applicable to Common Stock in this Section 14.
Such adjustment shall be made successively whenever any event
listed above shall occur.
(b) Adjustment for Rights Issue.
If the Company distributes any rights, options or warrants to
all holders of its Common Stock entitling them for a period expiring within 60
days after the record date mentioned below to purchase shares of Common Stock
or securities convertible into, or exchangeable or exercisable for, Common
Stock at a price per share (or with an initial conversion, exchange or exercise
price) less than the current market price per share on that record date, the
Exercise Price shall be adjusted in accordance with the following formula:
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O + N x P
-----
E' = E x M
---------
O + N
where:
E' = the adjusted Exercise Price.
E = the current Exercise Price.
O = the number of shares of Common Stock outstanding on the record
date.
N = the number of additional shares of Common Stock offered.
P = the offering price per share of the additional shares.
M = the current market price 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.
If the Company distributes to all holders of its Common Stock
any of its assets (including cash), debt securities, preferred stock or any
rights or warrants to purchase debt securities, assets or other securities of
the Company, the Exercise Price shall be adjusted in accordance with the
following formula:
E' = E x M - F
-----
M
where:
E' = the adjusted Exercise Price.
E = the current Exercise Price.
M = the current market price 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 applicable to one share of Common
Stock. The Board of Directors shall determine the fair market
value.
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.
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This subsection (c) does not apply to rights, options or
warrants referred to in subsection (b) of this Section 14.
(d) Adjustment for Common Stock Issue.
If the Company issues shares of Common Stock for a
consideration per share less than the current market price per share of Common
Stock on the date the Company fixes the offering price of such additional
shares, the Exercise Price shall be adjusted in accordance with the formula:
P
-
E' = E x O + M
---------
A
where:
E' = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares of Common Stock 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 of Common Stock on the date
of issuance of such additional shares.
A = the number of shares of Common Stock 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 14,
(2) the exercise of Warrants or other warrants
outstanding on the date of this Agreement, or the conversion or
exchange of other securities convertible or exchangeable for Common
Stock,
(3) Common Stock issued to the Company's employees,
consultants or directors under bona fide benefit plans adopted by the
Board of Directors and approved by the holders of Common Stock when
required by law, if such Common Stock would otherwise be covered by
this subsection (d) (but only to the extent that the aggregate number
of shares excluded hereby and issued after the date of this Agreement
shall not exceed 10% of the Common Stock outstanding at the time of
issuance),
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(4) Common Stock issuable upon the exercise of
rights or warrants issued to the holders of Common Stock,
(5) Common Stock issued to shareholders of any
person which merges into the Company in proportion to their stock
holdings of such person immediately prior to such merger, upon such
merger,
(6) Common Stock issued in a bona fide public
offering pursuant to a firm commitment underwriting,
(7) 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. to Person that are
not Affiliates (as defined in the Indenture) of the Company (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 20%), or
(8) Common Stock issued to Affiliates of the Company
simultaneous with, and resulting in at least the same net proceeds per
share of Common Stock to the Company as, an issuance referred to in
paragraphs (6) or (7) of this Section 14(d).
(e) Adjustment for Convertible Securities Issue.
If the Company issues any securities convertible into or
exchangeable for Common Stock (other than securities issued in transactions
described in subsections (a), (b) and (c) of this Section 14) for a
consideration per share of Common Stock initially deliverable upon conversion
or exchange of such securities less than the current market price per share on
the date of issuance of such securities, the Exercise Price shall be adjusted
in accordance with this formula:
P
-
E' = E x O + M
----------
O + D
where:
E' = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares of Common Stock 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 of Common Stock deliverable upon
conversion of or in exchange for such securities at the
initial conversion or exchange rate.
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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 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.
This subsection (e) does not apply to:
(1) 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,
(2) convertible securities issued in a bona fide
public offering pursuant to a firm commitment underwriting,
(3) convertible securities 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 Common Stock issuable upon
conversion, 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 20% of the then current market price),
(4) convertible securities issued to Affiliates
of the Company simultaneous with, and resulting in at least the same
net proceeds per share of Common Stock to the Company as, an issuance
referred to in paragraphs (2) or (3) of this Section 14(e), or
(5) stock options issued to the Company's
employees, consultants or directors.
(f) Current Market Price.
In subsections (b), (c), (d) and (e) of this Section 14 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 is the last reported sales price of the Common Stock as
reported by the Nasdaq National Market 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, or if not so reported or listed, the last reported bid price of the
Common Stock. In the absence of one or more such quotations, the Board of
Directors of the Company shall determine the current market price on such basis
as it in good faith considers appropriate.
