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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): November 27, 1995
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Merrill Lynch & Co., Inc.
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(Exact name of Registrant as specified in its charter)
Delaware 1-7182 13-2740599
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
World Financial Center, North Tower, New York, New York 10281-1220
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (212) 449-1000
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_________________________________________________________________
(Former name or former address, if changed since last report.)
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Item 5. Other Events
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Exhibits are filed herewith in connection with the Registration Statement
on Form S-3 (File No. 33-61559) filed by Merrill Lynch & Co., Inc. ("ML & Co.")
with the Securities and Exchange Commission (the "Registration Statement")
covering the Russell 2000 Index Call Warrants Expiring November 17, 1998 (the
"Warrants") issuable under a Warrant Agreement dated as of November 27, 1995
between ML & Co. and Citibank, N.A. (the "Warrant Agreement"). ML & Co. will
issue 1,350,000 Warrants pursuant to the Warrant Agreement. The exhibits
consist of the form of the Warrant Agreement (including a form of the Warrant)
and an opinion of counsel relating to the Warrants.
Item 7. Financial Statements, Pro Forma Financial Information
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and Exhibits
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EXHIBITS
(4) Instruments defining the rights of security holders, including
indentures.
Form of Warrant Agreement dated as of November 27, 1995,
including a form of the Warrant.
(5) & (23) Opinion re: legality; consent of counsel.
Opinion of Brown & Wood relating to the Russell 2000 Index
Call Warrants Expiring November 17, 1998 (including consent
for inclusion of such opinion in this report and in Merrill
Lynch & Co., Inc.'s Registration Statement relating to such
Warrants).
2
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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, thereto duly authorized.
MERRILL LYNCH & CO., INC.
---------------------------------
(Registrant)
By: /s/ Joseph T. Willett
_____________________________
Joseph T. Willett
Senior Vice President
and Chief Financial Officer
Date: November 27, 1995
3
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
MERRILL LYNCH & CO., INC.
EXHIBITS TO CURRENT REPORT ON
FORM 8-K DATED NOVEMBER 27, 1995
Commission File Number 1-7182
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Exhibit Index
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Exhibit No. Description Page
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(4) Instruments defining the rights of
security holders including indentures.
Form of Warrant Agreement dated as of
November 27, 1995, including a form of
the Warrant.
(5) & (23) Opinion re: legality; consent of counsel.
Opinion of Brown & Wood relating to the
Russell 2000 Index Call Warrants Expiring
November 17, 1998 (including consent for
inclusion of such opinion in this report
and in Merrill Lynch & Co., Inc.'s
Registration Statement relating to such
Warrants).
<PAGE>
EXHIBIT (4)
MERRILL LYNCH & CO., INC.
and
CITIBANK, N.A., as Warrant Agent
____________________
WARRANT AGREEMENT
dated as of November 27, 1995
____________________
1,350,000 RUSSELL 2000 INDEX CALL WARRANTS
EXPIRING NOVEMBER 17, 1998
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<PAGE>
TABLE OF CONTENTS
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Page
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PARTIES.........................................................1
RECITALS........................................................1
ARTICLE I
ISSUANCE, FORM, EXECUTION,
DELIVERY AND REGISTRATION OF WARRANTS
SECTION 1.01. Issuance of Warrants; Book Entry
Procedures; Successor Depository...........1
SECTION 1.02. Form, Execution and Delivery of Global
Warrant Certificate........................3
SECTION 1.03. Global Warrant Certificate..................4
SECTION 1.04. Registration of Transfers and Exchanges.....4
SECTION 1.05. Warrant Certificates........................5
ARTICLE II
DURATION AND EXERCISE OF WARRANTS
SECTION 2.01. Duration of Warrants; Minimum Exercise
Amounts; Notice of Exercise................8
SECTION 2.02. Exercise and Delivery of Warrants..........11
SECTION 2.03. Automatic Exercise of the Warrants.........13
SECTION 2.04. Extraordinary Events and Market
Disruption Events.........................16
SECTION 2.05. Covenant of the Company....................20
SECTION 2.06. Return of Global Warrant Certificate.......20
SECTION 2.07. Return of Money Held Unclaimed for Two
Years.....................................20
SECTION 2.08. Designation of Agent for Receipt of
Notice....................................21
ARTICLE III
OTHER PROVISIONS RELATING TO
RIGHTS OF HOLDERS
SECTION 3.01. Holder of Warrant May Enforce Rights.......21
SECTION 3.02. Merger, Consolidation, Sale, Transfer or
Conveyance................................21
ARTICLE IV
CANCELLATION OF WARRANTS
SECTION 4.01. Cancellation of Warrants...................22
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SECTION 4.02. Treatment of Holders.......................22
ARTICLE V
CONCERNING THE WARRANT AGENT
SECTION 5.01. Warrant Agent..............................23
SECTION 5.02. Conditions of Warrant Agent's
Obligations...............................23
SECTION 5.03. Resignation and Appointment of
Successor.................................25
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. Amendment..................................27
SECTION 6.02. Notices and Demands to the Company and
Warrant Agent.............................28
SECTION 6.03. Addresses for Notices......................28
SECTION 6.04. Notices to Holders.........................28
SECTION 6.05. Applicable Law.............................28
SECTION 6.06. Obtaining of Governmental Approvals........28
SECTION 6.07. Persons Having Rights Under Warrant
Agreement.................................29
SECTION 6.08. Headings...................................30
SECTION 6.09. Counterparts...............................30
SECTION 6.10. Inspection of Agreement....................30
SIGNATURES.....................................................30
EXHIBIT A - Form of Global Warrant Certificate
EXHIBIT B - Form of Irrevocable Notice of Exercise
<PAGE>
WARRANT AGREEMENT
THIS AGREEMENT, dated as of November 27, 1995, between MERRILL LYNCH &
CO., INC., a corporation duly organized and existing under the laws of the State
of Delaware (the "Company"), and CITIBANK, N.A., a national banking association
duly incorporated and existing under the laws of the United States, as Warrant
Agent (the "Warrant Agent"),
W I T N E S S E T H T H A T :
WHEREAS, the Company proposes to sell warrants (the "Warrants" or,
individually, a "Warrant") representing the right to receive from the Company
the Cash Settlement Value (as defined herein) in U.S. dollars computed by
reference to increases in the value of the Russell 2000 Index (the "Index"); and
WHEREAS, the Company wishes the Warrant Agent to act on behalf of the
Company in connection with the issuance, transfer and exercise of the Warrants,
and wishes to set forth herein, among other things, the provisions of the
