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SERIES D WARRANT AGREEMENT
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This SERIES D WARRANT AGREEMENT, dated as of December 19, 1994 (this
"Agreement"), is made and entered into by and between Federated Department
Stores, Inc., a Delaware corporation (the "Company"), and The Bank of New York,
a New York banking corporation (the "Warrant Agent").
RECITALS
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A. A plan of reorganization of R.H. Macy & Co., Inc. (a
predecessor of the Company, "Macy") and certain of its subsidiaries (the
"Plan") proposed by Macy and Federated Department Stores, Inc. (a predecessor
of the Company, "Old Federated") was confirmed by the United States Bankruptcy
Court for the Southern District of New York on December 8, 1994.
B. Pursuant to the Plan and an Agreement and Plan of Merger,
dated as of August 16, 1994, between Old Federated and Macy, Old Federated and
Macy were merged (the "Merger"), with the Company being the surviving
corporation in the Merger.
C. The Plan provides for the execution and delivery of this
Agreement by the Company.
D. The Company desires to issue the Warrants (as defined below)
on the terms and subject to the conditions herein set forth.
NOW, THEREFORE, in consideration of the mutual covenants herein set
forth, the parties hereto hereby agree as follows:
1. ISSUANCE OF WARRANTS; FORM OF WARRANTS.
1.1. ISSUANCE OF WARRANTS. On the terms and subject to the conditions
set forth in the Plan, the Company will issue and deliver to the holders of
Allowed Claims in Classes M-10, MOS-10, M-11, and MOS-11 (as such terms are
defined in the Plan) an aggregate of 9,999,841 warrants (the "Warrants"), each
Warrant initially representing the right to purchase one share of Common Stock,
par value $.01 per share, of the Company (the "Common Stock"). The purchase
price per Warrant Share payable upon the exercise of a Warrant (the "Warrant
Price") will initially be $29.92. The shares of Common Stock purchasable upon
exercise of the Warrants are hereinafter referred to as the "Warrant Shares."
The Warrant Price and the number and kind of Warrant Shares purchasable upon
exercise of the Warrants are subject to adjustment pursuant to the provisions
of Section 4.
1.2. FORM OF WARRANTS. Each Warrant, including without limitation any
Warrants that may be issued upon partial exercise, replacement, or transfer of
Warrants, will be evidenced by, and subject to the terms of, a Warrant
certificate (including the
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Form of Exercise Notice and Form of Assignment to be printed on the reverse
thereof, a "Warrant Certificate") in substantially the form of Exhibit A, with
such changes, marks of identification or designation, and such legends,
summaries, or endorsements printed thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or with any rule or regulation made
pursuant thereto.
1.3. COUNTERSIGNATURE OF WARRANTS. The Warrant Certificates will be
executed on behalf of the Company by the manual or facsimile signature of its
Chairman, President, or any Vice President, and attested by its Secretary or
any Assistant Secretary. The Warrant Certificates will be countersigned by the
Warrant Agent, either manually or by facsimile signature, and will not be valid
for any purpose unless so countersigned. In case any officer of the Company
who has signed any of the Warrant Certificates ceases to be such officer of the
Company before countersignature by the Warrant Agent and issuance and delivery
by the Company, such Warrant Certificates, nevertheless, may be countersigned
by the Warrant Agent, and issued and delivered by the Company with the same
force and effect as though the person who signed such Warrant Certificates 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, is a proper officer of the Company to
sign such Warrant Certificate, although on any other date such person was not
such an officer.
1.4 REGISTRATION OF WARRANTS. The Warrant Agent will keep or
cause to be kept, at the principal office of the Warrant Agent designated for
such purpose, books for registration and transfer of the Warrant Certificates
issued hereunder. Such books will show the names and addresses of the
respective holders of the Warrant Certificates, the number of Warrants
evidenced on its face by each of the Warrant Certificates, and the date of each
of the Warrant Certificates. The Company and the Warrant Agent will be
entitled to treat the registered holder of any Warrant Certificate (the
"Holder") as the sole owner of the Warrants represented by such Warrant
Certificate for all purposes and will not be bound to recognize any equitable
or other claim or interest in such Warrants on the part of any other person.
Neither the Company nor the Warrant Agent will be liable for any registration
of transfer of any Warrants that are registered or to be registered in the name
of a fiduciary or the nominee of a fiduciary.
2. TRANSFER AND EXCHANGE OF WARRANTS.
2.1. TRANSFER AND EXCHANGE. Any Warrant Certificate may be
transferred, split up, combined, or exchanged for another Warrant Certificate
or Warrant Certificates entitling the Holder thereof to purchase a like
aggregate number of Warrant Shares as the Warrant Certificate or Warrant
Certificates surrendered then
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entitled such Holder (or former Holder in the case of a transfer) to purchase.
Any Holder desiring to transfer, split up, combine, or exchange any such
Warrant Certificate will make such request in writing delivered to the Warrant
Agent, and will surrender the Warrant Certificate or Warrant Certificates to be
transferred, split up, combined, or exchanged, with the Form of Assignment duly
executed by the Holder thereof, at the principal office of the Warrant Agent
designated for such purpose. Thereupon or as promptly as practicable
thereafter, the Company will prepare, execute, and deliver to the Warrant
Agent, and the Warrant Agent will countersign and deliver, a Warrant
Certificate or Warrant Certificates, as the case may be, as so requested.
Neither the Company nor the Warrant Agent will be required to issue or deliver
any Warrant Certificates in connection with any transfer, split up,
combination, or exchange of Warrants or Warrant Certificates unless and until
the person or persons requesting the issuance or delivery thereof has paid to
the Warrant Agent the amount of any tax or governmental charge that may be
payable in connection with such transfer, split up, combination, or exchange or
has established to the satisfaction of the Warrant Agent that any tax or
governmental charge has been paid. Holders will not be required to pay any
other charge in connection with the transfer, split up, combination, or
exchange of Warrants.
2.2. LOST, STOLEN, AND MUTILATED WARRANT CERTIFICATES. Upon receipt
by the Company and the Warrant Agent of evidence reasonably satisfactory to
them of the loss, theft, destruction, or mutilation of a Warrant Certificate,
and, in case of loss, theft, or destruction, of indemnity or security
reasonably satisfactory to them, and reimbursement to the Company and the
Warrant Agent of all reasonable expenses incidental thereto, and upon surrender
to the Warrant Agent and cancellation of the Warrant Certificate if mutilated,
the Company will prepare, execute, and deliver a new Warrant Certificate of
like tenor to the Warrant Agent and the Warrant Agent will countersign and
deliver such new Warrant Certificate to the Holder in lieu of the Warrant
Certificate so lost, stolen, destroyed, or mutilated.
2.3. PAYMENT OF TAXES. The Company will pay all documentary or stamp
taxes, if any, attributable to the initial issuance of the Warrants and the
initial issuance of the Warrant Shares upon the exercise of Warrants; PROVIDED,
HOWEVER, that the Company's obligations in this regard will in all events be
conditioned upon the Holder cooperating with the Company and the Warrant Agent
in any reasonable arrangement designed to minimize or eliminate any such taxes.
