<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):September 17, 1997
United States Filter Corporation
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(Exact name of registrant as specified in its charter)
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Delaware 1-10728 33-0266015
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
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40-004 Cook Street, Palm Desert, California 92211
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (760)340-0098
Page 1 of 6 pages.
Exhibit Index Appears on Page 6.
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Item 5. Other Events.
On September 17, 1997, United States Filter Corporation, a Delaware
corporation (the "Company") acquired, through wholly owned subsidiaries, all of
the partnership interests in Western Farms, L.P., a California limited
partnership ("WFLP"), and FW Ranchlands L.P., a Texas limited partnership
("FWRLP"), in exchange for an aggregate of 8,000,000 shares (the "Initial
Shares") of the Company's Common Stock, par value $.01 per share (the "Common
Stock") and non-transferable warrants (the "Warrants") to purchase an aggregate
of 1,200,000 shares of the Common Stock (such shares together with the Initial
Shares, the "Shares"), issuable pursuant to a Warrant Agreement by and among the
Company and the Sellers identified below (the "Warrant Agreement"). Warrants to
purchase 600,000 shares are exercisable at each of $50.00 per share and $60.00
per share at any time after the first sale of water from water rights
appurtenant to the Properties (as defined below) and the receipt of
consideration therefor, and expire on September 17, 2007. The consideration for
the acquisition of such partnership interests was determined by arms' length
negotiations between representatives of the parties.
The interests in WFLP and FWRLP were purchased from Western Farm & Cattle
Company, a California corporation, California Land & Cattle Company, a Delaware
corporation, N. N. Investors, L.P., a Delaware limited partnership ("N. N.
Investors"), ST Ranch GenPar, Inc., a Texas corporation and FW Ranch Partners,
L.P., a Texas limited partnership ("FW Ranch", and collectively the "Sellers"),
pursuant to an Agreement for Sale and Purchase of Partnership Interests dated as
of August 3, 1997 by and among such entities and the Company (the "Acquisition
Agreement").
The principal assets of WFLP and FWRLP consist of approximately 47,000 acres
of agricultural land (the "Properties") situated in the Southwestern United
States, the large majority of which are in Imperial County, California located
within the Imperial Irrigation District. Pursuant to Farm Lease Agreements
dated September 17, 1997 (the "Farm Lease Agreements"), the portion of the
Properties not leased to third party agricultural tenants has been leased to
N.N. Investors and FW Ranch, in each case for agricultural purposes for a two-
year term, subject to earlier termination in certain circumstances. The lessees
have the right to use water available to the respective Properties, subject to
the Company's right to transfer or otherwise dispose of such water pursuant to
the water rights appurtenant to the Properties, which the Company has retained.
The Sellers and the Company also entered into a Transfer, Registration Rights
and Governance Agreement (the "Transfer Agreement") dated as of September 17,
1997 which provides, among other things, (i) for certain restrictions on
acquisitions of additional shares of Common Stock and dispositions of the Shares
by,
2
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and on certain other activities of, the Sellers and their permitted transferees
(the "Holders") and their respective affiliates; (ii) for certain registration
rights on the part of the Holders; and (iii) that the Holders have the right to
nominate one director for election to the Company's Board of Directors so long
as the Holders have beneficial ownership of not less than 5% of the Company's
outstanding Common Stock, and to approve the Company's next non-officer nominee
to the Board of Directors so long as the Holders have beneficial ownership of
not less than 7 1/2% of the Company's outstanding Common Stock.
The foregoing is qualified in its entirety by the text of the Acquisition
Agreement, Warrant Agreement, and Transfer Agreement attached to this Form 8-K
or incorporated herein by reference as exhibits hereto.
In accordance with their rights under the Transfer Agreement, the Sellers have
designated, and the Company's Board of Directors has appointed, Ardon Moore to
serve as a Class I director of the Company until the Company's Annual Meeting in
2000. Mr. Moore has been employed by Lee M. Bass, Inc. for more than 9 years.
In that capacity, he provides investment and management services for entities
associated with certain members of the Bass family, Fort Worth, Texas.
3
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Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit No. Description
- ----------- ------------
2.1 Agreement for Sale and Purchase of Partnership
Interests by and among Western Farm & Cattle Company,
California Land & Cattle Company, N.N. Investors, L.P.,
ST Ranch GenPar, Inc., FW Ranch Partners, L.P. and the
Registrant dated as of August 3, 1997, incorporated by
reference to Exhibit 2.1 to the Company's Current
Report on Form 8-K dated August 4, 1997 (File No. 1-
10728).
2.2 Transfer, Registration Rights and Governance Agreement
among the Registrant, Western Farm & Cattle Company,
N.N. Investors, L.P., California Land & Cattle Company,
ST Ranch GenPar, Inc. and FW Ranch Partners, L.P. dated
as of September 17, 1997.
4.1 Warrant Agreement dated September 17, 1997 by and among
the Registrant, Western Farm & Cattle Company,
California Land & Cattle Company, N.N. Investors, L.P.,
ST Ranch GenPar, Inc. and FW Ranch Partners, L.P.
4
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
United States Filter Corporation
Date: September 26, 1997 By: /s/ Damian C. Georgino
---------------------------
Damian C. Georgino
Senior Vice President, General
Counsel and Corporate Secretary
5
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EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
2.1 Agreement for Sale and Purchase of Partnership
Interests by and among Western Farm & Cattle Company,
California Land & Cattle Company, N.N. Investors, L.P.,
ST Ranch GenPar, Inc., FW Ranch Partners, L.P. and the
Registrant dated as of August 3, 1997, incorporated by
reference to Exhibit 2.1 to the Company's Current
Report on Form 8-K dated August 4, 1997 (File No. 1-
10728).
2.2 Transfer, Registration Rights and Governance Agreement
among the Registrant, Western Farm & Cattle Company,
N.N. Investors, L.P., California Land & Cattle Company,
ST Ranch GenPar, Inc. and FW Ranch Partners, L.P. dated
as of September 17, 1997.
4.1 Warrant Agreement dated September 17, 1997 by and
among the Registrant, Western Farm & Cattle Company,
California Land & Cattle Company, N.N. Investors, L.P.,
ST Ranch GenPar, Inc. and FW Ranch Partners, L.P.
6
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EXHIBIT 2.2
- --------------------------------------------------------------------------------
Transfer, Registration Rights and Governance Agreement
by and among
United States Filter Corporation,
Western Farm & Cattle Company,
N.N. Investors, L.P.,
California Land & Cattle Company,
ST Ranch GenPar, Inc.,
and
FW Ranch Partners, L.P.
dated as of
September 17, 1997
- --------------------------------------------------------------------------------
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Transfer, Registration Rights and Governance Agreement
by and among
United States Filter Corporation,
Western Farm & Cattle Company,
N.N. Investors, L.P.,
California Land & Cattle Company,
ST Ranch GenPar, Inc.,
and
FW Ranch Partners, L.P.
dated as of
September 17, 1997
TABLE OF CONTENTS
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Page
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ARTICLE I DEFINITIONS................................................. 2
Section 1.1. Certain Definitions.................................... 2
ARTICLE II REPRESENTATIONS AND WARRANTIES.............................. 4
Section 2.1. Representations and Warranties of the Company.......... 4
Section 2.2. Representations and Warranties of Western
Farm & Cattle........................................ 4
Section 2.3. Representations and Warranties of N.N. Investors....... 5
Section 2.4. Representations and Warranties of CLCC................. 5
Section 2.5. Representations and Warranties of GenPar............... 6
Section 2.6. Representations and Warranties of FW Ranch............. 6
ARTICLE III STANDSTILL.................................................. 6
Section 3.1. Acquisition of Company Securities...................... 6
Section 3.2. Further Restrictions on Holders' Conduct............... 7
Section 3.3. Publicity.............................................. 8
ARTICLE IV GOVERNANCE.................................................. 8
Section 4.1. Voting................................................. 8
Section 4.2. Director Designated by the Holders..................... 9
Section 4.3. Additional Non-Employee Directors...................... 10
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ARTICLE V RESTRICTIONS ON TRANSFERABILITY............................. 10
Section 5.1. Restrictions on Transferability........................ 10
Section 5.2. Notice of Proposed Transfers........................... 11
Section 5.3. Right of First Refusal................................. 11
Section 5.4. Restrictive Legends.................................... 12
ARTICLE VI REGISTRATION RIGHTS......................................... 13
Section 6.1. Demand Registration.................................... 13
Section 6.2. Company Registration................................... 14
Section 6.3. Expenses of Registration............................... 15
Section 6.4. Plan of Distribution................................... 15
Section 6.5. Indemnification........................................ 16
Section 6.6. Obligations of the Company............................. 18
Section 6.7. Securities Law Compliance.............................. 19
Section 6.8. Standoff Agreement..................................... 19
ARTICLE VII MISCELLANEOUS............................................... 20
Section 7.1. Termination............................................ 20
Section 7.2. Rule 144 Requirements.................................. 20
Section 7.3. Amendment.............................................. 20
Section 7.4. Investment Representation.............................. 20
Section 7.5. Notices, etc........................................... 20
Section 7.6. Entire Agreement; Severability......................... 21
Section 7.7. Governing Law.......................................... 21
Section 7.8. Counterparts........................................... 21
Section 7.9. Holders' Representative................................ 21
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TRANSFER, REGISTRATION RIGHTS AND GOVERNANCE AGREEMENT
------------------------------------------------------
This Transfer, Registration Rights and Governance Agreement ("Agreement")
is entered into as of September 17, 1997 by and among United States Filter
Corporation, a Delaware corporation (the "Company"), Western Farm & Cattle
Company, a California corporation ("Western Farm & Cattle"), California Land &
Cattle Company, a Delaware corporation ("CLCC"), N.N. Investors, L.P., a
Delaware limited partnership ("N.N. Investors"), ST Ranch GenPar, Inc., a Texas
corporation ("GenPar"), and FW Ranch, L.P., a Texas limited partnership ("FW
Ranch"), with reference to certain shares of Common Stock, $.01 par value, of
the Company (the "Common Stock").
WHEREAS, Western Farm & Cattle, CLCC, N.N. Investors, GenPar, FW Ranch and
the Company have entered into an Agreement for Sale and Purchase of Partnership
Interests dated as of August 3, 1997 (the "Acquisition Agreement") pursuant to
which, among other things, (i) GenPar, the sole general partner of FW
Ranchlands, L.P., a Texas limited partnership ("FWRLP"), assigned to the Company
and the Company acquired from GenPar, a 1% general partner interest in FWRLP
(the "FWRLP GP Interest"), (ii) FW Ranch, the sole limited partner of FWRLP,
assigned to the Company, and the Company acquired from FW Ranch, a 99% limited
partner interest in FWRLP (the "FWRLP LP Interest"), (iii) Western Farm &
Cattle, the sole general partner of Western Farms, L.P., a California limited
partnership ("WFLP"), assigned to the Company, and the Company acquired from
Western Farm & Cattle, a 1% general partner interest in WFLP ("WFLP GP
Interest"), (iv) CLCC, the sole general partner of and the holder of a 1%
general partner interest (the "California Farms GP Interest") in California
Farms, L.P., a Delaware limited partnership ("California Farms"), assigned to
the Company, and the Company acquired from CLCC, the California Farms GP
Interest, (v) N.N. Investors, the sole limited partner of and the holder of a
99% limited partner interest (the "California Farms LP Interest") in California
Farms, assigned to the Company, and the Company will acquire from N.N.
Investors, the California Farms LP Interest, and (vi) the Company issued to
Western Farm & Cattle, CLCC, N.N. Investors, GenPar and FW Ranch, as
consideration for the WFLP GP Interest, the California Farms GP Interest, the
California Farms LP Interest, the FWRLP GP Interest and the FWRLP LP Interest,
an aggregate of 8,000,000 shares of Common Stock, subject to adjustment as
provided therein, and 1,200,000 warrants to purchase shares of Common Stock (the
"Warrants");
WHEREAS, in connection with the transactions contemplated by the
Acquisition Agreement, the Company, Western Farm & Cattle, CLCC, N.N. Investors,
GenPar, and FW Ranch desire to set forth certain agreements among them with
respect to the governance of the Company and the transferability and
registration of the Shares (as defined below) and the shares of Common Stock
issuable upon exercise of the Warrants ("Warrant Shares");
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements hereinafter set forth, the parties hereto agree as follows:
<PAGE>
ARTICLE I
DEFINITIONS
Section 1.1. Certain Definitions. As used in this Agreement, the
-------------------
following terms shall have the following respective meanings:
"Affiliate" shall mean any Person (a) more than 50% of any class of
---------
the outstanding voting securities of which is owned, directly or
indirectly, by one or more Holders and/or one or more Affiliates, or (b)
over which one or more Holders is otherwise able to exert actual control;
provided, however, that, for purposes of clause (b) of this definition,
-------- -------
actual control shall be determined solely based on whether the Holder has
in fact the ability to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities,
by contract or otherwise.
