EXHIBIT 4.27
AMENDED AND RESTATED WARRANT AGREEMENT
between
SIRIUS SATELLITE RADIO INC.
and
UNITED STATES TRUST COMPANY OF NEW YORK
Warrant Agent and Escrow Agent
Dated as of December 27, 2000
TABLE OF CONTENTS
ARTICLE I Certain Definitions............................................................................4
SECTION 1.01 Definitions............................................................................4
ARTICLE II Original Issue of Warrants...................................................................10
SECTION 2.01 Form of Warrant Certificates..........................................................10
SECTION 2.02 Restrictive Legends...................................................................10
SECTION 2.03 Execution and Delivery of Warrant Certificates........................................11
SECTION 2.04 Loss or Mutilation....................................................................11
SECTION 2.05 CUSIP Number; Portal..................................................................12
SECTION 2.06 Certificated Warrants.................................................................12
ARTICLE III Exercise Price; Exercise of Warrants........................................................13
SECTION 3.01 Exercise Price........................................................................13
SECTION 3.02 Exercise; Restrictions on Exercise....................................................13
SECTION 3.03 Method of Exercise....................................................................13
SECTION 3.04 Issuance of Warrant Shares............................................................14
SECTION 3.05 Fractional Warrant Shares.............................................................15
SECTION 3.06 Reservation of Warrant Shares.........................................................15
SECTION 3.07 Escrow of Second Tranche Warrants and Third Tranche Warrants(a).......................15
SECTION 3.08 Vesting of Warrants(a)................................................................16
SECTION 3.09 Compliance with Law(a)................................................................17
ARTICLE IV Antidilution Provisions......................................................................17
SECTION 4.01 Changes in Common Stock...............................................................17
SECTION 4.02 Cash Dividends and Other Distributions................................................18
SECTION 4.03 Issuance of Common Stock or Rights or Options.........................................18
SECTION 4.04 Fundamental Transaction; Liquidation(a)...............................................20
SECTION 4.05 Other Events..........................................................................21
SECTION 4.06 Superseding Adjustment................................................................21
SECTION 4.07 Minimum Adjustment....................................................................21
SECTION 4.08 Notice of Adjustment..................................................................22
SECTION 4.09 Notice of Certain Transactions........................................................22
SECTION 4.10 Adjustment to Warrant Certificate.....................................................23
ARTICLE V Warrant Transfer Books; Restrictions On Transfer..............................................23
SECTION 5.01 Transfer and Exchange.................................................................23
SECTION 5.02 Registration; Registration of Transfer and Exchange...................................24
SECTION 5.03 Initial Certificated Warrants; Book-Entry Provisions for the Global
Warrants(a).........................................................................25
SECTION 5.04 Surrender of Warrant Certificates.....................................................26
(i)
Page#
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ARTICLE VI Registration Rights; Indemnification.........................................................26
SECTION 6.01 Effectiveness of Registration Statements(a)...........................................26
SECTION 6.02 Suspension............................................................................29
SECTION 6.03 Liquidated Damages....................................................................29
SECTION 6.04 Piggy-Back Registration Rights(a).....................................................29
SECTION 6.05 Blue Sky..............................................................................30
SECTION 6.06 Accuracy of Disclosure................................................................31
SECTION 6.07 Indemnification(a)....................................................................31
SECTION 6.08 Additional Acts.......................................................................34
SECTION 6.09 Expenses..............................................................................35
ARTICLE VII The Warrant and Escrow Agent................................................................35
SECTION 7.01 Duties and Liabilities................................................................35
SECTION 7.02 Right To Consult Counsel..............................................................37
SECTION 7.03 Compensation; Indemnification.........................................................37
SECTION 7.04 No Restrictions on Actions............................................................38
SECTION 7.05 Discharge or Removal; Replacement Warrant Agent.......................................38
SECTION 7.06 Successor Warrant Agent...............................................................39
ARTICLE VIII Warrant Holders............................................................................39
SECTION 8.01 Warrant Holder Not Deemed a Holder of Common Stock....................................39
SECTION 8.02 Right of Action.......................................................................39
ARTICLE IX Miscellaneous................................................................................39
SECTION 9.01 Payment of Taxes......................................................................39
SECTION 9.02 Reports to Holders....................................................................39
SECTION 9.03 Notices...............................................................................40
SECTION 9.04 Severability..........................................................................40
SECTION 9.05 Binding Effect........................................................................40
SECTION 9.06 Third-Party Beneficiaries.............................................................40
SECTION 9.07 Amendments............................................................................41
SECTION 9.08 Headings..............................................................................41
SECTION 9.09 GOVERNING LAW.........................................................................41
SECTION 9.10 Counterparts..........................................................................41
EXHIBIT A Form of Warrant Certificate
EXHIBIT B Form of Legend for Global Warrants
EXHIBIT C Form of Transfer Restriction Legend
EXHIBIT D Form of Accredited Investor Certificate Transferee Letter of
Representation
(ii)
AMENDED AND RESTATED WARRANT AGREEMENT (this "Agreement"), dated as of
December 27, 2000, between SIRIUS SATELLITE RADIO INC. (the "Company"), a
Delaware corporation, and UNITED STATES TRUST COMPANY OF NEW YORK, as Warrant
Agent and Escrow Agent (the "Warrant Agent").
WHEREAS, pursuant to the Warrant Agreement, dated as of June 1, 2000
(the "Old Warrant Agreement"), between the Company and the Warrant Agent, the
Company issued one million fifty thousand (1,050,000) warrants (the "Old
Warrants") to be held in escrow by the Warrant Agent and released in accordance
with the terms of the Old Warrant Agreement;
WHEREAS, the Company is party to the Term Loan Agreement (as defined
below) and the parties thereto have agreed to enter into a second amendment to
such agreement;
WHEREAS, as a condition to the effectiveness of such second amendment,
the Company and the holders of the Old Warrants desire to have the Company and
the Warrant Agent amend and restate the Old Warrant Agreement to cancel the Old
Warrants issued under the Old Warrant Agreement and to issue, in substitution
therefor, two million one hundred thousand (2,100,000) warrants (each, a
"Warrant," which term shall include warrants issued upon transfer, division or
combination of, or in substitution for, any Warrant) entitling the holders
thereof to purchase shares of common stock, par value $0.001 per share, of the
Company ("Common Stock") on the terms described herein. The Warrants shall be
identical in all respects other than vesting dates and, to the extent set forth
herein, exercise price; and
WHEREAS, the Company desires to establish an escrow account with the
Warrant Agent into which the Company shall deposit the Warrants (other than the
First Tranche Warrants (as defined below)) and the Warrant Agent is willing to
accept such Warrants in accordance with the terms of this Agreement and to hold
them in escrow until such time as the Warrants are released in accordance with
Sections 3.07 and 3.08 hereof.
NOW, THEREFORE, in consideration of the foregoing and for the purpose
of defining the terms and provisions of the Warrants and the respective rights
and obligations thereunder of the Company and the Warrant Agent, the Company and
the Warrant Agent each hereby agree for the benefit of the other party and for
the equal and ratable benefit of the holders of Warrants (the "Holders") that
the Old Warrant Agreement be amended and restated in its entirety as follows:
ARTICLE I
Certain Definitions
SECTION 1.01 Definitions. (a) As used in this Agreement, the following
terms shall have the following meanings:
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"Affiliate" means, with respect to any specified Person, (1) any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person or (2) any other Person that
owns, directly or indirectly, 25% or more of such specified Person's Voting
Stock or any executive officer or director of any such specified Person or other
Person or, with respect to any natural Person, any Person having a relationship
with such Person by blood, marriage or adoption not more remote than first
cousin. For the purposes of this definition, "control", when used with respect
to any specified Person, means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Board of Directors" means the Board of Directors of the Company or
any committee thereof duly authorized to act on behalf of such Board of
Directors.
"Business Day" means any day which is not a Saturday, a Sunday, or any
other day on which banking institutions in New York City are not required to be
open.
"By-laws" means the by-laws of the Company, as the same may be amended
or restated from time to time.
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"Cashless Exercise Ratio" means a fraction, the numerator of which is
the excess of the Current Market Value per share of Common Stock on the Exercise
Date over the Exercise Price per share as of the Exercise Date and the
denominator of which is the Current Market Value per share of the Common Stock
on the Exercise Date.
"Commission" means the Securities and Exchange Commission.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman, its Chief Executive Officer,
its President, any Vice President, its Treasurer or an Assistant Treasurer, and
delivered to the Warrant Agent.
"Current Market Value" per share of Common Stock of the Company or any
other security at any date means (1) if the security is not registered under the
Exchange Act, (a) the value of the security, determined in good faith by the
Board of Directors and certified in a board resolution, based on the most
recently completed arms-length transaction between the Company and a Person
other than an Affiliate of the Company and the closing of which occurs on such
date or shall have occurred within the six-month period preceding such date, or
(b) if no such transaction shall have occurred on such date or within such
six-month period, the fair market value of the security as determined by a
nationally or regionally recognized independent financial expert (provided that,
in the case of the calculation of Current Market Value for determining the cash
value of fractional shares, any such determination within six months that is, in
the
5
good faith judgment of the Board of Directors, a reasonable determination of
value, may be utilized) or (2) if the security is registered under the Exchange
Act, (a) the average of the daily closing sales prices of the securities for the
20 consecutive trading days immediately preceding such date, or (b) if the
securities have been registered under the Exchange Act for less than 20
consecutive trading days before such date, then the average of the daily closing
sales prices for all of the trading days before such date for which closing
sales prices are available, in the case of each of (2)(a) and (2)(b), as
certified to the Warrant Agent by the President, any Vice President or the Chief
Financial Officer of the Company. The closing sales price for each such trading
day shall be: (A) in the case of a security listed or admitted to trading on any
United States national securities exchange or quotation system, the closing
sales price, regular way, on such day, or if no sale takes place on such day,
the average of the closing bid and asked prices on such day; (B) in the case of
a security not then listed or admitted to trading on any national securities
exchange or quotation system, the last reported sale price on such day, or if no
sale takes place on such day, the average of the closing bid and asked prices on
such day, as reported by a reputable quotation source designated by the Company;
(C) in the case of a security not then listed or admitted to trading on any
national securities exchange or quotation system and as to which no such
reported sale price or bid and asked prices are available, the average of the
reported high bid and low asked prices on such day, as reported by a reputable
quotation service, or a newspaper of general circulation in the Borough of
Manhattan, City and State of New York, customarily published on each Business
Day, designated by the Company, or if there shall be no bid and asked prices on
such day, the average of the high bid and low asked prices, as so reported, on
the most recent day (not more than 30 days prior to the date in question) for
which prices have been so reported; and (D) if there are not bid and asked
prices reported during the 30 days prior to the date in question, the Current
Market Value shall be determined as if the securities were not registered under
the Exchange Act.
"DTC" means The Depository Trust Company, its nominees and their
respective successors.
"Exchange Act" means the United States Securities Exchange Act of
1934, as amended.
"Exercisability Date" means, with respect to any Warrant, the Vesting
Date thereof.
"Exercise Date" means, with respect to any Warrant, the Business Day
on which such Warrant is exercised in accordance with Article III of this
Agreement.
"Exercise Price" means the applicable exercise price with respect to a
Warrant determined in accordance with Section 3.01, in each case subject to
adjustment pursuant to the terms of this Agreement.
"Expiration Date" of any Warrant means the tenth anniversary of the
Vesting Date for such Warrant.
6
"Extraordinary Cash Dividend" means that portion, if any, of the
aggregate amount of all dividends paid by the Company on the Common Stock in any
fiscal year that exceeds $15 million.
"First Tranche Warrants" means the five hundred twenty-five thousand
(525,000) Warrants which vest on the date hereof in accordance with Section
3.08(a).
"Fundamental Transaction" means any transaction or series of related
transactions by which the Company consolidates with or merges with or into any
other Person or sells, assigns, transfers, leases, conveys or otherwise disposes
of all or substantially all of its properties and assets to another Person or
group of affiliated Persons or is a party to a merger or binding share exchange
which reclassifies or changes its outstanding Common Stock; provided, however,
that the Company may effect any of such transactions with a wholly-owned
subsidiary where after such transaction the Company or, in the event the Company
is not the surviving entity, the surviving entity has a consolidated net worth
which is no less than the consolidated net worth of the Company prior to such
transaction.
"Funding Date" means the date of the making of the Loans by the
Lenders under the Term Loan Agreement.
"Issue Date" means the date on which the Warrants are originally
issued.
"LBI" means Lehman Brothers Inc.
"LCPI" means Lehman Commercial Paper Inc.
"Lehman Brothers" means LBI and LCPI collectively.
"Lenders" has the meaning ascribed to such term in the Term Loan
Agreement.
"Loans" has the meaning ascribed to such term in the Term Loan
Agreement.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Preferred Stock", as applied to the Capital Stock of any Person,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends or distributions, or as to the payment
of assets upon any voluntary or involuntary liquidation or dissolution of such
Person, over shares of Capital Stock of any other class of such Person.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
7
"Registration Statements" means the collective reference to the
Warrant Shelf Registration Statement, the Warrant Share Shelf Registration
Statement and the Resale Shelf Registration Statement and any amendments or
supplements thereto.
"Rule 144A" means Rule 144A under the Securities Act.
"Second Tranche Warrants" means the one million fifty thousand
(1,050,000) Warrants which will either vest on the Funding Date or be released
to the Company for cancellation in accordance with Section 3.08(b).
"Securities" means the Warrants and the Warrant Shares.
"Securities Act" means the United States Securities Act of 1933, as
amended.
"Senior Notes" means the Company's 14-1/2% Senior Secured Notes due
2009 issued pursuant to the Indenture, dated as of May 15, 1999, between the
Company and United States Trust Company of New York, as Trustee, as the same may
be amended, supplemented or otherwise modified from time to time.
"Term Loan Agreement" means the Term Loan Agreement, dated as of June
1, 2000, as amended through the date hereof, among the Company, as borrower, the
several lenders from time to time parties thereto, LBI, as arranger, and LCPI,
as syndication agent and administrative agent, as such agreement may be further
amended, supplemented or otherwise modified from time to time.
"Third Tranche Warrants" means the five hundred twenty-five thousand
(525,000) Warrants which will either vest or be released to the Company for
cancellation in accordance with Section 3.08(b).
"Transfer Restricted Securities" means the Warrants and the Common
Stock which may be issued to Holders upon exercise of the Warrants, whether or
not such exercise has been effected. Each such security shall cease to be a
Transfer Restricted Security when (i) it has been disposed of pursuant to a
registration statement of the Company filed with the Commission and declared
effective by the Commission that covers the disposition of such Transfer
Restricted Security, (ii) it has been distributed pursuant to Rule 144
promulgated under the Securities Act (or any similar provisions under the
Securities Act then in effect) or (iii) it may be resold without registration
under the Securities Act, whether pursuant to Rule 144(k) under the Securities
Act or otherwise.