Neither the Company nor the Warrant Agent will be required to pay any tax or
governmental charge that may be payable in connection with any transfer, split
up, combination, or exchange of Warrants or Warrant Certificates.
2.4. CANCELLATION AND DESTRUCTION OF WARRANT CERTIFICATES. All
Warrant Certificates surrendered for the purpose of exercise, transfer, split
up, combination, or exchange will, if surrendered to the Company, be delivered
to the Warrant Agent for
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cancellation or in canceled form, or, if surrendered to the Warrant Agent, will
be canceled by it, and no Warrant Certificates will be issued in lieu thereof
except as expressly permitted by this Agreement. The Company will deliver to
the Warrant Agent for cancellation and retirement, and the Warrant Agent will
so cancel and retire, any other Warrant Certificate purchased or acquired by
the Company otherwise than upon the exercise thereof. The Warrant Agent will
deliver all canceled Warrant Certificates to the Company, or will, at the
written request of the Company, destroy such canceled Warrant Certificates, and
in such case will deliver a certificate of destruction thereof to the Company.
3. EXERCISE OF WARRANTS.
3.1. EXERCISE OF WARRANTS. (a) Warrants may be exercised by the
Holder thereof, in whole or in part, at any time and from time to time after
the date hereof and prior to 5:00 p.m., Cincinnati, Ohio time on the seventh
anniversary of the date hereof (the "Expiration Date") by delivering to the
Warrant Agent, at its principal office designated for such purpose, the
following:
(i) the Warrant Certificate or Warrant Certificates
representing the Warrants to be exercised, with the Form of Exercise
Notice duly executed by the Holder thereof; and
(ii) cash, a certified or bank cashier's check payable to
the order of the Company, or a wire transfer to an account designated
by the Company, in each case in an amount equal to the product of (A)
the number of Warrant Shares purchasable upon the exercise of the
Warrants designated for exercise in the Form of Exercise Notice and
(B) the Warrant Price.
(b) As promptly as practicable after an exercise of Warrants in
accordance with Section 3.1(a), and in any event within 10 Business Days after
such exercise, the Warrant Agent will (i) requisition from any transfer agent
for the Common Stock (or make available, if the Warrant Agent is the transfer
agent) certificates representing the number of Warrant Shares to be purchased
(and the Company hereby irrevocably authorizes and directs its transfer agent
to comply with all such requests), (ii) after receipt of such certificates,
cause the same to be delivered to or upon the order of the Holder exercising
such Warrants, registered in such name or names as may be designated by such
Holder, (iii) when appropriate, requisition from the Company the amount of cash
to be paid in lieu of the issuance of fractional Warrant Shares in accordance
with the provisions of Section 5, and (iv) when appropriate, after receipt,
deliver such cash to or upon the order of the Holder exercising such Warrants.
(c) If the number of Warrants represented by a Warrant Certificate
are not exercised in full, the Company will prepare,
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execute, and deliver to the Warrant Agent a new Warrant Certificate evidencing
Warrants equivalent to such Warrants remaining unexercised and the Warrant
Agent will countersign and deliver such new Warrant Certificate to or upon the
order of the Holder exercising such Warrants, registered in such name or names
as may be designated by such Holder.
(d) The Company will take all such action as may be necessary to
ensure that all Warrant Shares delivered upon exercise of Warrants, at the time
of delivery of the certificates for such Warrant Shares, will (subject to
payment of the Warrant Price) be duly and validly authorized and issued, fully
paid, and nonassessable and, if shares of Common Stock are then listed on any
national securities exchange (as defined in the Securities Exchange Act of
1934, as amended) or qualified for quotation on the National Association of
Securities Dealers, Inc. Automated Quotation System, will be duly listed or
qualified for quotation thereon, as the case may be.
(e) In the event that the Company is obligated to pay cash in lieu
of fractional Warrant Shares pursuant to Section 5 in connection with any
exercise of Warrants, it will make all arrangements necessary so that such cash
is available for distribution by the Warrant Agent, if and when appropriate.
(f) The Company will pay all expenses, taxes, and other charges
payable in connection with the preparation, issuance, and delivery of
certificates representing Warrant Shares or Warrant Certificates representing
unexercised Warrants in connection with any exercise of Warrants in accordance
with Section 3.1(a), except that, if any such certificates representing Warrant
Shares or any such Warrant Certificates are to be registered in a name or names
other than that of the Holder at the time of any such exercise of Warrants,
funds sufficient to pay all transfer or similar taxes payable as a result of
such transfer shall be paid by the Holder at the time of such exercise or
promptly upon receipt of a written request of the Company for payment thereof.
In connection with any exercise of Warrants in accordance with Section 3.1(a),
the Warrants will be deemed to have been exercised, any certificate
representing Warrant Shares or any Warrant Certificate issued on account
thereof will be deemed to have been issued, and the person in whose name any
such certificate or Warrant Certificate is issued will be deemed for all
purposes to have become a holder of record of the Warrant Shares or Warrants,
as the case may be, represented thereby as of the date of such exercise.
3.2. CERTAIN DEFINITIONS. For purposes of this Agreement, (a) the
term "Business Day" means any day other than a Saturday, Sunday, or a day on
which banking institutions in the state of Ohio are authorized or obligated by
law or executive order to close and (b) the term "Trading Day" means any day on
which shares of Common Stock are traded on the principal national securities
exchange on which the shares of Common Stock are
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listed or admitted to trading or, if shares of Common Stock are not so listed
or admitted to trading, in the over-the-counter market.
4. ADJUSTMENTS OF WARRANT PRICE AND WARRANT SHARES. The Warrant Price
and the number and kind of Warrant Shares purchasable upon exercise of the
Warrants will be subject to adjustment from time to time upon the occurrence of
certain events as provided in this Section 4.