"Beneficially Own" or "Beneficial Ownership" with respect to any
---------------- --------------------
securities shall mean "beneficial ownership" of such securities (as
determined pursuant to Rule 13d-3 promulgated under the Exchange Act).
"Board of Directors" shall mean the Board of Directors of the Company.
------------------
"Commission" shall mean the United States Securities and Exchange
----------
Commission or any other federal agency at the time administering the
Securities Act or the Exchange Act.
"Common Stock Equivalent" shall mean (a) shares of any class of
-----------------------
capital stock, other than Common Stock, of the Company which are then
entitled to vote generally in the election of directors and (b) any
warrant, option, convertible security or other similar right to acquire the
Common Stock or shares of any other class of capital stock of the Company
which are then entitled to vote generally in the election of directors.
"Exchange Act" shall mean the United States Securities Exchange Act of
------------
1934, as amended, or any federal statute enacted in replacement thereof,
all as the same shall be in effect at the time.
"Holder Designee" shall have the meaning specified in Section 4.2
---------------
hereof.
"Holders" shall mean Western Farm & Cattle, N.N. Investors, CLCC,
-------
GenPar and FW Ranch, and shall also include all permitted transferees of
Registrable Shares, provided that such transferees agree to be bound by the
terms of this Agreement and such transfer is made in compliance with this
Agreement and applicable law.
"Person" shall mean any individual, partnership, joint venture,
------
limited liability company, corporation, trust, unincorporated organization,
government or department or agency of a government.
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"Registrable Shares" shall mean the Shares and the Warrant Shares, if
------------------
issued; provided, however, that Shares and Warrant Shares, if any, shall be
-------- -------
treated as Registrable Shares only if and so long as they have not been
sold (x) in a public distribution or a public securities transaction, or
(y) in a transaction exempt from the registration and prospectus delivery
requirements of the Securities Act under Section 4(1) thereof so that all
transfer restrictions and restrictive legends with respect thereto are
removed upon the consummation of such sale.
The terms "register," "registered" and "registration" refer to a
-------- ---------- ------------
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and the rules and regulations
promulgated thereunder, and the declaration or ordering of the
effectiveness of such registration statement.
"Registration Expenses" shall mean all registration, qualification and
---------------------
filing fees (including N.A.S.D. filing fees), fees and disbursements of
counsel for the Company, accounting fees incident to any such registration
and blue sky fees and expenses.
"Rule 144" shall mean Rule 144 promulgated under the Securities Act,
--------
as such Rule shall be in effect at the time, and any successor thereto.
"Rule 145" shall mean Rule 145 promulgated under the Securities Act,
--------
as such Rule shall be in effect at the time, and any successor thereto.
"Securities Act" shall mean the United States Securities Act of 1933,
--------------
as amended, or any federal statute enacted in replacement thereof, all as
the same shall be in effect at the time.
"Selling and Distribution Expenses" shall mean all costs and expenses
---------------------------------
applicable to a registration, other than Registration Expenses, including
without limitation underwriting discounts, selling commissions and stock
transfer taxes applicable to the Shares registered by the Holders, fees and
disbursements of counsel for the Holders retained by them, printing
expenses and marketing expenses.
"Shares" shall mean the shares of Common Stock issued to or for the
------
benefit of the Holders pursuant to the Acquisition Agreement (other than
the Warrant Shares), and any shares of Common Stock issued in respect
thereof or into which the Shares shall be converted in connection with
stock splits, reverse stock splits, stock dividends or distributions, or
combinations or similar recapitalization, on or after the date hereof.
"Standstill Termination Date" shall mean the date that is 29 months
---------------------------
after the date of this Agreement.
"13D Group" shall mean any group of Persons acquiring, holding, voting
---------
or disposing of any Common Stock or Common Stock Equivalents which would be
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required under Section 13(d) of the Exchange Act and the rules and
regulations thereunder to file a statement on Schedule 13D with the
Commission as a "person" within the meaning of Section 13(d)(3) of the
Exchange Act.
"Transfer" shall mean any sale, transfer or other disposition (but not
--------
a pledge or encumbrance) to any Person other than another Holder, and to
"Transfer" shall mean to sell, transfer or otherwise dispose of (but not to
pledge or encumber) to any Person other than another Holder.
"Warrant Shares" shall mean the shares of Common Stock, if any, issued
--------------
upon exercise of the Warrants.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations and Warranties of the Company. The Company
---------------------------------------------
represents and warrants to Western Farm & Cattle, N.N. Investors, CLCC, GenPar
and FW Ranch as of the date hereof as follows:
(a) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware and has corporate power and authority to enter into this Agreement and
to carry out its obligations hereunder.
(b) This Agreement has been duly and validly authorized by the
Company and all necessary and appropriate action has been taken by the Company
to execute and deliver this Agreement and to perform its obligations hereunder.
(c) This Agreement has been duly executed and delivered by the
Company and, assuming due authorization and valid execution and delivery by
Western Farm & Cattle, N.N. Investors, CLCC, GenPar and FW Ranch, this Agreement
is a legal, valid and binding obligation of the Company, enforceable in
accordance with its terms, subject to (i) bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium and other similar laws now or
hereafter in effect relating to or affecting creditors' rights generally and
(ii) general principles of equity (regardless of whether considered in a
proceeding at law or in equity).
Section 2.2. Representations and Warranties of Western Farm & Cattle.
-------------------------------------------------------
Western Farm & Cattle represents and warrants to the Company as of the date
hereof as follows:
(a) Western Farm & Cattle has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the State
of California and has corporate power and authority to enter into this Agreement
and to carry out its obligations hereunder.
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(b) This Agreement has been duly and validly authorized by
Western Farm & Cattle and all necessary and appropriate action has been taken by
Western Farm & Cattle to execute and deliver this Agreement and to perform its
obligations hereunder.
(c) This Agreement has been duly executed and delivered by
Western Farm & Cattle and, assuming due authorization and valid execution and
delivery by the Company, CLCC, N.N. Investors, GenPar and FW Ranch, this
Agreement is a valid and binding obligation of Western Farm & Cattle,
enforceable in accordance with its terms, subject to (i) bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium and other similar laws now or
hereafter in effect relating to or affecting creditors' rights generally and
(ii) general principles of equity (regardless of whether considered in a
proceeding at law or in equity).
Section 2.3. Representations and Warranties of N.N. Investors. N.N.
------------------------------------------------
Investors represents and warrants to the Company as of the date hereof as
follows:
(a) N.N. Investors has been duly organized and is validly
existing as a limited partnership in good standing under the laws of the State
of Delaware and has all requisite power and authority to enter into this
Agreement and to carry out its obligations hereunder.
(b) This Agreement has been duly and validly authorized by N.N.
Investors and all necessary and appropriate action has been taken by N.N.
Investors to execute and deliver this Agreement and to perform its obligations
hereunder.
(c) This Agreement has been duly executed and delivered by N.N.
Investors and, assuming due authorization and valid execution and delivery by
the Company, Western Farm & Cattle, CLCC, GenPar and FW Ranch, this Agreement is
a valid and binding obligation of N.N. Investors, enforceable in accordance with
its terms, subject to (i) bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium and other similar laws now or hereafter in effect relating
to or affecting creditors' rights generally and (ii) general principles of
equity (regardless of whether considered in a proceeding at law or in equity).
Section 2.4. Representations and Warranties of CLCC. CLCC represents and
--------------------------------------
warrants to the Company as of the date hereof as follows:
(a) CLCC has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware and has all
requisite power and authority to enter into this Agreement and to carry out its
obligations hereunder.
(b) This Agreement has been duly and validly authorized by CLCC
and all necessary and appropriate action has been taken by CLCC to execute and
deliver this Agreement and to perform its obligations hereunder.
(c) This Agreement has been duly executed and delivered by CLCC
and, assuming due authorization and valid execution and delivery by the Company,
Western Farm &
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Cattle, N.N. Investors, GenPar and FW Ranch, this Agreement is a valid and
binding obligation of CLCC, enforceable in accordance with its terms, subject to
(i) bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium and
other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally and (ii) general principles of equity (regardless of
whether considered in a proceeding at law or in equity).
Section 2.5. Representations and Warranties of GenPar. GenPar represents
----------------------------------------
and warrants to the Company as of the date hereof as follows:
(a) GenPar has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Texas and has
corporate power and authority to enter into this Agreement and to carry out its
obligations hereunder.
(b) This Agreement has been duly and validly authorized by
GenPar and all necessary and appropriate action has been taken by GenPar to
execute and deliver this Agreement and to perform its obligations hereunder.
(c) This Agreement has been duly executed and delivered by
GenPar and, assuming due authorization and valid execution and delivery by the
Company, Western Farm & Cattle, CLCC, N.N. Investors and FW Ranch, this
Agreement is a valid and binding obligation of GenPar, enforceable in accordance
with its terms, subject to (i) bankruptcy, insolvency, reorganization,
fraudulent transfer, moratorium and other similar laws now or hereafter in
effect relating to or affecting creditors' rights generally and (ii) general
principles of equity (regardless of whether considered in a proceeding at law or
in equity).
Section 2.6. Representations and Warranties of FW Ranch. FW Ranch
------------------------------------------
represents and warrants to the Company as of the date hereof as follows:
(a) FW Ranch has been duly organized and is validly existing as
a limited partnership in good standing under the laws of the State of Texas and
has all requisite power and authority to enter into this Agreement and to carry
out its obligations hereunder.
(b) This Agreement has been duly and validly authorized by FW
Ranch and all necessary and appropriate action has been taken by FW Ranch to
execute and deliver this Agreement and to perform its obligations hereunder.
(c) This Agreement has been duly executed and delivered by FW
Ranch and, assuming due authorization and valid execution and delivery by the
Company, Western Farm & Cattle, CLCC, N.N. Investors and GenPar, this Agreement
is a valid and binding obligation of FW Ranch, enforceable in accordance with
its terms, subject to (i) bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium and other similar laws now or hereafter in effect relating
to or affecting creditors' rights generally and (ii) general principles of
equity (regardless of whether considered in a proceeding at law or in equity).
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ARTICLE III
STANDSTILL
Section 3.1. Acquisition of Company Securities. Each Holder agrees with
---------------------------------
the Company that, without the prior approval of a majority of the members of the
Board of Directors at a duly convened meeting thereof or of all of the Company's
directors by written consent thereto, prior to the Standstill Termination Date
such Holder will not, and will cause each of its Affiliates not to, singly or as
part of a partnership, limited partnership, syndicate or other 13D Group,
directly or indirectly, (i) acquire Beneficial Ownership of any Common Stock or
Common Stock Equivalents (other than pursuant to (A) exercise of any Warrant,
(B) the receipt of any dividends payable in Common Stock or Common Stock
Equivalents or (C) an acquisition as a result of which the Holders and their
Affiliates would not Beneficially Own Common Stock or Common Stock Equivalents
representing in the aggregate more than 25.0% of the outstanding Common Stock
and Common Stock Equivalents) or (ii) commence an unsolicited tender offer or
exchange offer for all or any portion of the Common Stock or any class of Common
Stock Equivalent not owned by the Holders or any unsolicited offer to the
Company to purchase all or substantially all of the assets of the Company;
provided, however, that the foregoing restrictions shall cease to apply if a
- -------- -------
bona fide offer, tender offer or exchange offer is made by any Person (other
than the Company, any Holder or any Affiliate of any Holder) to purchase
outstanding shares of Common Stock or any Common Stock Equivalent representing
50% or more of the Common Stock or any class of Common Stock Equivalent and such
offer is not accepted or rejected by the Company within five days after it is
made; and provided, further, that (a) the $25,000,000 aggregate principal amount
-------- -------
of the 4.5% Convertible Subordinated Debentures due December 15, 2001 of the
Company Beneficially Owned by McVeigh & Co., L.P. on the date of this Agreement
(and any shares of Common Stock issuable upon conversion thereof) shall not be
counted for purposes of determining compliance with the limitations of this
Section 3.1 and (b) McVeigh & Co., L.P., for its own account or for its client
accounts (which may include affiliates or associates of the Holders), is
permitted to engage in arbitrage and related trading in the equity and debt
securities of the Company in the ordinary course of business, provided that no
confidential information has been disclosed to any person directing such trading
or executing any order with respect thereto, such activity is in compliance with
applicable federal securities laws and McVeigh is not a member of any 13D Group
with the Holders.