"Voting Stock" means, with respect to any Person, any class or classes
of Capital Stock pursuant to which the holders thereof have the general voting
power under ordinary circumstances to elect at least a majority of the board of
directors, managers or trustees of such Person (irrespective of whether or not,
at the time, stock of any other class or classes shall have, or might have,
voting power by reason of the happening of any contingency).
8
"Warrant Shares" mean the shares of Common Stock for which the
Warrants are exercisable or which have been issued upon exercise of Warrants or
any other securities that are issuable upon exercise of Warrants.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
Term Section
---- -------
144A Eligible Warrants 5.03(a)
144A Price 3.01(b)
Agent Members 5.03(a)
Agreement Preamble
Base Exercise Price 3.01(b)
Cashless Exercise 3.03
Certificated Warrants 2.03
Common Stock Recitals
Company Preamble
Escrow Account 3.07
Global Warrant 2.03
Holders Recitals
Indemnified Parties 6.07(a)
Managing Underwriter 6.04(a)
Measured Yield 3.08(b)
New 144A Warrants 3.01(b)
Old Warrant Agreement Recitals
Old Warrants Recitals
Portal 2.05
Reference Period 3.08(b)
Registration Default 6.03
Requesting Holders 6.04(a)
Resale Shelf Registration Statement 6.01
Stock Transfer Agent 3.04
Successor Company 4.04(a)
Supplemental Warrant Agreement 4.04(a)
Vesting Date 3.08(b)
Warrant Recitals
Warrant Agent Preamble
Warrant Certificates 2.01
Warrant Register 5.01
Warrant Share Shelf Registration Statement 6.01
Warrant Shelf Registration Statement 6.01
9
ARTICLE II
Original Issue of Warrants
SECTION 2.01 Form of Warrant Certificates. Certificates representing
the Warrants (the "Warrant Certificates") shall be in registered form only and
substantially in the form attached hereto as Exhibit A. The Warrant Certificates
shall be dated the date on which they are countersigned by the Warrant Agent and
shall have such insertions as are appropriate or required or permitted by this
Agreement and may have such letters, numbers or other marks of identification
and such legends and endorsements typed, stamped, printed, lithographed or
engraved thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
law or with any rule or regulation pursuant thereto, or to conform to usage.
The terms and provisions contained in the form of Warrant Certificate
annexed hereto as Exhibit A shall constitute, and are hereby expressly made, a
part of this Agreement.
The definitive Warrant Certificates shall be typed, printed,
lithographed or engraved or produced by any combination of these methods, all as
determined by the officer of the Company executing such Warrant Certificates, as
evidenced by such officer's execution of such Warrant Certificates.
Pending the preparation of definitive Warrant Certificates, temporary
Warrant Certificates may be issued, which may be printed, lithographed,
typewritten, mimeographed or otherwise produced, and which will be substantially
of the tenor of the definitive Warrant Certificates in lieu of which they are
issued.
If temporary Warrant Certificates are issued, the Company will cause
definitive Warrant Certificates to be prepared without unreasonable delay. After
the preparation of definitive Warrant Certificates, the temporary Warrant
Certificates shall be exchangeable for definitive Warrant Certificates upon
surrender of the temporary Warrant Certificates to the Warrant Agent, without
charge to the Holder. Until so exchanged the temporary Warrant Certificates
shall in all respects be entitled to the same benefits under this Agreement as
definitive Warrant Certificates.
SECTION 2.02 Restrictive Legends. (a) Each Global Warrant shall bear
the legend set forth in Exhibit B on the face thereof.
(b) Warrants offered and sold to a QIB in reliance on Rule 144A or to
an institutional "accredited investor" as defined in Rule 501(a) (1), (2), (3)
or (7) under the Securities Act shall bear the restricted securities legend set
forth in Exhibit C on the face thereof.
(c) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global Warrant)
pursuant to Rule 144 under the Securities Act the Warrant Agent shall permit the
Holder thereof to exchange such Transfer Restricted Security for a Certificated
Warrant that does not bear
10
the legend set forth in Exhibit C and rescind any restriction on the transfer of
such Transfer Restricted Security.
(d) After a transfer of any Warrants during the period of the
effectiveness of and pursuant to a Registration Statement with respect to such
Warrants, the requirement pertaining to the legend set forth in Exhibit C on
such Warrant will cease to apply.
SECTION 2.03 Execution and Delivery of Warrant Certificates. Warrant
Certificates evidencing Warrants to purchase an aggregate of two million one
hundred thousand (2,100,000) shares of Common Stock shall be executed, on the
Issue Date, by the Company and delivered to the Warrant Agent for
countersignature, and the Warrant Agent shall thereupon countersign such Warrant
Certificates and (x) deposit Warrant Certificates representing the Second
Tranche Warrants and the Third Tranche Warrants in the Escrow Account and (y)
deliver Warrant Certificates representing the First Tranche Warrants to LCPI. On
the Issue Date, the Warrant Agent shall destroy the warrant certificates
evidencing the Old Warrants deposited into the Escrow Account pursuant to the
Old Warrant Agreement. The Warrant Agent is hereby authorized to countersign and
deliver Warrant Certificates as required by this Section 2.03 or by Section
2.04, 2.06, 3.03 or 5.03 of this Agreement.
The Warrant Certificates shall be executed on behalf of the Company by
its Chief Executive Officer, President or any Vice President, either manually or
by facsimile signature printed thereon. The Warrant Certificates shall be
countersigned manually by the Warrant Agent and shall not be valid for any
purpose unless so countersigned. In case any officer of the Company whose
signature shall have been placed upon any of the Warrant Certificates shall
cease to be such officer of the Company before countersignature by the Warrant
Agent and issuance and delivery thereof, such Warrant Certificates may,
nevertheless, be countersigned by the Warrant Agent and issued and delivered
with the same force and effect as though such person had not ceased to be such
officer of the Company.
Initially, the Warrants shall be issued in definitive, fully
registered form substantially in the form set forth in Exhibit A ("Certificated
Warrants"). To the extent provided in Section 5.03(a), each tranche of Warrants
may be issued in the form of one or more permanent global Warrant Certificates
in definitive, fully registered form, substantially in the form set forth in
Exhibit A (each a "Global Warrant"), deposited with the Warrant Agent (subject
to the provisions of Section 5.02 herein), which shall act as custodian for DTC,
duly executed by the Company and countersigned by the Warrant Agent as
hereinafter provided. The number of Warrants represented by the Global Warrant
may from time to time be increased or decreased by adjustments made on the
records of the Warrant Agent and DTC or its nominee as hereinafter provided.
Pursuant to Section 5.03, interests in the Global Warrant may be converted into
or exchanged for Certificated Warrants.
SECTION 2.04 Loss or Mutilation. Upon receipt by the Company and the
Warrant Agent of evidence satisfactory to them, in their reasonable discretion,
of the ownership and the loss, theft, destruction or mutilation of any Warrant
Certificate and of
11
indemnity satisfactory to them and (in the case of mutilation) upon surrender
and cancellation thereof, then, in the absence of notice to the Company or the
Warrant Agent that the Warrants represented thereby have been acquired by a bona
fide purchaser, the Company shall execute and the Warrant Agent shall
countersign and deliver to the registered Holder of the lost, stolen, destroyed
or mutilated Warrant Certificate, in exchange for or in lieu thereof, a new
Warrant Certificate of the same tenor and for a like aggregate number of
Warrants. Upon the issuance of any new Warrant Certificate under this Section
2.04, the Company may require the payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation thereto and other
expenses (including the reasonable fees and expenses of the Warrant Agent and of
counsel to the Company) in connection therewith. Every new Warrant Certificate
executed and delivered pursuant to this Section 2.04 in lieu of any lost, stolen
or destroyed Warrant Certificate shall constitute a contractual obligation of
the Company, whether or not the allegedly lost, stolen or destroyed Warrant
Certificates shall be at any time enforceable by anyone, and shall be entitled
to the benefits of this Agreement equally and proportionately with any and all
other Warrant Certificates duly executed and delivered hereunder. The provisions
of this Section 2.04 are exclusive and shall preclude (to the extent lawful) all
other rights or remedies with respect to the replacement of mutilated, lost,
stolen, or destroyed Warrant Certificates.
SECTION 2.05 CUSIP Number; Portal. The Company in issuing the Warrants
may use a "CUSIP" number(s), and if so, the Warrant Agent shall use the CUSIP
number(s) in notices as a convenience to Holders; provided, however, that any
such notice may state that no representation is made as to the correctness or
accuracy of the CUSIP number(s) printed in the notice or on the Warrants, and
that reliance may be placed only on the other identification numbers printed on
the Warrants. In addition, the Company shall arrange for the Warrants to be
designated Private Offerings, Resales and Trading through Automatic Linkages
("Portal") Market securities in accordance with the rules and regulations
adopted by the National Association of Securities Dealers Inc. relating to
trading in the Portal Market and for the Warrants to be eligible for clearance
and settlement through DTC.
SECTION 2.06 Certificated Warrants. If DTC is at any time unwilling or
unable to continue as a depository for a Global Warrant and a successor
depository is not appointed by the Company within 90 days or if so requested by
any Holder of at least 10,000 Warrants, the Company will issue Certificated
Warrants in exchange for such Global Warrant (to the extent so requested in the
case of a request by such a Holder). In connection with the execution and
delivery of such Certificated Warrants, the Warrant Agent shall, upon receipt of
the order and at the direction of the Company, reflect on its books and records
a decrease in the principal amount of the relevant Global Warrant equal to the
number of such Certificated Warrants and the Company shall execute and the
Warrant Agent shall countersign and deliver one or more Certificated Warrants in
an equal aggregate number.
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ARTICLE III
Exercise Price; Exercise of Warrants
SECTION 3.01 Exercise Price. (a) On or after the applicable Vesting
Date with respect to a Warrant, each Warrant shall, when the certificate
therefor is countersigned by the Warrant Agent, entitle the Holder thereof,
subject to and upon compliance with the provisions of this Agreement, to
purchase one (1) share of Common Stock, subject to adjustment pursuant to the
terms of this Agreement.
(b) The exercise price (the "Base Exercise Price") of each of the
Warrants is $29.00 per share of Common Stock, subject to adjustments pursuant to
the terms of this Agreement, provided, however, that if such exercise price with
respect to any tranche of Warrants is less than 110% of the closing sales price
of the Common Stock of the Company on the date such Warrants vest as provided in
Section 3.08 (the "144A Price"), then Lehman Brothers may select, at its
exclusive option, by written notice to the Company and the Warrant Agent on such
Vesting Date, the 144A Price as the Exercise Price for such Warrants. Any such
notice from Lehman Brothers shall set forth a calculation of the 144A Price. In
the event that Lehman Brothers accepts the Base Exercise Price with respect to
any tranche of Warrants and Lehman Brothers and the Company agree (such
agreement not to be unreasonably withheld) that the Base Exercise Price equals
or exceeds the 144A Price on the Vesting Date, then such tranche of Warrants
shall be represented by a Global Warrant and, in the event the Base Exercise
Price is less than the 144A Price, then such tranche of Warrants will be
evidenced only by Certificated Warrants. If Lehman Brothers accepts the Base
Exercise Price with respect to any tranche of Warrants and the Base Exercise
Price is less than the applicable 144A Price, Lehman Brothers shall have the
right at any time thereafter to exchange all or any portion of such Warrants for
new Warrants which are eligible for resale under Rule 144A (the "New 144A
Warrants"). The Exercise Price of the New 144A Warrants shall be the 144A Price
for such tranche of Warrants as determined on the Vesting Date for such tranche
of Warrants; provided that such Exercise Price shall not be less than the Base
Exercise Price.
SECTION 3.02 Exercise; Restrictions on Exercise. Subject to the terms
and conditions set forth herein, including without limitation Section 3.09, the
Warrants shall be exercisable on any Business Day on or after the Exercisability
Date. Any Warrants not exercised by 5:00 p.m., New York City time, on the
relevant Expiration Date shall expire and all rights of the Holders of such
Warrants shall terminate.
SECTION 3.03 Method of Exercise. Warrants may be exercised only in
whole upon (i) surrender to the Warrant Agent at the office of the Warrant Agent
of the related Warrant Certificate, together with the form of election attached
thereto to purchase Common Stock on the reverse thereof duly filled in and
signed by the Holder thereof and (ii) payment to the Warrant Agent, for the
account of the Company, of the Exercise Price for each Warrant Share or other
security issuable upon the exercise of such Warrants then exercised. Such
payment shall be made (i) in cash or by certified or official bank check payable
to the order of the Company or by wire transfer of funds to an account
designated by the Company for such purpose or (ii) to the extent the Company
would be permitted to repurchase the requisite number of its Warrant Shares at
such time
13
under applicable law, without the payment of cash, by reducing the number of
shares of Common Stock obtainable upon the exercise of a Warrant and payment of
the Exercise Price in cash so as to yield a number of shares of Common Stock
upon the exercise of such Warrant equal to the product of (a) the number of
shares of Common Stock issuable as of the Exercise Date upon the exercise of
such Warrant (if payment of the Exercise Price were being made in cash) and (b)
the Cashless Exercise Ratio or (iii) any combination of (i) or (ii) above;
provided, that in the case of payment made pursuant to (ii) or (iii), the
Company shall calculate the number of shares of Common Stock to which such
Holder is entitled, and shall inform the Warrant Agent in writing of such
number. An exercise of a Warrant in accordance with clause (ii) of the
immediately preceding sentence is herein called a "Cashless Exercise". Upon
surrender of a Warrant Certificate representing more than one Warrant in
connection with the Holder's option to elect a Cashless Exercise, the number of
shares of Common Stock deliverable upon a Cashless Exercise shall be equal to
the number of shares of Common Stock issuable upon the exercise of Warrants that
the Holder specifies are to be exercised pursuant to a Cashless Exercise
multiplied by the Cashless Exercise Ratio. All provisions of this Agreement
shall be applicable with respect to a surrender of a Warrant Certificate
pursuant to a Cashless Exercise for less than the full number of Warrants
represented thereby. In the event that a Warrant Certificate is surrendered for
exercise of less than all the Warrants represented by such Warrant Certificate
at any time prior to the Expiration Date, a new Warrant Certificate representing
the remaining Warrants shall be issued. The Warrant Agent shall countersign and
deliver the required new Warrant Certificates, and the Company, at the Warrant
Agent's request, shall supply the Warrant Agent with Warrant Certificates duly
signed on behalf of the Company for such purpose. Upon the request of the
Company, the Warrant Agent shall provide to the Company information with respect
to (x) the total number of Warrants which have been exercised as of the date of
such request and (y) the total amount of funds which have been received pursuant
to the exercise of such Warrants as of the date of such request.