4.1. MECHANICAL ADJUSTMENTS. The Warrant Price and the number and
kind of Warrant Shares purchasable upon exercise of a Warrant will be subject
to adjustment as follows:
(a) Subject to Section 4.1(f), if the Company (i) pays a
dividend or otherwise distributes to holders of its Common Stock, as
such, shares of its capital stock (whether Common Stock or capital
stock of any other class), (ii) subdivides its outstanding shares of
Common Stock into a greater number of shares of Common Stock, (iii)
combines its outstanding shares of Common Stock into a smaller number
of shares of Common Stock, or (iv) issues any shares of its capital
stock in a reclassification of its outstanding shares of Common Stock
(including any such reclassification in connection with a
consolidation, merger, or other business combination transaction in
which the Company is the continuing or surviving corporation), then
the number and kind of Warrant Shares purchasable upon exercise of
each Warrant immediately prior thereto will be adjusted so that the
Holder of each Warrant will be entitled to receive (A) in the case of
a dividend or distribution, the sum of (1) the number of Warrant
Shares that, if such Warrant had been exercised immediately prior to
such adjustment, such Holder would have received upon such exercise
and (2) the number and kind of additional shares of capital stock that
such Holder would have been entitled to receive as a result of such
dividend or distribution by virtue of its ownership of such Warrant
Shares, (B) in the case of a subdivision or combination, the number of
Warrant Shares that, if such Warrant had been exercised immediately
prior to such adjustment, such Holder would have received upon such
exercise, adjusted to give effect to such subdivision or combination
as if such Warrant Shares had been subject thereto, or (C) in the case
of an issuance in a reclassification, the sum of (1) the number of
Warrant Shares that, if such Warrant had been exercised immediately
prior to such adjustment, such Holder would have received upon such
exercise and retained after giving effect to such reclassification as
if such Warrants Shares had been subject thereto and (2) the number
and kind of additional shares of capital stock that such Holder would
have been entitled to receive as a result of such reclassification as
if such Warrant Shares had been subject thereto. An adjustment made
pursuant to this paragraph (a) will become effective immediately after
the record date for the
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determination of stockholders entitled to receive such dividend or
distribution in the case of a dividend or distribution and will become
effective immediately after the effective date of such subdivision,
combination, or reclassification in the case of a subdivision,
combination, or reclassification.
(b) Subject to Section 4.1(f), if the Company distributes
to holders of its Common Stock, as such, (i) evidences of indebtedness
or assets (excluding regular cash dividends or cash distributions
payable out of consolidated retained earnings) of the Company or any
corporation or other legal entity a majority of the voting equity
securities or equity interests of which are owned, directly or
indirectly, by the Company (a "Subsidiary"), (ii) shares of capital
stock of any Subsidiary, (iii) securities convertible into or
exchangeable for capital stock of the Company (including Common Stock
or capital stock of any other class) or any Subsidiary, or (iv) any
rights, options, or warrants to purchase any of the foregoing
(excluding those described in Section 4.1(c)), then, the number of
Warrant Shares thereafter purchasable upon exercise of each Warrant
will be adjusted to the number that results from multiplying the
number of Warrant Shares purchasable upon the exercise of each Warrant
immediately prior to such adjustment by a fraction, the numerator of
which will be the Current Market Price per share (as defined in
Section 4.1(e)) of Common Stock on the record date for such
distribution, and the denominator of which will be such Current Market
Price per share of Common Stock less the fair value (as determined in
good faith by the Board of Directors of the Company, whose
determination will be conclusive if based on the financial advice of a
nationally recognized investment banking firm) of the portion of the
evidences of indebtedness, assets, securities, or rights, options, or
warrants so distributed on account of one share of Common Stock. Such
adjustment will be made whenever any such distribution is made, and
will become effective immediately after the record date for the
determination of stockholders entitled to receive such distribution.
Except as provided in Section 4.1(i), no further adjustments of the
number of Warrant Shares will be made upon the actual issue of shares
of Common Stock upon conversion or exchange of such securities
convertible or exchangeable for shares of Common Stock or upon
exercise of such rights, warrants, or options for shares of Common
Stock.
(c) Subject to Section 4.1(f), if the Company issues
rights, options, or warrants to holders of the outstanding shares of
Common Stock, as such, entitling the holders of such rights, options,
or warrants (for a period expiring within 60 calendar days after the
record date mentioned below) to subscribe for or purchase shares of
Common Stock at a price per share that is lower on the record date
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mentioned below than the Current Market Price per share of Common
Stock on such record date, then the number of Warrant Shares
thereafter purchasable upon the exercise of each Warrant will be
adjusted to the number that results from multiplying the number of
Warrant Shares purchasable upon exercise of each Warrant immediately
prior to such adjustment by a fraction (not to be less than one), the
numerator of which will be the number of shares of Common Stock
outstanding on such record date plus the number of additional shares
of Common Stock offered by such rights, options, or warrants for
subscription or purchase and the denominator of which will be the
number of shares of Common Stock outstanding on such record date plus
the number of shares of Common Stock which the aggregate subscription
or purchase price of the total number of shares of Common Stock so
offered would purchase at the Current Market Price per share of Common
Stock on such record date. Such adjustment will be made whenever such
rights, options, or warrants are issued, and will become effective
immediately after the record date for the determination of
stockholders entitled to receive such rights, options, or warrants.
In case such subscription or purchase price may be paid in a
consideration part or all of which is in a form other than cash, the
fair value of such consideration will be as determined by the Board of
Directors of the Company, whose determination will be conclusive if
based on the financial advice of a nationally recognized investment
banking firm. Except as provided in Section 4.1(i), no further
adjustments of the number of Warrant Shares will be made upon the
actual issue of shares of Common Stock upon exercise of such rights,
options, or warrants.
(d) Subject to Section 4.1(f), if the Company issues
shares of Common Stock or securities convertible into or exchangeable
for shares of Common Stock (excluding shares of Common Stock or
convertible or exchangeable securities issued in any of the
transactions described in paragraph (a), (b), or (c) of this Section
4.1) for a purchase price per share of such Common Stock, or for a
conversion or exchange price per share of Common Stock initially
deliverable upon conversion or exchange of such securities, that is
less than the Current Market Price per share of Common Stock on the
date the purchase, conversion, or exchange price of such additional
shares of Common Stock are first fixed, then the number of Warrant
Shares thereafter purchasable upon the exercise of each Warrant will
be adjusted to the number that results from multiplying the number of
Warrant Shares purchasable upon exercise of each Warrant immediately
prior to such adjustment by a fraction (not to be less than one), the
numerator of which will be the number of shares of Common Stock
outstanding on such date plus the number of additional shares of
Common Stock so issued or issuable upon such conversion or exchange,
and the denominator of which will be the number of shares of Common
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Stock outstanding on such date plus the number of shares of Common
Stock which the aggregate purchase, conversion, or exchange price
received or receivable by the Company for such additional shares of
Common Stock would purchase at the Current Market Price per share of
Common Stock on such date. Such adjustment will be made whenever such
shares of Common Stock or convertible or exchangeable securities are
issued, and will become effective immediately after the effective date
of such event. In case such purchase, conversion, or exchange price
may be paid in a consideration part or all of which is in a form other
than cash, the fair value of such consideration will be as determined
by the Board of Directors of the Company, whose determination will be
conclusive if based on the financial advice of a nationally recognized
investment banking firm. Except as provided in 4.1(i), no further
adjustment will be made upon the actual issue of shares of Common
Stock upon conversion or exchange of such securities convertible into
or exchangeable for shares of Common Stock.
(e) For purposes of this Agreement, the "Current Market
Price" per share of Common Stock on any date will be the average of
the daily closing prices for 20 consecutive Trading Days commencing 30
Trading Days before the date of such computation. The closing price
for each day (the "Closing Price") will be the last reported sales
price regular way or, in case no such reported sale takes place on
such day, the average of the closing bid and asked prices regular way
for such day, in each case on the principal national securities
exchange on which the shares of Common Stock are listed or admitted to
trading or, if not so listed or admitted to trading, the average of
the closing bid and asked prices of the shares of Common Stock in the
over-the-counter market as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System or any comparable
system. In the absence of one or more such quotations, the Board of
Directors of the Company will determine the Current Market Price in
good faith on the basis of such quotations or other relevant
information as it considers appropriate.