Section 3.2. Further Restrictions on Holders' Conduct. Prior to the
----------------------------------------
Standstill Termination Date, the Holders agree that they shall not, and they
shall cause each of their Affiliates not to:
(a) in any manner acquire, agree to acquire or make any proposal
to acquire, directly or indirectly, any securities or property of the Company or
any of its subsidiaries other than in a manner consistent with the terms of this
Agreement;
(b) deposit (either before or after the date of the execution of
this Agreement) any Common Stock or Common Stock Equivalent in a voting trust or
subject any Common Stock or Common Stock Equivalent to any similar arrangement
or proxy with respect
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to the voting of such Common Stock or Common Stock Equivalents if the effect of
any such arrangement or proxy would result in a violation by any Holder of the
terms of this Agreement;
(c) make, or in any way participate, directly or indirectly, in
any "solicitation" of "proxies," or become a "Participant" in a "solicitation"
(as such terms are used in Regulation 14A promulgated under the Exchange Act) to
vote, or to seek to advise or influence any person to vote against any proposal
or director nominee recommended to the stockholders of the Company or any of its
subsidiaries by at least a majority of the members of the Board of Directors;
provided, however, that the restriction of this Section 3.2(c) shall not apply:
- -------- -------
(i)(A) during any proxy solicitation from a Person other than the Company
pursuant to which such Person seeks to take any action which, if successful, and
when combined with all other actions previously taken by such Person, would
result in a change in control of the Company (including, without limitation, by
means of electing or replacing directors of the Company), (B) during any offer,
tender offer or exchange offer for 50% or more of the Common Stock or any class
of Common Stock Equivalent or 50% or more of the consolidated assets of the
Company, and (C) with respect to any proposal by the Company which would result
in any other Person or 13D Group Beneficially Owning 50% or more of the Common
Stock or any class of Common Stock Equivalent or 50% or more of the consolidated
assets of the Company; and (ii) regarding any matter with respect to which the
Holders and their Affiliates are not bound by the terms of this Agreement to
vote in accordance with the recommendation of the Board of Directors;
(d) form, join or in any way participate in a 13D Group other
than in a manner consistent with the terms of this Agreement; or
(e) cooperate or agree with any third party who has contacted
any Holder or, to any Holder's knowledge, any Affiliate of such Holder in
connection with any of the foregoing.
Section 3.3. Publicity. The Company and each Holder shall, and each
---------
Holder shall cause each of its Affiliates to, prior to the issuance of any press
release or other public announcement or communication relating to the execution
or performance of this Agreement or to the transactions contemplated hereby,
consult with each other and use their best efforts to coordinate the issuance of
such press release, public announcement or communication.
ARTICLE IV
GOVERNANCE
Section 4.1. Voting. Until the Standstill Termination Date, each Holder,
------
as a holder of shares of Common Stock and Common Stock Equivalents, agrees that:
(a) such Holder shall, and shall cause each of its Affiliates
to, be present, in person or by proxy, at all meetings of stockholders of the
Company so that all Common Stock and Common Stock Equivalents having voting
rights directly or indirectly owned by such
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Holder and its Affiliates may be counted for the purpose of determining the
presence of a quorum at such meetings; and
(b) such Holder shall, and shall cause each of its Affiliates
to, on any matter submitted to a vote of the Company's stockholders (other than
(i) the sale of all or substantially all of the assets of the Company, (ii) any
merger or acquisition transaction in which the Company is not the surviving
corporation or the parent of the surviving corporation (unless the holders of
the Company's Common Stock immediately prior to such transaction continue to own
80% or more of the outstanding voting stock of the surviving corporation or its
parent) or involving the issuance by the Company of shares of Common Stock
representing 20% or more of the outstanding Common Stock and Common Stock
Equivalents, (iii) any amendment of the certificate of incorporation or by-laws
of the Company that would adversely affect the rights of the Holders or (iv) the
dissolution or liquidation of the Company), vote or cause to be voted all Common
Stock and Common Stock Equivalents having voting rights with respect to such
matter directly or indirectly owned by such Holder and its Affiliates as
recommended by a majority of the members of the Board of Directors.
Section 4.2. Director Designated by the Holders. For so long as Western
----------------------------------
Farm & Cattle, CLCC, N.N. Investors, GenPar and FW Ranch, the direct and
indirect partners of N.N. Investors and FW Ranch and their respective Affiliates
collectively own at least 5% of the outstanding Common Stock:
(a) the Board of Directors shall elect as a Class I Director of
the Company (to serve until the next succeeding annual meeting of stockholders
of the Company at which Class I Directors are to be elected) on the date of the
Closing, one person designated by the Holders (the "Holder Designee," which term
shall include any person designated by the Holders to succeed any Class I
Director designated by the Holders pursuant to this Section 4.2) in writing to
the Company at least seven days prior to the date of the Closing. In the event
of a vacancy caused by the disqualification, removal, resignation or other
cessation of service of the Holder Designee from the Board of Directors, the
Board of Directors shall elect as a Class I Director of the Company (to serve
until the Company's next succeeding annual meeting of stockholders at which
Class I Directors are to be elected) a Holder Designee designated in writing to
the Company at least fifteen days prior to the date of a regular meeting of the
Board of Directors.
(b) At the first annual meeting of stockholders of the Company
following the Closing at which Class I Directors are to be elected and at each
subsequent annual meeting of stockholders of the Company at which (i) the term
of the Holder Designee is to expire or (ii) a vacancy caused by the
disqualification, removal, resignation or other cessation of service of the
Holder Designee is to be filled, the Company shall cause the Holder Designee or
a successor Holder Designee to be included in the slate of nominees recommended
by the Board of Directors to the Company's stockholders for election as
directors and shall use all reasonable efforts to cause the election of such
Holder Designee or successor Holder Designee to the Board of Directors,
including soliciting proxies in favor of the election of such person.
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(c) The Holders shall provide notice in writing at least 90 days
prior to any annual meeting of the Company's stockholders at which Class I
Directors are to be elected indicating the name of the Holder Designee and all
information required by Regulation 14A and Schedule 14A promulgated under the
Exchange Act with respect to such Holder Designee.
(d) In the event that the Holder Designee cannot attend any
meeting of the Board of Directors, the Holders shall be entitled to designate a
person to attend such meeting in a non-voting capacity at the Board of
Directors' invitation. The Company shall give the Holders no less than seven (7)
days' notice of any such meeting; provided, however, that if the Company is
-------- -------
unable, for good cause, to give seven (7) days' notice with respect to any
meeting of its Board of Directors at which the Board of Directors considers
and/or acts upon any important corporate action, the Company may give such
lesser notice as is reasonably practicable, except that such notice shall in all
circumstances be at least two (2) full business days. Any Holder Designee may
participate telephonically in any meeting of the Board of Directors.
(e) The Holders shall consult with the Company in connection
with the identity of any proposed Holder Designee, but the Company shall not
have the right to object to any Holder Designee unless such person either (i) is
a director or officer of a direct competitor of the Company or (ii) has engaged
in any adverse conduct that would require disclosure under Item 7 of Schedule
14A promulgated under the Exchange Act. In any such case, the Holders agree to
withdraw such proposed person and nominate a replacement therefor (which
replacement shall be subject to the requirements of this Section 4.2(e)). Any
such objection by the Company must be made no later than one month after the
Holders first inform the Company of the identity of the proposed Holder
Designee; provided, however, that the Company shall in all cases notify the
-------- -------
Holders of any such objection sufficiently in advance of the date on which proxy
materials are mailed by the Company in connection with such election of
directors to enable the Holders to propose an alternate Holder Designee pursuant
to and in accordance with the terms of this Agreement.
Section 4.3. Additional Non-Employee Directors. If, at any time while
---------------------------------
Western Farm & Cattle, N.N. Investors, CLCC, GenPar and FW Ranch, the direct and
indirect partners of N.N. Investors and FW Ranch and their respective Affiliates
continue to own at least 7 1/2% of the outstanding Common Stock, a vacancy shall
occur in the Board of Directors as the result of the cessation to serve of a
non-employee director (other than by reason of the death, disqualification,
resignation, removal or other cessation of service of a Holder Designee, which
vacancy shall be filled with a successor Holder Designee pursuant to Section
4.2(a)), such vacancy shall be filled by the Board of Directors only by a person
satisfactory to the Holders.
ARTICLE V
RESTRICTIONS ON TRANSFERABILITY
Section 5.1. Restrictions on Transferability.
-------------------------------
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(a) The Shares may be Transferred only in accordance with the
conditions specified in this Agreement, which conditions are intended to ensure
compliance with the provisions of the Securities Act.
(b) The Holders shall not Transfer any Shares except for:
(i) Transfers of Shares in a registered public offering
pursuant to Article VI of this Agreement;
(ii) Transfers of Shares pursuant to Rule 144;
(iii) Transfers of Shares pursuant to any offer made by the
Company or any of its Affiliates;
(iv) Transfers of Shares to any direct or indirect partner
of any Holder or any Affiliate thereof; provided,
--------
however, that any such transferee shall agree with the
-------
Company in writing prior to each such Transfer to be
bound by the terms of this Agreement for the rest of
its duration;
(v) Transfers by will or the laws of descent and
distribution, Transfers by an individual to a spouse
or children or Transfers to trusts for the benefit of
a Holder's spouse and/or children; provided, however,
-------- -------
that any such transferee shall agree prior to (or as a
condition of) such transfer to be bound by the terms
of this Agreement for the rest of its duration; and
(vi) any other Transfers of Shares after a refusal by the
Company to purchase such Shares (by either lapse of
time or written notice) in accordance with Section 5.3
hereof.
Section 5.2. Notice of Proposed Transfers. The Holder of each certificate
----------------------------
representing Shares by acceptance thereof agrees to comply in all respects with
the provisions of this Agreement. Prior to any proposed Transfer of any Shares,
unless there is in effect a registration statement under the Securities Act
covering the proposed Transfer or the Transfer is pursuant to Rule 144 and
covers fewer than 500,000 shares, the Holder thereof shall notify the Company in
writing of such Holder's intention to effect such Transfer and the intended
manner and circumstances thereof in reasonable detail. If requested by the
Company, any such notice shall be accompanied at such Holder's expense by a
written opinion of legal counsel who is, and whose legal opinion shall be,
reasonably satisfactory to the Company, addressed to the Company, to the effect
that the proposed Transfer may be effected without registration of the
applicable Shares under the Securities Act, and by such certificates and other
information as the Company may reasonably require to confirm such opinion,
whereupon the Holder of such Shares shall be entitled to Transfer such Shares in
the manner contemplated by such opinion. Each certificate evidencing Shares
Transferred as above provided shall bear, except if such
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transfer is made pursuant to Rule 144, the appropriate restrictive legends set
forth in Section 5.4(a) and (b) hereof, except that such certificate shall not
bear such restrictive legends if in the opinion of counsel for such Holder and
the Company the restrictive legend set forth in Section 5.4(a) hereof is not
required in order to establish compliance with any provisions of the Securities
Act. So long as such restrictive legend shall be required to remain on any such
certificates, the Transfer of any Shares represented thereby (excluding,
however, a Transfer pursuant to the realization by any pledgee (other than the
Company) upon Shares pledged with it) shall be conditioned upon the transferee
thereof becoming a party hereto.
Section 5.3. Right of First Refusal. In the event that, during the
----------------------
existence of this Agreement, any Holder shall desire to Transfer any Shares
under circumstances other than those referred to in Section 5.1(b)(i), (ii),
(iii), (iv) and (v) hereof:
(a) the notice given by such Holder to the Company pursuant to
Section 5.2 hereof shall specify the number of Shares to be sold, the
prospective purchasers thereof and the price and terms and conditions of such
sale, and offering to sell such Shares to the Company (or its designee) at such
price and on like terms and conditions.
(b) the Company shall have the right to accept or reject any
offer pursuant to subsection (a) as promptly as practicable but in all events
within the time period of one business day. Such time period shall run from, and
not include, the date of delivery of the notice of such offer pursuant to
subsection (a) above. If the Company shall accept such offer within the
applicable time period specified above, then the Company shall purchase the
Shares specified in the notice given pursuant to subsection (a) above as
promptly as is reasonably practicable, but in no event after the later of (i)
the 15th day following such acceptance and (ii) the third day following receipt
of all required governmental approvals.