SECTION 3.04 Issuance of Warrant Shares. Upon the surrender of Warrant
Certificates and payment of the per share Exercise Price, as set forth in
Section 3.03, the Company shall issue and cause the Warrant Agent or, if
appointed, a transfer agent for the Common Stock ("Stock Transfer Agent") to
countersign and deliver to or upon the written order of the Holder and in such
name or names as the Holder may designate, a certificate or certificates for the
number of full Warrant Shares so purchased upon the exercise of such Warrants or
other securities or property to which it is entitled, registered or otherwise,
to the Person or Persons entitled to receive the same (including any depositary
institution so designated by a Holder), together with cash as provided in
Section 3.05 in respect of any fractional Warrant Shares otherwise issuable upon
such exercise (but only to the extent permitted by applicable law and the
instruments and agreements governing the indebtedness of the Company and its
subsidiaries at such time and if the payment of cash is not so permitted, the
Company shall issue Warrant Shares in an amount equal to the next highest whole
number). 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 Warrant Certificates and payment of the per share Exercise Price, as
aforesaid; provided, however, that if, at such date, the transfer books for the
Warrant Shares shall be closed, the certificates for the Warrant Shares in
respect of which such
14
Warrants are then exercised shall be issuable as of the date on which such books
shall next be opened and until such date the Company shall be under no duty to
deliver any certificates for such Warrant Shares; provided further, however,
that such transfer books, unless otherwise required by law, shall not be closed
at any one time for a period longer than 20 calendar days and shall not be
closed without 10 days prior written notice to the Holders.
SECTION 3.05 Fractional Warrant Shares. The Company shall not be
required to issue fractional Warrant Shares on the exercise of Warrants. If more
than one Warrant shall be exercised in full at the same time by the same Holder,
the number of full Warrant Shares which shall be issuable upon such exercise
shall be computed on the basis of the aggregate number of Warrant Shares which
may be purchasable pursuant thereto. If any fraction of a Warrant Share would,
except for the provisions of this Section 3.05, be issuable upon the exercise of
any Warrant, the Company shall pay an amount in cash equal to the Current Market
Value per Warrant Share, as determined on the day immediately preceding the date
the Warrant is presented for exercise, multiplied by such fraction, computed to
the nearest whole cent (but only to the extent permitted by applicable law and
the instruments and agreements governing the indebtedness of the Company and its
subsidiaries at such time and if the payment of cash is not so permitted, the
Company shall issue Warrant Shares in an amount equal to the next highest whole
number).
SECTION 3.06 Reservation of Warrant Shares. The Company shall at all
times keep reserved out of its authorized shares of Common Stock a number of
shares of Common Stock sufficient to provide for the exercise of all outstanding
Warrants. The registrar for the Common Stock shall at all times until the
Expiration Date 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 Stock Transfer Agent. The Company will supply such Stock Transfer Agent with
duly executed stock certificates for such purpose and will itself provide or
otherwise make available any cash which may be payable as provided in Section
3.05. The Company will furnish to such Stock Transfer Agent a copy of all
notices of adjustments (and certificates related thereto) transmitted to each
Holder.
Before taking any action which would cause an adjustment pursuant to
Article IV to reduce the Exercise Price below the then par value (if any) of the
Common Stock, the Company shall take any and all corporate action which may, in
the opinion of its counsel, be necessary in order that the Company may validly
and legally issue fully paid and nonassessable shares of Common Stock at the
Exercise Price as so adjusted.
The Company covenants that all Warrant Shares which may be issued upon
exercise of Warrants shall, upon issue, be fully paid, nonassessable, free of
preemptive rights, free from all taxes and free from all liens, charges and
security interests with respect to the issue thereof.
SECTION 3.07 Escrow of Second Tranche Warrants and Third Tranche
Warrants. (a) The Company shall promptly deliver to the Warrant Agent for
deposit into an escrow account, which the Warrant Agent shall establish
specifically for the purpose
15
of complying with this Agreement (the "Escrow Account"), the Second Tranche
Warrants and the Third Tranche Warrants.
(b) The Warrant Agent shall release Warrants from the Escrow Account
only on or after the Vesting Date for such Warrants as provided in Section 3.08
of this Agreement. Warrants so released from the Escrow Account shall be
delivered by the Warrant Agent in accordance with a written direction from LBI
to the Warrant Agent. For purposes of determining the Vesting Dates of the
Warrants, the Warrant Agent may rely on certificates signed by an officer of
LBI, who is a managing director or officer senior thereto, and by an officer of
the Company eligible to sign a Company Request.
SECTION 3.08 Vesting of Warrants. (a) The First Tranche Warrants shall
vest immediately on the date hereof and shall not be deposited into escrow and
instead shall be delivered to LCPI in accordance with Section 2.03.
(b) The Second Tranche Warrants and Third Tranche Warrants shall be
released from escrow and absolute ownership thereof shall be vested in LCPI as
follows (the date on which any Warrants are released from escrow as provided
below, or delivered under 3.08(a) above, is referred to as the "Vesting Date"
for such Warrants):
(i) the Second Tranche Warrants shall be released and shall
vest on the Funding Date;
(ii) if the Funding Date occurs and on the 20th trading day
after the Funding Date the Measured Yield (as defined below) of the
Senior Notes is equal to or greater than 20.0% per annum, then all of
the Third Tranche Warrants shall be released to LCPI and shall vest;
or if the Funding Date occurs and on the 20th trading day after the
Funding Date the Measured Yield of the Senior Notes is less than 20.0%
per annum, then the Third Tranche Warrants shall not vest and shall be
promptly released to the Company for cancellation. The "Measured
Yield" means the imputed yield to worst of the Senior Notes derived
from the average of the bid prices quoted at 2:00 p.m., New York City
time, by LBI, Merrill Lynch, Pierce, Fenner & Smith Incorporated and
Credit Suisse First Boston Corporation for the Senior Notes during the
period commencing on the eleventh trading day immediately succeeding
the Funding Date through and including the twentieth trading day
immediately succeeding the Funding Date (the "Reference Period"),
provided that if there are no bid prices for the Senior Notes on any
such trading day the average price for such trading day shall be
deemed to be the average of the bid prices on the prior trading date
during which bid prices for the Senior Notes were available and,
provided further that during the Reference Period, the difference
between LBI's bid price and ask price for the Senior Notes shall not
exceed two points; and
(iii) if the Funding Date shall not have occurred, by May
31, 2001, or, if such date is extended, by such extended date, then
the Second Tranche Warrants and the Third Tranche Warrants shall not
vest and shall be promptly released to the Company for cancellation.
16
SECTION 3.09 Compliance with Law. (a) Notwithstanding anything in this
Agreement to the contrary, in no event shall a Holder be entitled to exercise a
Warrant unless (i) a registration statement filed under the Securities Act in
respect of the issuance of the Warrant Shares upon exercise is then effective or
(ii) (A) the Company has received the opinion of counsel to the Holder (in form
and substance satisfactory to the Company) addressed to the Company and the
Warrant Agent to the effect that the issuance of the shares of Common Stock upon
the exercise of such Warrants is exempt from the registration requirements of
the Securities Act and (B) there is sufficient information for the Company to
conclude that such securities are qualified for sale or exempt from
qualification under the applicable securities laws of the states or other
jurisdictions in which such Holder resides. The Company shall use commercially
reasonable efforts to cause the Warrant Shares issued upon exercise to be
qualified for sale or exempt from qualification under the applicable securities
laws of the states or other jurisdictions in which such Holder resides;
provided, however, that the Company shall not be required to qualify generally
to do business in any jurisdiction where it would not otherwise be required to
qualify but for this Section 3.09 or to take any action which would subject it
to general service of process or to taxation in any such jurisdiction where it
is not then so subject.
(b) If any shares of Common Stock required to be reserved for purposes
of the exercise of Warrants require, under any other Federal or state law or
applicable governing rule or regulation of any national securities exchange,
registration with or approval of any governmental authority, or listing on any
such national securities exchange or quotation system before such shares may be
issued upon exercise, the Company will cause such shares to be duly registered
or approved by such governmental authority or listed on the relevant national
securities exchange or quotation system, as the case may be.
ARTICLE IV
Antidilution Provisions
SECTION 4.01 . Changes in Common Stock. In the event that at any time
and from time to time the Company shall (i) pay a dividend or make a
distribution on Common Stock in shares of Common Stock or other shares of
Capital Stock, (ii) subdivide its outstanding shares of Common Stock into a
larger number of shares of Common Stock, (iii) combine its outstanding shares of
Common Stock into a smaller number of shares of Common Stock or (iv) increase or
decrease the number of shares of Common Stock outstanding by reclassification of
its Common Stock, then the number of shares of Common Stock issuable upon
exercise of each Warrant immediately after the happening of such event shall be
adjusted so that, after giving effect to such adjustment, the Holder of each
Warrant shall be entitled to receive the number of shares of Common Stock upon
exercise of such Warrant that such Holder would have owned or have been entitled
to receive had such Warrants been exercised immediately prior to the happening
of the events described above (or, in the case of a dividend or distribution of
Common Stock, immediately prior to the record date therefor), and the Exercise
Price shall be adjusted to the price (calculated to the nearest 100th of one
cent) determined by multiplying the Exercise Price immediately prior to such
event by a fraction, the
17
numerator of which shall be the number of Warrant Shares purchasable with one
Warrant immediately prior to such event and the denominator of which shall be
the number of Warrant Shares purchasable with one Warrant after the adjustment
referred to above. An adjustment made pursuant to this Section 4.01 shall become
effective immediately after the distribution date, retroactive to the record
date therefor in the case of a dividend or distribution in shares of Common
Stock or other shares of Capital Stock, and shall become effective immediately
after the effective date in the case of a subdivision, combination or
reclassification.
SECTION 4.02 Cash Dividends and Other Distributions. In the event that
at any time and from time to time the Company shall distribute to all holders of
Common Stock (i) any dividend or other distribution (including any dividend or
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation) of cash, evidences of its indebtedness,
shares of its Capital Stock or any other properties or securities or (ii) any
options, warrants or other rights to subscribe for or purchase any of the
foregoing (other than, in the case of clause (i) and (ii) above, (A) any
dividend or distribution described in Section 4.01, (B) any rights, options,
warrants or securities described in Section 4.03 or Section 4.04 and (C) any
cash dividends or other cash distributions from current or retained earnings
other than Extraordinary Cash Dividends), then the number of shares of Common
Stock issuable upon the exercise of each Warrant immediately prior to such
record date for any such dividend or distribution shall be increased to a number
determined by multiplying the number of shares of Common Stock issuable upon the
exercise of such Warrant immediately prior to such record date for any such
dividend or distribution by a fraction, the numerator of which shall be the
Current Market Value per share of Common Stock on the record date for such
dividend or distribution, and the denominator of which shall be such Current
Market Value per share of Common Stock less the sum of (x) the amount of cash,
if any, distributed per share of Common Stock and (y) the then fair value (as
determined in good faith by the Board of Directors, whose determination shall be
evidenced by a board resolution filed with the Warrant Agent, a copy of which
will be sent to Holders upon request) of the portion, if any, of the
distribution applicable to one share of Common Stock consisting of evidences of
indebtedness, shares of stock, securities, other property, warrants, options or
subscription or purchase rights; and, subject to Section 4.08, the Exercise
Price shall be adjusted to a number determined by dividing the Exercise Price
immediately prior to such record date by the above fraction. Such adjustments
shall be made, and shall only become effective, whenever any dividend or
distribution is made; provided, however, that the Company is not required to
make an adjustment pursuant to this Section 4.02 if at the time of such
distribution the Company makes the same distribution to Holders of Warrants as
it makes to holders of Common Stock pro rata based on the number of shares of
Common Stock for which such Warrants are exercisable (whether or not currently
exercisable). No adjustment shall be made pursuant to this Section 4.02 which
shall have the effect of decreasing the number of shares of Common Stock
issuable upon exercise of each Warrant or increasing the Exercise Price.
SECTION 4.03 Issuance of Common Stock or Rights or Options. In the
event that at any time or from time to time the Company shall issue shares of
Common Stock or rights, options or warrants or securities convertible or
exchangeable into
18
Common Stock, other than in a bona fide underwritten public offering by or
through a syndicate managed by an investment bank of national or regional
standing, for a consideration per share (which, in the case of convertible,
exchangeable or exercisable securities shall be the amount received by the
Company in consideration for the sale and issuance of such convertible,
exchangeable or exercisable securities plus the minimum aggregate amount of
additional consideration payable to the Company upon conversion, exchange or
exercise thereof (as determined in good faith by the Board of Directors, whose
determination shall be evidenced by a board resolution filed with the Warrant
Agent, a copy of which will be sent to Holders upon request), provided, however,
that the value attributable to such convertible, exchangeable or exercisable
securities when issued as part of a unit with debt or other obligations of the
Company shall be excluded to the extent it is a result of calculating the
discount applicable to such debt or other obligations of the Company under
generally accepted accounting principles) that is less than the lesser of (a)
the Current Market Value per share of Common Stock as of the date the Company
agrees in writing to issue such shares and (b) the closing price per share of
Common Stock as of the date the Company agrees in writing to issue such shares,
or entitling the holders of rights, options, warrants or securities not
originally issued in connection with an underwritten public offering to
subscribe for or purchase shares of Common Stock at a price that is equal to the
lesser of (a) the Current Market Value per share of Common Stock as of the date
the Company agrees in writing to issue such rights, options, warrants or
securities and (b) the closing price per share of Common Stock as of the date
the Company agrees in writing to issue such shares, the number of shares of
Common Stock issuable upon the exercise of each Warrant immediately after such
date shall be determined by multiplying the number of shares of Common Stock
issuable upon exercise of each Warrant immediately prior to such date by a
fraction, the numerator of which shall be the number of shares of Common Stock
outstanding immediately preceding the date the Company agrees in writing to
issue such shares or rights, options, warrants or securities plus the number of
additional shares of Common Stock to be issued in such transaction or offered
for subscription or purchase or into which such securities are convertible or
exchangeable, and the denominator of which shall be the number of shares of
Common Stock outstanding immediately preceding the date the Company agrees in
writing to issue such shares or rights, options, warrants or securities plus the
total number of shares of Common Stock which the aggregate consideration
expected to be received by the Company upon the issuance of such shares or the
exercise, conversion or exchange of such rights, options, warrants or securities
(as determined in good faith by the Board of Directors, whose determination
shall be evidenced by a board resolution filed with the Warrant Agent, a copy of
which will be sent to Holders upon request) would purchase at the lesser of (a)
the Current Market Value per share of Common Stock as of the date the Company
agrees in writing to issue such shares or rights, options, warrants or
securities and (b) the closing price per share of Common Stock as of the date
the Company agrees in writing to issue such shares, and, subject to Section
4.08, in the event of any such adjustment, the Exercise Price shall be adjusted
to a number determined by dividing the Exercise Price immediately prior to such
date by the aforementioned fraction; provided, however, that no adjustment to
the number of Warrant Shares issuable upon the exercise of the Warrants or to
the Exercise Price shall be made as a result of (i) the vesting or exercise of
the Warrants, (ii) the exercise, conversion or exchange of any right, option,
warrant or security, the issuance of which has previously required an adjustment
to the number of Warrant Shares issuable upon the exercise of the
19
Warrants or to the Exercise Price pursuant to this Section 4.03, (iii) the
exercise, conversion or exchange of any right, option, warrant or security
outstanding on the Issue Date (to the extent such exercise, conversion or
exchange is made in accordance with the terms of such right, option, warrant or
security as in effect on the Issue Date) or (iv) the issuance, exercise,
conversion or exchange of options to acquire Common Stock by officers, directors
or employees of the Company; provided, however, that the aggregate number of
shares of Common Stock subject to this clause (iv) shall not exceed 4% of the
number of shares of Common Stock outstanding on a fully diluted basis on the
Issue Date. Any adjustment required by this Section 4.03 shall be made, and
shall only become effective, whenever such shares or such rights, options,
warrants or securities are issued. No adjustment shall be made pursuant to this
Section 4.03 which shall have the effect of decreasing the number of shares of
Common Stock issuable upon exercise of each Warrant or increasing the Exercise
Price.