(f) No adjustment in the number of Warrant Shares
purchasable upon the exercise of a Warrant will be required unless
such adjustment would require an increase or decrease in the number of
Warrant Shares purchasable upon the hypothetical exercise of a Warrant
of at least 1%; PROVIDED, HOWEVER, that any adjustments which by reason
of this paragraph (f) are not required to be made currently will be
carried forward and made at the time and together with the next
subsequent adjustment which, together with any adjustments so carried
forward, would require an increase or decrease in the number of
Warrant Shares purchasable upon the hypothetical exercise of a Warrant
of 1% or more. All calculations with respect to the number of Warrant
Shares
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will be made to the nearest one-thousandth of a share and all
calculations with respect to the Warrant Price will be to the nearest
whole cent. No adjustment in the number of Warrant Shares purchasable
upon the exercise of a Warrant will be made under paragraph (b), (c),
or (d) of this Section 4.1 if the Company issues or distributes to
each Holder the shares, rights, options, warrants, convertible or
exchangeable securities, evidences of indebtedness, assets, or other
securities referred to in the applicable paragraph that such Holder
would have been entitled to receive had the Warrants been exercised
prior to the happening of such event on the record date with respect
thereto (provided that, in any case in which such Holder would have
been so entitled to receive a fractional interest in any such
securities or assets, the Company may distribute to such Holder in
lieu of such fractional interest cash in an amount equal to the fair
value of such fractional interest as determined in good faith by the
Board of Directors of the Company). No adjustment in the number of
Warrant Shares purchasable upon the exercise of a Warrant will be made
on account of: (1) any issuance of shares of Common Stock, or of
options, rights, or warrants to purchase, or securities convertible
into or exchangeable for, shares of Common Stock, pursuant to the
Plan, (2) any issuance of shares of Common Stock upon the exercise of
options, rights, or warrants or upon the conversion or exchange of
convertible or exchangeable securities, in either case issued pursuant
to the Plan or outstanding as of the date hereof, (3) any issuance of
shares of Common Stock, or of options, rights, or warrants to
purchase, or securities exchangeable for or convertible into, shares
of Common Stock, in accordance with any plan for the benefit of the
employees or Directors of the Company existing as of the date hereof,
contemplated by the Plan, or assumed by the Company as a result of or
in connection with the Merger, or any other plan adopted by the
Directors of the Company for the benefit of the employees or Directors
of the Company or any of its Subsidiaries, (4) any issuance of shares
of Common Stock in connection with a Company-sponsored plan for
reinvestment of dividends or interest, (5) any issuance of share
purchase rights pursuant to the New Combined Company Share Purchase
Rights Agreement, as from time to time amended, or any similar
successor or replacement share purchase rights plan, or (6) any
issuance of shares of Common Stock or securities convertible into or
exchangeable for shares of Common Stock pursuant to an underwritten
public offering for a price per share of Common Stock in the case of
an issuance of shares of Common Stock, or for a price per share of
Common Stock initially deliverable upon conversion or exchange of such
securities, that is equal to or greater than 95% of the Closing Price
per share of Common Stock on the date the offering, conversion, or
exchange price of such additional shares of Common Stock is first
fixed. No adjustment in the number of
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Warrant Shares will be made for a change in the par value of the
shares of Common Stock.
(g) Whenever the number of Warrant Shares purchasable upon
the exercise of each Warrant is adjusted as herein provided, the
Warrant Price will be adjusted by multiplying the Warrant Price in
effect immediately prior to such adjustment by a fraction, the
numerator of which will be the number of Warrant Shares purchasable
upon the exercise of each Warrant immediately prior to such
adjustment, and the denominator of which will be the number of Warrant
Shares so purchasable immediately thereafter.
(h) For the purpose of this Section 4, the term "Common
Stock" means (i) the class of shares designated as the Common Stock of
the Company as of the date of this Agreement, (ii) all shares of any
class or classes (however designated) of the Company, now or hereafter
authorized, the holders of which have the right, without limitation as
to amount, either to all or to a part of the balance of current
dividends and liquidating dividends after the payment of dividends and
distributions on any shares entitled to preference, and the holders of
which are ordinarily entitled to vote generally in the election of
directors of the Company, or (iii) any other class of shares resulting
from successive changes or reclassifications of such shares consisting
solely of changes in par value, or from par value to no par value, or
from no par value to par value. In the event that at any time, as a
result of an adjustment made pursuant to Section 4.1(a), the Warrants
become exercisable to purchase Warrant Shares other than shares of
Common Stock, thereafter the number of such other shares so
purchasable upon exercise of each Warrant and the Warrant Price
payable in respect of such other shares upon the exercise of each
Warrant will be subject to adjustment from time to time in a manner
and on terms as nearly equivalent as practicable to the provisions
with respect to the Warrant Shares and the Warrant Price contained in
this Section 4.1.
(i) Upon the expiration of any rights, options, warrants,
or conversion or exchange privileges, if any thereof have not been
exercised, the Warrant Price and the number of Warrant Shares
purchasable upon the exercise of each Warrant will, upon such
expiration, be readjusted and will thereafter be such as it would have
been had it been originally adjusted (or had the original adjustment
not been required, as the case may be) as if (i) the only shares of
Common Stock so issued were the shares of Common Stock, if any,
actually issued or sold upon the exercise of such rights, options,
warrants, or conversion or exchange rights and (ii) such shares of
Common Stock, if any, were issued or sold for the consideration
actually received by the Company upon such exercise, conversion, or
exchange plus the aggregate consideration, if any, actually received
by the
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Company for the issuance, sale, or grant of all such rights, options,
warrants, or conversion or exchange rights whether or not exercised;
PROVIDED, HOWEVER, that no such readjustment will have the effect of
increasing the Warrant Price or decreasing the number of Warrant
Shares purchasable upon the exercise of each Warrant by an amount in
excess of the amount of the adjustment initially made in respect of
the issuance, sale, or grant of such rights, options, warrants, or
conversion or exchange privileges.
4.2. NOTICE OF ADJUSTMENT. Whenever the Warrant Price or the number
or kind of Warrant Shares purchasable upon exercise of the Warrants is adjusted
pursuant to any of the provisions of this Agreement, the Company will promptly
give notice to the Holders of such adjustment or adjustments, together with a
certificate of a firm of independent public accountants selected by the Company
(who may be the regular accountants employed by the Company) setting forth the
adjustments in the Warrant Price and the number or kind of Warrant Shares
purchasable upon exercise of each Warrant, and also setting forth a brief
statement of the facts requiring such adjustments and the computations upon
which such adjustments are based. Such certificate will be conclusive evidence
of the correctness of such adjustments.