Warrants and the terms and conditions on which they may be issued, transferred,
exercised and cancelled;
NOW, THEREFORE, in consideration of the promises and of the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
ISSUANCE, FORM, EXECUTION,
DELIVERY AND REGISTRATION OF WARRANTS
SECTION 1.01. Issuance of Warrants; Book Entry Procedures; Successor
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Depository. (a) The Warrants shall initially be represented by a single
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certificate (the "Global Warrant Certificate"). Each Warrant shall represent
the right, subject to the provisions contained herein and in the Global Warrant
Certificate, to receive the Cash Settlement Value, if any, (as defined in
paragraph (e) of Section 2.02) of such Warrant. In no event shall Holders (as
defined in Section 4.02) be entitled to receive any interest on any Cash
Settlement Value (unless the Company shall default in the payment of such Cash
Settlement Value). Beneficial owners of interests in the Global Warrant
Certificate shall not be entitled to receive definitive Warrants evidencing the
Warrants; provided, however, that if (i) the Depository (as defined in Section
1.01(b)) is at any time unwilling or unable to continue as Depository for the
Warrants and a successor Depository is not appointed by the Company within 90
days, or (ii) the Company shall be adjudged bankrupt or
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insolvent or make an assignment for the benefit of its creditors or institute
proceedings to be adjudicated bankrupt or shall consent to the filing of a
bankruptcy proceeding against it, or shall file a petition or answer or consent
seeking reorganization under applicable law, or shall consent to the filing of
any such petition, or shall consent to the appointment of a receiver or
custodian of all or any substantial part of its property, or shall admit in
writing its inability to pay or meet its debts as they mature, or if a receiver
or custodian of it or all or any substantial part of its property shall be
appointed, or if any public officer shall have taken charge or control of the
Company or of its property or affairs, for the purpose of rehabilitation,
conservation or liquidation, the Company will issue Warrants in definitive form
in exchange for the Global Warrant Certificate. In addition, the Company may at
any time determine not to have the Warrants represented by a Global Warrant
Certificate and, in such event, will issue Warrants in definitive form in
exchange for the Global Warrant Certificate. In any such instance, and in
accordance with the provisions of this Agreement, each beneficial owner of an
interest in the Global Warrant Certificate will be entitled to have a number of
Warrants equivalent to such owner's beneficial interest in the Global Warrant
Certificate registered in its name and will be entitled to physical delivery of
such Warrants in definitive form by the Depository Participant (as defined in
Section 1.01(c)) through which such owner's beneficial interest is reflected.
The provisions of Section 1.05 shall apply only if, and when, Warrants in
definitive form ("Warrant Certificates") are issued hereunder. Unless the
context shall otherwise require, all references in this Agreement to the Global
Warrant Certificate shall include the Warrant Certificates in the event that
Warrant Certificates are issued.
(b) The Global Warrant Certificate shall be deposited with the
Depository or its agent (the term "Depository", as used herein, initially refers
to The Depository Trust Company and includes any successor depository selected
by the Company as provided in Section 1.01(d)) for credit to the accounts of the
Depository Participants as shown on the records of the Depository from time to
time.
(c) The Global Warrant Certificate will initially be registered in the
name of a nominee of the Depository selected by the Company for the Warrants.
The Warrant holdings of Depository Participants will be recorded on the books of
the Depository. The holdings of customers of Depository Participants will be
reflected on the books and records of such Depository Participants and will not
be known to the Warrant Agent, the Company or to the Depository. "Depository
Participants" include securities brokers and dealers, banks and trust companies,
clearing organizations and certain other organizations which are participants in
the Depository's system. The Global Warrant Certificate will be held by the
Depository or its agent.
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(d) The Company may from time to time select a new entity to act as
Depository and, if such selection is made, the Company shall promptly give the
Warrant Agent notice to such effect identifying the new Depository, and the
Global Warrant Certificate shall be delivered to the Warrant Agent and shall be
transferred to the new Depository as provided in Section 1.04 as promptly as
possible. Appropriate changes may be made in the Global Warrant Certificate,
the notice of exercise and the related notices delivered in connection with an
exercise of Warrants to reflect the selection of the new Depository.
SECTION 1.02. Form, Execution and Delivery of Global Warrant
----------------------------------------------
Certificate. The Global Warrant Certificate shall be in registered form and
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substantially in the form set forth in Exhibit A hereto, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Agreement. The Global Warrant Certificate may have imprinted
or otherwise reproduced thereon such letters, numbers or other marks of
identification or designation and such legends or endorsements as the officers
of the Company executing the same may approve (execution thereof to be
conclusive evidence of such approval) and are not inconsistent with the
provisions of this Agreement, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which the Warrants may be listed or of the Depository,
or to conform to usage. The Global Warrant Certificate shall be signed on
behalf of the Company by its President, Chairman of the Board, officer serving
as Chief Financial Officer, Treasurer, any Executive Vice President or any Vice
President, manually or by facsimile signature, and a facsimile of its corporate
seal shall be impressed, imprinted or engraved thereon, which shall be attested
by its Secretary or any Assistant Secretary, either manually or by facsimile
signature. Typographical and other minor errors or defects in any such
reproduction of the seal or any such signature shall not affect the validity or
enforceability of the Global Warrant Certificate that has been duly
authenticated and delivered by the Warrant Agent.
In case any officer of the Company who shall have signed the Global
Warrant Certificate either manually or by facsimile signature shall cease to be
such officer before the Global Warrant Certificate so signed shall have been
authenticated and delivered by the Warrant Agent or delivered by the Company,
such Global Warrant Certificate nevertheless may be authenticated and delivered
as though the person who signed such Global Warrant Certificate had not ceased
to be such officer of the Company; and the Global Warrant Certificate may be
signed on behalf of the Company by such persons as, at the actual date of the
execution of such Global Warrant Certificate, shall be the proper officers of
the Company, although at the date of the execution of this Agreement any such
person was not such officer.