SECTION 4.04 Fundamental Transaction; Liquidation. (a) Except as
provided in Section 4.04(b), in the event of a Fundamental Transaction, each
Holder shall have the right to receive upon exercise of the Warrants the kind
and amount of shares of Capital Stock or other securities or property which such
Holder would have been entitled to receive upon completion of or as a result of
such Fundamental Transaction had such Warrant been exercised immediately prior
to such event or to the relevant record date for any such entitlement
(regardless of whether the Warrants are then exercisable and without giving
effect to the Cashless Exercise Option), assuming (to the extent applicable)
that such Holder (i) was not a constituent Person or an affiliate to a
constituent Person to such Fundamental Transaction, (ii) made no election with
respect thereto, and (iii) was treated alike with the plurality of non-electing
Holders. Unless paragraph (b) is applicable to a Fundamental Transaction, the
Company shall provide that the surviving or acquiring Person (the "Successor
Company") in such Fundamental Transaction will enter into an agreement (a
"Supplemental Warrant Agreement") with the Warrant Agent confirming the Holders'
rights pursuant to this Section 4.04(a) and providing for adjustments, which
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Article IV. Any such Supplemental Warrant Agreement shall further
provide that such Successor Company will succeed to and be substituted for every
right and obligation of the Company in respect of this Agreement and the
Warrants. The provisions of this Section 4.04(a) shall similarly apply to
successive Fundamental Transactions involving any Successor Company.
(b) In the event of (i) a Fundamental Transaction with another Person
(other than a subsidiary of the Company) where consideration to the holders of
Common Stock in exchange for their shares is payable solely in cash or (ii) the
dissolution, liquidation or winding-up of the Company, the Holders of the
Warrants shall be entitled to receive, upon surrender of their Warrant
Certificates, such cash distributions on an equal basis with the holders of
Common Stock or other securities issuable upon exercise of the Warrants, as if
the Warrants had been exercised immediately prior to such event, less the
Exercise Price.
In the event of any Fundamental Transaction described in this Section
4.04(b), the Successor Company and, in the event of any dissolution, liquidation
or winding-up of the Company, the Company, shall deposit promptly with the
Warrant
20
Agent the funds, if any, necessary to pay the Holders of the Warrants the
amounts to which they are entitled as described above. After such funds and the
surrendered Warrant Certificates are received, the Warrant Agent shall make
payment to the Holders by delivering a check in such amount as is appropriate
(or, in the case of consideration other than cash, such other consideration as
is appropriate) to such Person or Persons as it may be directed in writing by
the Holders surrendering such Warrant Certificates.
SECTION 4.05 Other Events. If any event occurs as to which the
foregoing provisions of this Article IV are not strictly applicable or, if
strictly applicable, would not, in the good faith judgment of the Board of
Directors, fairly and adequately protect the purchase rights of the Warrants in
accordance with the essential intent and principles of such provisions, then the
Board of Directors shall make such adjustments in the application of such
provisions, in accordance with such essential intent and principles, as shall be
reasonably necessary, in the good faith opinion of the Board of Directors, to
protect such purchase rights as aforesaid, but in no event shall any such
adjustment have the effect of increasing the Exercise Price or decreasing the
number of shares of Common Stock issuable upon exercise of the Warrants.
SECTION 4.06 Superseding Adjustment. Upon the expiration of any
rights, options, warrants or conversion or exchange privileges which resulted in
adjustments pursuant to this Article IV, if any thereof shall not have been
exercised, the number of Warrant Shares issuable upon the exercise of each
Warrant shall be readjusted pursuant to the applicable section of this Article
IV as if (i) the only shares of Common Stock issuable upon exercise of such
rights, options, warrants, conversion or exchange privileges were the shares of
Common Stock, if any, actually issued upon the exercise of such rights, options,
warrants or conversion or exchange privileges and (ii) shares of Common Stock
actually issued, if any, were issuable for the consideration actually received
by the Company upon such exercise plus the aggregate consideration, if any,
actually received by the Company for the issuance, sale or grant of all such
rights, options, warrants or conversion or exchange privileges whether or not
exercised and the Exercise Price shall be readjusted inversely; provided,
however, that no such readjustment (except by reason of an intervening
adjustment under Section 4.01) shall have the effect of decreasing the number of
Warrant Shares issuable upon the exercise of each Warrant, or increasing the
Exercise Price, 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.
SECTION 4.07 Minimum Adjustment. The adjustments required by the
preceding sections of this Article IV shall be made whenever and as often as any
specified event requiring an adjustment shall occur, except that no adjustment
of the Exercise Price or the number of shares of Common Stock issuable upon
exercise of the Warrants that would otherwise be required shall be made unless
and until such adjustment either by itself or with other adjustments not
previously made increases or decreases by at least 1% the Exercise Price or the
number of shares of Common Stock issuable upon exercise of the Warrants
immediately prior to the making of such adjustment. Any adjustment representing
a change of less than such minimum amount shall be carried forward and made as
soon as such adjustment, together with other adjustments required by this
Article IV and not previously made, would result in a
21
minimum adjustment. For the purpose of any adjustment, any specified event shall
be deemed to have occurred at the close of business on the date of its
occurrence. In computing adjustments under this Article IV, fractional interests
in Common Stock shall be taken into account to the nearest one-hundredth of a
share.
SECTION 4.08 Notice of Adjustment. Whenever the Exercise Price or the
number of shares of Common Stock and other property, if any, issuable upon
exercise of the Warrants is adjusted, as herein provided, the Company shall
deliver to the Warrant Agent an agreed upon procedures letter of a firm of
independent accountants selected by the Board of Directors (who may be the
regular accountants employed by the Company) setting forth, in reasonable
detail, the event requiring the adjustment and the method by which such
adjustment was calculated (including a description of the basis on which (i) the
then fair value of any evidences of indebtedness, other securities or property
or warrants, options or other subscription or purchase rights was determined and
(ii) the Current Market Value of the Common Stock was determined, if either of
such determinations were required), and specifying the Exercise Price and the
number of shares of Common Stock issuable upon exercise of the Warrants after
giving effect to such adjustment. The Company shall promptly cause the Warrant
Agent, at the Company's expense, to mail a copy of such certificate to each
Holder in accordance with Section 9.03. The Warrant Agent shall be under no duty
or responsibility with respect to any such certificate, except to exhibit the
same from time to time, to any Holder desiring an inspection thereof during
reasonable business hours. Without limiting the foregoing, the Warrant Agent
shall not at any time be under any duty or responsibility to any Holder to
determine whether any facts exist which may require any adjustment of the
Exercise Price or the number of shares of Common Stock or other stock or
property issuable on exercise of the Warrants, or with respect to the nature or
extent of any such adjustment when made, or with respect to the method employed
in making such adjustment or the validity or value of any shares of Common
Stock, evidences of indebtedness, warrants, options, or other securities or
property.
SECTION 4.09 Notice of Certain Transactions. In the event that the
Company shall propose to (a) pay any dividend payable in securities of any class
to the holders of its Common Stock or to make any other non-cash dividend or
distribution to the holders of its Common Stock, (b) offer the holders of its
Common Stock rights to subscribe for or to purchase any securities convertible
into shares of Common Stock or shares of stock of any class or any other
securities, rights or options, (c) issue any (i) shares of Common Stock, (ii)
rights, options or warrants entitling the holders thereof to subscribe for
shares of Common Stock or (iii) securities convertible into or exchangeable or
exercisable for Common Stock (in the case of (i), (ii) and (iii), if such event
would result in an adjustment hereunder), (d) effect any capital reorganization,
reclassification, consolidation or merger, (e) effect the voluntary or
involuntary dissolution, liquidation or winding-up of the Company or (f) make a
tender offer or exchange offer with respect to the Common Stock, the Company
shall within five days after deciding to take any such action or make any such
offer send to the Warrant Agent a notice and the Warrant Agent shall within five
days after receipt thereof, at the expense of the Company, send the Holders a
notice (in such form as shall be furnished to the Warrant Agent by the Company)
of such proposed action or offer. Such notice shall be mailed by the Warrant
Agent to the Holders at their addresses as they appear in the
22
Warrant Register, which shall specify the record date for the purposes of such
dividend, distribution or rights, or the date such issuance or event is to take
place and the date of participation therein by the holders of Common Stock, if
any such date is to be fixed, and shall briefly indicate the effect, if any, of
such action on the Common Stock and on the number and kind of any other shares
of stock and on other property, if any, and the number of shares of Common Stock
and other property, if any, issuable upon exercise of each Warrant and the
Exercise Price after giving effect to any adjustment pursuant to Article IV
which will be required as a result of such action. Such notice shall be given as
promptly as possible and (x) in the case of any action covered by clause (a) or
(b) above, at least 10 days prior to the record date for determining holders of
the Common Stock for purposes of such action or (y) in the case of any other
such action, at least 20 days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of Common Stock,
whichever shall be the earlier.
SECTION 4.10 Adjustment to Warrant Certificate. The form of Warrant
Certificate need not be changed because of any adjustment made pursuant to this
Article IV, and Warrant Certificates issued after such adjustment may state the
same Exercise Price and the same number of shares of Common Stock issuable upon
exercise of the Warrants as are stated in the Warrant Certificates initially
issued pursuant to this Agreement. The Company, however, may at any time in its
sole discretion make any change in the form of Warrant Certificate that it may
deem appropriate to give effect to such adjustments and that does not affect the
substance of the Warrant Certificate, and any Warrant Certificate thereafter
issued or countersigned, whether in exchange or substitution for an outstanding
Warrant Certificate or otherwise, may be in the form as so changed.
ARTICLE V
Warrant Transfer Books; Restrictions On Transfer
SECTION 5.01 Transfer and Exchange. The Warrant Certificates shall be
issued in registered form only. The Company shall cause to be kept at the office
of the Warrant Agent a register (the "Warrant Register") in which, subject to
such reasonable regulations as it may prescribe, the Company shall provide for
the registration of Warrant Certificates and transfers or exchanges of Warrant
Certificates as herein provided. All Warrant Certificates issued upon any
registration of transfer or exchange of Warrant Certificates shall be the valid
obligations of the Company, evidencing the same obligations, and entitled to the
same benefit under this Agreement, as the Warrant Certificates surrendered for
such registration of transfer or exchange.
A Holder may transfer its Warrants only by complying with the terms of
this Agreement. No such transfer shall be effected until, and such transferee
shall succeed to the rights of a Holder only upon, final acceptance and
registration of the transfer by the Warrant Agent in the Warrant Register. Prior
to the registration of any transfer of Warrants by a Holder as provided herein,
the Company, the Warrant Agent, any agent of the Company or the Warrant Agent
may treat the Person in whose name the Warrants are registered as the owner
thereof for all purposes and as the Person entitled to exercise the rights
represented thereby, any notice to the contrary notwithstanding.
23
Furthermore, any Holder of a Global Warrant, shall, by acceptance of such Global
Warrant, agree that transfers of beneficial interests in such Global Warrant may
be effected only through a book-entry system maintained by the Holder of such
Global Warrant (or its agent), and that ownership of a beneficial interest in
the Warrants represented thereby shall be required to be reflected in a book
entry. When Warrants are presented to the Warrant Agent with a request to
register the transfer or to exchange them for an equal amount of Warrants of
other authorized denominations, the Warrant Agent shall register the transfer or
make the exchange in accordance with the provisions hereof.
SECTION 5.02 Registration; Registration of Transfer and Exchange. When
Certificated Warrants are presented to the Warrant Agent with a request from the
Holder of such Warrants to register the transfer or to exchange them for an
equal number of Warrants of other authorized denominations, the Warrant Agent
shall register the transfer or make the exchange as requested; provided,
however, that (i) every Warrant Certificate presented and surrendered for
registration of transfer or exchange shall be duly endorsed and be accompanied
by a written instrument of transfer in form satisfactory to the Company, duly
executed by the Holder thereof or the Holder's attorneys duly authorized in
writing and (ii) if being transferred or exchanged pursuant to an effective
registration statement under the Securities Act or pursuant to clause (A), (B)
or (C) below, shall be accompanied by the following additional information and
documents, as applicable:
(A) if such Certificated Warrants are 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
the form set forth on the reverse of the Warrant); or
(B) if such Certificated Warrants are being transferred to
the Company, a certification to that effect (in the form set forth on
the reverse of the Warrant); or
(C) if such Certificated Warrants are being transferred (w)
pursuant to an exemption from registration in accordance with Rule
144A under the Securities Act, if available; or (x) pursuant to an
exemption from registration in accordance with Rule 144 under the
Securities Act; or (y) in reliance on another exemption from the
registration requirements of the Securities Act: (1) a certification
to that effect (in the form set forth on the reverse of the Warrant)
and (2) if the Company or Warrant Agent so requests, an opinion of
counsel (with customary assumptions and exceptions) or other evidence
reasonably satisfactory to them as to the compliance with the
restrictions set forth in the legend set forth in Exhibit C, including
without limitation in the case of a transfer pursuant to clause (y) in
the case of a Transfer Restricted Security, a representation letter
from the transferee in the form of Exhibit D hereto.