4.3. NO ADJUSTMENT FOR DIVIDENDS. Except as provided in Section 4.1,
no adjustment or payment in respect of any dividends will be made at any time.
4.4. PRESERVATION OF PURCHASE RIGHTS UPON MERGER, CONSOLIDATION, ETC.
In case of any consolidation of the Company with or merger of the Company into
another corporation or in case of any sale, transfer, or lease to another
corporation of all or substantially all the property of the Company, the
Company or such successor or purchasing corporation, as the case may be, will
execute an agreement providing that each Holder will have the right thereafter,
upon payment of an amount equal to the amount payable upon the exercise of a
Warrant immediately prior thereto, to purchase upon exercise of each Warrant
the kind and amount of securities or property that it would have owned or have
been entitled to receive after giving effect to such consolidation, merger,
sale, transfer, or lease on account of the Warrant Shares that would have been
purchasable upon the exercise of such Warrant had such Warrant been exercised
immediately prior thereto (provided that, to the extent that such Holder would
have been so entitled to receive cash on account of such Warrant Shares, such
Holder may elect in connection with the exercise of a Warrant in accordance
with Section 3.1 to reduce the amount of cash that it would be entitled to
receive upon such exercise in exchange for a corresponding reduction in the
amount payable upon such exercise); PROVIDED, HOWEVER, that no adjustment in
respect of dividends, interest, or other income on or from such shares or other
securities or property will be made during the term of a Warrant or upon the
exercise of a Warrant. Such agreement will
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provide for adjustments that will be as nearly equivalent as may be practicable
to the adjustments provided for in this Section 4. The provisions of this
Section 4.4 will similarly apply to successive consolidations, mergers, sales,
transfers, or leases.
4.5. WARRANT CERTIFICATES. Whether or not any adjustments in the
Warrant Price or the number or kind of Warrant Shares purchasable upon the
exercise of the Warrants has been made, Warrant Certificates theretofore or
thereafter issued may continue to express the same Warrant Price and number and
kind of Warrant Shares as are stated in the Warrant Certificate initially
issued.
5. FRACTIONAL INTERESTS. Neither the Company nor the Warrant Agent
will be required to issue fractional Warrant Shares or fractional interests in
any other securities upon the exercise of the Warrants. If any fraction of a
Warrant Share or other security would, except for the provisions of this
Section 5, be issuable upon the exercise of the Warrants, the Company will pay
an amount in cash (a) in lieu of a fractional Warrant Share, equal to the
Current Market Price for one share of Common Stock, as defined in Section
4.1(e), on the Trading Day immediately preceding the date on which the Warrants
are presented for exercise, multiplied by such fraction of a Warrant Share, or
(b) in lieu of a fractional interest in any other security, equal to the fair
value of such fractional interest, determined in a manner as similar as
possible, taking into account the difference in the fractional interest being
valued, to the calculation described in clause (a) of this Section 5.
6. WARRANT AGENT MATTERS.
6.1. APPOINTMENT OF WARRANT AGENT. The Company hereby appoints the
Warrant Agent to act as agent for the Company and the Holders in accordance
with the terms and conditions hereof, and the Warrant Agent hereby accepts such
appointment and hereby certifies that it complies with the requirements of the
New York Stock Exchange governing transfer agents and registrars.
6.2. CONCERNING THE WARRANT AGENT. (a) The Company will pay to the
Warrant Agent reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Warrant Agent, its reasonable expenses
and counsel fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company will indemnify the Warrant Agent for, and hold it
harmless against, any loss, liability, suit, action, proceeding, or expense,
incurred without negligence, bad faith, or willful misconduct on the part of
the Warrant Agent, for anything done or omitted by the Warrant Agent in
connection with the acceptance and administration of this Agreement, including
the costs and expenses of defending against any claim of liability arising
therefrom, directly or indirectly.
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(b) The Warrant Agent will be protected and will incur no
liability for or in respect of any action taken, suffered, or omitted by it in
connection with its administration of this Agreement in reliance upon any
Warrant Certificate or certificate evidencing Common Stock or other securities
of the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed, and, where necessary, verified or acknowledged, by the proper
person or persons.
6.3. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF WARRANT AGENT. Any
corporation into which the Warrant Agent or any successor 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 or any successor Warrant
Agent is a party, or any corporation succeeding to the corporate trust business
of the Warrant Agent or any successor Warrant Agent, will be the successor to
the Warrant Agent under this Agreement 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 6.5.
6.4. DUTIES OF 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, by their acceptance of
Warrant Certificates, will be bound:
(a) The Warrant Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel will be full
and complete authorization and protection to the Warrant Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Warrant Agent deems it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board,
the President, or any Vice President of the Company and delivered to the
Warrant Agent; and such certificate will be full authorization to the Warrant
Agent for any action taken or suffered in good faith by it under the provisions
of this Agreement in reliance upon such certificate.
(c) The Warrant Agent will be liable hereunder only for its own
negligence, bad faith, or willful misconduct.
(d) The Warrant Agent will not be liable for or by reason of any
of the statements of fact or recitals contained in this
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15
Agreement or in the Warrant Certificates or be required to verify the same, but
all such statements and recitals are and will be deemed to have been made by
the Company only.
(e) The Warrant Agent will not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution and delivery hereof by the Warrant Agent) or in
respect of the validity or execution of any Warrant Certificate (except the due
countersignature thereof by the Warrant Agent); nor will it be responsible for
any breach by the Company of any covenant or condition contained in this
Agreement or in any Warrant Certificate; nor will it be responsible for any
adjustment required under the provisions of Section 4 hereof or responsible for
the manner, method or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except with respect
to the exercise of Warrants evidenced by Warrant Certificates after actual
notice of any such adjustment); nor will it by any act hereunder be deemed to
make any representation or warranty as to the authorization or reservation of
any shares of stock or other securities to be issued pursuant to this Agreement
or any Warrant Certificate or as to whether any shares of stock or other
securities will, when issued, be validly authorized and issued, fully paid, and
nonassessable.
(f) The Company will perform, execute, acknowledge, and deliver or
cause to be performed, executed, acknowledged, and delivered all such further
and other acts, instruments, and assurances as may reasonably be required by
the Warrant Agent for the carrying out or performing by the Warrant Agent of
the provisions of this Agreement.
(g) The Warrant Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the President, or any Vice President of the
Company, and to apply to such officers for advice or instructions in connection
with its duties, and it will not be liable for any action taken or suffered to
be taken by it in good faith in accordance with instructions of any such
officer.
(h) 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 will preclude the Warrant
Agent from acting in any other capacity for the Company or for any other legal
entity.
(i) The Warrant Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents,
-15-
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and the Warrant Agent will not be answerable or accountable for any act,
default, neglect, or misconduct of any such attorneys or agents or for any
loss to the Company resulting from any such act, default, neglect, or
misconduct, provided reasonable care was exercised in the selection and
continued employment thereof. The Warrant Agent will not be under any duty or
responsibility to insure compliance with any applicable federal or state
securities laws in connection with the issuance, transfer, or exchange of
Warrant Certificates.