(c) If the Company (i) shall reject such offer in writing, (ii)
shall not within the applicable time period after receipt of the notice given by
such Holder pursuant to subsection (a) above, accept such offer in writing with
respect to all the Shares specified in such notice or (iii) shall fail to
purchase such Shares within the time period specified in subsection (b) above,
then such Holder shall be free to enter into any agreement to sell such Shares
to the prospective purchaser, at a price equal to or above the minimum price and
on the terms and conditions specified in the notice delivered to the Company
pursuant to subsection (a) above.
(d) Any sale of Shares by any Holder pursuant to subsection (c)
above must be consummated within 30 days of the earlier of receipt of a written
rejection from the Company or the expiration of the applicable time period
allotted the Company for the rejection or consummation of the offer to sell such
Shares by such Holder.
(e) Each Holder that has determined to make (or commenced
negotiations to make) a Transfer (other than under the circumstances referred to
in Section 5.1(b)(i), (ii), (iii), (iv) and (v) hereof) shall give notice to the
Company of such fact at the earliest practicable time.
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<PAGE>
Section 5.4. Restrictive Legends.
-------------------
(a) Each certificate representing Shares which are Registrable
Shares shall (unless otherwise permitted by subsection (d) of this Section 5.4
or Section 5.2 hereof) be stamped with the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED
IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE COMPANY RECEIVES AN
OPINION OF COUNSEL (WHICH MAY BE COUNSEL FOR THE COMPANY) REASONABLY
ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE
REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT.
(b) Each certificate representing Shares which are Registrable
Shares shall also be stamped with the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS AND CONDITIONS OF AN AGREEMENT BETWEEN CERTAIN STOCKHOLDERS AND
THE COMPANY WHICH INCLUDES RESTRICTIONS ON CERTAIN SALES OF THE
SECURITIES. COPIES OF THE AGREEMENT MAY BE OBTAINED UPON WRITTEN
REQUEST TO THE SECRETARY OF THE COMPANY.
(c) Each certificate representing Shares which are Registrable
Shares shall be stamped with such other legends, if any, as are required by
applicable federal or state law.
(d) Each Holder consents to the Company's making a notation on
its records and giving instructions to any transfer agent of the Shares in order
to implement the restrictions on transfer established in this Agreement. The
legend placed on any certificate pursuant to Section 5.4(a) hereof and any
notations or instructions with respect to the Shares represented by such
certificate will be promptly removed, and the Company will promptly issue a
certificate without such legend to the Holder of such Shares (i) if such Shares
are registered under the Securities Act (but only in connection with the actual
sale of such securities) and a prospectus meeting the requirements of Section 10
of the Securities Act is available, (ii) if the Holder thereof satisfies the
requirements of Rule 144(k) and, where reasonably determined necessary by the
Company, provides the Company with an opinion of counsel for the Holder of the
Shares, both such counsel and such opinion being satisfactory to the Company, to
the effect that (A) the Holder meets the requirements of Rule 144(k) or (B) a
public sale, transfer or assignment of the Shares may be made without
registration.
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<PAGE>
ARTICLE VI
REGISTRATION RIGHTS
Section 6.1. Demand Registration. At any time or from time to time during
-------------------
the four year period commencing 29 months after the date of this Agreement, one
or more Holders may on two separate occasions require the Company, by delivery
to the Company of a notice in writing (a "Demand"), to cause no fewer than
2,000,000 Registrable Shares held by such Holder or Holders to be registered for
sale to the public under the Securities Act. Upon receipt of such a notice, the
Company will use its best efforts to file a registration statement (on Form S-3
or successor form) with the Commission promptly (but not more than 30 days)
after such request and to effect such registration (including, without
limitation, the execution of an undertaking to file post-effective amendments,
appropriate qualification under applicable blue sky or other state securities
laws and appropriate compliance with applicable regulations under the Securities
Act) as would permit or facilitate the sale and distribution of such Registrable
Shares as are specified in such request in the manner of distribution specified
therein, together with all Registrable Shares of any Holder or Holders joining
in such request as are specified in written requests received by the Company
within 15 days after receipt of such Demand; provided, however, that the Company
-------- -------
shall not be obligated to take any action to effect any such registration,
qualification or compliance pursuant to this Section 6.1:
(a) in any particular jurisdiction in which the Company would be
required to qualify to do business or to execute a general consent to service of
process in effecting such registration, qualification or compliance except as
may be required by the Securities Act;
(b) during the period starting with the date 60 days prior to
the filing of, and ending on a date 120 days following the effective date of, a
registration statement filed by the Company (other than with respect to a
registration statement relating to a Rule 145 or other business combination
transaction, an offering solely to employees and/or directors or any other
registration which is not appropriate for the registration of Registrable
Shares); or
(c) at any time when the Holders would be required to refrain
from selling Registrable Shares pursuant to Section 6.7(b) hereof.
In the event that any Holder seeks to require the Company to effect the
registration of Shares at a time when the Company is not obligated to effect
such registration pursuant to clause (b) or (c) of the immediately preceding
sentence, such Holder shall be entitled to require the Company to effect the
registration of Shares as soon as the conditions specified in such clauses (b)
and (c) cease to apply. If at the time of receipt of a Demand pursuant to this
Section 6.1 there shall be any public offering of Common Stock contemplated by
the Company to occur within the following 90 days or in progress, then, upon
receipt of such Demand, the Company shall notify the Holders of such public
offering, advising them that they may elect to withdraw such Demand and
participate in such public offering pursuant to Section 6.2. Such withdrawn
Demand shall not count toward the two registrations provided by this Section
6.1.
Section 6.2. Company Registration.
--------------------
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(a) Notice of Registration. If, at any time or from time to
----------------------
time, the Company shall determine to register any of its Common Stock, either
for its own account or for the account of a security holder or holders
exercising their respective demand registration rights for distribution pursuant
to an underwritten offering, the Company will (i) promptly give to each Holder
written notice thereof, and (ii) include in such registration (and any related
qualification under the blue sky laws or other compliance), subject to Section
6.2(b) hereof, all the Registrable Shares specified in a written request made by
any Holder within 30 days after its receipt of such written notice from the
Company. Such registration shall not constitute a demand registration described
under Section 6.1 hereof.
(b) Underwriting. If the registration pursuant to this Section
------------
6.2 hereof is an underwritten offering, the right of any Holder to such
registration shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of Shares in the underwriting to the extent
provided herein. All Holders proposing to distribute all or a portion of their
Shares through such underwriting shall (together with the Company and the other
holders distributing shares of Common Stock through such underwriting) enter
into an underwriting agreement in customary form with the managing underwriter
selected for such underwriting by the Company (or by the holders who have
demanded such registration), and shall provide to the Company upon written
request such information referenced in Section 6.1(b) hereof as may be specified
in such request. Notwithstanding any other provision of this Section 6.2, if the
managing underwriter in its sole discretion determines that marketing factors
require a limitation of the number of shares to be underwritten, the managing
underwriter may limit the Shares to be included in such registration. The
Company shall so advise all Holders and the other holders distributing their
securities through such underwriting pursuant to piggyback registration rights
similar to the rights of the Holders under this Section 6.2, and the number of
Shares that may be included in the registration and underwriting by such
Holders, the Company and such other holders shall be reduced by the number of
shares determined by the managing underwriter not to be included in such
registration, such reduction to be allocated among the Holders, the Company and
such other holders in proportion, as nearly as practicable, to the respective
amounts of shares proposed to be registered by such Holders, by the Company and
by such other holders. If any Holder disapproves of the terms of any such
underwriting, it may elect to withdraw therefrom by written notice to the
Company and the managing underwriter.
(c) Right to Terminate Registration. The Company shall have the
-------------------------------
right to terminate or withdraw any registration under this Section 6.2 prior to
the effectiveness of such registration whether or not any Holder has elected to
include securities in such registration.
Section 6.3. Expenses of Registration. All Registration Expenses incurred
------------------------
in connection with any registration pursuant to Sections 6.1 or 6.2 hereof shall
be borne by the Company. All other Selling and Distribution Expenses relating to
securities registered on behalf of the Holders shall be borne by the Holders of
the Shares included in such registration, other selling stockholders and the
Company pro rata on the basis of the number of shares of Common Stock so
registered.
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Section 6.4. Plan of Distribution.
--------------------
(a) The distribution of Registrable Shares pursuant to a
registration under Section 6.1 shall be effected only by or through such
investment banking firm or firms as may be designated by the Holders and as are
reasonably satisfactory to the Company in connection with the filing of the
applicable registration statement, acting in such capacity (as broker, dealer,
principal or otherwise), and receiving such compensation, as may be agreed by
the Holders of the Shares to be distributed and such investment banking firm or
firms.
(b) The Company shall give the Holder or Holders of Registrable
Shares to be included in any registration statement at least ten (10) days'
written notice prior to the filing of a registration statement pursuant to
Section 6.1 hereof. Such Holder or Holders shall advise the Company in writing
within five (5) days of receipt of such notice of the terms of its or their
compensation arrangements with the designated investment banking firm or firms,
the capacity in which such firm or firms will act, the distribution proposed by
such Holder or Holders and such information regarding such Holder or Holders and
the shares of Common Stock held by them as the Company may reasonably request in
writing and as shall be required in connection with any registration,
qualification or compliance referred to in this Agreement.
(c) The Holders shall be entitled to exclude from any
registration effected pursuant to Section 6.1 hereof any shares of Common Stock
other than Registrable Shares if the investment banking firm or firms designated
under subsection (a) hereof determines that marketing factors require a
limitation of the number of shares to be included in such registration.
(d) The Company hereby represents and warrants that it has no
agreement, undertaking or other arrangement granting to any third party the
right (whether demand, piggyback or otherwise) to require the Company to
register any class of shares of its capital stock, outstanding as of the date of
this Agreement, except as disclosed on Schedule 6.4(d).
Section 6.5. Indemnification.
---------------
(a) The Company will indemnify each Holder, each of its
officers, directors, partners, employees and agents and each person controlling
such Holder within the meaning of Section 15 of the Securities Act, with respect
to which registration, qualification or compliance has been effected pursuant to
this Agreement, against all expenses, claims, losses, damages or liabilities (or
actions in respect thereof), including any of the foregoing incurred in
settlement of any litigation, commenced or threatened, arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any registration statement, prospectus, offering circular or other
document, or any amendment or supplement thereto, incident to any such
registration, qualification or compliance, or based on any 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 in
which they were made, not misleading, or any violation by the Company of any
rule or regulation promulgated under the Securities Act or any other federal,
state or common law rule or regulation applicable to the Company in connection
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with any such registration, qualification or compliance, and the Company will
reimburse each such Holder, each of its officers, directors, employees and
agents and each person controlling such Holder for any legal and any other
expenses reasonably incurred in connection with investigating, preparing or
defending any such claim, loss, damage, liability or action; provided, however,
-------- -------
that the Company will not be liable in any such case to the extent that any such
claim, loss, damage, liability or expense arises out of or is based on any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with any written information furnished to the
Company pursuant to an instrument duly executed by such Holder or controlling
person and stated to be specifically for use therein.
(b) Each Holder will, if Shares held by such Holder are included
in the securities as to which such registration, qualification or compliance is
being effected, indemnify the Company, each of its directors and officers, each
underwriter, if any, of the Company's securities covered by such a registration
statement, each person who controls the Company or such underwriter within the
meaning of Section 15 of the Securities Act, and each other such Holder, each of
its officers and directors and each person controlling such Holder within the
meaning of Section 15 of the Securities Act, against all claims, losses, damages
and liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company, such Holders, such directors,
officers, persons, underwriters or control persons for any legal or any other
expense reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability or action, in each case to the extent, but
only to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with any written information furnished to the Company pursuant to an
instrument duly executed by such Holder and stated to be specifically for use
therein.