(g) Consideration Received.
For purposes of any computation respecting consideration
received pursuant to subsections (d) and (e) of this Section 14, 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 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; and
(3) in the case of the issuance of securities
convertible into or exchangeable for shares, the aggregate
consideration received therefor shall be deemed to be the
consideration received by the Company for the issuance of such
securities plus the additional minimum consideration, if any, to be
received by the Company upon the conversion or exchange thereof (the
consideration in each case to be determined in the same manner as
provided in clauses (1) and (2) of this subsection).
(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 14 shall be made to the
nearest cent or to the nearest 1/100th of a share, as the case may be.
(i) When No Adjustment Required.
No adjustment need be made for a transaction referred to in
subsections (a), (b), (c), (d) or (e) of this Section 14 if Warrant holders are
to participate 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 rights to purchase Common Stock
pursuant to any of the Company's plan for reinvestment of dividends or
interest.
No adjustment need be made for a change in the par value, or
from par value to no par value, or from no par value to par value, of the
Common Stock.
To the extent the Warrants become convertible into cash, no
adjustment need be made thereafter as to the cash. Interest will not accrue on
the cash.
(j) Notice of Adjustment.
Whenever the Exercise Price is adjusted, the Company shall
provide the notices required by Section 17 hereof.
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(k) Voluntary Reduction.
The Company from time to time may, as the Board of Directors
deems appropriate, reduce the Exercise Price by any amount for any period of
time if the period is at least 20 days and if the reduction is irrevocable
during the period; provided, however, that in no event may the Exercise Price
be less than the par value of a share of Common Stock.
Whenever the Exercise Price is reduced, the Company shall mail
to Warrant holders a notice of the reduction. The Company shall mail the
notice at least 15 days before the date the reduced Exercise Price takes
effect. The notice shall state the reduced Exercise Price and the period it
will be in effect.
A reduction of the Exercise Price pursuant to this Section
14(k), other than a reduction which the Company has irrevocably committed will
be in effect for so long as any Warrants are outstanding, does not change or
adjust the Exercise Price otherwise in effect for purposes of subsections (a),
(b), (c), (d) and (e) of this Section 14.
(l) Notice of Certain Transactions.
If:
(1) The Company takes any action that would
require an adjustment in the Exercise Price pursuant to subsections
(a), (b), (c), (d) or (e) of this Section 14 and if the Company does
not arrange for Warrant holders to participate pursuant to subsection
(i) of this Section 14;
(2) The Company takes any action that would
require a supplemental Warrant Agreement pursuant to subsection (m) of
this Section 14; or
(3) there is a liquidation or dissolution of the
Company,
the Company shall mail to Warrant holders a notice stating the proposed record
date for a dividend or distribution or the proposed effective date of a
subdivision, combination, reclassification, consolidation, merger, transfer,
lease, liquidation or dissolution. The Company shall mail the notice at least
15 days before such date. Failure to mail the notice or any defect in it shall
not affect the validity of the transaction.
(m) Reorganization of the Company.
(1) If the Company consolidates or merges with or
into, or transfers or leases all or substantially all its assets to,
any person, upon consummation of such transaction the Warrants shall
automatically become exercisable for the kind and amount of
securities, cash or other assets which the holder of a Warrant would
have owned immediately after the consolidation, merger, transfer or
lease if the holder had exercised the Warrant immediately before the
effective date of the transaction. Concurrently with the consummation
of such transaction, the corporation formed by or surviving any such
consolidation or merger if other than the Company, or the person to
which such sale or conveyance shall have been made (any such person,
the "Successor Guarantor"), shall enter into 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 14. The Successor Guarantor shall mail
to Warrant holders a notice describing the supplemental Warrant
Agreement. If the issuer of securities
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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.
(2) Notwithstanding paragraph (1) of this Section
14(m), in the case of any merger, reverse stock split, or other
transaction in which the publicly held Common Stock shall be converted
into the right to receive a consideration consisting solely of cash,
(A) this Warrant Agreement and each Warrant shall terminate and (B)
each holder of a Warrant, without having to take any other action than
the surrendering of such Warrant to the Company, shall receive an
amount equal to the amount (if any) by which the price per share
payable to, or which would be received by, any public holder of Common
Stock in connection with such transaction exceeds the Exercise Price
effective at that time.
(3) If this subsection (m) applies, subsections
(a), (b), (c), (d) and (e) of this Section 14 do not apply.
(n) The Company Determination Final.
Any determination that the Company or the Board of Directors
must make pursuant to subsection (a), (c), (d), (e), (f), (g) or (i) of this
Section 14 is conclusive.