6.5. CHANGE OF WARRANT AGENT. The Warrant Agent or any successor
Warrant Agent may resign and be discharged from its duties under this Agreement
upon 30 calendar days' notice in writing mailed to the Company and to each
transfer agent of the Common Stock by registered or certified mail, and to the
Holders by first-class mail. The Company may remove the Warrant Agent or any
successor Warrant Agent upon 30 calendar days' notice in writing, mailed to the
Warrant Agent or successor Warrant Agent, as the case may be, and to each
transfer agent of the Common Stock by registered or certified mail, and to the
Holders by first-class mail. If the Warrant Agent resigns or is removed or
otherwise becomes incapable of acting, the Company will appoint a successor to
the Warrant Agent. If the Company fails to make such appointment within a
period of 30 calendar days after giving notice of such removal or after it has
been notified in writing of such resignation or incapacity by the resigning or
incapacitated Warrant Agent or by any Holder (who will, with such notice,
submit his Warrant Certificate for inspection by the Company), then any Holder
may apply to any court of competent jurisdiction for the appointment of a
successor Warrant Agent. Any successor Warrant Agent, whether appointed by the
Company or by such a court, will be a corporation organized and doing business
under the laws of the United States or of the State of Ohio or New York (or of
any other state of the United States so long as such corporation is authorized
to do business as a banking institution in the State of Ohio or New York), in
good standing, having a principal office in the State of Ohio or New York,
which is authorized under such laws to exercise corporate trust powers and is
subject to supervision or examination by federal or state authority and which
has at the time of its appointment as Warrant Agent a combined capital and
surplus of at least $50 million. After appointment, the successor Warrant
Agent will 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 predecessor Warrant Agent will deliver and transfer to the
successor 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. Not later than the effective date of any such appointment,
the Company will file notice thereof in writing with the predecessor Warrant
Agent and each transfer agent of the Common Stock, and mail by first class mail
a notice thereof to each Holder. Failure to give any notice provided for in
this Section 6.5, however, or any defect therein, will not affect the
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legality or validity of the resignation or removal of the Warrant Agent or the
appointment of the successor Warrant Agent, as the case may be.
Notwithstanding anything to the contrary contained herein, no resignation or
removal of the Warrant Agent or any successor Warrant Agent will become
effective prior to the effectiveness of the appointment of a successor Warrant
Agent therefor.
7.1 NO RIGHTS AS A STOCKHOLDER; NOTICES TO HOLDERS. Nothing
contained in this Agreement or in the Warrant Certificate will be construed as
conferring upon the Holders or their transferees the right to vote, or to
receive dividends, or to consent or to receive notice as a stockholder in
respect of any meeting of stockholders for the election of directors of the
Company or any other matter, or any rights whatsoever as a stockholder of the
Company; PROVIDED, HOWEVER, that if, at any time prior to the Expiration Date
and prior to the exercise of all of the Warrants, any of the following events
occur:
(a) The Company declares any dividend payable in any
securities upon its shares of Common Stock or makes any distribution
(other than a regular cash dividend payable out of consolidated
retained earnings) to the holders of its shares of Common Stock;
(b) The Company offers to the holders of its Common Stock
any shares of capital stock of the Company or any Subsidiary or
securities convertible into or exchangeable for shares of capital
stock of the Company or any Subsidiary or any option, right, or
warrant to subscribe for or purchase any thereof;
(c) The Company distributes to the holders of its Common
Stock evidences of indebtedness or assets (including any cash dividend
which would result in an adjustment under Section 4.1) of the Company
or any Subsidiary;
(d) Any reclassification of the Common Stock, any
consolidation of the Company with or merger of the Company into
another corporation, any sale, transfer, or lease to another
corporation of all or substantially all the property of the Company,
or any proposal of the Company to effect any of the foregoing
transactions that has been publicly announced by the Company; or
(e) Any proposal by the Company to effect a dissolution,
liquidation, or winding up of the Company that has been publicly
announced by the Company;
then in any one or more of such events the Company will give notice of such
event to the Holders, as provided in Section 11 hereof, such giving of notice
to be completed at least ten days prior to the date fixed as a record date or
the date of closing
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the transfer books for the determination of the stockholders entitled to such
dividend, distribution, or subscription rights, or for the determination of
stockholders entitled to vote on such proposed reclassification, consolidation,
merger, sale, transfer or lease, dissolution, liquidation, or winding up;
PROVIDED, HOWEVER, that no such notice will be required in respect of any of
the matters referred to in the penultimate sentence of Section 4.1(f). Such
notice will specify such record date or the date of closing the transfer books,
as the case may be, for such event. Failure to mail or receive such notice or
any defect therein or in the mailing thereof will not affect the validity of
any action taken in connection with such event.
7.2. REPORTS TO HOLDERS. To the extent such documents are required to
be sent by the Company to the holders of outstanding Common Stock, the Company
will file with the Warrant Agent and provide each Holder, within 15 calendar
days after it files them with the Securities and Exchange Commission (the
"SEC"), copies of its annual report 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) which the Company is required to file
with the SEC pursuant to Section 13 or 15(d) of the Exchange Act.
7.3. AGREEMENTS RESPECTING WARRANTS. The Company will not enter into
any agreement or instrument which would preclude the exercise of the Warrants
as herein provided.
8. AGREEMENT OF WARRANT HOLDERS. Every Holder by accepting a
Warrant Certificate consents and agrees with the Company and the Warrant Agent
and with every other Holder that:
(a) The Warrant Certificates are transferable only in accordance
with the terms of this Agreement and only on the registry books of the Warrant
Agent if surrendered at the principal office of the Warrant Agent designated
for such purpose, duly endorsed or accompanied by a proper instrument of
transfer, and otherwise in compliance with Section 2;
(b) The Company and the Warrant Agent may deem and treat the
person in whose name the Warrant Certificate is registered as the absolute
owner thereof and of the Warrants evidenced thereby (notwithstanding any
notations of ownership or writing on the Warrant Certificate made by anyone
other than the Company or the Warrant Agent) for all purposes whatsoever, and
neither the Company nor the Warrant Agent will be affected by any notice to the
contrary;
(c) Such Holder expressly waives any right to receive any
fractional Warrants and any fractional securities upon exercise or exchange of
a Warrant; and
(d) Notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Warrant Agent will have any
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liability to any Holder or other person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree, or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory, or administrative
agency or commission, or any statute, rule, regulation, or executive order
promulgated or enacted by any governmental authority, prohibiting or otherwise
restraining performance of such obligation; PROVIDED, HOWEVER, that the Company
will use reasonable efforts to have any such order, decree, or ruling lifted or
otherwise overturned as soon as possible.