(c) Each party entitled to indemnification under this Section
6.5 (the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, but the
failure of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this Agreement unless,
but only to the extent that, the failure to give such notice is actually
prejudicial to an Indemnifying Party's ability to defend such action, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld), and the Indemnified Party may participate in such defense at such
party's expense; provided, however, that if the Indemnified Party determines in
-------- -------
good faith that a conflict of interest exists and that therefore it is advisable
for such Indemnified Party or parties to be represented by separate counsel or
that, upon written advice and legal opinion of counsel, there may be sound legal
defenses available to it or them which are different from or in
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addition to those available to the Indemnifying Party, then the Indemnifying
Party shall not be entitled to assume such defense and the Indemnified Parties
shall be entitled to counsel at the Indemnifying Party's expense. If an
Indemnifying Party is not so entitled to assume the defense of such action or
does not assume such defense, after having received the notice referred to in
the first sentence of this paragraph, the Indemnifying Party will pay the
reasonable fees and expenses of counsel of the Indemnified Party. No
Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnified Party
of a release from all liability in respect to such claim or litigation.
(d) In order to provide for just and equitable contribution to
joint liability under the Securities Act in any case in which any Holder of
Shares exercising rights under this Agreement, or any controlling person of any
such Holder, makes a claim for indemnification pursuant to this Section 6.5 but
is judicially determined (by the entry of a final judgment or decree by a court
of competent jurisdiction and the expiration of time to appeal or the denial of
the last right of appeal) that such indemnification may not be enforced in such
case, notwithstanding the fact that this Section 6.5 provides for
indemnification in such case, the Company and such Holder will contribute to the
aggregate losses, claims, damages or liabilities to which they may be subject
(after contribution from others) in such proportion so that such Holder is
responsible for the portion represented by the percentage that the public
offering price of its Shares offered by the registration statement bears to the
public offering price of all Shares offered by such registration statement; and
the Company is responsible for the remaining portion not payable by any Holder
or other holder; provided, however, that, in any such case, (A) no such Holder
-------- -------
will be required to contribute any amount in excess of the public offering price
of all such Shares offered by it pursuant to such registration statement, and
(B) no person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) will be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
Section 6.6. Obligations of the Company. Whenever required under this
--------------------------
Agreement to use its best efforts to effect the registration of any Registrable
Shares, the Company shall, as expeditiously as reasonably possible:
(a) Prepare and file with the Commission a registration
statement with respect to such Registrable Shares, and use its best efforts to
cause such registration statement to become effective and, except in the case of
a firm commitment underwriting, to keep such registration statement effective
for the period required by the Holders up to 180 days.
(b) Prepare and file with the Commission such amendments and
supplements to such registration statement as may be necessary (i) to update and
keep such registration statement effective as provided in Section 6.6(a) hereof,
(ii) to comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Shares covered by such registration statement and
(iii) to reflect a modification in the manner of distribution of such
Registrable Shares. Notwithstanding anything else to the contrary contained
herein, the
-18-
<PAGE>
Company shall not be required to disclose in any amendment or supplement to a
registration statement or otherwise (x) any confidential information concerning
any matter which is the subject of a notice given under Section 6.6(f) hereof as
to which the Company has a bona fide interest in withholding disclosure, or (y)
historical financial statements or pro forma financial information required by
Regulation S-X of the Commission in connection with a business acquisition or
disposition prior to the date when such information would otherwise be required
to be filed with the Commission (including extensions pursuant to Item 7(a)(4)
of Form 8-K).
(c) Furnish to the Holders such numbers of copies of any
prospectus included in such registration statement, including any preliminary
prospectus, in conformity with the requirements of the Securities Act, and such
other documents as they may reasonably request in order to facilitate the
disposition of such Registrable Shares owned by them.
(d) Use its best efforts to register and qualify the
Registrable Shares covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as shall be reasonably
requested by the Holders whose Registrable Shares have been included in such
registration statement, provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions.
(e) In the event of any underwritten public offering
contemplated by Section 6.1 hereof, enter into and perform its obligations under
an underwriting agreement, in usual and customary form, with the managing
underwriter of such offering and participate with such managing underwriter in
road shows and other customary marketing activities. Each Holder participating
in such underwriting shall also enter into and perform its obligations under
such an agreement.
(f) Notify each Holder of Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, or upon the happening of any
event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
under which the prospectus is used, and, except for a period not to exceed 180
days in each instance where the Company has a bona fide corporate interest in
withholding disclosure or the time period for filing with the Commission
information referred to in Section 6.6(b)(y) hereof has not expired, promptly
prepare and furnish to such Holders a supplement or amendment to such
prospectus, or otherwise update such prospectus through the filing of a Current
Report on Form 8-K or otherwise, so that such prospectus will not contain an
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading.
Section 6.7. Securities Law Compliance.
-------------------------
(a) The Holder or Holders of Registrable Shares included in any
registration pursuant to this Agreement covenant that they will comply with the
Securities Act and with the
-19-
<PAGE>
Exchange Act with respect to any such registration, recognizing that the Company
may notify such Holder or Holders in accordance with Section 6.6(f) hereof that
the registration statement is not then current.
(b) The Holders agree that, immediately upon receipt of a
notification pursuant to Section 6.6(f) hereof, they will refrain from selling
Registrable Shares under a registration statement filed pursuant to Section 6.1
hereof until (i) subsequently notified by the Company that the registration is
current or (ii) receipt of a favorable opinion of counsel as hereinbelow
provided. The Company agrees that it will consult with the Holders and, at the
Holders' request, counsel for the Holders following the giving of such
notification, and that in the event the Holders (or their counsel) is of the
view that the Shares subject to such registration could be sold in compliance
with the Securities Act and the Exchange Act without disclosure of the nonpublic
information which is the subject of the notification, the parties hereto agree
to be bound by an opinion of counsel reasonably satisfactory to the Holders and
the Company as to whether such sales can be made without violation of the
Securities Act or the Exchange Act.
Section 6.8. Standoff Agreement. The Holders agree in connection with any
------------------
registration of the Company's securities, which include, without limitation,
Shares to be sold by the Holders, upon request of the underwriters managing any
underwritten offering of the Company's securities, not to sell, make any short
sale of, loan, grant any option for the purchase of, or otherwise dispose of any
Registrable Shares (other than those included in such registration), without the
prior written consent of the Company or such underwriters, as the case may be,
for such period of time (not to exceed 120 days) from the effective date of such
registration as may be requested by the Company or such managing underwriters.
ARTICLE VII
MISCELLANEOUS
Section 7.1. Termination. This Agreement shall terminate upon the tenth
-----------
anniversary of the date hereof; provided, however, that this Agreement shall
-------- -------
terminate earlier upon the occurrence of any of the following:
(a) any third party acquires Common Stock or Common Stock
Equivalents representing 50% or more of the outstanding Common Stock;
(b) the Company agrees to merge with and into any entity, if the
Company will not be the surviving entity in such merger; or
(c) Holders, the direct and indirect partners of N.N. Investors
and FW Ranch and their Affiliates shall cease to own at least 5% of the
outstanding Common Stock.
-20-
<PAGE>
Section 7.2. Rule 144 Requirements. The Company agrees to:
---------------------
(a) use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act and the rules and regulations promulgated
thereunder; and
(b) furnish to any Holder of Registrable Shares upon request (i)
a written statement by the Company as to its compliance with the requirements of
Rule 144(c), and the reporting requirements of the Securities Act and the
Exchange Act and the rules and regulations promulgated thereunder, (ii) a copy
of the most recent annual or quarterly report of the Company, and (iii) such
other reports and documents of the Company as such Holder may reasonably request
to avail itself of any similar rule or regulation of the Commission allowing
such Holder to sell any such securities without registration.
Section 7.3. Amendment. Any provision of this Agreement may be amended
---------
and the observance thereof may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written
consent of the Company and 66-2/3% in interest of the Holders. Any amendment or
waiver effected in accordance with this Section 7.3 shall be binding upon each
Holder of any Shares then outstanding, each future holder of any Shares who is a
party to this Agreement, and the Company.
Section 7.4. Investment Representation. Each Holder hereby confirms and
-------------------------
represents and warrants to the Company that such Holder is acquiring the Shares
for investment only and not with a view to or in connection with any resale or
distribution of the Shares.
Section 7.5. Notices, etc. All notices, requests, demands and other
-------------
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered by hand, courier service, United States mail (return
receipt requested) or by facsimile, addressed as follows:
(a) if to Western Farm & Cattle, N.N. Investors, CLCC, GenPar or
FW Ranch, to:
Western Farm & Cattle Company
201 Main Street, Suite 3200
Fort Worth, Texas 76102
Fax: 817-390-8751
Attn: Ardon Moore
with a copy to:
F. Richard Bernasek
Kelly, Hart & Hallman
201 Main Street, Suite 2500
Fort Worth, Texas 76102
Fax: 817-878-9280
-21-
<PAGE>
(b) if to the Company, to:
United States Filter Corporation
40-004 Cook Street
Palm Desert, CA 92211
Fax No. (760) 341-9368
Attn: Chief Executive Officer
with a copy to: General Counsel
or to such other address or facsimile number of a party of which such party has
given notice to the other parties pursuant to this Section.
Section 7.6. Entire Agreement; Severability. This Agreement and the
------------------------------
Acquisition Agreement together with the Schedules and Exhibits thereto set forth
all of the provisions, covenants, agreements, conditions and undertakings among
the parties hereto with respect to the subject matter hereof. The provisions of
this Agreement are severable, and in the event that any one or more provisions
are deemed illegal or unenforceable, the remaining provisions shall remain in
full force and effect.
Section 7.7. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws (other than those with respect to choice
of law) of the State of Delaware. Each of the parties hereto agrees that all
claims in any action or proceeding arising out of or related to this Agreement
may be heard and determined in any Delaware state court or federal court sitting
in the State of Delaware.
Section 7.8. Counterparts. This Agreement may be executed simultaneously
------------
in any number of counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
Section 7.9. Holders' Representative.
-----------------------
(a) Creation. The Holders do hereby, for themselves and their
--------
personal representatives and other successors, constitute and appoint a
representative, initially Ardon Moore (the "Representative"), as their agent and
attorney-in-fact to give and receive all notices and consents under this
Agreement. The Representative will advise the other Holders of notices and
other communications received by him hereunder.
(b) Replacement. In the event of the death, physical or mental
-----------
incapacity or resignation of the Representative, the Holders shall promptly
appoint a substitute or substitutes and shall advise the Company thereof. As
between the Representative and the Holders, the Representative shall not be
liable for, and shall be indemnified by the Holders against, any good faith
error of judgment on his part or any other act done or omitted by him in good
faith in connection with his duties as the Representative, except for gross
negligence or willful misconduct.
-22-
<PAGE>
(c) Company Reliance. The Company shall be entitled to rely
----------------
exclusively upon any communications given by the Representative on behalf of all
Holders, and shall not be liable for any action taken or not taken in reliance
upon the Representative. The Company shall be entitled to disregard any notices
or communications given or made by the Holders unless given or made through the
Representative.
-23-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
UNITED STATES FILTER CORPORATION
By: /s/ Michael E. Hulme
---------------------
Name: Michael E. Hulme
Title: Attorney-in-Fact for
President & CEO,
Richard J. Heckmann
WESTERN FARM & CATTLE COMPANY
By: /s/ Ardon E. Moore
-------------------
Name: Ardon E. Moore
Title: President
N.N. INVESTORS, L.P.
By: California Land & Cattle Company,
its General Partner
By: /s/ Ardon E. Moore
-------------------
Name: Ardon E. Moore
Title: President
CALIFORNIA LAND & CATTLE COMPANY
By: /s/ Ardon E. Moore
-------------------
Name: Ardon E. Moore
Title: President
ST RANCH GENPAR, INC.
By: /s/ Ardon E. Moore
-------------------
Name: Ardon E. Moore
Title: President
-24-
<PAGE>
FW RANCH PARTNERS, L.P.
By: ST Ranch GenPar, Inc.,
its General Partner
By: /s/ Ardon E. Moore
-------------------
Name: Ardon E. Moore
Title: President
-25-
<PAGE>
Schedule 6.4(d)
---------------
Transfer and Registration Agreement between United States Filter Corporation and
Alcoa Securities Corporation dated as of December 31, 1991.
Transfer, Registration and Other Rights Agreement among United States Filter
Corporation, Warburg, Pincus Capital Company, L.P. and Certain Individual
Stockholders of United States Filter Corporation dated as of July 8, 1994.
Transfer, Registration and Other Rights Agreement among United States Filter
Corporation, Laidlaw International Investments (Luxembourg) S.A., Laidlaw
Investments (Barbados) Ltd., Marfit, S.p.A., Laidlaw, Inc. and Ing.
Gilberto Cominetta dated as of August 31, 1994, as modified and amended.