To permit registrations of transfers and exchanges, the Company shall
make available to the Warrant Agent a sufficient number of executed Warrant
Certificates to effect such registrations of transfers and exchanges. No service
charge
24
shall be made to the Holder for any registration of transfer or exchange of
Warrants, but the Company may require from the transferring or exchanging Holder
payment of a sum sufficient to cover any transfer tax or similar governmental
charge payable upon exchanges pursuant to Section 2.04 and exchanges in respect
of portions of Warrants not exercised and the Company may deduct such taxes from
any payment of money to be made and such transfer or exchange shall not be
consummated (if such taxes are not deducted in full) unless or until the Holder
shall have paid to the Company the amount of such tax or shall have established
to the satisfaction of the Company and the Warrant Agent that such tax has been
paid.
SECTION 5.03 Initial Certificated Warrants; Book-Entry Provisions for
the Global Warrants. (a) Initially the Warrants shall be in the form of
Certificated Warrants registered in the name of LB I Group Inc. and the Company
shall deliver such Certificated Warrants to the Warrant Agent for
counter-signature and direct the Warrant Agent to deposit them, other than the
First Tranche Warrants which will be delivered to or upon the order of LCPI,
into the Escrow Account and to hold them in accordance with Section 3.07. To the
extent all or any portion of the Warrants that vest in accordance with Section
3.08 are eligible for resale under Rule 144A (the "144A Eligible Warrants"), as
soon as reasonably practicable after agreement between the Company and Lehman
Brothers regarding such eligibility in accordance with Section 3.01, the Company
shall exchange such Certificated Warrants for Global Warrants evidencing such
144A Eligible Warrants which initially shall (i) be registered in the name of
DTC or the nominee of DTC, (ii) be delivered to the Warrant Agent, as custodian
for DTC, and (iii) bear legends as set forth in Section 2.02; provided, however,
that prior to the time of such exchange any transfers of interests in such
Certificated Warrants shall be made in accordance with Section 5.02. Members of,
or participants in, DTC ("Agent Members") shall have no rights under this
Agreement with respect to the Global Warrant held on their behalf by DTC or the
Warrant Agent as its custodian, and DTC may be treated by the Company, the
Warrant Agent and any agent of the Company or the Warrant Agent as the absolute
owner of such Global Warrant for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Warrant Agent or any
agent of the Company or the Warrant Agent from giving effect to any written
certification, proxy or other authorization furnished by DTC or impair, as
between DTC and its Agent Members, the operation of customary practices
governing the exercise of the rights of a beneficial owner of any Warrants.
(b) Transfers of the Global Warrant shall be limited to transfers of
such Global Warrant in whole, but not in part, to DTC, its successors or their
respective nominees. Interests of beneficial owners in the Global Warrant may be
transferred in accordance with the rules and procedures of DTC. Certificated
Warrants shall be transferred to all beneficial owners in exchange for their
beneficial interests in the Global Warrant if (i) DTC notifies the Company that
it is unwilling or unable to continue as depositary for the Global Warrant or
(ii) DTC ceases to be a "Clearing Agency" registered under the Exchange Act and
a successor depositary is not appointed by the Company within 90 days.
(c) In connection with the transfer of the entire Global Warrant to
beneficial owners pursuant to paragraph (b) of this Section 5.03, the Global
Warrant shall
25
be deemed to be surrendered to the Warrant Agent for cancellation, and the
Company shall execute, and the Warrant Agent shall countersign and deliver, to
each beneficial owner identified by DTC in exchange for its beneficial interest
in the Global Warrant, Certificated Warrants of authorized denominations
representing, in the aggregate, the number of Warrants theretofore represented
by the Global Warrant.
(d) Any Certificated Warrant delivered in exchange for an interest in
a Global Warrant pursuant to paragraph (b) or (c) of this Section 5.03 shall
bear applicable legends as set forth in Section 2.02 hereof.
(e) The registered holder of the Global Warrant may grant proxies and
otherwise authorize any Person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Agreement or the Warrants.
(f) Beneficial owners of interests in the Global Warrant may receive
Certificated Warrants (which shall bear the legend set forth in Exhibit C if
required by Section 2.02) in accordance with the procedures of DTC. In
connection with the execution, countersigning and delivery of such Certificated
Warrants, the Warrant Agent shall reflect on its books and records a decrease in
the number of Warrants represented by the Global Warrant equal to the number of
Warrants represented by such Certificated Warrants and the Company shall execute
and the Warrant Agent shall countersign and deliver one or more Certificated
Warrants representing, in the aggregate, the number of Warrants theretofore
represented by the Global Warrant.
SECTION 5.04 Surrender of Warrant Certificates. Any Warrant
Certificate surrendered for registration of transfer, exchange or exercise of
the Warrants represented thereby shall, if surrendered to the Company, be
delivered to the Warrant Agent, and all Warrant Certificates surrendered or so
delivered to the Warrant Agent shall be promptly canceled by the Warrant Agent
and shall not be reissued by the Company and, except as provided in this Article
V in case of an exchange or in Article III hereof in case of the exercise of
less than all the Warrants represented thereby or in case of a mutilated Warrant
Certificate or in the case of a transfer, no Warrant Certificate shall be issued
hereunder in lieu thereof. The Warrant Agent shall deliver to the Company from
time to time or otherwise dispose of such canceled Warrant Certificates as the
Company may direct in writing.
ARTICLE VI
Registration Rights; Indemnification
SECTION 6.01 Effectiveness of Registration Statements. (a) Subject to
Section 6.02, the Company shall cause to be filed pursuant to Rule 415 (or any
successor provision) of the Securities Act (1) a shelf registration statement
relating to the offer and sale of the Warrants by the Holders from time to time
in accordance with the methods of distribution elected by such holders and set
forth in such registration statement (the "Warrant Shelf Registration
Statement"), and shall use its reasonable best efforts to cause the Warrant
Shelf Registration Statement to be declared effective under the Securities Act
on or before September 30, 2001, (2) to the extent available under then existing
rules,
26
regulations and interpretations of the Commission, a shelf registration
statement covering the issuance of Warrant Shares upon the exercise of the
Warrants that are not at such time Transfer Restricted Securities (the "Warrant
Share Shelf Registration Statement"), and shall use its reasonable best efforts
to cause the Warrant Share Shelf Registration Statement to be declared effective
on or before September 30, 2001 and (3) a shelf registration statement covering
the resale of Warrant Shares acquired upon exercise of a Warrant that is at the
time of exercise a Transfer Restricted Security, or if the Warrant Share Shelf
Registration Statement is not available under then existing rules, regulations
and interpretations of the Commission, covering the resale of Warrant Shares
acquired upon exercise of any Warrant by the Holder thereof (the "Resale Shelf
Registration Statement"), and shall use its reasonable best efforts to cause the
Resale Shelf Registration Statement to be effective on or before September 30,
2001. The Registration Statements may be filed with the Commission on a single
registration statement, subject to the rules, regulations and interpretations of
the Commission.
(b) Subject to Section 6.02, the Company shall use its reasonable best
efforts to cause (x) the Warrant Shelf Registration Statement to remain
effective until the earliest of (i) such time as all Warrants have been sold
thereunder and (ii) until all Warrants can be sold without restriction under the
Securities Act, (y) the Warrant Share Shelf Registration Statement to remain
effective until the earliest of (i) such time as all Warrants have been
exercised and (ii) the Expiration Date of the Third Tranche Warrants and (z) the
Resale Shelf Registration Statement to remain effective until the earliest of
(i) such time as all Warrant Shares covered thereby have been sold thereunder
and (ii) until all Warrant Shares covered thereby can be sold without
restriction under the Securities Act (which, if the Warrant Share Shelf
Registration Statement is not available under the existing rules, regulations
and interpretations of the Commission, shall be the Expiration Date of the Third
Tranche Warrants).
(c) In connection with the Warrant Shelf Registration Statement, the
Warrant Share Shelf Registration Statement and the Resale Shelf Registration
Statement,
(i) the Company shall furnish to the Warrant Agent, prior to
the filing with the Commission, a copy of any registration statement,
and each amendment thereof and each amendment or supplement, if any,
to the prospectus included therein and shall use its reasonable best
efforts to reflect in each such document, when filed with the
Commission, such comments as the Warrant Agent may reasonably propose,
(ii) the Company shall furnish to each Holder and holders of
Warrant Shares whose securities are covered by such registration
statement, without charge, at least one copy of any registration
statement and any post-effective amendment thereto, including
financial statements and schedules, and, if the Holder so requests in
writing, all exhibits thereto (including those incorporated by
reference),
(iii) the Company shall, for so long as any such
registration statement is effective, deliver to each Holder and
holders of Warrant Shares whose securities are covered by such
registration
27
statement, without charge, as many copies of the prospectus (including
each preliminary prospectus) included in such registration statement
and any amendment or supplement thereto as such Holder and holders of
Warrant Shares whose securities are covered by such registration
statement may reasonably request, and the Company consents to the
proper use of the prospectus therein and any amendment or supplement
thereto by each of the selling holders in connection with the offering
and sale of the Warrants or the Warrant Shares, as the case may be,
covered by such prospectus and any amendment or supplement thereto,
(iv) the Company shall use its commercially reasonable best
efforts to avoid the issuance of or, if issued, obtain the withdrawal
of any order enjoining or suspending the effectiveness of any
registration statement or prospectus or the lifting of any suspension
or qualification (or exemption from qualification) of any securities
covered thereby,
(v) the Company may require each Holder of Warrants to be
sold pursuant to the Warrant Shelf Registration Statement or Holder of
Warrant Shares to be sold pursuant to the Resale Shelf Registration
Statement to furnish to the Company such information regarding the
Holder and the distribution of such Warrants or Warrant Shares as the
Company may from time to time reasonably request for inclusion in such
registration statement,
(vi) subject to Section 6.02, use its reasonable best
efforts to keep such Registration Statements continuously effective
for the periods specified in Section 6.01 and if reasonably requested
by any selling holders of Warrants or Warrant Shares, promptly include
in any Registration Statement or prospectus pursuant to a supplement
or post-effective amendment, if necessary, such information concerning
the selling holders as they may reasonably request, including, without
limitation, information with respect to the plan of distribution,
(vii) the Company shall enter into such agreements
(including underwriting agreements) as are appropriate, customary and
reasonably necessary in connection with any such registration
statement and provide a CUSIP number for such securities and
(viii) the Company shall (A) make available to the
underwriters, if any, all material customary for reasonable due
diligence examinations in connection with such registration
statements, (B) make such representations and warranties to the
Holders of Warrants, the holders of Warrant Shares and the
underwriters, if any, as are customary and reasonable in connection
with such registration statements, (C) obtain such opinions of counsel
to the Company addressed to and reasonably satisfactory to the Holders
and the holders of Warrant Shares as are customary and reasonable in
connection with such registration statements and (D) obtain such
"comfort" letters and updates thereof from the independent certified
public accountants of the Company addressed to the
28
Holders and the holders of Warrant Shares as are customary and
reasonable in connection with such registration statements. The
Company will furnish the Warrant Agent and the holders of the Warrant
Shares with current prospectuses meeting the requirements of the
Securities Act in sufficient quantity to permit the Warrant Agent to
deliver, at the Company's expense, a prospectus to each holder of a
Warrant upon the exercise thereof and to the holders of Warrant Shares
for their resale needs. The Company shall promptly inform the Warrant
Agent of any change in the status of the effectiveness or availability
of any registration statement.
SECTION 6.02 Suspension. During any consecutive 365-day period, the
Company shall be entitled to suspend the availability of each of the Warrant
Shelf Registration Statement and the Warrant Share Shelf Registration Statement
for up to three 30 consecutive-day periods (except for the 45 consecutive-day
period immediately prior to the Expiration Date of the First Tranche Warrants,
the Second Tranche Warrants or the Third Tranche Warrants) but for no more than
an aggregate of 60 days during any 365-day period if the Company's Board of
Directors determines in the exercise of its good faith judgment that it is
necessary to amend such registration statement or amend or supplement any
prospectus or prospectus supplement thereunder in order that each such document
not include any untrue statement of fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances under which they were made.
SECTION 6.03 Liquidated Damages. If (i) the Warrant Shelf Registration
Statement has not been declared effective, (ii) the Warrant Share Shelf
Registration Statement, if available under applicable rules, regulations and
interpretations of the Commission, has not been declared effective or (iii) the
Resale Shelf Registration Statement has not been declared effective, in each
case before September 30, 2001 (each a "Registration Default"), then the Company
will pay liquidated damages in cash to each Holder of Warrants in an amount
equal to $0.0082 per week per Warrant (or Warrant Share, as the case may be)
while such Registration Default continues for the first 90-day period
immediately following such Registration Default; provided, however, that no
Holder shall be entitled to liquidated damages in respect of any Warrant or
Warrant Share that is not at such time a Transfer Restricted Security. The
amount of liquidated damages payable in cash by the Company to each Holder of
Warrants will increase by an amount equal to $0.0055 per week per Warrant (or
Warrant Share, as the case may be) with respect to each subsequent 90-day period
during which such Registration Default continues and until such Registration
Default is cured, up to a maximum of $0.0192 per week per Warrant (or Warrant
Share, as the case may be). All liquidated damages accrued, but not paid, on or
prior to any June 1 or December 1, will be paid to Holders of Warrants (or
Warrant Share, as the case may be) on such date at their registered addresses.
SECTION 6.04 Piggy-Back Registration Rights. (a) If, after September
30, 2001, the Company proposes to sell Common Stock pursuant to an effective
registration statement under the Securities Act (other than a registration
statement on Form S-4 or S-8, a registration statement filed in connection with
an offer of securities
29
solely to existing security holders or a universal shelf registration statement
on Form S-3) or the Company files a registration statement to cover the sale of
Common Stock for the account of any of its security holders (other than Prime 66
Partners, L.P., Apollo Management, L.P., The Blackstone Group, L.P., or any
successors thereto as holders of the Company's securities) then the Company
shall in each case give written notice, not later than the date of the initial
filing of such registration statement related to such offering, of such proposed
offering to the Holders of Warrants and Warrant Shares and such notice shall
offer to such Holders the opportunity to include in such offering such number of
Warrants as such Holders may request. From and after the Exercisability Date,
Holders of Warrants may also request to include Warrant Shares in such offering.