(o) Warrant Agent's Disclaimer.
The Warrant Agent has no duty to determine when an adjustment
under this Section 14 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 subsection (m) of this Section 14 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 14.
(p) When Issuance or Payment May Be Deferred.
In any case in which this Section 14 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 16 hereof; provided, however, that the Company shall
deliver to such holder a due bill 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.
(q) Adjustment in Number of Shares.
Upon each adjustment of the Exercise Price pursuant to this
Section 14, 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:
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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.
(r) 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 15. No Dilution or Impairment. (a) If any event
shall occur as to which the provisions of Section 14 are not strictly
applicable but the failure to make any adjustment would adversely affect the
purchase rights represented by the Warrants in accordance with the essential
intent and principles of such Section 14, then, in each such case, the Company
shall appoint an investment banking firm of recognized national standing, or
any other financial expert that does not (or whose directors, officers,
employees, affiliates or stockholders do not) have a direct or material
indirect financial interest in the Company or any of its subsidiaries, who has
not been, and, at the time it is called upon to give independent financial
advice to the Company, is not (and none of its directors, officers, employees,
affiliates or stockholders are) a promoter, director or officer of the Company
or any of its subsidiaries, which shall give their opinion upon the adjustment,
if any, on a basis consistent with the essential intent and principles
established in Section 14, necessary to preserve, without dilution, the
purchase rights, represented by the Warrants. Upon receipt of such opinion,
the Company will promptly mail a copy thereof to the holders of the Warrants
and shall make the adjustments described therein.
(b) The Company will not, by amendment of its certificate
of incorporation or through any consolidation, merger, reorganization, transfer
of assets, dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the
terms of the Warrants, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the holder of the
Warrants against dilution or other impairment. Without limiting the generality
of the foregoing, the Company (1) will take all such action as may be necessary
or appropriate in order that the Company may validly and legally issue fully
paid and nonassessable shares of Common Stock on the exercise of the Warrants
from time to time outstanding and (2) will not take any action which results in
any adjustment of the Exercise Price if the total number of Warrant Shares
issuable after the action upon the exercise of all of the Warrants would exceed
the total number of shares of Common Stock then authorized by the Company's
certificate of incorporation and available for the purposes of issue upon such
exercise. A consolidation, merger, reorganization or transfer of assets
involving the Company covered by Section 14(m) shall not be prohibited by or
require any adjustment under this Section 15.
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SECTION 16. 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 16, be issuable on the exercise of any Warrants (or specified portion
thereof), the Company shall notify the Warrant Agent in writing of the amount
to be paid in lieu of the fraction of a Warrant Share and concurrently pay or
provide to the Warrant Agent for payment to the Warrant holder an amount in
cash equal to the product of (i) such fraction of a Warrant Share and (ii) the
difference of the current market price of a share of Common Stock over the
Exercise Price.
SECTION 17. Notices to Warrant Holders. Upon any adjustment
of the Exercise Price pursuant to Section 14 hereof, the Company shall within
15 days 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
the Warrant Certificates at such registered holder's 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 17.
In case:
(a) 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; or
(b) the Company shall authorize the distribution to all
holders of shares of Common Stock of evidences of its indebtedness or assets
(other than cash dividends or cash distributions payable out of consolidated
earnings or earned surplus or dividends payable in shares of Common Stock or
distributions referred to in subsection (a) of Section 14 hereof); or
(c) of any consolidation or merger to which the Company
is a party and for which approval of any shareholders 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
(d) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company; or
(e) a Change of Control (as defined in the Indenture)
occurs; or
(f) the Company proposes to take any action (other than
actions of the character described in Section 14(a)) which would require an
adjustment of the Exercise Price pursuant to Section 14; then the Company shall
cause to be filed with the Warrant Agent and shall cause to be given to each
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of the registered holders of the Warrant Certificates at his address appearing
on the Warrant register, at least 15 days (or 10 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 (i) 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, or (ii) the initial expiration date set forth in any tender offer
or exchange offer for shares of Common Stock, or (iii) the date on which any
such consolidation, merger, conveyance, transfer, dissolution, liquidation or
winding up is expected to become effective or consummated, and the date as of
which it is expected that holders of record of shares of Common Stock shall be
entitled to exchange such shares for securities or other property, if any,
deliverable upon such reclassification, consolidation, merger, conveyance,
transfer, dissolution, liquidation or winding up. The failure to give the
notice required by this Section 17 or any defect therein shall not affect the
legality or validity of any distribution, right, option, warrant,
consolidation, merger, conveyance, transfer, lease, dissolution, liquidation or
winding up, or the vote upon any action.