Transfer and Registration Agreement among United States Filter Corporation, John
Hancock Capital Growth Fund IIB Limited Partnership, John Hancock Capital
Growth Fund III Limited Partnership, Carl C. Landegger, Trustee and The
Black Clawson Company dated as of May 31, 1996.
Transfer and Registration Agreement among United States Filter Corporation, CGW
Southeast Partners II, L.P., Harry K. Hornish, Mickey Jordan and Mechelle
S. Slaughter, dated as of October 25, 1996.
-26-
<PAGE>
EXHIBIT 4.1
WARRANT AGREEMENT
dated as of September 17, 1997
by and among
UNITED STATES FILTER CORPORATION,
WESTERN FARM & CATTLE COMPANY,
CALIFORNIA LAND & CATTLE COMPANY,
N.N. INVESTORS, L.P.,
ST RANCH GENPAR, INC.,
and
FW RANCH PARTNERS, L.P.
<PAGE>
WARRANT AGREEMENT
-----------------
WARRANT AGREEMENT, dated as of September 17, 1997, by and among UNITED
STATES FILTER CORPORATION, a Delaware corporation (the "Company"), WESTERN FARM
& CATTLE COMPANY, a California corporation, CALIFORNIA LAND & CATTLE COMPANY, a
California corporation, N.N. INVESTORS, L.P., a Delaware limited partnership, ST
RANCH GENPAR, INC., a Texas corporation, and FW RANCH PARTNERS, L.P., a Texas
limited partnership (collectively, the "Sellers").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company and the Sellers have entered into an Agreement
for Sale and Purchase of Partnership Interests, dated as of August 3, 1997 (the
"Acquisition Agreement");
WHEREAS, the Company proposes to issue warrants to Sellers
("Warrants") to purchase up to 1,200,000 shares (the "Shares") of common stock,
par value $.01 per share, of the Company (the "Common Stock") at exercise prices
of $50.00 per share of Common Stock for 600,000 Shares and $60.00 per share of
Common Stock for 600,000 Shares (subject to adjustments as hereinafter
provided);
WHEREAS, the Warrants to be issued pursuant to this Agreement will be
issued on the Closing Date (as such term is defined in the Acquisition
Agreement) by the Company to Sellers in partial consideration for Sellers' sale
of certain partnership interests under the Acquisition Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
Section 1. Grant. The Sellers are hereby granted the right to
-----
purchase, at any time after the first contractual sale of water, and the receipt
of monies, funds, assets, debt forgiveness or the like therefor, by the Company
or any Affiliate of the Company or by the IID or another Governmental Body as
trustee or otherwise for the benefit of the Company or any Affiliate of the
Company from Water Rights appurtenant to the Properties of WFLP, California
Farms and FWRLP, as such terms are defined in the Acquisition Agreement, to
occur after September 17, 1997 (the "Closing Date") until 5:30 p.m., New York
time, on September 17, 2007 (the "Exercise Period"), up to 1,200,000 Shares
(subject to adjustment as provided in Section 8 hereof) at exercise prices equal
to $50.00 per Share for 600,000 Shares and $60.00 per Share for 600,000 Shares
(subject to adjustment as provided in Section 8 hereof), all subject to
<PAGE>
the terms and conditions of this Agreement. Each Seller shall receive the
Warrants for the number of Shares and at the exercise prices stated on Schedule
I hereto.
Section 2. Warrant Certificates. The warrant certificates (the
--------------------
"Warrant Certificates") delivered and to be delivered pursuant to this Agreement
shall be substantially in the form set forth in Exhibit A attached hereto and
made a part hereof, with such appropriate insertions and other variations as
required or permitted by this Agreement. The Warrant Certificates shall further
evidence the purchase rights granted hereby.
Section 3. Exercise of Warrant; Method of Exercise. The purchase
---------------------------------------
rights represented by each Warrant Certificate are exercisable at the option of
the Holder (as defined herein) thereof, in whole or in part (but not for less
than 5,000 Shares if exercised in part), at any time or from time to time during
the Exercise Period. Upon surrender of a Warrant Certificate with the annexed
Form of Election to Purchase duly executed, together with payment of the Common
Stock Exercise Price (as hereinafter defined), payable to the Company, by
certified or official bank check or wire transfer in New York Clearing House
funds for the Shares purchased, at the Company's principal offices in Palm
Desert, California (currently located at 40-004 Cook Street, Palm Desert,
California 92211), the registered holder of a Warrant Certificate ("Holder" or
"Holders") shall be entitled to receive a certificate or certificates for the
Shares so purchased. In the case of the purchase of less than all the Shares
purchasable under any Warrant Certificate, the Company, at its expense, shall
cancel said Warrant Certificate upon the surrender thereof and shall execute and
deliver a new Warrant Certificate of like tenor for the balance of the Shares
purchasable thereunder. The Holder shall identify the aggregate principal amount
of Shares for which the Warrant is exercised on the Form of Election to
Purchase.
Section 4. Issuance of Certificates. Upon the exercise of Warrants,
------------------------
the issuance of certificates for the Shares and/or other securities, properties
or rights underlying such Warrants shall be made forthwith (and in any event
within five (5) business days thereafter) without charge to the Holder thereof
including, without limitation, any tax which may be payable in respect of the
issuance thereof (other than state or federal income taxes), and such
certificates shall (subject to the provisions of Section 7 hereof) be issued in
the name of, or in such names as may be directed by, the Holder thereof;
provided, however, that the Company shall not be required to pay any tax which
- -------- -------
may be payable in respect of any transfer involved in the issuance and delivery
of any such certificates in a name other than that of the Holder thereof and the
Company shall not be required to issue or deliver such certificates unless or
until the individual, partnership, joint venture, limited liability company,
corporation, trust, unincorporated organization, government or department or
agency of a government ("Person") or Persons requesting the issuance thereof
shall have paid to the Company the amount of such tax or shall have established
to the satisfaction of the Company that such tax has been paid.
<PAGE>
The Warrant Certificates and the certificates representing the Shares
and/or other securities, property or rights issuable upon the exercise of
Warrants shall be executed on behalf of the Company by the manual or facsimile
signature of the then present Chairman or Vice Chairman of the Board of
Directors or President or any Vice President of the Company under its corporate
seal reproduced thereon and by the manual or facsimile signature of the then
present Treasurer or any Assistant Treasurer or Secretary or any Assistant
Secretary of the Company. Warrant Certificates shall be dated the date of
execution by the Company upon initial issuance, division, exchange, substitution
or transfer. Certificates representing the Shares and/or other securities,
property or rights issuable upon exercise of Warrants shall be dated the date on
which the exercise is perfected by the Holder hereof as provided in Section 3
hereof (the "Exercise Date") and any interest bearing securities so issued shall
accrue interest from the Exercise Date.
Section 5. Restriction On Transfer of Warrants. The Holder of a
-----------------------------------
Warrant Certificate, by its acceptance thereof, covenants and agrees that the
Warrants are being acquired as an investment and not with a view to the
distribution thereof. Subject to compliance with all applicable federal and
state securities laws, the Sellers may transfer the Warrants and this Agreement
(i) upon receiving the written consent of the Company or (ii) to any direct or
indirect partner of any Holder or any Affiliate thereof; provided, however, that
-------- -------
any such transferee shall agree with the Company in writing prior to each such
transfer to be bound by the terms of this Agreement. As used herein,
"Affiliate" shall mean any Person (a) more than 50% of any class of the
outstanding voting securities of which is owned, directly or indirectly, by one
or more Holders and/or one or more Affiliates, or (b) over which one or more
Holders is otherwise able to exert actual control; provided, however, that, for
-------- -------
purposes of clause (b) of this definition, actual control shall be determined
solely based on whether the Holder has in fact the ability to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise.
Section 6. Exercise Price.
--------------
Section 6.1. Initial and Adjusted Exercise Price. The initial
-----------------------------------
exercise price of each Warrant for Common Stock shall be the exercise price
stated on the Warrant Certificates issued on the Closing Date, as prepared in
accordance with Schedule I hereto. The adjusted exercise price for Common Stock
shall be the price which shall result from time to time from any and all
adjustments of the initial exercise price in accordance with the provisions of
Section 8 hereof.
Section 6.2. Exercise Price. The term "Common Stock Exercise Price"
--------------
herein shall mean the initial exercise price for Common Stock hereunder or, if
the initial exercise price has been adjusted pursuant to the terms hereof, the
adjusted exercise price for Common Stock hereunder.
3
<PAGE>
Section 7. Transfer Restrictions.
---------------------
Section 7.1. Registration Under the Securities Act of 1933. The
---------------------------------------------
Warrants, the Shares and any of the other securities issuable upon exercise of
Warrants have not been registered under the Securities Act of 1933, as amended.
Upon exercise, in part or in whole, of Warrants, the Shares shall be subject to
the restrictions on transfer specified in Article V of the Transfer,
Registration Rights and Governance Agreement among the Company and Sellers dated
September 17, 1997 (the "Transfer Agreement"), and the certificates representing
the Shares shall bear the legends required under Article V of the Transfer
Agreement.
Section 8. Adjustments to Exercise Price and Number of Securities.
------------------------------------------------------
Section 8.1. Computation of Adjusted Exercise Price. Except as
--------------------------------------
hereinafter provided, in case the Company shall at any time after the date
hereof issue or sell any shares of Common Stock (other than the issuances or
sales referred to in Section 8.3 or 8.7 hereof), including shares held in the
Company's treasury (but excluding (i) shares issued upon the exercise of any
options, rights or warrants and shares issued upon the direct or indirect
conversion or exchange of securities and (ii) shares issued pursuant to employee
or director benefit plans approved by a majority of the Company's entire Board
of Directors), for a consideration per share less than the Market Price per
share of Common Stock on the date immediately prior to the issuance or sale of
such shares, or without consideration, then forthwith upon such issuance or
sale, the Common Stock Exercise Price shall (until another such issuance or sale
or other event giving rise to an adjustment to the Common Stock Exercise Price
pursuant to this Section 8) be adjusted (calculated to the nearest full cent) by
multiplying the Common Stock Exercise Price in effect immediately prior to such
issuance or sale by the quotient derived by dividing (x) an amount equal to the
sum of (a) the total number of shares of Common Stock outstanding immediately
prior to such issuance or sale plus (b) the number of shares of Common Stock
which the aggregate consideration received by the Company in connection with
such issuance or sale would purchase at such Market Price, by (y) the total
number of shares of Common Stock outstanding immediately after such issuance or
sale; provided, however, that in no event shall the Common Stock Exercise Price
-------- -------
be adjusted pursuant to this computation to an amount in excess of the Common
Stock Exercise Price in effect immediately prior to such computation, except in
the case of a combination of outstanding shares of Common Stock as provided by
Section 8.3 hereof.
As used herein, the "Market Price" of Common Stock at any date shall
be deemed to be the last reported sale price (expressed as a dollar value per
share) or, in case no such reported sale takes place on such day, the average of
the last reported sale prices for the last three (3) trading days, in either
case as officially reported by the principal securities exchange on which the
Common Stock is listed or admitted to trading or, if not so listed or admitted,
by the National Association of Securities Dealers Automated Quotation System
("NASDAQ") National
4
<PAGE>
Market System ("NASDAQ/NMS") or, if not approved for quotation on the
NASDAQ/NMS, the average closing bid price as furnished by the National
Association of Securities Dealers, Inc. (the "NASD") through NASDAQ or a similar
organization if NASDAQ is no longer reporting such information or, if such
security is not quoted on NASDAQ, as determined in good faith by resolution of
the Board of Directors of the Company, based on the best information available
to it.
For the purposes of any computation to be made in accordance with this
Section 8.1, the following provisions shall be applicable:
(i) In case of the issuance or sale of shares of Common Stock for
a consideration part or all of which shall be cash, the amount of the cash
consideration therefor shall be deemed to be the amount of cash received by
the Company for such shares (or, if shares of Common Stock are offered by
the Company for subscription, the subscription price, or, if shares of
Common Stock shall be sold to underwriters or dealers for public offering
without a subscription offering, the initial public offering price) before
deducting therefrom any compensation paid or discount allowed in the sale,
underwriting or purchase thereof by underwriters or dealers or others
performing similar services or any expenses incurred in connection
therewith.