Within 20 days after receipt of such notice, the Holders of Warrants and Warrant
Shares (the "Requesting Holders") shall, subject to the following sentence, have
the right by notifying the Company in writing to require the Company to include
in the registration statement relating to such offering such number of Warrants
or Warrant Shares as such Holder may request. Notwithstanding the foregoing, if
at any time the managing underwriter or underwriters of such offering (the
"Managing Underwriter") shall advise the Company in writing (and shall deliver a
copy thereof to the Warrant Agent) that, in its opinion, the total number or
type of Warrants, Warrant Shares or other securities, as the case may be,
proposed to be sold exceeds the maximum number or type of Warrants, Warrant
Shares or other securities, as the case may be, which the Managing Underwriter
believes may be sold without materially adversely affecting the price, timing or
distribution of the offering, then the Company will be required to include, for
each Requesting Holder, only that pro rata number (based on the number of
Warrants or Warrant Shares requested to be included therein by all Requesting
Holders) of Warrants or Warrant Shares which, together with any other shares of
stock to be included in such registration statement, the Managing Underwriter
believes may be sold without causing such adverse effect. The Company will have
the right to postpone or withdraw any registration statement relating to any
Offering described under this Section 6.04 prior to the effective date without
obligation to any Requesting Holder.
(b) If the Company has complied with all the obligations under Section
6.04(a), to the extent applicable, all Holders of Warrants and Warrant Shares
upon request of the Managing Underwriter will be required not to sell or
otherwise dispose of (except to the extent so included in the offering referred
to in Section 6.04(a)) any Warrants or Warrant Shares owned by them for a period
not to exceed 30 days prior to, or 90 days after, the consummation of any
underwritten public offering.
(c) The provisions of Sections 6.01(b), 6.01(c) and 6.02 shall apply
to any registration statement governed by Section 6.04(a).
SECTION 6.05 Blue Sky. The Company shall use its reasonable best
efforts to register or qualify the Warrants and the Warrant Shares for issuance
(if available under applicable interpretations of the Commission) and resale
under all applicable securities laws, blue sky laws or similar laws of all
jurisdictions in the United States in which any holder of Warrants may or may be
deemed to purchase Warrants or Warrant Shares upon the exercise of Warrants and
shall use its best efforts to maintain such registration or qualification for so
long as it is required to cause the Warrant Shelf Registration Statement (in the
case of the Warrants), the Warrant Share Shelf
30
Registration Statement and the Resale Shelf Registration Statement (in the case
of the Warrant Shares) and any registration statement governed by Section 6.04
to remain effective under the Securities Act pursuant to Section 6.01 or until
the offering pursuant to Section 6.04 is complete; provided, however, that the
Company shall not be required to qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 6.05 or to take any action which would subject it to general service of
process or to taxation in any such jurisdiction where it is not then so subject.
SECTION 6.06 Accuracy of Disclosure. The Company represents and
warrants to each Holder and agrees for the benefit of each Holder that (i) each
of the Registration Statements and any registration statement governed by
Section 6.04 and any amendment thereto will not contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements contained therein not misleading and (ii)
each of the prospectus furnished to such Holder for delivery in connection with
the sale of Warrants and the prospectus delivered to such Holder upon the
exercise of Warrants or for the resale of the Warrants and the Warrant Shares
and the documents incorporated by reference therein will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements contained therein, in light
of the circumstances under which they were made, not misleading; provided,
however, that the Company shall have no liability under clauses (i) or (ii) of
this Section 6.06 with respect to any such untrue statement or omission made in
any registration statement or prospectus in reliance upon and in conformity with
information furnished to the Company by or on behalf of the Holders and holders
of Warrant Shares specifically for inclusion therein.
SECTION 6.07 Indemnification. (a) In connection with any registration
statement governed by this Article VI, the Company agrees to indemnify and hold
harmless each Holder of the Securities, and each person, if any, who controls
such Holder within the meaning of the Securities Act or the Exchange Act (each
Holder and such controlling persons being referred to collectively as the
"Indemnified Parties") from and against any losses, claims, damages or
liabilities, joint or several, or any actions in respect thereof (including, but
not limited to, any losses, claims, damages, liabilities or actions relating to
purchases and sales of the Securities) to which each Indemnified Party may
become subject under the Securities Act, the Exchange Act or otherwise, insofar
as such losses, claims, damages, liabilities or actions arise out of or are
based upon any untrue statement or alleged untrue statement of a material fact
contained in a registration statement governed by this Article VI or prospectus
or in any amendment or supplement thereto or in any preliminary prospectus
relating to a registration statement governed by this Article VI, or arise out
of, or are based upon, the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, and shall reimburse, as incurred, the Indemnified Parties for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action in
respect thereof; provided, however, that (i) the Company shall not be liable in
any such case to the extent that such loss, claim, damage or liability arises
out of or is based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in a registration statement
31
governed by this Article VI or prospectus or in any amendment or supplement
thereto or in any preliminary prospectus relating to a registration statement
governed by this Article VI in reliance upon and in conformity with written
information pertaining to such Holder and furnished to the Company by or on
behalf of such Holder specifically for inclusion therein and (ii) with respect
to any untrue statement or omission or alleged untrue statement or omission made
in any preliminary prospectus relating to a Registration Statement, the
indemnity agreement contained in this subsection (a) shall not inure to the
benefit of any Holder from whom the person asserting any such losses, claims,
damages or liabilities purchased the Securities concerned, to the extent that a
prospectus relating to such Securities was required to be delivered by such
Holder under the Securities Act in connection with such purchase and any such
loss, claim, damage or liability of such Holder results from the fact that there
was not sent or given to such person, at or prior to the written confirmation of
the sale of such Securities to such person, a copy of the final prospectus (as
amended or supplemented if the Company shall have furnished any such amendments
or supplements to such Holder) if the Company had previously furnished copies
thereof to such Holder in a timely manner; provided further, however, that this
indemnity agreement will be in addition to any liability which the Company may
otherwise have to such Indemnified Party. The Company shall also indemnify
underwriters, selling brokers, dealer-managers and similar securities industry
professionals participating in the distribution (in each case as described in
the registration statement governed by this Article VI), their officers and
directors and each person who controls such persons within the meaning of the
Securities Act or the Exchange Act to the same extent as provided above with
respect to the indemnification of the Holders of the Securities if requested by
such Holders.
(b) In connection with any registration statement governed by this
Article VI, each Holder of the Securities, severally and not jointly, will
indemnify and hold harmless the Company and each person, if any, who controls
the Company within the meaning of the Securities Act or the Exchange Act (and
the directors, officers, agents and employees of the Company and any such
controlling person) from and against any losses, claims, damages or liabilities
or any actions in respect thereof (including, but not limited to, any losses,
claims, damages, liabilities or actions relating to purchases and sales of the
Securities) to which the Company or any such controlling person (or the
directors, officers, agents and employees of the Company and any such
controlling person) may become subject under the Securities Act, the Exchange
Act or otherwise, insofar as such losses, claims, damages, liabilities or
actions arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in a registration statement governed by
this Article VI or prospectus or in any amendment or supplement thereto or in
any preliminary prospectus relating to a registration statement governed by this
Article VI, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information pertaining to such
Holder and furnished to the Company by or on behalf of such Holder specifically
for inclusion therein; and, subject to the limitation set forth immediately
preceding this clause, shall reimburse, as incurred, the Company for any legal
or other expenses reasonably incurred by the Company or any such
32
controlling person (or the directors, officers, agents and employees of the
Company and any such controlling person) in connection with investigating or
defending any loss, claim, damage, liability or action in respect thereof. This
indemnity agreement will be in addition to any liability which such Holder may
otherwise have to the Company or any of its controlling persons.
(c) Promptly after receipt by an indemnified party under this Section
6.07 of notice of the commencement of any action or proceeding (including a
governmental investigation), such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under this Section 6.07,
notify the indemnifying party of the commencement thereof; but the failure to so
notify the indemnifying party will not, in any event, relieve the indemnifying
party from any obligations to any indemnified party (except to the extent that
it is prejudiced or harmed in any material respect by failure to give such
prompt notice). In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, act as both counsel to the indemnified and indemnifying parties in such
action if, in the reasonable opinion of counsel to the indemnified party, a
conflict exists which makes such joint representation not advisable), and after
notice from the indemnifying party to such indemnified party of its election to
so assume the defense thereof the indemnifying party will not be liable to such
indemnified party under this Section 6.07 for any legal or other expenses (other
than in the event the indemnified party retains its own counsel pursuant to the
preceding parenthetical, in which case the indemnifying party shall be liable
for the reasonable fees and expenses of one counsel), other than reasonable
costs of investigation, subsequently incurred by such indemnified party in
connection with the defense thereof. No indemnifying party shall, without the
prior written consent of the indemnified party, (which shall not be unreasonably
withheld), effect any settlement of any pending or threatened action in respect
of which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party unless such settlement
includes an unconditional release of such indemnified party from all liability
on any claims that are the subject matter of such action. No indemnifying party
shall be liable for any amounts paid in settlement of any action or claim
without its written consent, which consent shall not be unreasonably withheld.
(d) If the indemnification provided for in this Section 6.07 is
unavailable or insufficient to hold harmless an indemnified party under
subsections (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to in
subsection (a) or (b) above (i) in such proportion as is appropriate to reflect
the relative benefits received by the indemnifying party or parties on the one
hand and the indemnified party on the other from the registration statement
governed by this Article VI and the original financing relating thereto, or (ii)
if the allocation provided by the foregoing clause (i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the indemnifying party or parties on the one hand and
33
the indemnified party on the other in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof) as well as any other relevant equitable
considerations. The relative fault of the parties shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or such Holder or
such other indemnified person, as the case may be, on the other, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities referred to in
the first sentence of this subsection (d) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding any other provision of this Section 6.07(d), the
Holders of the Securities shall not be required to contribute any amount in
excess of the amount by which the net proceeds received by such Holders from the
sale of the Warrants pursuant to the Warrant Shelf Registration Statement or the
Warrant Shares pursuant to the Warrant Share Shelf Registration Statement or
Resale Shelf Registration Statement or the Warrants or Warrant Shares pursuant
to any registration statement governed by Section 6.04 exceeds the amount of
damages which such Holders have otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. For purposes of this paragraph
(d), each person, if any, who controls such indemnified party within the meaning
of the Securities Act or the Exchange Act shall have the same rights to
contribution as such indemnified party and each person, if any, who controls the
Company within the meaning of the Securities Act or the Exchange Act shall have
the same rights to contribution as the Company.
(e) The agreements contained in this Section 6.07 shall survive the
sale of the Securities pursuant to the registration statements governed by this
Article VI and shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement or any investigation made by or on
behalf of any indemnified party.
SECTION 6.08 Additional Acts. If the sale of Warrants or the issuance
or sale of any Common Stock or other securities issuable upon the exercise of
the Warrants requires registration or approval of any governmental authority
(other than the registration requirements under the Securities Act), or the
taking of any other action under the laws of the United States or any political
subdivision thereof before such securities may be validly offered or sold in
compliance with such laws, then the Company covenants that it will, in good
faith and as expeditiously as reasonably possible, use its reasonable best
efforts to secure and maintain such registration or approval or to take such
other action, as the case may be. The Company shall promptly notify the Warrant
Agent in writing when (i) the Company has obtained all such governmental
approvals and authorizations and (ii) such approvals and authorizations
thereafter cease to be in effect.
34
SECTION 6.09 Expenses. All expenses incident to the Company's
performance of or compliance with its obligations under this Article VI will be
borne by the Company, including: (i) all Commission, stock exchange or National
Association of Securities Dealers, Inc. registration and filing fees, (ii) all
reasonable fees and expenses incurred in connection with the compliance with
state securities or blue sky laws, (iii) all expenses of any Persons incurred by
or on behalf of the Company in preparing or assisting in preparing, printing and
distributing the Registration Statements or any registration statement governed
by Section 6.04, prospectus, any amendments or supplements thereto and other
documents relating to the performance of and compliance with this Article VI,
(iv) the fees and disbursements of the Warrant Agent as agreed, (v) the fees and
disbursements of counsel for the Company and the Warrant Agent as agreed and
(vi) the fees and disbursements of the independent public accountants of the
Company, including the expenses of any special audits or comfort letters
required by or incident to such performance and compliance.
ARTICLE VII
The Warrant and Escrow Agent
SECTION 7.01 Duties and Liabilities. The Company hereby appoints the
Warrant Agent to act as agent of the Company as set forth in this Agreement. The
Warrant Agent hereby accepts the agency established by this Agreement and agrees
to perform the same upon the terms and conditions herein set forth, by all of
which the Company and the Holders of Warrants, by their acceptance thereof,
shall be bound. The Warrant Agent shall not have any obligation towards or
relationship of agency or trust for the Holders. The Warrant Agent shall not, by
countersigning Warrant Certificates or by any other act hereunder, be deemed to
make any representations as to the validity or authorization of the Warrants or
the Warrant Certificates (except as to its countersignature thereon) or of any
securities or other property delivered upon exercise of any Warrant, or as to
the accuracy of the calculation of the Exercise Price, or the number or kind or
amount of Common Stock or other securities or other property deliverable upon
exercise of any Warrant, or as to the correctness of the representations of the
Company made in the certificates that the Warrant Agent receives or the
validity, sufficiency or adequacy of any offering materials. The Warrant Agent
shall not have any obligation to calculate or determine any adjustments with
respect to either (i) the Exercise Price, or (ii) the type or quantity of
securities receivable by a Holder upon exercise or repurchase of such Holder's
Warrants, nor shall the Warrant Agent have a duty to independently verify any
such adjustments that may be supplied to it by the Company. The Warrant Agent
shall not (a) be liable for any recital or statement of fact contained herein or
in the Warrant Certificates or for any action taken, suffered or omitted by it
in good faith in the belief that any Warrant Certificate or any other documents
or any signatures are genuine or properly authorized, (b) be responsible for any
failure on the part of the Company to comply with any of its covenants and
obligations contained in this Agreement or in the Warrant Certificates or (c) be
liable for any act or omission in connection with this Agreement except for its
own gross negligence or wilful misconduct. The Warrant Agent is hereby
authorized to accept instructions with respect to the performance of its duties
hereunder from the Chief Executive Officer, President, any Vice President or the
Secretary or Treasurer of the Company and to apply to any such
35
officer for instructions (which instructions will be promptly given in writing
when requested) and the Warrant Agent shall not be liable for any action taken
or suffered to be taken by it in good faith in accordance with the instructions
of any such officer; however, in its sole discretion, the Warrant Agent may in
lieu thereof accept other evidence of such or may require such further or
additional evidence as it may deem reasonable. The Warrant Agent shall not be
liable for any action taken, or for any failure to take any action, with respect
to any matter in the event it requests instructions from the Company as to that
matter and does not receive such instructions within a reasonable period of time
after the request therefor.