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SECTION 1.03. Global Warrant Certificate. A Global Warrant
--------------------------
Certificate relating to 1,350,000 Warrants originally issued may be executed by
the Company and delivered to the Warrant Agent on or after the date of execution
of this Agreement. The Warrant Agent is authorized, upon receipt of the Global
Warrant Certificate from the Company, duly executed on behalf of the Company, to
authenticate such Global Warrant Certificate. The Global Warrant Certificate
shall be manually authenticated and dated the date of its authentication by the
Warrant Agent and shall not be valid for any purpose unless so authenticated.
The Warrant Agent shall authenticate and deliver the Global Warrant Certificate
to or upon the written order of the Company.
SECTION 1.04. Registration of Transfers and Exchanges. Except as
---------------------------------------
otherwise provided herein or in the Global Warrant Certificate, the Warrant
Agent shall from time to time register the transfer of the Global Warrant
Certificate in the records of the Warrant Agent only to the Depository, to a
nominee of the Depository, to a successor Depository, or to a nominee of a
successor Depository, upon surrender of such Global Warrant Certificate, duly
endorsed and accompanied by a written instrument or instruments of transfer in
form satisfactory to the Warrant Agent and the Company, duly signed by the
registered Holder thereof or by the duly appointed legal representative thereof
or by a duly authorized attorney. Upon any such registration of transfer, the
Company shall execute and the Warrant Agent shall authenticate and deliver in
the name of the designated transferee a new Global Warrant Certificate of like
tenor and evidencing a like number of Unexercised Warrants as evidenced by the
Global Warrant Certificate at the time of such registration of transfer.
The Global Warrant Certificate may be transferred as provided above at
the option of the Holder thereof when surrendered to the Warrant Agent at its
office or agency maintained for the purpose of transferring and exercising any
of the Warrants, which shall be south of Chambers Street in the Borough of
Manhattan, The City of New York (the "Warrant Agent Office"), and which is, on
the date of this Agreement, 111 Wall Street, New York, New York 10043
Attention: Corporate Trust Services, or at the office of any successor Warrant
Agent as provided in Section 5.03, in exchange for another Global Warrant
Certificate of like tenor and representing a like number of Unexercised
Warrants. At any time, "Unexercised Warrants" shall mean all Warrants which
have not been exercised pursuant to Article II herein.
SECTION 1.05. Warrant Certificates. Any Warrant Certificates issued
--------------------
in accordance with Section 1.01(a) shall be in registered form substantially in
the form set forth in Exhibit
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<PAGE>
A hereto, with such appropriate insertions, omissions, substitutions and other
variations as are necessary or desirable for individual Warrant Certificates,
and may represent any integral multiple of Warrants. The Warrant Certificates
may have imprinted or otherwise reproduced thereon such letters, numbers or
other marks of identification or designation and such legends or endorsements as
the officers of the Company executing the same may approve (execution thereof to
be conclusive evidence of such approval) and are not inconsistent with the
provisions of this Agreement, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which the Warrants may be listed or of the Depository,
or to conform to usage. Warrant Certificates shall be signed on behalf of the
Company upon the same conditions, in substantially the same manner and with the
same effect as the Global Warrant Certificate.
Each Warrant Certificate, when so signed on behalf of the Company,
shall be delivered to the Warrant Agent, which shall manually authenticate and
deliver the same to or upon the written order of the Company. Each Warrant
Certificate shall be dated the date of its authentication.
No Warrant Certificate shall be valid for any purpose, and no Warrant
evidenced thereby shall be exercisable, until such Warrant Certificate has been
authenticated by the manual signature of the Warrant Agent. Such signature by
the Warrant Agent upon any Warrant Certificate executed by the Company shall be
conclusive evidence that the Warrant Certificate so authenticated has been duly
issued hereunder.
Warrant Certificates delivered in exchange for the Global Warrant
Certificate shall be registered in such names and addresses (including tax
identification numbers) and in such denominations as shall be requested in
writing by the Depository or its nominee in whose name the Global Warrant
Certificate is registered, upon written certification to the Company and the
Warrant Agent in form satisfactory to each of them of a beneficial ownership
interest in the Global Warrant Certificate.
The Company shall cause to be kept at an office of the Warrant Agent
in The City of New York a register (the register maintained in such office and
in any other office or agency maintained by or on behalf of the Company for such
purpose being herein sometimes collectively referred to as the "Warrant
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of Warrant Certificates and the
transfer of Warrant Certificates. The Warrant Agent is hereby appointed
"Warrant Registrar" for the purpose of registering Warrant Certificates and the
transfer of Warrant Certificates as herein provided.
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Upon surrender for registration of a transfer of a Warrant Certificate
at an office or agency of the Company maintained for such purpose, the Company
shall execute, and the Warrant Agent shall authenticate and deliver, in the name
of the designated transferee or transferees, one or more new Warrant
Certificates of any authorized denominations and representing Warrants of a like
aggregate number.
At the option of the Holder, Warrant Certificates may be exchanged for
other Warrant Certificates of any authorized denominations and representing
Warrants of a like aggregate number, upon surrender of the Warrant Certificates
to be exchanged at such office or agency. Whenever any Warrant Certificates are
so surrendered for exchange, the Company shall execute, and the Warrant Agent
shall authenticate and deliver, the Warrant Certificates which the Holder making
the exchange is entitled to receive.
All Warrant Certificates issued upon any registration of a transfer or
an exchange of Warrant Certificates shall be the valid obligations of the
Company, evidencing the same obligations of the Company, and entitled to the
same benefits under this Warrant Agreement, as the Warrant Certificates
surrendered upon such registration of a transfer or an exchange.
Every Warrant Certificate presented or surrendered for registration of
a transfer or for an exchange shall (if so required by the Company or the
Warrant Agent) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Warrant Registrar duly
executed, by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of a transfer or
an exchange of Warrant Certificates, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of a transfer or an exchange of Warrant
Certificates.
If any mutilated Warrant Certificate is surrendered to the Warrant
Agent, the Company shall execute and the Warrant Agent shall authenticate and
deliver in exchange therefor a new Warrant Certificate of like tenor
representing Warrants of a like number and bearing a number not
contemporaneously outstanding.