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 or to receive notice as shareholders in respect of
the meetings of shareholders or the election of Directors of the Company or any
other matter, or any rights whatsoever as shareholders of the Company.
SECTION 18. Merger, Consolidation or Change of Name of
Warrant Agent. Any corporation into which the Warrant Agent may be merged or
with which it may be consolidated, or any corporation resulting from any merger
or consolidation to which the Warrant Agent shall be a party, or any
corporation succeeding to the business of the Warrant Agent, shall be the
successor to the Warrant Agent hereunder without the execution or filing of any
paper or any further act on the part of any of the parties hereto, provided
that such corporation would be eligible for appointment as a successor warrant
agent under the provisions of Section 21 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.
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 19. Warrant Agent. The Warrant Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Warrants, by their
acceptance thereof, shall be bound:
(a) The statements contained herein and in the
Warrant Certificates shall be taken as statements of the Company. The
Warrant Agent assumes no responsibility for the correctness of any of
the same except such as describe the Warrant Agent or action taken or
to be
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taken by it. The Warrant Agent assumes no responsibility with respect
to the distribution of the Warrant Certificates except as herein
otherwise provided.
(b) The Warrant Agent shall not be responsible
for any failure of the Company to comply with any of the covenants
contained in this Agreement or in the Warrant Certificates to be
complied with by the Company.
(c) The Warrant Agent may consult at any time
with counsel satisfactory to it (who may be counsel for the Company)
and the Warrant Agent shall incur no liability or responsibility to
the Company or to any holder of any Warrant Certificate in respect of
any action taken, suffered or omitted by it hereunder in good faith
and in accordance with the opinion or the advice of such counsel.
(d) The Warrant Agent shall incur no liability or
responsibility to the Company or to any holder of any Warrant
Certificate for any action taken in reliance on any Warrant
Certificate, certificate of shares, notice, resolution, waiver,
consent, order, certificate, or other paper, document or instrument
believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties. The Warrant Agent shall not
be bound by any notice or demand, or any waiver, modification,
termination or revision of this Agreement or any of the terms hereof,
unless evidenced by a writing between the Company and the Warrant
Agent.
(e) The Company agrees to pay to the Warrant
Agent reasonable compensation for all services rendered by the Warrant
Agent in the execution of this Agreement, to reimburse the Warrant
Agent for all expenses, taxes (including withholding taxes) and
governmental charges and other charges of any kind and nature incurred
by the Warrant Agent in the execution, delivery and performance of its
responsibilities under this Agreement and to indemnify the Warrant
Agent and save it harmless against any and all liabilities, including
judgments, costs and counsel fees, for anything done or omitted by the
Warrant Agent in the execution, delivery and performance of its
responsibilities under this Agreement except as a result of its
negligence or bad faith.
(f) The Warrant Agent shall be under no
obligation to institute any action, suit or legal proceeding or to
take any other action likely to involve expense unless the Company or
one or more registered holders of Warrant Certificates shall furnish
the Warrant Agent with reasonable security and indemnity for any costs
and expenses which may be incurred, but this provision shall not
affect the power of the Warrant Agent to take such action as it may
consider proper, whether with or without any such security or
indemnity. All rights of action under this Agreement or under any of
the Warrants may be enforced by the Warrant Agent without the
possession of any of the Warrant Certificates or the production
thereof at any trial or other proceeding relative thereto, and any
such action, suit or proceeding instituted by the Warrant Agent shall
be brought in its name as Warrant Agent and any recovery of judgment
shall be for the ratable benefit of the registered holders of the
Warrants, as their respective rights or interests may appear.
(g) Except as required by law, the Warrant Agent,
and any stockholder, director, officer or employee of the Warrant
Agent, may buy, sell or deal in any of the Warrants or other
securities of the Company or become pecuniarily interested in 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.
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(h) The Warrant Agent shall act hereunder solely
as agent for the Company, and its duties shall be determined solely by
the provisions hereof. The Warrant Agent shall not be liable for
anything which it may do or refrain from doing in connection with this
Agreement except for its own negligence or bad faith.
(i) The Warrant Agent shall not at any time be
under any duty or responsibility to any holder of any Warrant
Certificate to make or cause to be made any adjustment of the Exercise
Price or number of the Warrant Shares or other securities or property
deliverable as provided in this Agreement, or to determine whether any
facts exist which may require any of such adjustments, or with respect
to the nature or extent of any such adjustments, when made, or with
respect to the method employed in making the same. The Warrant Agent
shall not be accountable with respect to the validity or value or the
kind or amount of any Warrant Shares or of any securities or property
which may at any time be issued or delivered upon the exercise of 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 20. Registration Rights
The Company and Warrant Agent acknowledge that the holders
shall have the registration rights set forth in the Warrant Registration Rights
Agreement, dated as of even date herewith, by and among the Company and the
Initial Purchasers relating to the Warrants and Warrant Shares (the "Warrant
Registration Rights Agreement").