In the event of any disagreement resulting in adverse claims or demands
being made in connection with the matters covered by this Agreement, or in the
event that the Warrant Agent, in good faith, shall be in doubt as to what action
it should take hereunder, the Warrant Agent may at its option, refuse to comply
with any claims or demands on it, or refuse to take any other action hereunder,
so long as such disagreement continues or such doubt exists, and in any such
event, the Warrant Agent shall not be or become liable in any way or to any
person for its failure or refusal to act, and the Warrant Agent shall be
entitled to continue so to refrain from action until (i) the rights of all
interested parties shall have been fully and finally adjudicated by a court of
competent jurisdiction or (ii) all differences shall have been adjudged and all
doubt resolved by agreement among all of the interested persons, and in each of
the cases in clauses (i) and (ii) the Warrant Agent shall have been notified
thereof in a writing signed by all such persons. Notwithstanding the preceding,
the Warrant Agent may in its discretion obey the order, judgment, decree or levy
of any court, whether with or without jurisdiction, or of any agency of the
United States or any political subdivision thereof, or of any agency of the
State of New York or of any political subdivision thereof, and the Warrant Agent
is hereby authorized in its sole discretion, to comply with and obey (and shall
have no liability to any person for so doing) any such orders, judgments,
decrees or levies which the Warrant Agent is advised by legal counsel of its own
choosing is binding upon it. The rights of the Warrant Agent under this
paragraph are in addition to all other rights which it may have by law or
otherwise.
The Warrant Agent may execute and exercise any of the rights and powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorneys, agents or employees, and the Warrant Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys, agents or employees; provided, however, reasonable care has been
exercised in the selection and in the continued employment of any such attorney,
agent or employee. The Warrant Agent shall not be under any obligation or duty
to institute, appear in or defend any action, suit or legal proceeding in
respect hereof, unless first indemnified to its satisfaction, but this provision
shall not affect the power of the Warrant Agent to take such action as the
Warrant Agent may consider proper, whether with or without such indemnity. The
Warrant Agent shall promptly notify the Company in writing of any claim made or
action, suit or proceeding instituted against it arising out of or in connection
with this Agreement.
The Warrant Agent may rely and shall be fully protected in acting or
refraining from acting upon any certificate, notice, instruction, Warrant,
document or
36
other writing believed by it to be genuine and to have been signed or presented
by the proper Person. The Warrant Agent need not investigate any fact or matter
stated in any such certificate, notice, instruction, Warrant, document or other
writing. The Warrant Agent shall not be liable for any action that it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers.
The Company will perform, execute, acknowledge and deliver or cause to
be performed, executed, acknowledged and delivered all such further acts,
instruments and assurances as are consistent with this Agreement and as may
reasonably be required by the Warrant Agent in order to enable it to carry out
or perform its duties under this Agreement.
The Warrant Agent shall act solely as agent of the Company hereunder.
The Warrant Agent shall not be liable except for the failure to perform such
duties as are specifically set forth herein, and no implied covenants or
obligations shall be read into this Agreement against the Warrant Agent, whose
duties and obligations shall be determined solely by the express provisions
hereof.
With respect to the identity of beneficial owners of interests in the
Global Warrant and the number of Warrants beneficially owned by any beneficial
owner, the Warrant Agent shall be entitled to rely conclusively on the records
of DTC and shall be fully protected in so relying.
SECTION 7.02 Right To Consult Counsel. The Warrant Agent may at any
time consult with legal counsel acceptable to it (who may be legal counsel for
the Company), and the opinion or advice of such counsel shall be full and
complete authorization and protection to the Warrant Agent and the Warrant Agent
shall incur no liability or responsibility to the Company or to any Holder for
any action taken, suffered or omitted by it in good faith in accordance with the
opinion or advice of such counsel.
SECTION 7.03 Compensation; Indemnification. The Company agrees to pay
to the Warrant Agent from time to time compensation for all services rendered by
it hereunder as the Company and the Warrant Agent may agree in writing from time
to time, and to reimburse the Warrant Agent for reasonable expenses and
disbursements incurred in connection with the execution and administration of
this Agreement (including the reasonable fees and the expenses of its counsel),
and further agrees to indemnify the Warrant Agent for, and to hold it harmless
against, any claim, loss, liability or expense arising out of or in connection
with the acceptance and administration of this Agreement, including the costs
and expenses of defending itself against any such claim or liability, except
that the Company shall have no liability hereunder to the extent that any such
loss, liability or expense results from the Warrant Agent's own gross negligence
or wilful misconduct. The obligations of the Company under this Section 7.03
shall survive the exercise and the expiration of the Warrants and the
resignation or removal of the Warrant Agent. No provision of this Agreement
shall require the Warrant Agent to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder
or in the exercise of any of its rights or powers if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it.
37
SECTION 7.04 No Restrictions on Actions. The Warrant Agent and any
stockholder, director, officer or employee of the Warrant Agent may buy, sell or
deal in any of the Warrants or other securities of the Company or become
pecuniarily interested in transactions in which the Company may be interested,
or contract with or lend money to the Company or otherwise act as fully and
freely as though it were not the Warrant Agent under this Agreement. Nothing
herein shall preclude the Warrant Agent from acting in any other capacity for
the Company or for any other legal entity.
SECTION 7.05 Discharge or Removal; Replacement Warrant Agent. Except as
otherwise provided in this Section 7.05, and except after the exercise of all of
the outstanding Warrants and the delivery of Warrant Shares with respect
thereto, no resignation or removal of the Warrant Agent and no appointment of a
successor warrant agent shall become effective until the acceptance of
appointment by the successor warrant agent provided herein. The Warrant Agent
may resign from its position as such and be discharged from all further duties
and liabilities hereunder (except liabilities arising as a result of the Warrant
Agent's own gross negligence or wilful misconduct), after giving one month's
prior written notice to the Company. The Company may remove the Warrant Agent
upon one month's prior written notice specifying the date when such discharge
shall take effect, and the Warrant Agent shall thereupon in like manner be
discharged from all further duties and liabilities hereunder, except as
aforesaid. The Warrant Agent or the Company shall cause to be mailed (by
first-class mail, postage prepaid) to each Holder of a Warrant a copy of said
notice of resignation or notice of removal, as the case may be. Upon such
resignation or removal the Company shall appoint in writing a new warrant agent.
If the Company shall fail to make such appointment within a period of 30
calendar days after it has been notified in writing of such resignation by the
resigning Warrant Agent or after such removal, then the resigning Warrant Agent
or the Holder of any Warrant may apply to any court of competent jurisdiction
for the appointment of a new warrant agent. Any new warrant agent, whether
appointed by the Company or by such a court, shall be a bank or trust company
doing business under the laws of the United States or any state thereof, in good
standing and having a combined capital and surplus of not less than $50,000,000.
The combined capital and surplus of any such new warrant agent shall be deemed
to be the combined capital and surplus as set forth in the most recent annual
report of its condition published by such warrant agent prior to its
appointment; provided, however, that such reports are published at least
annually pursuant to law or to the requirements of a federal or state
supervising or examining authority. After acceptance in writing of such
appointment by the new warrant agent, it shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named herein as
the Warrant Agent, without any further assurance, conveyance, act or deed;
however, the original Warrant Agent, upon payment of its fees and expenses,
shall in all events deliver and transfer to the successor Warrant Agent all
property, if any, at the time held hereunder by the original Warrant Agent and
if for any reason it shall be necessary or expedient to execute and deliver any
further assurance, conveyance, act or deed, the same shall be done at the
expense of the Company and shall be legally and validly executed and delivered
by the resigning or removed Warrant Agent. Not later than the effective date of
any such appointment, the Company shall file a notice thereof with the resigning
or removed Warrant Agent and shall forthwith cause a copy of such notice to be
mailed to each Holder of a Warrant. Failure to give any notice provided for in
this Section 7.05,
38
however, or any defect therein, shall not affect the legality or validity of the
resignation of the Warrant Agent or the appointment of a new warrant agent, as
the case may be.
SECTION 7.06 Successor Warrant Agent. Any corporation into which the
Warrant Agent or any successor warrant agent may be merged or converted, or any
corporation resulting from any consolidation to which the Warrant Agent or any
successor warrant agent shall be a party, and any corporation that acquires
substantially all of the corporate trust business of the Warrant Agent, shall be
a successor Warrant Agent under this Agreement without any further act;
provided, however, that such corporation would be eligible for appointment as
successor to the Warrant Agent under the provisions of Section 7.05 hereof. Any
such successor Warrant Agent shall promptly cause notice of its succession as
Warrant Agent to be mailed (by first-class mail, postage prepaid) to each Holder
of a Warrant.
ARTICLE VIII
Warrant Holders
SECTION 8.01 Warrant Holder Not Deemed a Holder of Common Stock. Prior
to the exercise of the Warrants, no Holder of a Warrant Certificate, as such,
shall be entitled to any rights of a holder of Common Stock.
SECTION 8.02 Right of Action. All rights of action with respect to this
Agreement are vested in the Holders of the Warrants, and any Holder of any
Warrant, without the consent of the Warrant Agent or the Holder of any other
Warrant, may, on such Holder's own behalf and for such Holder's own benefit,
enforce, and may institute and maintain any suit, action or proceeding against
the Company suitable to enforce, or otherwise in respect of, such Holder's right
to exercise, exchange or tender for purchase such Holder's Warrants in the
manner provided in the Warrant Certificate representing its Warrants and in this
Agreement.
ARTICLE IX
Miscellaneous
SECTION 9.01 Payment of Taxes. The Company shall pay any stamp,
registration, and other similar taxes and other governmental charges that may be
imposed under the laws of the United States of America or any political
subdivision or taxing authority thereof or therein in respect of the issue or
delivery thereof or of other securities deliverable upon exercise of Warrants
(other than income taxes imposed on the Holders). The Company shall not be
required, however, to pay any tax or other charge imposed in connection with any
transfer involved in the issue of any Warrant Shares to any Person other than
the Holder of a Warrant Certificate surrendered upon the exercise of a Warrant,
and in case of such transfer or payment, the Warrant Agent and the Company shall
not be required to issue any Warrant Shares or pay any cash until such tax or
charge has been paid or it has been established to the Warrant Agent's and the
Company's satisfaction that no such tax or other charge is due.
SECTION 9.02 Reports to Holders. The Company shall:
39
(a) file the reports (or copies of such portions of any of the
foregoing as the Commission may from time to time by rules and regulations
prescribe) required to be filed by it under the Securities Act and the Exchange
Act, and the rules, regulations and policies adopted by the Commission
thereunder in a timely manner in accordance with the requirements of the
Securities Act and the Exchange Act; or, if the Company is not required to file
information, documents or reports pursuant to either of said Sections, then the
Company shall, upon the request of any Holder or beneficial owner of Warrants,
make available such information as necessary to permit sales pursuant to Rule
144 or Rule 144A under the Securities Act; and
(b) file with the Warrant Agent and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by the
Company with the conditions and covenants of this Agreement as may be required
from time to time by such rules and regulations.
SECTION 9.03 Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any air courier (a) if to a Holder of
the Warrants, at the address of such Holder maintained by the Warrant Agent, (b)
if to the Company, to Sirius Satellite Radio Inc., 1221 Avenue of the Americas,
New York, New York 10020, Attention: Patrick L. Donnelly and (c) if to the
Warrant Agent, to United States Trust Company of New York, 114 West 47th Street,
New York, NY 10036, Attention: Corporate Trust Administration.
All such notices and communications shall be deemed to have been duly
given; at the time delivered by hand, if personally delivered; at the time
received, if mailed or sent by air courier; when answered back, if telexed; and
when receipt is acknowledged, by recipient's telecopy operator, if telecopied.
SECTION 9.04 Severability. If any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
SECTION 9.05 Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the Company and the Warrant Agent and their respective
successors and assigns, and the Holders from time to time of the Warrants.
Nothing in this Agreement is intended or shall be construed to confer upon any
Person, other than the Company, the Warrant Agent and the Holders of the
Warrants (as well as the persons entitled to the benefits of indemnification
under Section 6.07), any right, remedy or claim under or by reason of this
Agreement or any part hereof.
SECTION 9.06 Third-Party Beneficiaries. The Holders and holders of
Warrant Shares shall be third-party beneficiaries to the agreements made
hereunder between the Company, on the one hand, and the Warrant Agent, on the
other hand, and each Holder and holder of Warrant Shares shall have the right to
enforce such agreements
40
directly to the extent it deems such enforcement necessary or advisable to
protect its rights or the rights of Holders or holders of Warrant Shares
hereunder.
SECTION 9.07 Amendments. The Company may, without the consent of the
Holders of the Warrants, by supplemental agreement or otherwise, make any
changes or corrections in this Agreement that it shall have been advised by
counsel (a) are required to cure any ambiguity or to correct or supplement any
provision herein which may be defective or inconsistent with any other provision
herein or (b) add to the covenants and agreements of the Company for the benefit
of the Holders, or surrender any rights or power reserved to or conferred upon
the Company in this Agreement; provided, however, that, in each case, such
changes or corrections shall not adversely affect the interests of the Holders
or holders of Warrant Shares in any material respect. Amendments or supplements
which do not meet the requirements of the preceding sentence shall require the
written consent of the Holders of a majority of the then outstanding Warrants
and, to the extent such amendment or supplement affects the rights of holders of
Warrant Shares under Article VI hereof, the written consent of the holders of a
majority of the then outstanding Warrant Shares; provided, however, that the
consent of each Holder is required for any amendment or supplement pursuant to
which the Exercise Price would be increased (other than pursuant to adjustments
as provided in Article IV of this Agreement). The Warrant Agent shall join with
the Company in the execution and delivery of any such supplemental agreements
unless it affects the Warrant Agent's own rights, duties of immunities
hereunder, in which case the Warrant Agent may, but shall not be required to,
join in such execution and delivery.
SECTION 9.08 Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning of any provision hereof.
SECTION 9.09 GOVERNING LAW. THIS AGREEMENT AND THE WARRANTS SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
SECTION 9.10 Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
[Signature page follows.]
41
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
SIRIUS SATELLITE RADIO INC.
By:
--------------------------------------
Michael Haynes
Vice President and Treasurer
UNITED STATES TRUST COMPANY OF
NEW YORK, Warrant Agent and Escrow
Agent
By:
--------------------------------------
Name:
Title:
By its signature below Lehman Commercial
Paper Inc., as sole beneficial holder of the
Old Warrants, hereby acknowledges and consents
to (1) this amendment and restatement of
the Old Warrant Agreement and (2) the
cancellation of the Old Warrants.
LEHMAN COMMERCIAL PAPER INC.
By:
-----------------------------------
Name:
Title:
42
EXHIBIT A TO
WARRANT AGREEMENT
CUSIP No. [ ](1)
No. [ ] Certificate for [ ] [First/Second/Third](1)/Tranche Warrants
WARRANTS TO PURCHASE COMMON STOCK OF
SIRIUS SATELLITE RADIO INC.