If there shall be delivered by a Holder to the Company and the Warrant
Agent (i) evidence to their satisfaction of the destruction, loss or theft of
any Warrant Certificate, (ii) such security or indemnity as may be required by
them to save each of them and any agent of either of them harmless and (iii)
funds sufficient to cover any cost or expense to the Company (including
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any fees charged by the Warrant Agent) relating to the issuance of a new Warrant
Certificate, then, in the absence of notice to the Company or the Warrant Agent
that such Warrant Certificate has been acquired by a bona fide purchaser, the
Company shall execute and upon its request the Warrant Agent shall authenticate
and deliver, in lieu of any such destroyed, lost or stolen Warrant Certificate,
a new Warrant Certificate of like tenor representing Warrants of a like number
and bearing a number not contemporaneously outstanding.
In case the Warrants evidenced by any such mutilated, destroyed, lost
or stolen Warrant Certificate have been exercised, or have been or are about to
be deemed to be exercised, the Company in its discretion may, instead of issuing
a new Warrant Certificate, treat the same as if it had received written
irrevocable notice of exercise in good form in respect thereof, as provided
herein.
Every new Warrant Certificate issued pursuant to this Section 1.05 in
lieu of any destroyed, lost or stolen Warrant Certificate shall constitute an
original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Warrant Certificate shall be at any time enforceable
by anyone, and shall be entitled to all the benefits of this Warrant Agreement
equally and proportionately with any and all other Warrant Certificates duly
issued hereunder.
The provisions of this Section 1.05 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Warrant
Certificates.
Prior to due presentment of a Warrant Certificate for registration of
transfer, the Company, the Warrant Agent and any agent of the Company or the
Warrant Agent may treat the person in whose name such Warrant Certificate is
registered as the owner of such Warrant Certificate for all purposes hereunder
whatsoever, whether or not such Warrant Certificate has been transferred and
neither the Company, the Warrant Agent nor any agent of the Company or the
Warrant Agent shall be affected by notice to the contrary.
All Warrant Certificates surrendered for exercise, registration of
transfer or exchange shall, if surrendered to any person other than the Warrant
Agent, be delivered to the Warrant Agent and shall be promptly cancelled by it.
The Company may at any time deliver to the Warrant Agent for cancellation any
Warrant Certificates previously authenticated and delivered hereunder which the
Company may have acquired in any manner whatsoever, and all Warrant Certificates
so delivered shall be promptly cancelled by the Warrant Agent. No Warrant
Certificates shall be authenticated in lieu of or in exchange for any Warrant
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<PAGE>
Certificates cancelled as provided in this Section 1.05, except as expressly
permitted by this Warrant Agreement. All cancelled Warrant Certificates held by
the Warrant Agent shall be disposed of as directed by the Company.
ARTICLE II
DURATION AND EXERCISE OF WARRANTS
SECTION 2.01. Duration of Warrants; Minimum Exercise Amounts; Notice
------------------------------------------------------
of Exercise. (a) Subject to the limitations described herein, each Warrant
- -----------
evidenced by the Global Warrant Certificate may be irrevocably exercised at the
option of the Holder in whole but not in part on any New York Business Day (as
defined in Section 2.01(b)) from its date of issuance (i.e., the date of initial
settlement with respect to the initial sales of Warrants) until 1:00 P.M., New
York City time, on the fourth scheduled Index Calculation Day (as defined below)
immediately preceding the Expiration Date (as defined below in Section 2.03).
Except in the case of automatic exercise, each Warrant evidenced by the Global
Warrant Certificate may be exercised by written notice (the "Exercise Notice")
to the Warrant Agent from a Depository Participant acting on behalf of the
beneficial owner of such Warrant and upon receipt by the Warrant Agent through
delivery of such Warrant free on the records of the Depository to the Warrant
Agent's Depository Participant Account (entitled Citibank, N.A. Corporate Trust
Warrant Agent Account, No. 2659, or such other account of the Warrant Agent at
the Depository as the Warrant Agent shall designate in writing to the Company
and to the Depository (the "Warrant Account")) ("Proper Delivery"); provided,
however, that Exercise Notices are subject to rejection by the Warrant Agent as
provided herein. As used herein, "Index Calculation Day" means any day on which
the New York Stock Exchange (the "NYSE") is open for trading and the Index or
any Successor Index is calculated and published. "Index Business Day" means any
day on which the NYSE is open for trading.
"Index" shall mean the Russell 2000 Stock Index published by Frank
Russell Company ("FRC"). If FRC discontinues publication of the Index and FRC
or another entity publishes a successor or substitute index that the Calculation
Agent (as defined in Section 2.02(e)) determines, in its sole discretion, to be
comparable to the Index (any such index being referred to herein as a "Successor
Index"), then, upon the Calculation Agent's notification of such determination
to the Warrant Agent and the Company, the Calculation Agent shall substitute the
Successor Index as calculated by FRC or such other entity for the Index and
calculate the Cash Settlement Value upon an exercise as described above. Upon
any selection by the Calculation Agent of a Successor Index, the Company shall
promptly give notice to the beneficial owners by publication in a United States
newspaper with a
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national circulation (currently expected to be The Wall Street Journal), within
three New York Business Days of such selection.
If FRC discontinues publication of the Index and a Successor Index is
not selected by the Calculation Agent or is no longer published on any Valuation
Date (as defined in Section 2.01(c)), the value to be substituted for the Index
for any Valuation Date used to calculate the Cash Settlement Value upon exercise
shall be a value computed by the Calculation Agent on each Valuation Date in
accordance with the procedures last used to calculate the Index prior to such
discontinuance.
If a Successor Index is selected or the Calculation Agent calculates a
value as a substitute for the Index, such Successor Index or value shall be
substituted for the Index for all purposes, including for purposes of
determining whether a Market Disruption Event (as defined in Section 2.04(c)) or
Extraordinary Event (as defined in Section 2.04(a)) exists. If the Calculation
Agent calculates a value as a substitute for the Index, "Index Calculation Day"
shall mean any day on which the Calculation Agent is able to calculate such
value.