SECTION 21. Change of Warrant Agent. If the Warrant Agent
shall become incapable of acting as Warrant Agent or shall resign as provided
below, 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 holders of a majority of Warrant Certificates, then the registered
holder of any Warrant Certificate 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. After appointment the successor to the Warrant Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Warrant Agent without further act or deed; but 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 21, however, or any defect
therein, shall not affect the legality or validity of the appointment of a
successor to the Warrant Agent.
The Warrant Agent may resign at any time and be discharged
from the obligations hereby created by so notifying the Company in writing at
least 30 days in advance of the proposed effective date of its resignation. If
no successor Warrant Agent accepts the engagement hereunder by such time, the
Company shall act as Warrant Agent.
SECTION 22. Notices to the 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 Certificate to or on
the Company shall be sufficiently given or made when and 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:
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Exide Electronics Group, Inc.
8609 Six Forks Road
Raleigh, NC 27615
Attention: General Counsel
with a copy to:
Smith Helms Mulliss & Moore, L.L.P.
316 West Edenton Street (27603)
P.O. Box 27525
Raleigh, NC 27611-7525
Attention: Brad S. Markoff, Esq.
Any notice pursuant to this Agreement to be given by the
Company or by the registered holder(s) of any Warrant Certificate 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 at
the Warrant Agent Office as follows:
American Bank National Association
101 East Fifth Street
St. Paul, Minnesota 55101
Attention: Corporate Trust Department
Notice may also be given by facsimile transmission (effective
when receipt is acknowledged) or by overnight delivery service (effective the
next business day).
SECTION 23. Rule 144A. The Company hereby agrees with each
holder, for so long as any Registrable Securities remain outstanding, to make
available, upon request of any holder of Registrable Securities, to any holder
or beneficial owner of Registrable Securities in connection with any sale
thereof and any prospective purchaser of such Registrable Securities designated
by such holder or beneficial owner, the information required by Rule 144A(d)(4)
under the Securities Act in order to permit resales of such Registrable
Securities pursuant to Rule 144A.
SECTION 24. Supplements and Amendments. The Company and the
Warrant Agent may from time to time supplement or amend this Agreement without
the consent of any holders of Warrant Certificates in order to cure any
ambiguity or to correct or supplement any provision contained herein which may
be defective or inconsistent with any other provision herein, or to make any
other provisions in regard to matters or questions arising hereunder which the
Company and the Warrant Agent may deem necessary or desirable and which shall
not in any way materially adversely affect the interests of the holders of
Warrant Certificates. Any amendment or supplement to this Agreement that has a
material adverse effect on the interests of holders of the Warrants shall
require the written consent of registered 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 a Warrant 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 in accordance with Section 14 or 16 hereof).
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SECTION 25. 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 26. Termination. This Agreement shall terminate at
5:00 p.m., New York, New York time on March 15, 2006. Notwithstanding the
foregoing, this Agreement will terminate on such earlier date on which all
outstanding Warrants have been exercised.
SECTION 27. Governing Law; Jurisdiction. 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 governed
by and construed in accordance with the internal laws of said State. The
parties hereto irrevocably consent to the jurisdiction of the courts of the
State of New York and any federal court located in such state in connection
with any action, suit or proceeding arising out of or relating to this
Agreement.
SECTION 28. 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 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 Company, the Warrant Agent and the registered holders of the Warrant
Certificates.
SECTION 29. 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.
SECTION 30. Further Assurances. From time to time on and
after the date hereof, the Company shall deliver or cause to be delivered to
the Warrant Agent such further documents and instruments and shall do and cause
to be done such further acts as the Warrant Agent shall reasonably request (it
being understood that the Warrant Agent shall have no obligation to make such
request) to carry out more effectively the provisions and purposes of this
Agreement, to evidence compliance herewith or to assure itself that it is
protected hereunder.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above written.
EXIDE ELECTRONICS GROUP, INC.