9. RESERVATION OF COMMON STOCK. The Company will, for so long as
Warrants remain outstanding, reserve and keep available, solely for issuance
and delivery upon the exercise of Warrants, a number of shares of Common Stock
(or, if applicable, other securities) sufficient to provide for the exercise of
all outstanding Warrants. The transfer agent for the Common Stock (or, if
applicable, other securities) will be irrevocably authorized and directed at
all times until the exercise or expiration of the Warrants to reserve such
number of authorized shares of Common Stock (or, if applicable, other
securities) as necessary for such purpose. The Company will keep copies of
this Agreement on file with the transfer agent and will supply the transfer
agent with duly executed stock certificates for such purpose.
10. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents and warrants to the Warrant Agent that:
(a) The Company is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Delaware
and has all requisite corporate power and authority to execute,
deliver, and perform its obligations hereunder and to consummate the
transactions contemplated hereby;
(b) The execution, delivery, and performance of this
Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby have been duly and validly authorized
by all necessary corporate action on the part of the Company;
(c) The execution, delivery, and performance of this
Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby in accordance with the terms hereof
will not conflict with, violate, or constitute a breach of any
material contract, agreement, or instrument by which the Company is
bound or any judgment, order, decree, law, statute, rule, regulation,
or other judicial or governmental restriction to which the Company is
subject;
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(d) This Agreement constitutes the legal, valid, and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as the enforceability hereof may be
limited by bankruptcy, insolvency, reorganization, moratorium, or
other similar laws affecting creditors' rights generally; and
(e) The Warrants, when issued and delivered to the
initial Holders as provided in this Agreement, and the Warrant Shares
issued upon exercise of the Warrants, when issued, paid for, and
delivered as provided in this Agreement, will be duly and validly
issued and outstanding, fully paid, and nonassessable.
11. NOTICES. All notices, requests, waivers, releases, consents, and
other communications required or permitted by this Agreement (collectively,
"Notices") must be in writing. Except as expressly otherwise provided herein
with respect to manner of delivery, notices will be deemed sufficiently given
for all purposes when delivered in person, when dispatched by telegram or
electronic facsimile transmission, when sent by first-class mail, postage
prepaid, or upon confirmation of receipt when dispatched by a nationally
recognized overnight courier service to the appropriate party as follows: (a)
if to a Holder, at the address of such Holder as shown in the registry books
maintained by the Warrant Agent; (b) if to the Company, at 7 West Seventh
Street, Cincinnati, Ohio 45202, Telecopy No. (513) 579-7897 (marked for the
attention of the Chief Financial Officer and the General Counsel), or at such
other address as the Company may have furnished to the Holders and the Warrant
Agent in writing; and (c) if to the Warrant Agent, at 101 Barclay Street, New
York, New York 10286, Telecopy No. (212) 815-3201 (marked for the attention of
William Skinner) or at such other address as the Warrant Agent may have
furnished to the Company and the Holders in writing.
12. AMENDMENT AND WAIVER. No failure or delay of the Holder in
exercising any power or right hereunder (other than a failure to exercise
Warrants in accordance with the provisions hereof) will operate as a waiver
thereof, nor will any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. No notice or demand on the Company in any case will entitle
the Company to any other or future notice or demand in similar or other
circumstances. Subject to the last sentence of this Section 12, (a) if the
Company so directs, the Company and the Warrant Agent will supplement or amend
this Agreement without the approval of any Holders in order to cure any
ambiguity or correct or supplement any provision contained herein which may be
defective or inconsistent with any other provisions herein and (b) the Company
and the Warrant Agent may from time to time supplement or amend this Agreement,
with the consent of Holders of at least 50% of the Warrants then
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outstanding, for any other for purpose. Notwithstanding anything in this
Agreement to the contrary, no supplement or amendment which increases the
Warrant Price, decreases the period of time remaining during which the Warrants
may be exercised, or changes in a manner adverse to Holders the number of
Warrant Shares purchasable upon the exercise of Warrants will be made without
the consent of all Holders. Any such amendment, modification, or waiver
effected pursuant to and in accordance with the provisions of this Section 12
will be binding upon all Holders and upon each future Holder, the Company, and
the Warrant Agent. In the event of any such amendment, modification, or
waiver, the Company will given prompt notice thereof to all Holders and, if
appropriate, notation thereof will be made on all Warrant Certificates
thereafter surrendered for registration of transfer or exchange.
13. SUCCESSORS AND ASSIGNS. This Agreement will be binding upon and
inure to the benefit of the parties hereto, their respective successors and
permitted assigns, and, subject to Sections 1.4 and 8(d), all Holders, but will
not be assignable or delegable by any party without the prior written consent
of the other party. In the absence of such prior written consent, any
purported assignment or delegation of any right or obligation hereunder will be
null and void.
14. RIGHTS OF THE PARTIES. Except as provided in Section 13, nothing
expressed or implied in this Agreement is intended or will be construed to
confer upon or give any person or entity other than the parties hereto and the
Holders any rights or remedies under or by reason of this Agreement or any
transaction contemplated hereby. All rights of action in respect of this
Agreement are vested in the Holders, and any Holder without the consent of the
Warrant Agent or any other Holder may, on such Holder's own behalf and for such
Holder's own benefit, enforce such Holder's rights hereunder, including the
right to exercise, exchange, or surrender for transfer such Holder's Warrant
Certificates in accordance with the provisions hereof.
15. TITLES AND HEADINGS. Titles and headings to Sections herein are
inserted for convenience of reference only, and are not intended to be a part
of or to affect the meaning or interpretation of this Agreement.
16. CERTAIN INTERPRETIVE MATTERS AND DEFINITIONS.
(a) Unless the context otherwise requires, (i) all
references to Sections or Exhibits are to Sections or Exhibits of or
to this Agreement, (ii) each term defined in this Agreement has the
meaning assigned to it, (iii) "or" is disjunctive but not necessarily
exclusive, and (iv) words in the singular include the plural and VICE
VERSA. All references to "$" or dollar amounts are to lawful currency
of the United States of America.
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(b) No provision of this Agreement will be interpreted in
favor of, or against, any party hereto by reason of the extent to
which such party or its counsel participated in the drafting thereof
or by reason of the extent to which any such provision is inconsistent
with any prior draft hereof or thereof.
17. ENTIRE AGREEMENT. This Agreement, together with its Exhibits,
constitutes the entire agreement among the parties hereto with respect to the
subject matter hereof, and there are no agreements among the parties hereto
with respect thereto except as expressly set forth herein.
18. SEVERABILITY. In case any provision contained in this Agreement
is invalid, illegal, or unenforceable, the validity, legality, and
enforceability of the remaining provisions will not in any way be affected or
impaired thereby. The Company and the Warrant Agent will endeavor in good
faith to replace the invalid, illegal, or unenforceable provisions with valid,
legal, and enforceable provisions the economic effect of which comes as close
as possible to that of the invalid, illegal, or unenforceable provisions.
19. GOVERNING LAW. This Agreement will be governed by and construed
in accordance with the laws of the State of Delaware, without giving effect to
the principles of conflict of laws thereof.
20. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which so executed will be deemed to be an original; such
counterparts will together constitute but one agreement.