(ii) In case of the issuance or sale of shares of Common Stock
for consideration part or all of which shall be other than cash, the amount
of the consideration therefor other than cash shall be deemed to be the
value of such consideration as determined in good faith by the Board of
Directors of the Company and shall include any amounts payable to security
holders or any affiliates thereof, including without limitation, pursuant
to any employment agreement, royalty, consulting agreement, covenant not to
compete, earned or contingent payment right or similar arrangement,
agreement or understanding, whether oral or written, all such amounts being
valued for the purposes hereof at the aggregate amount payable thereunder,
whether such payments are absolute or contingent, and irrespective of the
period or uncertainty of payment, the rate of interest, if any, or the
contingent nature thereof; provided, however, that if any Holder does not
-------- -------
agree with such valuation, a mutually acceptable independent appraiser
shall make such valuation, the cost of which shall be borne by the Company.
(iii) Shares of Common Stock issuable by way of dividend or
other distribution on any stock of the Company other than the Common Stock
shall be deemed to have been issued immediately after the opening of
business on the day following the record date for the determination of
stockholders entitled to receive such dividend or other distribution and
shall be deemed to have been issued without consideration.
5
<PAGE>
(iv) The reclassification of securities of the Company (other
than shares of Common Stock) into securities including shares of Common
Stock shall be deemed to involve the issuance of such shares of Common
Stock for a consideration other than cash immediately prior to the close of
business on the date fixed for the determination of security holders
entitled to receive such shares, and the value of the consideration
allocable to such shares of Common Stock shall be determined as provided in
subsection (ii) of this Section 8.1.
(v) The number of shares of Common Stock at any one time
outstanding shall include the aggregate number of shares issued or issuable
(subject to readjustment upon the actual issuance thereof, upon the
exercise of options, rights and warrants and upon the conversion or
exchange of convertible or exchangeable securities.
Section 8.2. Options, Rights, Warrants and Convertible and
---------------------------------------------
Exchangeable Securities. In case the Company shall at any time after the date
- -----------------------
hereof issue options, rights or warrants to purchase or subscribe for, or
exercisable for, shares of Common Stock, or issue any securities convertible
into or exchangeable for shares of Common Stock, for a consideration per share
less than the Market Price for Common Stock immediately prior to the issuance of
such options, rights, warrants or convertible or exchangeable securities, or
without consideration, the Common Stock Exercise Price in effect immediately
prior to the issuance of such options, rights, warrants or convertible or
exchangeable securities, as the case may be, shall be reduced to a price
determined by making a computation in accordance with the provisions of Section
8.1 hereof; provided that:
--------
(i) The aggregate maximum number of shares of Common Stock, as
the case may be, issuable under such options, rights or warrants shall be
deemed to be issued and outstanding at the time such options, rights or
warrants were issued, and for a consideration equal to the minimum purchase
or subscription price per share provided for in such options, rights or
warrants at the time of issuance, plus the consideration (determined in the
same manner as consideration received on the issue or sale of shares in
accordance with the terms of the Warrants), if any, received by the Company
for such options, rights or warrants.
(ii) The aggregate maximum number of shares of Common Stock
issuable upon conversion or exchange of such convertible or exchangeable
securities shall be deemed to be issued and outstanding at the time of
issuance of such securities, and for a consideration equal to the
consideration (determined in the same manner as consideration received on
the issue or sale of shares of Common Stock in accordance with the terms of
the Warrants) received by the Company for such securities, plus the minimum
consideration, if any, receivable by the Company upon the conversion or
exchange thereof.
6
<PAGE>
(iii) If any change shall occur in the purchase or subscription
price per share provided for in any of such options, rights or warrants or
in the conversion or exchange price per share of such securities, such
options, rights, warrants or conversion or exchange rights, as the case may
be, shall be deemed to have expired or terminated on the date when such
price change became effective in respect of shares not theretofore issued
pursuant to the exercise or conversion or exchange thereof, and the Company
shall be deemed to have issued upon such date new options, rights, warrants
or convertible or exchangeable securities at the new purchase,
subscription, conversion or exchange price in respect of the number of
shares issuable upon the exercise of such options, rights or warrants or
the conversion or exchange of such convertible or exchangeable securities.
Section 8.3. Subdivision and Combination. In case the Company shall
---------------------------
at any time (i) declare a dividend on the Common Stock payable in shares of its
capital stock (including Common Stock), (ii) subdivide or combine the
outstanding shares of Common Stock, or (iii) issue any class of its capital
stock in a reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing corporation), then the Common Stock Exercise Price in
effect immediately prior to the record date for such dividend or the effective
date of such subdivision, combination or reclassification shall forthwith be
proportionately adjusted so that the holder of any Warrant exercised after such
date shall be entitled to receive the aggregate number and kind of capital stock
which, if such Warrant had been exercised immediately prior to such date, such
holder would have owned upon such exercise and been entitled to receive by
virtue of such dividend, division, subdivision, combination or reclassification.
Section 8.4. Adjustment in Number of Securities. Upon each
----------------------------------
adjustment of the Common Stock Exercise Price pursuant to the provisions of this
Section 8, the number of shares of Common Stock issuable upon exercise at the
adjusted Common Stock Exercise Price of each Warrant shall be adjusted to the
nearest full amount by multiplying a number equal to the Common Stock Exercise
Price in effect immediately prior to such adjustment by the number of shares of
Common Stock issuable upon exercise of Warrants immediately prior to such
adjustment and dividing the product so obtained by the adjusted Common Stock
Exercise Price.
Section 8.5. Common Stock. If any class, classes and/or series of
------------
capital stock is issued in exchange for Common Stock upon conversion thereof or
in lieu thereof in connection with any change in par or stated value,
recapitalization, reorganization or other transaction, such class, classes
and/or series of capital stock shall thereafter be the Common Stock referred to
herein.
Section 8.6. Merger or Consolidation. In case of any consolidation
-----------------------
or merger of the Company with or into another corporation or other entity (other
than a consolidation or
7
<PAGE>
merger in which the Company is the continuing corporation and which does not
result in any reclassification or change of the outstanding Common Stock or
other securities issuable upon exercise of Warrants) or in case of any sale or
conveyance to another Person of all or substantially of the assets and the
property of the Company, then, as a condition of such consolidation, merger,
sale or conveyance, the Company, or such successor or purchasing corporation, as
the case may be, shall execute and deliver to the Holder of each Warrant then
outstanding a supplemental warrant agreement providing that such Holder shall
have the right thereafter to receive, upon exercise of such Warrant (until the
expiration of such Warrant) the kind and amount of securities, rights and
property receivable upon such consolidation, merger, sale or conveyance by a
holder of the number of Warrant Securities issuable upon exercise of such
Warrant immediately prior to such consolidation, merger, sale or transfer. Such
supplemental warrant agreement shall provide for adjustments which shall be
identical to the adjustments provided in this Section 8. The above provision of
this subsection shall similarly apply to successive consolidations, mergers,
conveyances and sales.
Section 8.7. No Adjustment of Exercise Price in Certain Cases. No
------------------------------------------------
adjustment of the Common Stock Exercise Price shall be made:
(i) Upon the issuance or sale of the Warrants, upon exercise of
the Warrants or the issuance of the shares of Common Stock issuable upon
the exercise of the Warrants; or
(ii) If the amount of said adjustment shall be less than one cent
(1 cent) per share; provided, however, that in such case any adjustment
-------- -------
that would otherwise be required then to be made shall be carried forward
and shall be made at the time of and together with the next subsequent
adjustment which, together with any adjustment so carried forward, shall
amount to at least one cent (1 cent) per share.
Section 8.8. Certificate of Adjustment. After each adjustment of the
-------------------------
Common Stock Exercise Price or the amount of Warrant Securities purchasable upon
exercise of Warrants pursuant to this Section 8, the Company will promptly
prepare a certificate signed by the Chairman or President, and by the Treasurer
or an Assistant Treasurer or the Secretary or an Assistant Secretary, of the
Company setting forth: (i) the Common Stock Exercise Price, as so adjusted; (ii)
the number of Shares purchasable upon exercise of each Warrant after such
adjustment; and (iii) a brief statement of the facts accounting for such
adjustment. The Company will promptly file such certificate with its records and
cause a brief summary thereof to be sent by first-class mail to each Holder at
his last address as it shall appear on the registry books of the Company. No
failure to mail such notice nor any defect therein or in the mailing thereof
shall affect the validity thereof, except as to any Holder to whom the Company
failed to mail such notice or except as to any Holder whose notice was
defective.
8
<PAGE>
Section 8.9. Validity of Warrant Certificate. Irrespective of any
-------------------------------
adjustments or changes in the Common Stock Exercise Price or the number of
Shares purchasable upon exercise of Warrants, Warrant Certificates theretofore
and thereafter issued shall continue to express the Common Stock Exercise Price
per share and the number of Shares purchasable thereunder as of the date such
Warrant Certificates were originally issued; provided that the Holders shall be
--------
entitled to exercise Warrants represented by such Warrant Certificates after
giving effect to each such adjustment and change, and such Warrant Certificate
shall be deemed to incorporate each such adjustment and change as if new Warrant
Certificates reflecting each such adjustment and change had been issued to the
Holders.
Section 8.10. Dividends and Other Distributions. In the event that
---------------------------------
the Company shall at any time prior to the exercise of all Warrants declare a
dividend (other than a dividend consisting solely of shares of Common Stock and
other than a regularly scheduled dividend with respect to any calendar year
declared within such calendar year or the following calendar year which does not
exceed one hundred percent (l00%) of net earnings (after taxes) for such
calendar year) or otherwise distribute to all its stockholders any assets
(including shares of any subsidiary), property, rights, evidences of
indebtedness, securities (other than shares of Common Stock) then, forthwith
upon such declaration, the Common Stock Exercise Price (until another such
declaration or other event causing price adjustments to the Common Stock
Exercise Price pursuant to this Section 8) whether issued by the Company or by
another, or other thing of value, shall be adjusted (calculated to the nearest
$.0001) by multiplying the Common Stock Exercise Price in effect immediately
prior to the record date for such dividend or other distribution by the quotient
derived by dividing (i) the difference between (a) the product of the number of
shares of Common Stock outstanding immediately prior to such declaration
multiplied by the Market Price for Common Stock immediately prior to such
declaration and (b) the aggregate fair market value amount of such dividend or
distribution so declared by (ii) the product of the number of shares of Common
Stock outstanding immediately prior to such declaration multiplied by the Market
Price for Common Stock immediately prior to such declaration. Such adjustments
shall be made on the record date for determination of stockholders entitled to
receive such dividend or distribution.
Section 9. Exchange and Replacement of Warrant Certificates. Each
------------------------------------------------
Warrant Certificate is exchangeable, without expense, upon the surrender thereof
by the Holder at the principal executive office of the Company, for a new
Warrant Certificate of like tenor and date representing in the aggregate the
right to purchase the same number of Warrant Securities in such denominations as
shall be designated by the Holder at the time of such surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of any Warrant Certificate, and,
in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of
9
<PAGE>
such Warrant Certificates, if mutilated, the Company will make and deliver a new
Warrant Certificate of like tenor in lieu thereof.
Section 10. Elimination of Fractional Interests. The Company shall
-----------------------------------
not be required to issue certificates representing fractions of shares of Common
Stock upon the exercise of Warrants, nor shall it be required to issue scrip or
pay cash in lieu of such fractional interests, it being the intent of the
parties that all fractional interests shall be eliminated by rounding any
fraction up to the nearest whole number of shares of Common Stock or other
securities, properties or rights.
Section 11. Reservation and Listing of Securities. The Company shall
--------------------------------------
at all times reserve and keep available out of its authorized capital stock,
solely for the purpose of issuance of Common Stock issuable upon exercise of
Warrants, such number of shares of Common Stock as shall be issuable upon
exercise thereof. The Company covenants and agrees that, upon exercise of the
Warrants and payment of the Common Stock Exercise Price, all Shares of Common
Stock and other securities issuable upon such exercise when issued shall be duly
and validly issued, fully paid, non-assessable and not subject to the preemptive
rights of any security holder of the Company. As long as Warrants shall be
outstanding, the Company shall use reasonable efforts to cause the Common Stock
issuable upon the exercise of Warrants to be listed (subject to official notice
of issuance) on all securities exchanges on which the Common Stock may then be
listed and/or quoted on NASDAQ/NMS.
The Company represents and warrants that (i) the Company has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of Delaware and has all requisite power, authority and legal right to enter
into this Agreement; (ii) this Agreement has been duly executed and delivered by
the Company and constitutes a valid and legally binding agreement of the
Company, enforceable against the Company in accordance with its terms, subject
to (a) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium
and other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally and (b) general principles of equity (regardless of
whether considered in a proceeding at law or in equity); (iii) the Warrants have
been duly authorized, validly issued and are fully paid and non-assessable and
are not subject to any preemptive rights; and (iv) as of June 23, 1997, the
Company had 80,377,604 shares of Common Stock issued and outstanding.