By: /s/ Marty R. Kittrell
--------------------------------
Name: Marty R. Kittrell
Title: Vice President, Chief Financial
Officer, Treasurer and Assistant
Secretary
AMERICAN BANK NATIONAL ASSOCIATION
By: /s/ Frank P. Leslie III
--------------------------------------
Authorized Signatory
By: /s/ Thomas M. Korsman
--------------------------------------
Authorized Signatory
32
EXHIBIT A
EXERCISABLE ON OR AFTER THE SEPARATION DATE (AS DEFINED HEREIN). THE
WARRANTS EVIDENCED BY THIS CERTIFICATE ARE NOT TRANSFERABLE SEPARATELY FROM THE
NOTES ORIGINALLY SOLD AS A UNIT WITH SUCH WARRANTS UNTIL THE EARLIEST TO OCCUR
OF (I) 90 DAYS AFTER THE ISSUANCE OF THE UNITS, (II) SUCH DATE AS DONALDSON,
LUFKIN & JENRETTE SECURITIES CORPORATION MAY IN THEIR DISCRETION, DEEM
APPROPRIATE (BUT IN NO EVENT EARLIER THAN 10 DAYS AFTER THE ISSUE DATE (AS
DEFINED IN THE INDENTURE RELATING TO THE NOTES)), (III) IN THE EVENT A CHANGE
OF CONTROL (AS DEFINED IN THE INDENTURE RELATING TO THE NOTES) OCCURS, THE DATE
THE COMPANY MAILS NOTICE THEREOF TO HOLDERS OF NOTES AND (IV) THE DATE ON WHICH
THE EXCHANGE OFFER REGISTRATION STATEMENT (AS DEFINED IN THE INDENTURE RELATING
TO THE NOTES) IS DECLARED EFFECTIVE (THE "SEPARATION DATE").
THE COMMON STOCK, PAR VALUE $0.01, OF THE COMPANY (THE "COMMON STOCK")
FOR WHICH THIS WARRANT IS EXERCISABLE MAY NOT BE OFFERED OR SOLD IN THE UNITED
STATES ABSENT REGISTRATION UNDER THE SECURITIES AND EXCHANGE ACT OF 1933, AS
AMENDED (THE "EXCHANGE ACT") AND ANY APPLICABLE STATE SECURITIES LAWS OR AN
APPLICABLE EXEMPTION FROM REGISTRATION REQUIREMENTS. ACCORDINGLY, NO WARRANT
HOLDER SHALL BE ENTITLED TO EXERCISE SUCH HOLDER'S WARRANTS AT ANY TIME UNLESS,
AT THE TIME OF EXERCISE, (i) A REGISTRATION STATEMENT UNDER THE EXCHANGE ACT
RELATING TO THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THIS
WARRANT (THE "WARRANT SHARES") HAS BEEN FILED WITH, AND DECLARED EFFECTIVE BY,
THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC"), AND NO STOP ORDER
SUSPENDING THE EFFECTIVENESS OF SUCH REGISTRATION STATEMENT HAS BEEN ISSUED BY
THE SEC OR (ii) THE ISSUANCE OF THE WARRANT SHARES IS PERMITTED PURSUANT TO AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE EXCHANGE ACT.
Form of Initial Warrant Certificate
[Face]
No. _____ 125,000 Warrants
Warrant Certificate
Exide Electronics Group, Inc.
This Warrant Certificate certifies that Cede & Co., or its
registered assigns, is the registered holder of Warrants expiring March 15,
2006 (the "Warrants"), to purchase shares of the Common Stock, par value $.01
(the "Common Stock"), of Exide Electronics Group, Inc., a Delaware corporation
("the Company"). Each Warrant entitles the registered holder upon exercise at
any time from 9:00 a.m. on the Separation Date referred to below until 5:00
p.m. New York City Time on March 15, 2006, to receive from the Company 5.15
fully paid and nonassessable shares of Common Stock (the "Warrant Shares") at
the initial exercise price (the "Exercise Price") of $13.475 per share 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 or agency of the
Warrant Agent, but only subject to the conditions set forth herein and in the
Warrant Agreement referred to on the reverse hereof. The Exercise Price and
number of Warrant Shares issuable upon exercise of the Warrants are subject to
adjustment upon the occurrence of certain events set forth in the Warrant
Agreement. All capitalized terms not defined herein shall have the meanings
assigned to such terms in the Warrant Agreement.
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No Warrant may be exercised before the Separation Date. No
Warrant may be exercised after 5:00 p.m., New York, New York Time on March 15,
2006 and to the extent not exercised by such time such Warrants shall become
void.
Reference is hereby made to the further provisions of this
Warrant Certificate set forth on the reverse hereof and such further provisions
shall for all purposes have the same effect as though fully set forth at this
place.
This Warrant Certificate shall not be valid unless
countersigned by the Warrant Agent, as such term is used in the Warrant
Agreement.