If at any time the method of calculating the Index or any Successor
Index, as the case may be, or the value thereof, is changed in a material
respect, or if the Index is in any other way modified so that such Index does
not, in the opinion of the Calculation Agent, fairly represent the value of the
Index had such changes or modifications not been made, then, from and after such
time, the Calculation Agent shall, at the close of business in New York, New
York, on each Valuation Date, make such adjustments as, in the good faith
judgment of the Calculation Agent, may be necessary in order to arrive at a
calculation of a value of a stock index comparable to the Index or any Successor
Index, as the case may be, as if such changes or modifications had not been
made, and calculate such Closing Index Value (as defined in Section 2.02(e))
with reference to the Index or any Successor Index, as the case may be, as
adjusted. Accordingly, if the method of calculating the Index or any Successor
Index, as the case may be, is modified so that the value of such Index or such
Successor Index is a fraction or a multiple of what it would have been if it had
not been modified (e.g., due to a split in the Index), the Calculation Agent
shall adjust the Index in order to arrive at a value of the Index or such
Successor Index as if it had not been modified (e.g., as if such split had not
occurred).
(b) No fewer than 100 Warrants may be exercised by or on behalf of
any one beneficial owner at any one time, except that no such minimum exercise
amount shall apply in the case of automatic exercise pursuant to Section 2.03
hereof on the Expiration Date or Early Expiration Date (as defined in Section
2.03(a)) or upon cancellation of the Warrants pursuant to Section
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2.04 hereof. An irrevocable Exercise Notice to the Warrant Agent shall be in
the form set forth in Exhibit B hereto, or such other form as the Company and
Warrant Agent may approve, and shall be sent to the Warrant Agent in writing
(which shall include facsimile transmissions) at its address as set forth in
such Exercise Notice or at such other address as the Warrant Agent may specify
from time to time. As used herein, "New York Business Day" means any day other
than a Saturday or a Sunday or a day on which commercial banks in The City of
New York are required or authorized by law or executive order to be closed.
Except as provided in Section 2.02(b), the Warrant Agent shall be entitled to
rely conclusively on any Exercise Notice received by it with no duty of inquiry
by the Warrant Agent.
(c) All exercises of Warrants (other than on automatic exercise) are
subject, at the Company's option, to the limitation that not more than 20% of
the Warrants originally issued (provided, however, that no more than 10% of the
Warrants originally issued shall be exercised for the account of any beneficial
owner) may be exercised on any Exercise Date (as defined in Section 2.02(a)) and
not more than 10% of the Warrants originally issued may be exercised by or on
behalf of any beneficial owner, either individually or in concert with any other
beneficial owner, on any Exercise Date. If any New York Business Day would
otherwise, under the terms of this Agreement, be the Exercise Date in respect to
more than 20% of the Warrants originally issued, then at the Company's election,
20% of the Warrants originally issued (provided, however, that no more than 10%
of the Warrants originally issued shall be exercised for the account of any
beneficial owner) shall be deemed exercised on such Exercise Date (such Warrants
to be selected by the Warrant Agent on a pro rata basis, but if, as a result of
such pro rata selection, any beneficial owners of Warrants would be deemed to
have exercised less than 100 Warrants, then the Warrant Agent shall first select
an additional amount of such beneficial owner's Warrants so that no beneficial
owner shall be deemed to have exercised less than 100 Warrants), and the
remainder of such warrants (the "Remaining Warrants") shall be deemed exercised
on the following New York Business Day (subject to successive applications of
this provision); provided that any Remaining Warrants for which an Exercise
Notice was delivered on a given Exercise Date shall be deemed exercised before
any other Warrants for which an Exercise Notice was delivered on a later
Exercise Date. Any election made by the Company hereunder shall be made
telephonically and confirmed in writing no later than 5:00 P.M. on the New York
Business Day immediately following the Valuation Date on which the Company
receives notice that in excess of 20% of the Warrants originally issued, or more
than 10% of the Warrants originally issued for the account of any beneficial
owner have been exercised. The "Valuation Date" for a Warrant shall be the
applicable Exercise Date, subject to postponement upon the occurrence of an
Extraordinary Event or a Market
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<PAGE>
Disruption Event as described in Section 2.04 below or as a result of the
exercise of a number of Warrants exceeding the limits on exercise describe
above.
SECTION 2.02. Exercise and Delivery of Warrants. (a) Except for
---------------------------------
Warrants subject to automatic exercise or held through the facilities of Cedel
Bank, societe anonyme ("Cedel") or Morgan Guaranty Trust Company of New York,
Brussels office, as operator for the Euroclear System ("Euroclear"), the
"Exercise Date" for a Warrant shall be (i) the New York Business Day on which
the Warrant Agent receives the Warrant and Exercise Notice in proper form with
respect to such Warrant, if received at or prior to 1:00 P.M., New York City
time, on such day, or (ii) if the Warrant Agent receives such Warrant and
Exercise Notice after 1:00 P.M., New York City time, on a New York Business Day,
then the first New York Business Day following such New York Business Day.
In the case of Warrants held through the facilities of Cedel or
Euroclear, except for Warrants subject to automatic exercise, the "Exercise
Date" for a Warrant shall be (i) the New York Business Day on which the Warrant
Agent receives the Exercise Notice in proper form with respect to such Warrant
if such Exercise Notice is received at or prior to 1:00 P.M., New York City
time, on such day, provided that the Warrant is received by the Warrant Agent by
1:00 P.M., New York City time, on the Valuation Date, or (ii) if the Warrant
Agent receives such Exercise Notice after 1:00 P.M., New York City time, on a
New York Business Day, then the first New York Business Day following such New
York Business Day, provided that the Warrant is received by 1:00 P.M., New York
City time, on the Valuation Date relating to exercises of Warrants on such
succeeding New York Business Day. In the event that the Warrant is received
after 1:00 P.M., New York City time, on the Valuation Date, then the Exercise
Date for such Warrants shall be the first New York Business Day following the
day on which such Warrants are received. In the case of Warrants held through
the facilities of Cedel or Euroclear, in order to ensure proper exercise on a
given New York Business Day, participants in Cedel or Euroclear must submit
exercise instructions to Cedel or Euroclear, as the case may be, by 10:00 A.M.,
Luxembourg time, in the case of Cedel and by 10:00 A.M., Brussels time (by
telex), or 11:00 A.M., Brussels time (by EUCLID), in the case of Euroclear. In
addition, in the case of book-entry exercises by means of the Euroclear System,
(i) participants must also transmit, by facsimile (facsimile number (201) 262-
7521), to the Warrant Agent a copy of the Exercise Notice submitted to Euroclear
by 1:00 P.M., New York City time, on the desired Exercise Date and (ii)
Euroclear must confirm by telex to the Warrant Agent by 9:00 A.M., New York City
time, on the Valuation Date, that the Warrants will be received by the Warrant
Agent on such date; provided, that if such telex communication is received after
9:00 A.M., New York City time, on
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the Valuation Date, the Company shall be entitled to direct the Warrant Agent to
reject the related Exercise Notice or waive the requirement for timely delivery
of such telex communication.