THIS CERTIFIES THAT [ ], or its registered assigns, is the registered
holder of the number of Warrants set forth above (the "Warrants"). Each Warrant
entitles the holder thereof (the "Holder"), at its option and subject to the
provisions contained herein and in the Warrant Agreement referred to below, to
purchase from SIRIUS SATELLITE RADIO INC., a Delaware corporation (the
"Company"), one (1) share of Common Stock, par value of $0.001 per share, of the
Company (the "Common Stock") at the per share exercise price of [Base Price/
144A Price](1) (the "Exercise Price"), or by Cashless Exercise referred to
below. Each Warrant shall terminate and become void as of 5:00 p.m., New York
City time, on the tenth anniversary of the Vesting Date of the Warrant (as
defined in the Warrant Agreement) (the "Expiration Date") if not previously
exercised. The number of shares issuable upon exercise of the Warrants and the
Exercise Price per share shall be subject to adjustment from time to time as set
forth in the Warrant Agreement.
This Warrant Certificate is issued under and in accordance with the
Amended and Restated Warrant Agreement, dated as of December 27, 2000 (the
"Warrant Agreement"), between the Company and United States Trust Company of New
York, as Warrant Agent and Escrow Agent (the "Warrant Agent", which term
includes any successor Warrant Agent under the Warrant Agreement), and is
subject to the terms and provisions contained in the Warrant Agreement, to all
of which terms and provisions the Holder of the Warrants evidenced by this
Warrant Certificate consents by acceptance hereof. The Warrant Agreement is
hereby incorporated herein by reference and made a part hereof. Reference is
hereby made to the Warrant Agreement for a full statement of the respective
rights, limitations of rights, duties and obligations of the Company, the
Warrant Agent and the Holders of the Warrants. Capitalized terms used but not
defined herein shall have the meanings ascribed thereto in the Warrant
Agreement.
[The Warrants will initially be delivered by the Company to the Warrant
Agent which will hold the Warrants in escrow pursuant to the Warrant Agreement.
The Warrants may be released from such escrow on or after their Vesting
Dates.](2)
Subject to the terms of the Warrant Agreement, the Warrants
may be exercised in whole (i) by presentation of this Warrant Certificate with
the Election to Purchase attached hereto duly executed and with the simultaneous
payment of the Exercise Price in cash (subject to adjustment) to the Warrant
Agent for the account of the
- -------------------------
(1) To be filled in as applicable to First Tranche Warrants, Second Tranche
Warrants and Third Tranche Warrants.
(2) Not for First Tranche Warrants.
43
Company at the office of the Warrant Agent or (ii) by Cashless Exercise. Payment
of the Exercise Price in cash shall be made by certified or official bank check
payable to the order of the Company or by wire transfer of funds to an account
designated by the Company for such purpose. Payment by Cashless Exercise shall
be made without the payment of cash by reducing the amount of Common Stock that
would be obtainable upon the exercise of a Warrant and payment of the Exercise
Price in cash so as to yield a number of shares of Common Stock upon the
exercise of such Warrant equal to the product of (1) the number of shares of
Common Stock for which such Warrant is exercisable as of the Exercise Date (if
the Exercise Price were being paid in cash) and (2) a fraction, the numerator of
which is the excess of the Current Market Value per share of Common Stock on the
Exercise Date over the Exercise Price per share as of the Exercise Date and the
denominator of which is the Current Market Value per share of the Common Stock
on the Exercise Date.
As provided in the Warrant Agreement and subject to the terms and
conditions therein set forth, including the provisions regarding Vesting Dates,
the Warrants shall be exercisable at any time and from time to time on any
Business Day on or after the Exercisability Date; provided, however, that
Holders of Warrants will be able to exercise their Warrants only if the
Registration Statement relating to the Common Stock underlying the Warrants is
effective or the exercise of such Warrants is exempt from the registration
requirements of the Securities Act of 1933 and such securities are qualified for
sale or exempt from qualification under the applicable securities laws of the
states or other jurisdictions in which such Holders reside; provided further,
however, that no Warrant shall be exercisable after the tenth anniversary of its
Vesting Date.
In the event of a Fundamental Transaction, the Holder hereof will be
entitled to receive upon exercise of the Warrants the kind and amount of shares
of capital stock or other securities or other property as the Holder would have
received had the Holder exercised its Warrants immediately prior to such
Fundamental Transaction; provided, however, that in the event that, in
connection with such Fundamental Transaction (other than with a wholly-owned
subsidiary of the Company that does not result in a reduction in consolidated
net worth), consideration to holders of Common Stock in exchange for their
shares is payable solely in cash or in the event of the dissolution, liquidation
or winding-up of the Company, the Holder hereof will be entitled to receive such
cash distributions on an equal basis with the holders of Common Stock or other
securities issuable upon exercise of the Warrants, as if the Warrants had been
exercised immediately prior to such Fundamental Transaction, less the Exercise
Price.
As provided in the Warrant Agreement, the number of shares of Common
Stock issuable upon the exercise of the Warrants and the Exercise Price are
subject to adjustment upon the happening of certain events.
The Company may require payment of a sum sufficient to pay all taxes,
assessments or other governmental charges in connection with the transfer or
exchange of the Warrant Certificates pursuant to Section 5.02 of the Warrant
Agreement, but not for any exchange or original issuance (not involving a
transfer) with respect to temporary Warrant Certificates, the exercise of the
Warrants or the Warrant Shares.
44
Upon any exercise of the Warrants for less than all of the Warrants
represented by this Warrant Certificate, there shall be countersigned and issued
to the Holder hereof a new Warrant Certificate representing those Warrants which
were not exercised. This Warrant Certificate may be exchanged at the office of
the Warrant Agent by presenting this Warrant Certificate properly endorsed with
a request to exchange this Warrant Certificate for other Warrant Certificates
evidencing an equal number of Warrants. No fractional Warrant Shares will be
issued upon the exercise of the Warrants, but the Company shall pay an amount in
cash equal to the Current Market Value per Warrant Share on the day immediately
preceding the date the Warrant is exercised, multiplied by the fraction of a
Warrant Share that would be issuable on the exercise of any Warrant.
All shares of Common Stock issuable by the Company upon the exercise of
the Warrants shall, upon such issue, be duly and validly issued and fully paid
and non-assessable.
The holder in whose name this Warrant Certificate is registered may be
deemed and treated by the Company and the Warrant Agent as the absolute owner of
the Warrants evidenced by this Warrant Certificate for all purposes whatsoever
and neither the Company nor the Warrant Agent shall be affected by notice to the
contrary.
The Warrants do not entitle any Holder hereof to any of the rights of a
stockholder of the Company.
[Signature page follows.]
45
This Warrant Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Warrant Agent.
SIRIUS SATELLITE RADIO INC.
By:
------------------------------------
Name:
Title:
Countersigned:
UNITED STATES TRUST COMPANY OF NEW YORK,
as Warrant Agent and Escrow Agent,
By:
------------------------------------
Authorized Signatory
46
FORM OF ELECTION TO PURCHASE WARRANT SHARES
(to be executed only upon exercise of Warrants)
SIRIUS SATELLITE RADIO INC.
The undersigned hereby irrevocably elects to exercise ______________
[First/Second/Third] Tranche Warrants to acquire shares of Common Stock, par
value $0.001 per share, of Sirius Satellite Radio Inc., at an exercise price per
share of Common Stock of [Base Price/ 144A Price] and otherwise on the terms and
conditions specified in the within Warrant Certificate and the Warrant Agreement
therein referred to, surrenders this Warrant Certificate and all right, title
and interest therein to Sirius Satellite Radio Inc. and directs that the shares
of Common Stock deliverable upon the exercise of such Warrants be registered or
placed in the name and at the address specified below and delivered thereto.
Date:
(3)
- ------------------------------------------------------------------------------
(Signature of Owner)
(Street Address)
(City) (State) (Zip Code)
Signature Guaranteed by:
Securities and/or check to be issued to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
- ----------------------
(3) The signature must correspond with the name as written upon the face of the
within Warrant Certificate in every particular, without alteration or
enlargement or any change whatever, and must be guaranteed by a national
bank or trust company or by a member firm of any national securities
exchange.
47
A new Warrant Certificate evidencing any unexercised Warrants evidenced by the
within Warrant Certificate is to be issued to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
In connection with any transfer of any of the Warrants evidenced by
this certificate occurring prior to the expiration of the period referred to in
Rule 144(k) under the Securities Act after the later of the Vesting Date of such
Warrants and the last date, if any, on which such Warrants were owned by the
Company or any Affiliate of the Company, the undersigned certifies that such
Warrants are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
(1) [ ] to the Company; or
(2) [ ] pursuant to an effective registration statement under the
Securities Act of 1933; or
(3) [ ] pursuant to Rule 144A under the Securities Act of 1933; or
(4) [ ] outside the United States in accordance with Rule 904 of
Regulation S under the Securities Act of 1933; or
(5) [ ] pursuant to another available exemption from registration
provided under the Securities Act of 1933.
Unless one of the boxes is checked, the Warrant Agent will refuse to
register any of the Warrants evidenced by this certificate in the name of any
person other than the registered holder thereof; provided, however, that if box
(4) or (5) is checked, the Warrant Agent may require, prior to registering any
such transfer of the Warrants, such legal opinions, additional certifications
and other information as the Company has reasonably requested to confirm that
such transfer is being made pursuant to an exemption from, or in a transaction
not subject to, the registration requirements of the Securities Act of 1933,
such as the exemption provided by Rule 144 under such Act.
----------------------------
Signature
Signature Guarantee:
- ---------------------------- ----------------------------
Signature must be guaranteed Signature
- ----------------------------------------------------------------------------
48
SCHEDULE OF EXCHANGES OF GLOBAL WARRANTS(4)
The following exchanges of a part of this Global Warrant Certificate for
definitive Warrants have been made:
Number of Warrants
Amount of change in in this Global
Number of Warrants Warrant Certificate Signature of
Date of in this Global following authorized officer
Exchange Warrant Certificate such change of Warrant Agent
- -------- ------------------- ------------------- ----------------
- --------------------------
(4) To be included only if the Warrant is in global form.
49
EXHIBIT B TO
WARRANT AGREEMENT
FORM OF LEGEND FOR GLOBAL WARRANTS
Any Global Warrant authenticated and delivered hereunder shall bear a legend in
substantially the following form:
THIS WARRANT IS A GLOBAL WARRANT WITHIN THE MEANING OF THE WARRANT AGREEMENT
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS WARRANT IS NOT
EXCHANGEABLE FOR WARRANTS REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
WARRANT AGREEMENT, AND NO TRANSFER OF THIS WARRANT (OTHER THAN A TRANSFER OF
THIS WARRANT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE WARRANT AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
50
EXHIBIT C
TO THE WARRANT AGREEMENT
FORM OF TRANSFER RESTRICTION LEGEND
THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION AS SET FORTH BELOW. EACH PURCHASER OF THIS SECURITY 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
("RULE 144A"). BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A), AN INSTITUTIONAL
"ACCREDITED INVESTOR" OR NOT A "U.S. PERSON" (AS DEFINED IN RULE 902 OF THE
SECURITIES ACT) AND (2) AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL
ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE
COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY)
ONLY (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE
144A INSIDE THE UNITED STATES, TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) OUTSIDE
THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
51
EXHIBIT D TO
WARRANT AGREEMENT
FORM OF ACCREDITED INVESTOR CERTIFICATE
TRANSFEREE LETTER OF REPRESENTATION
United States Trust Company of New York
114 West 47th Street
New York, New York 10036
Attention: Corporate Trust Administration
Ladies and Gentlemen:
In connection with our proposed purchase of [ ] Warrants (the
"Warrants") entitling the holders thereof to purchase shares of common stock,
par value $0.001 per share, of Sirius Satellite Radio Inc. (the "Issuer"), we
confirm that:
1. We are (a) an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act of
1933, as amended (the "Securities Act")), purchasing for our own account or for
the account of such an institutional "accredited investor" as to which we
exercise sole investment discretion, and we have such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and
risks of our investment in the Warrants, and we and any account for which we are
acting are each able to bear the economic risk of our or its investment, (b) a
"qualified institutional buyer" (as defined in Rule 144A under the Securities
Act) or (c) a non "U.S. person" (as defined in Rule 902 of the Securities Act).
2. We understand and acknowledge that the Warrants have not been
registered under the Securities Act or any other applicable securities law, and
that the Warrants may not be offered or sold except as permitted in the
following sentence. We agree, on our own behalf and on behalf of any account for
which we are acting, that if we should sell any Warrants within the time period
referred to in Rule 144(k) of the Securities Act, we will do so only (A) to the
Issuer or any subsidiary thereof, (B) to a "qualified institutional buyer" (as
defined in Rule 144A of the Securities Act), or to an institutional "accredited
investor" (as defined above) in either case that, prior to such transfer,
furnishes to the Warrant Agent under the Amended and Restated Warrant Agreement,
dated as of December 27, 2000, governing the Warrants a signed letter containing
certain representations and agreements relating to the restrictions on transfer
of the Warrants (the form of which letter can be obtained from the Warrant
Agent) and an opinion of counsel acceptable to the Issuer that such transfer is
in compliance with the Securities Act, (C) outside the United States in
accordance with Rule 904 of Regulation S under the Securities Act, (D) pursuant
to the exemption from registration provided by Rule 144 under the Securities Act
(if available) or (E) pursuant to an effective registration statement under the
Securities Act, and we further agree to provide to any person purchasing any of
the Warrants from us a notice advising such purchaser that resales of the
Warrants are restricted as stated herein.
3. We understand that, on any proposed resale of any Warrants, we will
be required to furnish to the Issuer and the Warrant Agent such certifications,
legal
52
opinions and other information as the Issuer and the Warrant Agent may
reasonably require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Warrants purchased by us will bear
a legend to the foregoing effect.
4. We are acquiring the Warrants for investment purposes and not with a
view to distribution thereof or with any present intention of offering or
selling any Warrants, except as permitted above; provided that the disposition
of our property and property of any accounts for which we are acting as
fiduciary will remain at all times within our control.
You and the Issuer are entitled to rely upon this letter and you are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceeding or official inquiry with respect
to the matters covered hereby.
THIS LETTER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
PRINCIPLES THEREOF, OTHER THAN ANY MANDATING THE APPLICATION OF SUCH LAWS).
Very truly yours,
(Name of Purchaser)
By:
------------------------------
Name:
Title:
Date:
----------------------------
Upon transfer, the Warrants would be registered in the name of the new
beneficial owner as follows:
By:
---------------------------------
Date:
--------------------------------
Taxpayer ID number:
------------------
53