This Warrant Certificate shall be governed and construed in
accordance with the internal laws of the State of New York.
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IN WITNESS WHEREOF, Exide Electronics Group, Inc. has caused
this Warrant Certificate to be signed by its Chief Financial Officer and by its
Secretary, each by a facsimile of his signature, and has caused a facsimile of
its corporate seal to be affixed hereunto or imprinted hereon.
Dated:
Exide Electronics Group, Inc.
By:
------------------------------------
Marty R. Kittrell
Chief Financial Officer,
Vice President, Treasurer and
Assistant Secretary
By:
------------------------------------
Nicholas J. Costanza
Vice President,
Chief Administrative Officer,
Chief Legal Counsel and Secretary
(seal)
Countersigned:
American Bank National Association,
as Warrant Agent
By:
--------------------------------------
Authorized Signatory
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Form of Warrant Certificate
[Reverse]
[Unless and until it is exchanged in whole or in part for
Warrants in definitive form, this Warrant may not be transferred except as a
whole by the depositary to a nominee of the depositary or by a nominee of the
depositary to the depositary or another nominee of the depositary or by the
depositary or any such nominee to a successor depositary or a nominee of such
successor depositary. The Depository Trust Company ("DTC"), (55 Water Street,
New York, New York) shall act as the depositary until a successor shall be
appointed by the Company and the Warrant Agent. Unless this certificate is
presented by an authorized representative of DTC to the issuer or its agent for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or such other name as requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or such
other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.](1)
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY
EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH
NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) (a) TO
A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES
ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES
ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS
SET FORTH IN (A) ABOVE.
--------------------
(1) This paragraph is to be included only if the Warrant is in
global form.
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The Warrants evidenced by this Warrant Certificate are part of
a duly authorized issue of Warrants expiring March 15, 2006 entitling the
holder upon exercise to receive shares of common stock, par value $0.01, of the
Company (the "Common Stock"), and are issued or to be issued pursuant to a
Warrant Agreement dated as of March 13, 1996 (the "Warrant Agreement"), duly
executed and delivered by the Company to American Bank National Association, as
warrant agent (the "Warrant Agent"), which Warrant Agreement is hereby
incorporated by reference in and made a part of this instrument and is hereby
referred to for a description of the rights, limitation of rights, obligations,
duties and immunities thereunder of the Warrant Agent, the Company and the
holders (the words "holders" or "holder" meaning the registered holders or
registered holder) of the Warrants.
Warrants may be exercised at any time from 9:00 a.m. on or
after the earliest to occur of (i) June 11, 1996, (ii) such date as Donaldson,
Lufkin & Jenrette Securities Corporation may in their discretion, deem
appropriate (but in no event earlier than 10 days after the Issue Date (as
defined in the Indenture relating to the Notes)), (iii) in the event a Change
of Control (as defined in the Indenture relating to the Notes) occurs, the date
the Company mails notice thereof to holders of Notes and (iv) the date on which
the Exchange Offer Registration Statement (as defined in the Indenture relating
to the Notes) is declared effective (the "Separation Date") and until 5:00
p.m., New York City Time on March 15, 2006. The holder of Warrants evidenced
by this Warrant Certificate may exercise them by surrendering this Warrant
Certificate, with the form of election to purchase set forth hereon properly
completed and executed, together with payment of the Exercise Price in lawful
money of the United States of America at the office of the Warrant Agent. 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 to the holder hereof or his assignee a new
Warrant Certificate evidencing the number of Warrants not exercised. No
adjustment shall be made for any dividends on any Common Stock issuable upon
exercise of this Warrant.
The Warrant Agreement provides that upon the occurrence of
certain events the Exercise Price set forth on the face hereof may, subject to
certain conditions, be adjusted. If the Exercise Price is adjusted, the
Warrant Agreement provides that the number of shares of Common Stock issuable
upon the exercise of each Warrant shall be adjusted. No fractions of a share
of Common Stock will be issued upon the exercise of any Warrant, but the
Company will pay the cash value thereof determined as provided in the Warrant
Agreement.
The Warrant Agreement provides that the Company shall be bound
by certain registration obligations with respect to the Common Stock issuable
upon exercise of the Warrants, as set forth in the Warrant Registration Rights
Agreement (as defined in the Warrant Agreement).
Warrant Certificates, when surrendered at the office of the
Warrant Agent by the registered holder thereof in person or by legal
representative or attorney duly authorized in writing, may be exchanged, in the
manner and subject to the limitations provided in the Warrant Agreement, but
without payment of any service charge, for another Warrant Certificate or
Warrant Certificates of like tenor evidencing in the aggregate a like number of
Warrants.