Any Exercise Notice received after 1:00 P.M., New York City time, on
the fourth scheduled Index Calculation Day immediately preceding the Expiration
Date shall be void and of no effect and shall be deemed not to have been
delivered.
(b) Following receipt of a written irrevocable Exercise Notice in good
form and Proper Delivery of a Warrant, the Warrant Agent shall: (i) determine
whether the Exercise Notice has been duly completed and is in proper form duly
executed by the Depository Participant tendering such Warrant and if the Warrant
Agent determines that such Exercise Notice has not been duly completed or is not
in proper form, or has not been so executed, the Warrant Agent shall reject such
Exercise Notice and shall send to the Depository Participant that executed such
Exercise Notice (at the address specified in such notice) a notice of rejection
in the form included in Exhibit B hereto and shall return the related Warrant to
such Depository Participant by redelivering such Warrant free through the
facilities of the Depository to the account of such Depository Participant; (ii)
notify the Company and the Calculation Agent by 5:00 P.M., New York City time,
on the New York Business Day such Exercise Notice and Proper Delivery are
received (or deemed to have been received) of the number of Warrants in respect
of which Exercise Notices, not rejected pursuant to clause (i) above, and Proper
Delivery were received after 1:00 P.M., New York City time, the preceding New
York Business Day and at or prior to 1:00 P.M., New York City time, on such
date; (iii) not later than 10:00 A.M., New York City time, on the New York
Business Day following the applicable Valuation Date obtain the Index Spot Price
from the Calculation Agent (which shall be the Closing Index Value on such
Valuation Date); (iv) determine the Cash Settlement Value of such Warrants; (v)
advise the Company of the aggregate Cash Settlement Value of the exercised
Warrants and send notice of confirmation of exercise in the form set forth in
Exhibit B hereto to such Depository Participant; and (vi) promptly deliver a
copy of such notice of exercise to the Company if requested by the Company and
advise the Company of such other matters relating to the exercised Warrants as
the Company shall reasonably request. Any notice to be given to the Company by
the Warrant Agent pursuant to this Section 2.02 or pursuant to Section 2.03
shall be by telephone and shall be promptly confirmed in writing. Any notice to
be given to the Calculation Agent pursuant to this Section 2.02 or pursuant to
Section 2.03 shall be by facsimile transmission to the address of the
Calculation Agent set forth in Section 6.03.
(c) The Company shall make available to the Warrant Agent, no later
than 3:00 P.M., New York City time, on the fourth
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New York Business Day following the Valuation Date (the "Settlement Date"),
funds in an amount sufficient to pay such aggregate Cash Settlement Value.
Provided that the Company has made adequate funds available to the Warrant Agent
in such manner, the Warrant Agent shall make payment by check to the relevant
Depository Participant, after 3:00 P.M., New York City time, but prior to the
close of business, on such Settlement Date. Any such payment shall be in the
amount of the aggregate Cash Settlement Value in respect of exercised Warrants
for which delivery has been accepted by the Warrant Agent.
(d) The Warrant Agent shall cause its records, which may be kept
electronically, to be marked to reduce the number of Warrants evidenced by the
Global Warrant Certificate, by the number of Warrants delivered to the Warrant
Account for which payment has been made, promptly after such delivery and
payment.
(e) Except as provided in Section 2.04, "Cash Settlement Value" of an
exercised Warrant is an amount stated in U.S. dollars that results from the
following formula:
Percentage Change X $15
The "Percentage Change" shall equal the following amount:
Index Spot Price - Index Strike Price
-------------------------------------
Index Strike Price
The "Index Spot Price" relating to any Exercise Date shall be determined by
Merrill Lynch, Pierce, Fenner & Smith Incorporated, or any successor thereto
(the "Calculation Agent"), and shall equal (i) for any Valuation Date on or
prior to the fourth Index Calculation Day preceding the Expiration Date, the
Closing Index Value of the Index, or, if applicable, the Successor Index, in New
York on such date, and (ii) for any Valuation Date after the fourth Index
Calculation Day preceding the Expiration Date, the opening value of the Index,
or, if applicable, the Successor Index, in New York on such date as calculated
by the Calculation Agent using opening prices for the Underlying Stock (as
defined in Section 2.04(a)) that constitute the Index or Successor Index, as
applicable. Since the opening value of the Index as reported by FRC or a
Successor Index published by its distributor will not reflect the opening prices
for the Underlying Stocks that constitute the Index or Successor Index, the
Calculation Agent will calculate an opening value for the Index or Successor
Index using the same method then used to calculate the Index or Successor Index
and such opening prices.
The "Closing Index Value" for any Valuation Date shall equal the
closing value in New York of the Index on such date.
The "Index Strike Price" equals 302.22.
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<PAGE>
The Cash Settlement Value shall be rounded, if necessary, to the
nearest cent (with one-half cent being rounded upwards).
SECTION 2.03. Automatic Exercise of the Warrants. (a) All Warrants
----------------------------------
for which the Warrant Agent has not received a valid Exercise Notice at or prior
to 1:00 P.M., New York City time, or for which the Warrant Agent has received a
valid Exercise Notice but with respect to which timely delivery of the relevant
Warrants has not been made, together with any Warrants the Valuation Date for
which has at such time been postponed as described under Section 2.04 of this
Agreement, on (i) the fourth scheduled Index Calculation Day immediately
preceding November 17, 1998 (the "Expiration Date") or (ii) the close of
business on the New York Business Day on which the Warrants are delisted from,
or permanently suspended from trading on, the American Stock Exchange (the
"AMEX") and the Warrants are not simultaneously accepted for trading pursuant to
the rules of another self-regulatory organization whose rules are filed with the
Securities and Exchange Commission (a "Self-Regulatory Organization") under the
Securities Exchange Act of 1934, as amended, (the "Early Expiration Date") shall
be automatically exercised, without any required delivery of an Exercise Notice
or delivery of the Warrants from any relevant Depository Participant to the
Warrant Agent, on the first scheduled Index Calculation Day immediately
preceding such Expiration Date or Early Expiration Date, as the case may be,
(such first scheduled Index Calculation Day shall be the Exercise Date for such
automatically exercised Warrants). The Company shall advise the Warrant Agent of
the date of any expected delisting or permanent suspension of trading of the
Warrants as soon as is practicable and shall immediately inform the Warrant
Agent after the Company has received notice that such delisting or suspension
has occurred and that the Warrants are not accepted for listing on another Self-
Regulatory Organization, but in no event will such notice be given to the
Warrant Agent later than 5:00 P.M., New York City time, on the New York Business
Day preceding the Early Expiration Date.