21. REFERENCES TO THE PLAN. Terms used herein with initial capital
letters that are not otherwise defined are used herein as defined in the Plan.
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IN WITNESS WHEREOF, the parties to this Agreement have executed this
Agreement as of the date first above written.
FEDERATED DEPARTMENT STORES, INC.
By: /s/ Dennis J. Broderick
-----------------------------
Name: Dennis J. Broderick
-----------------------
Title: Senior Vice President
-----------------------
THE BANK OF NEW YORK
By: /s/ John I. Siverrsen Name:
-----------------------------
Name: John I. Siverrsen
-----------------------
Title: Vice President
-----------------------
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EXHIBIT A
---------
WARRANT CERTIFICATE
THE WARRANTS REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS SET FORTH IN THE WARRANT AGREEMENT (AS HEREINAFTER DEFINED), A COPY
OF WHICH WILL BE MADE AVAILABLE BY THE ISSUER UPON REQUEST. THE TRANSFER OR
EXCHANGE OF THESE WARRANTS MUST BE REGISTERED IN ACCORDANCE WITH THE WARRANT
AGREEMENT.
NO. _______ WARRANTS ______________
VOID AFTER 5:00 P.M. CINCINNATI TIME
ON December 19, 2001
Federated Department Stores, Inc. Series D Warrant Certificate
THIS CERTIFIES THAT for value received, __________, or its
registered assigns (the "Holder"), is the owner of the number of Warrants set
forth above that initially entitle it to purchase from Federated Department
Stores, Inc., a Delaware corporation (the "Company"), at any time and from time
to time prior to 5:00 p.m. Cincinnati time on December 19, 2001 (the
"Expiration Date"), a like number of fully paid and nonassessable shares of the
Common Stock, par value $.01 per share, of the Company (the "Common Stock") at
an initial purchase price of $29.92 per share (the "Warrant Price"), subject to
adjustment as provided in the Warrant Agreement. The shares of Common Stock
purchasable upon exercise of the Warrants are hereinafter referred to as the
"Warrant Shares." Subject to the terms and conditions of the Warrant
Agreement, the Warrants may be exercised by surrendering to the Warrant Agent
(as hereinafter defined) this Warrant Certificate, with the Form of Exercise
Notice on the reverse side hereof duly executed, together with cash, a
certified or bank cashier's check payable to the order of the Company, or a
wire transfer to an account designated by the Company, in each case in an
amount of lawful currency of the United States of America equal to the product
of (a) the number of Warrant Shares purchasable upon the exercise of the
Warrants designated for exercise in the Form of Exercise Notice and (b) the
Warrant Price.
The number and kind of Warrant Shares that may be purchased
upon exercise of the Warrants evidenced by this Warrant Certificate are the
number as of the date of the original issue of such Warrants, based on the
shares of Common Stock of the Company as constituted at such date. As provided
in the Warrant Agreement, the Warrant Price and the number and kind of Warrant
A-1
25
Shares purchasable upon exercise of the Warrants are subject to adjustment.
This Warrant Certificate and the Warrants it represents are
subject to, and entitled to the benefits of, all of the terms, provisions, and
conditions of the Warrant Agreement, dated as of December 19, 1994 (the
"Warrant Agreement"), by and between the Company and The Bank of New York, a
New York banking corporation (the "Warrant Agent"), which Warrant Agreement is
hereby incorporated herein by reference and made a part hereof and to which
Warrant Agreement reference is hereby made for a full description of the
rights, limitation of rights, obligations, and duties hereunder of the Company
and the Holder. A copy of the Warrant Agreement will be made available to the
Holders by the Company upon request of the Holders.
Subject to the provisions set forth in the Warrant Agreement
or in this Certificate, this Warrant Certificate, with or without other Warrant
Certificates, may be transferred, split up, combined, or exchanged for another
Warrant Certificate or Warrant Certificates, entitling the Holder to purchase a
like aggregate number of Warrant Shares as the Warrant Certificate or Warrant
Certificates surrendered entitled such Holder (or former Holder in the case of
a transfer) to purchase, upon presentation and surrender hereof at the
principal office of the Warrant Agent designated for such purpose, with the
Form of Assignment (if appropriate) and the related Certificate duly executed.
The Company will not be required to issue fractional Warrant
Shares or other fractional interests in securities upon the exercise of any
Warrants evidenced by this Warrant Certificate, but in lieu thereof a cash
payment will be made, as provided in the Warrant Agreement.
Nothing contained in the Warrant Agreement or in this Warrant
Certificate will be construed as conferring upon the holder of this Warrant
Certificate the right to vote, or to receive dividends, or to consent or
(except as provided in the Warrant Agreement) to receive notice in respect of
any meeting of stockholders for the election of directors of the Company or any
other matter, or any rights whatsoever as a stockholder of the Company.
This Warrant Certificate will not be valid or obligatory for
any purpose until it has been countersigned by the Warrant Agent.
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26
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be executed on this ____ day of __________, ____, by its
corporate officers duly authorized.
Attest: FEDERATED DEPARTMENT STORES, INC.
By:
- - ----------------------------------- --------------------------------
[Name, title] [Name, title]
Dated:
----------, ----
Countersigned:
THE BANK OF NEW YORK
By:
-------------------------------
[Authorized Signature]
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27
Form of Reverse Side of Warrant Certificate
FORM OF ASSIGNMENT
------------------
(To be executed if the Holder desires to transfer Warrants)
FOR VALUE RECEIVED, __________________________________________
hereby sells, assigns, and transfers unto _____________________________________
_______________________________________________________________________________
(Please print name and address of transferee)
_______________________________________________________________________________
this Warrant Certificate, together with all right, title, and interest therein,
and does hereby irrevocably constitute and appoint ____________________________
Attorney, to transfer the within Warrant Certificate on the books of the
within-named Company, with full power of substitution.
Dated: ____________________, ______
_______________________________
Signature
Signature Guaranteed:
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28
FORM OF EXERCISE NOTICE
-----------------------
(To be executed if the Holder desires to exercise Warrants)
TO FEDERATED DEPARTMENT STORES, INC.:
The undersigned hereby irrevocably elects to exercise
__________ Warrants evidenced by this Warrant Certificate to purchase the
Warrant Shares issuable upon the exercise of such Warrants and requests that
certificates for such Warrant Shares be issued in the name of:
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
Please insert social security or
other identifying number: _____________________________________________________
If such number of Warrants is not all the Warrants evidenced by this Warrant
Certificate, a new Warrant Certificate for the balance remaining of such
Warrants will be registered in the name of and delivered to:
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
Please insert social security
or other identifying number: __________________________________________________
Dated: _______________________, _____
_______________________________
Signature
Signature Guaranteed:
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29
NOTICE
------
Signatures on the foregoing Form of Assignment and Form of
Exercise Notice and in the related Warrant Certificates must correspond to the
name as written upon the face of this Warrant Certificate in every particular,
without alternation or enlargement or any change whatsoever.
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States.
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