Upon due presentation for registration of transfer of this
Warrant Certificate at the office of the Warrant Agent a new Warrant
Certificate or Warrant Certificates of like tenor and evidencing in the
aggregate a like number of Warrants shall be issued to the transferee(s) in
exchange for this Warrant Certificate, subject to the limitations provided in
the Warrant Agreement, without charge except for any tax or other governmental
charge imposed in connection therewith.
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The Company and the Warrant Agent may deem and treat the
registered holder(s) thereof as the absolute owner(s) of this Warrant
Certificate (notwithstanding any notation of ownership or other writing hereon
made by anyone), for the purpose of any exercise hereof, of any distribution to
the holder(s) hereof, and for all other purposes, and neither the Company nor
the Warrant Agent shall be affected by any notice to the contrary. Neither the
Warrants nor this Warrant Certificate entitles any holder hereof to any rights
of a stockholder of the Company.
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Form of Election to Purchase
(To Be Executed Upon Exercise Of Warrant)
The undersigned hereby irrevocably elects to exercise the
right, represented by this Warrant Certificate, to receive __________ shares of
Common Stock and herewith (check item) tenders payment for such shares to the
order of Exide Electronics Group, Inc. in the amount of $_____ in accordance
with the terms hereof. The undersigned requests that a certificate for such
shares be registered in the name of _______________________________, whose
address is ______________________________________ and that such shares be
delivered to ________________________________ whose address is
________________________________.
If said number of shares is less than all of the shares of
Common Stock purchasable hereunder, the undersigned requests that a new Warrant
Certificate representing the remaining balance of such shares be registered in
the name of _____________________, whose address is __________________, and
that such Warrant Certificate be delivered to ________________, whose address
is _____________________.
Date:
--------------------
Your Signature:
------------------------
(Sign exactly as your name appears on
the face of this Warrant)
Signature Guarantee:
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SCHEDULE OF EXCHANGES OF DEFINITIVE WARRANTS(2)
The following exchanges of a part of this Global Warrant for definitive
Warrants have been made:
Number of Warrants
Amount of decrease Amount of increase in this Global
in Number of in Number of Warrant following Signature of
Warrants in this Warrants in this such decrease or authorized officer
Date of Exchange Global Warrant Global Warrant increase of Warrant Agent
--------------------------------------------------------------------------------------------------------------
- -------------------
(2) This is to be included only if the Warrant is in global
form.
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EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER OF
WARRANTS
Re: _____ Warrants to Purchase Common Stock (the "Warrants") of EXIDE
ELECTRONICS GROUP, INC.
This Certificate relates to _____ Warrants held in * ________
book-entry or * ________ definitive form by _________ (the "Transferor").
The Transferor*:
/ / has requested the Warrant Agent by written order to deliver in
exchange for its beneficial interest in the Global Warrants held by the
depositary a Warrant or Warrants in definitive, registered form equal to its
beneficial interest in such Global Warrant (or the portion thereof indicated
above); or
/ / has requested the Warrant Agent by written order to exchange or
register the transfer of a Warrant or Warrants
/ / In connection with such request and in respect of each such
Warrant, the Transferor does hereby certify that the Transferor is familiar
with the Warrant Agreement relating to the above captioned Warrants and that
the transfer of this Warrant does not require registration under the Securities
Act of 1933, as amended (the "Securities Act") because:
/ / Such Warrant is being acquired for the Transferor's own account
without transfer (in satisfaction of Section 5 of the Warrant Agreement).
/ / Such Warrant is being transferred (i) to a qualified
institutional buyer (as defined in Rule 144A under the Securities Act), in
reliance on Rule 144A or (ii) pursuant to an exemption from registration in
accordance with Rule 904 under the Securities Act (and, in the case of clause
(ii), based on an opinion of counsel if the Company so requests).
/ / Such Warrant is being transferred (i) in accordance with Rule
144 under the Securities Act (and based on an opinion of counsel if the Company
so requests) or (ii) pursuant to an effective registration statement under the
Securities Act.
/ / Such Warrant is being transferred to an institutional accredited
investor within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act pursuant to a private placement exemption from the registration
requirements of the Securities Act (together with a certification).
- ------------------
* Check applicable box.
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41
/ / Such Warrant is being transferred in reliance on and in
compliance with another exemption from the registration requirements of the
Securities Act (and based on an opinion of counsel if the Company so requests).
[INSERT NAME OF TRANSFEROR]
By:
-------------------------
Date:
- ------------------
* Check applicable box.
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