(b) In the event the Warrants are cancelled by the Company because of
the continuance of an Extraordinary Event, Warrants not previously exercised
shall be automatically exercised on the basis that the Valuation Date for such
Warrants shall be the Cancellation Date (as defined in Section 2.04(a)).
(c) By 5:00 P.M., New York City time, on the fourth scheduled Index
Calculation Day immediately preceding the Expiration Date the Warrant Agent
shall advise the Company of the number of Unexercised Warrants outstanding after
1:00 P.M., New York City time, on such Index Calculation Day. The Warrant Agent
shall, not later than 10:00 A.M., New York City time, on the New York Business
Day following the applicable Valuation Date, (i) obtain the Index Spot Price
from the Calculation Agent and
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determine the Cash Settlement Value, if any, in the manner provided in paragraph
(e) of Section 2.02, (ii) advise the Company of the Index Spot Price and the
Cash Settlement Value, if any, of the Unexercised Warrants evidenced by the
Global Warrant Certificate, and (iii) advise the Company of such other matters
relating to the Unexercised Warrants as the Company shall reasonably request.
Provided that the Company has made adequate funds available to the Warrant Agent
in a timely manner which shall, in no event, be later than 3:00 P.M., New York
City time, on the fourth New York Business Day following the Expiration Date,
the Warrant Agent shall make its check (or another form of payment in accordance
with existing arrangements between the Warrant Agent and the Depository)
available to the Depository against receipt by the Warrant Agent from the
Depository of the Global Warrant Certificate on the fourth New York Business Day
following the Expiration Date, such payment to be in the amount of the aggregate
Cash Settlement Value in respect of the number of Unexercised Warrants evidenced
by the Global Warrant Certificate at the close of business on the Expiration
Date. The Warrant Agent shall promptly cancel the Global Warrant Certificate
following its receipt thereof from the Depository.
(d) The Company shall notify the Holders, or shall cause such Holders
to be notified, as promptly as is practicable, of any delisting or suspension of
trading of the Warrants.
(e) Notwithstanding the foregoing, no delisting or suspension of
trading shall affect the right of a beneficial owner of an interest in the
Global Warrant Certificate to cause a Depository Participant to exercise the
Warrants or effect an automatic exercise of the Warrants if the Warrants are
simultaneously accepted for trading pursuant to the rules of another Self-
Regulatory Organization. If the Warrants are so listed by another Self-
Regulatory Organization, from and after such date all references in this Section
2.03 shall continue to apply, but each reference to the "American Stock
Exchange" herein shall be deemed to refer to such other Self-Regulatory
Organization.
(f) By 5:00 P.M., New York City time, on the Early Expiration Date the
Warrant Agent shall advise the Company of the number of Unexercised Warrants
outstanding after 1:00 P.M., New York City time, on such Early Expiration Date.
The Warrant Agent shall, not later than 10:00 A.M., New York City time, on the
New York Business Day following the applicable Valuation Date, (i) obtain the
Index Spot Price from the Calculation Agent and determine the Cash Settlement
Value, if any, in the manner provided in paragraph (e) of Section 2.02, (ii)
advise the Company of the Index Spot Price and the Cash Settlement Value, if
any, of the Unexercised Warrants evidenced by the Global Warrant Certificate,
and (iii) advise the Company of such other matters relating to the Unexercised
Warrants as the Company shall
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<PAGE>
reasonably request. Provided that the Company has made adequate funds available
to the Warrant Agent in a timely manner which shall, in no event, be later than
3:00 P.M., New York City time, on the fourth New York Business Day following the
Early Expiration Date, the Warrant Agent shall make its check (or another form
of payment in accordance with existing arrangements between the Warrant Agent
and the Depository) available to the Depository against receipt by the Warrant
Agent from the Depository of the Global Warrant Certificate on the fourth New
York Business Day following the Early Expiration Date, such payment to be in the
amount of the aggregate Cash Settlement Value in respect of the number of
Unexercised Warrants evidenced by the Global Warrant Certificate at the close of
business on the Early Expiration Date. The Warrant Agent shall promptly cancel
the Global Warrant Certificate following its receipt thereof from the
Depository.
SECTION 2.04. Extraordinary Events and Market Disruption Events. (a)
--------------------------------------------------
If the Calculation Agent determines that an Extraordinary Event has occurred and
is continuing on the Index Business Day with respect to which the Index Spot
Price on a Valuation Date is to be determined (the "Applicable Index Business
Day"), then the Cash Settlement Value in respect of an exercise shall be
calculated on the basis that the Valuation Date shall be the next Index
Calculation Day following an Applicable Index Business Day on which there is no
Extraordinary Event or Market Disruption Event; provided that if a Valuation
Date has not occurred on or prior to the Expiration Date or the Early Expiration
Date, the Holders shall receive the Alternative Settlement Amount (as defined
below) in lieu of the Cash Settlement Value which shall be calculated as if the
Warrants had been cancelled on the Expiration Date or the Early Expiration Date,
as the case may be. The Company shall promptly give notice to beneficial
owners, by publication in a United States newspaper with a national circulation
(currently expected to be The Wall Street Journal), if an Extraordinary Event
shall have occurred.