Section 12. Notices to Warrant Holders. Nothing contained in this
--------------------------
Agreement shall be construed as conferring upon the Holders of Warrants the
right to vote or to consent or to receive notice as a stockholder in respect of
any meetings of stockholders for the election of directors or any other matter
or as having any rights whatsoever as a stockholder of the Company. If, however,
at any time prior to the earlier of the expiration of the Warrants or their
exercise, any of the following events shall occur:
10
<PAGE>
(i) the Company shall take a record of the holders of shares of
Common Stock for the purpose of entitling them to receive a dividend or
distribution payable otherwise than in cash, or a cash dividend or
distribution payable otherwise than out of current or retained earnings, as
indicated by the accounting treatment of such dividend or distribution on
the books of the Company; or
(ii) the Company shall offer to all the holders of shares of
Common Stock any additional shares of capital stock of the Company or
securities convertible into or exchangeable for shares of capital stock of
the Company, or any option, right or warrant to subscribe therefor; or
(iii) a dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation or merger) or a sale of all
or substantially all of its property, assets and business as an entirety
shall be proposed;
then, in any one or more of said events, the Company shall give written notice
of such event to each Holder of Warrants at least fifteen (15) days prior to the
date fixed as a record date or the date of closing the transfer books for the
determination of the stockholders entitled to such dividend, distribution or
offer. Such notice shall specify such record date or the date of closing the
transfer books, as the case may be. Failure to give such notice or any defect
therein shall not affect the validity of any action taken in connection with
such dividend, distribution, offer, dissolution, liquidation, winding up or
sale.
Section 13. Notices. All notices, requests, consents and other
-------
communications hereunder shall be in writing and shall be deemed to have been
duly made and sent when delivered, or mailed by registered or certified mail,
return receipt requested:
(i) If to a Holder, to the address of such Holder as shown on the
books of the Company; or
(ii) If to the Company, to the address set forth in Section 3
hereof or to such other address as the Company may designate by notice to
the Holders.
Section 14. Supplements and Amendments. The Company and the Sellers
--------------------------
may from time to time supplement or amend this Agreement without the approval of
any Holders (other than Sellers) in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be defective or inconsistent
with any provisions herein, or to make any other provisions in regard to matters
or questions arising hereunder which the Company and the Sellers may deem
necessary or desirable and which the Company and the Sellers deem shall not
adversely affect the interests of the Holders.
11
<PAGE>
Section 15. Successors. All the covenants and provisions of this
----------
Agreement shall be binding upon and inure to the benefit of the Company, the
Holders and their respective successors and assigns hereunder.
Section 16. Termination. Except for the representation and warranty
-----------
of the Company contained herein that all Shares issued upon the exercise of any
Warrants are validly issued, fully paid and non-assessable, this Agreement, and
all provisions hereof, shall terminate at the close of business on September 17,
2007.
Section 17. Governing Law; Submission to Jurisdiction. This
-----------------------------------------
Agreement and each Warrant Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of Delaware and for all purposes shall
be construed in accordance with the laws of said State without giving effect to
the rules of said State governing conflicts of laws.
The Company, Sellers and the Holders hereby agree that any action,
proceeding or claim against it arising out of, or relating in any way to, this
Agreement shall be brought and enforced in the courts of the State of Delaware
or of the United States of America for the District of Delaware, and irrevocably
submit to such jurisdiction, which jurisdiction shall be exclusive. The Company,
the Sellers and the Holders hereby irrevocably waive any objection to such
exclusive jurisdiction or inconvenient forum and also hereby irrevocably waive
any right or claim to trial by jury in connection with any such action,
proceeding or claim. Any such process or summons to be served upon any of the
Company, the Sellers and the Holders (at the option of the party bringing such
action, proceeding or claim) may be served by transmitting a copy thereof, by
registered or certified mail, return receipt requested, postage prepaid,
addressed to it at the address referred to in Section 13 hereof. Such mailing
shall be deemed personal service and shall be legal and binding upon the party
so served in any action, proceeding or claim. The Company, the Sellers and the
Holders agree that the prevailing party(ies) in any such action or proceeding
shall be entitled to recover from the other party(ies) all of its(their)
reasonable legal costs and expenses relating to such action or proceeding and/or
incurred in connection with the preparation therefor.
Section 18. Entire Agreement; Modification. This Agreement
------------------------------
(including the Acquisition Agreement to the extent portions thereof are referred
to herein) contains the entire understanding between the parties hereto with
respect to the subject matter hereof and may not be modified or amended except
by a writing duly signed by the party against whom enforcement of the
modification or amendment is sought.
Section 19. Severability. If any provision of this Agreement shall
------------
be held to be invalid or unenforceable, such invalidity or unenforceability
shall not affect any other provision of this Agreement.
12
<PAGE>
Section 20. Captions. The caption headings of the Sections of this
--------
Agreement are for convenience of reference only, are not intended as, nor should
they be construed as, a part of this Agreement and shall be given no substantive
effect.
Section 21. Benefits of this Agreement. Nothing in this Agreement
--------------------------
shall be construed to give to any Person other than the Company and Sellers and
any other Holders of Warrants, any legal or equitable right, remedy or claim
under this Agreement, and this Agreement shall be for the sole and exclusive
benefit of the Company and Sellers and any other Holders of Warrants.
Section 22. Counterparts. This Agreement may be executed in any
------------
number of counterparts, each of such counterparts shall for all purposes be
deemed to be an original and such counterparts shall together constitute but one
and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
[SEAL] UNITED STATES FILTER CORPORATION
By: /s/ Michael E. Hulme
--------------------------------
Name: Michael E. Hulme
Title: Attorney-in-Fact for
Richard J. Heckmann
WESTERN FARM & CATTLE COMPANY
By: /s/ Ardon E. Moore
--------------------------------
Name: Ardon E. Moore
Title: President
N.N. INVESTORS, L.P.
By: California Land & Cattle Company,
its General Partner
By: /s/ Ardon E. Moore
--------------------------------
Name: Ardon E. Moore
Title: President
13
<PAGE>
CALIFORNIA LAND & CATTLE COMPANY
By: /s/ Ardon E. Moore
--------------------------------
Name: Ardon E. Moore
Title: President
ST RANCH GENPAR, INC.
By: /s/ Ardon E. Moore
--------------------------------
Name: Ardon E. Moore
Title: President
FW RANCH PARTNERS, L.P.
By: ST Ranch GenPar, Inc.,
its General Partner
By: /s/ Ardon E. Moore
--------------------------------
Name: Ardon E. Moore
Title: President
14
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
Seller Warrants Exercise Price
- ------ -------- --------------
<S> <C> <C>
N.N. Investors, L.P. 551,232 $50
551,232 $60
FW Ranch Partners, L.P. 42,768 $50
42,768 $60
California Land & Cattle Company 5,568 $50
5,568 $60
ST Ranch GenPar, Inc. 432 $50
432 $60
Western Farm & Cattle Company 0 N/A
0 N/A
---------
1,200,000
=========
</TABLE>
15
<PAGE>
EXHIBIT A
FORM OF WARRANT CERTIFICATE
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES
ISSUABLE UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i)
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, (ii) TO
THE EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH
ACT RELATING TO THE DISPOSITION OF SECURITIES) OR (iii) AN OPINION OF COUNSEL,
IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL FOR THE ISSUER, THAT
AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS
CERTIFICATE IS RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO
HEREIN.
EXERCISABLE ON OR BEFORE
5:30 P.M., NEW YORK TIME, SEPTEMBER 17, 2007.
No. W-____ ___________ Warrants
WARRANT CERTIFICATE
This Warrant Certificate certifies that ________________, or its
registered assigns, is the registered holder of __________________ Warrants to
purchase initially, at any time after the first contractual sale of water, and
the receipt of monies, funds, assets, debt forgiveness or the like therefor, by
the Company or any Affiliate of the Company or by the IID or another
Governmental Body as trustee for the benefit of the Company or any Affiliate of
the Company from Water Rights appurtenant to the Properties of WFLP, California
Farms and FWRLP, as such terms are defined in the Acquisition Agreement, dated
August 3, 1997, by and among the Company and the Sellers named therein, to occur
after the date of this Warrant Certificate until 5:30 p.m. New York time on
September 17, 2007 (the "Expiration Date"), up to ________________ fully paid
and non-assessable shares of Common Stock, par value $.01 per share (the "Common
Stock") of UNITED STATES FILTER CORPORATION, a Delaware corporation (the
"Company"), at the initial exercise price, subject to adjustment in certain
events (the "Common Stock Exercise Price"), equal to $_____ per share upon
surrender of this Warrant Certificate and payment of the Common Stock Exercise
Price at an office or agency of the Company, but subject to the conditions set
forth herein and in the Warrant Agreement dated as of September 17, 1997
between the Company and the Sellers (the "Warrant Agreement"). Each Warrant
entitles the holder thereof initially to purchase one (1) share of Common Stock.
<PAGE>
Payment of the Common Stock Exercise Price shall be made by certified or
official bank check or wire transfer in New York Clearing House funds payable to
the order of the Company.
No Warrant may be exercised after 5:30 p.m., New York time, on the
Expiration Date, at which time all Warrants evidenced hereby, unless exercised
prior thereto, shall thereafter be void.
The Warrants evidenced by this Warrant Certificate are a duly
authorized issue of Warrants issued pursuant to the Warrant Agreement, which
Warrant Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights, limitation
of rights, obligations, duties and immunities thereunder of the Company and the
holder(s) (the word "holders" or "holder" meaning the registered holders or
registered holder) of the Warrants.
The Warrant Agreement provides that, upon the occurrence of certain
events, the Common Stock Exercise Price and the type and/or number of the
Company's securities issuable upon exercise of Warrants may, subject to certain
conditions, be adjusted. In such event, the Company will, at the request of the
holder, in exchange for the old Warrant Certificate, issue a new Warrant
Certificate evidencing the adjustment in the Common Stock Exercise Price and the
number and/or type of securities issuable upon the exercise of the Warrants;
provided, however, that the failure of the Company to issue such new Warrant
- -------- -------
Certificates shall not in any way change, alter or otherwise impair the rights
of the holder(s) as set forth in the Warrant Agreement.
Upon due presentment for registration of transfer of this Warrant
Certificate at an office or agency of the Company, a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided herein and in the Warrant
Agreement, without any charge except for any tax or other governmental charge
imposed in connection with such transfer.
Upon the exercise of less than all of the Warrants evidenced by this
Warrant Certificate, the Company shall forthwith issue to the holder hereof a
new Warrant Certificate representing such number of unexercised Warrants.
The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
All terms used in this Warrant Certificate which are defined in the
Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.
2
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed under its corporate seal.
Dated as of September 17, 1997.
UNITED STATES FILTER CORPORATION
[SEAL]
By:
---------------------------------
Name:
Title:
3
<PAGE>
FORM OF ELECTION TO PURCHASE
PURSUANT TO SECTION 3.1
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase ___________ shares of
Common Stock and herewith tenders in payment for such securities a certified or
official bank check or wire transfer payable in New York Clearing House Funds to
the order of UNITED STATES FILTER CORPORATION in the amount of
$_______________________, all in accordance with the terms of Section 3.1 of
that certain Warrant Agreement dated as of September 17, 1997 by and among
UNITED STATES FILTER CORPORATION, WESTERN FARM & CATTLE COMPANY, CALIFORNIA LAND
& CATTLE COMPANY, N.N. INVESTORS, L.P., ST RANCH GENPAR, INC. and FW RANCH
PARTNERS, L.P. The undersigned requests that a certificate for such securities
be registered in the name of
___________________________________, whose address is
_____________________________________ and that such certificate be delivered to
________________________ whose address is _____________________________________.
Date: _______________________ Signature:________________________________
(Signature must conform in all
respects to name of holder as specified on
the face of the Warrant Certificate.)
------------------------------------------
(Insert Social Security or Other Identifying
Number of Holder)
<PAGE>
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Warrant Certificate.)
FOR VALUE RECEIVED,_______________________________________
hereby sells, assigns and transfers unto
---------------------------------------------
(Please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint____________________________
Attorney to transfer the within Warrant Certificate on the books of the within-
named Company, with full power of substitution.
Date:___________________ Signature:__________________________________
(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant Certificate.)
____________________________________________
(Insert Social Security or Other Identifying
Number of Assignee)