"Extraordinary Event" means any of the following events:
(i) a suspension or absence of trading on the NYSE, AMEX or the over-
the-counter market of all the Underlying Stocks which then comprise the
Index or a Successor Index;
(ii) the enactment, publication, decree or other promulgation of any
statute, regulation, rule or order of any court or any other U.S. or non-
U.S. governmental authority which would make it unlawful for the Company to
perform any of its obligations under this Agreement or the Warrants; or
(iii) any outbreak or escalation of hostilities or other national or
international calamity or crises (including,
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without limitation, natural calamities that in the reasonable opinion of
the Calculation Agent may materially and adversely affect the economy of
the United States or the trading of securities generally on the NYSE, AMEX
or the over-the-counter market) that has or will have a material adverse
effect on the ability of the Company to perform its obligations under the
Warrants or to modify the hedge of its position with respect to the Index
or the Underlying Stocks.
For the purposes of determining whether an Extraordinary Event has
occurred: (1) a limitation on the hours or number of days of trading on an
exchange will not constitute an Extraordinary Event if it results from an
announced change in the regular business hours of such exchange and (2) an
"absence of trading" on an exchange will not include any time when such exchange
itself is closed for trading under ordinary circumstances.
"Underlying Stocks" means the stocks included in the Index or any Successor
Index.
If the Calculation Agent determines that an Extraordinary Event has
occurred and is continuing, and if the Extraordinary Event is expected by the
Calculation Agent to continue, the Company may immediately cancel all
outstanding Warrants by notifying the Warrant Agent of such cancellation (the
date such notice is given being the "Cancellation Date"), and each beneficial
owner's rights under the Warrants and this Agreement shall thereupon cease;
provided that each Warrant shall be automatically exercised on the basis that
the Valuation Date for such Warrant shall be the Cancellation Date, if the
Cancellation Date is an Index Calculation Day, or the immediately succeeding
Index Calculation Day, if the Cancellation Date is not an Index Calculation Day,
and the Holder of each such Warrant shall receive, in lieu of the Cash
Settlement Value of such Warrant, an amount (the "Alternative Settlement
Amount"), determined by the Calculation Agent, which is the greater of (i) the
average of the last sale prices, as available, of the Warrants on the AMEX (or
any successor securities exchange on which the Warrants are listed) on the 30
trading days preceding the date on which such Extraordinary Event was declared;
provided that, if the Warrants were not traded on the AMEX (or such successor
securities exchange) on at least 20 of such trading days, no effect will be
given to this clause (i) for the purpose of determining the Alternative
Settlement Amount, and (ii) the amount "X" calculated using the formula set
forth below:
T A
X = I + [ --- X --- ]
2 B
where
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<PAGE>
I = The Cash Settlement Value of the Warrants determined as described in
Section 2.02(e), but subject to the following modifications:
(1) if the Cancellation Date for such Warrants is a date on which the
Index or a Successor Index is calculated and published, for the purpose of
determining such Cash Settlement Value, the Index Spot Price shall be
determined as of such Cancellation Date except that, if the Index Spot
Price as of such day is less than 90% of the Index Spot Price as of the
immediately preceding Index Calculation Day, then the Index Spot Price
shall be deemed to be 90% of the Index Spot Price on such preceding Index
Calculation Day; or
(2) if the Cancellation Date for such Warrants is a date on which the
Index or a Successor Index is not calculated or published, for the purpose
of determining such Cash Settlement Value, the Index Spot Price shall be
deemed to be the lesser of (i) the Index Spot Price as of the first Index
Calculation Day immediately preceding the Cancellation Date except that, if
the Index Spot Price as of such day is less than 90% of the Index Spot
Price as of the second Index Calculation Day immediately preceding such
Cancellation Date, 90% of the Index Spot Price as of such second Index
Calculation Day and (ii) the arithmetic average of four amounts, being (a)
the Index Spot Price at each of the three successive Index Calculation Days
immediately preceding the Cancellation Date and (b) the Index Spot Price at
the next Index Calculation Day, provided that if an Extraordinary Event
described in clause (i) of the definition of Extraordinary Event continues
for 30 consecutive days immediately following such Cancellation Date, then
the Calculation Agent shall calculate an amount which, in its reasonable
opinion, fairly reflects the value of the Underlying Stocks on the Index
Calculation Day immediately following such Cancellation Date which, subject
to approval by the Company (such approval not to be unreasonably withheld),
shall for purposes of calculating the amount under this clause (2)(ii) be
treated as the figure arrived at under clause (2)(ii)(b) above;
T = U.S. $3.15;
A = the total number of days from but excluding the Cancellation Date for
such Warrants to and including the Expiration Date; and
B = the total number of days from but excluding the date the Warrants were
initially sold to and including the Expiration Date.
For the purposes of determining "I" in the above formula, in
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<PAGE>
the event that the Calculation Agent and the Company are required to have, but
have not, after good faith consultation with each other and within five days
following the first day upon which such Alternative Settlement Amount may be
calculated in accordance with the above formula, agreed upon a figure under
clause (2)(ii)(b) which fairly reflects the value of the Underlying Stocks on
the Cancellation Date, then the Calculation Agent shall promptly nominate a
third party, subject to approval by the Company (such approval not to be
unreasonably withheld), to determine such figure and calculate the Alternative
Settlement Amount in accordance with the above formula. Such party shall act as
an independent expert and not as an agent of the Company or the Calculation
Agent, and its calculation and determination of the Alternative Settlement
Amount shall, absent manifest error, be final and binding on the Company, the
Warrant Agent, the Calculation Agent and the Holders. Any such calculations
shall be made available to Holders for inspection at the Warrant Agent's office.
Neither the Company nor such third party shall have any responsibility for good
faith errors or omissions in calculating the Alternative Settlement Amount.
(b) With respect to all Warrants which have been canceled as described
above, the Company shall make available to the Warrant Agent not later than 3:00
p.m., New York City time, on the fourth New York Business Day following the
Cancellation Date (the "Alternative Settlement Date"), funds in an amount equal
to the aggregate Alternative Settlement Amount of such Warrants. Subject to
such funds having been made available as provided in the preceding sentence, the
Warrant Agent shall be responsible for making a payment to the Depository, after
3:00 p.m., New York City time, but prior to the close of business on, the
Alternative Settlement Date, in an amount equal to the aggregate Alternative
Settlement Amount of such exercised Warrants.
(c) If the Calculation Agent determines that on a Valuation Date a Market
Disruption Event has occurred and is continuing, the Valuation Date shall be
postponed to the first succeeding Index Calculation Day on which no Market
Disruption Event occurs; provided that, if the Valuation Date has not occurred
on or prior to the fifth Index Business Day following an Exercise Date because
of Market Disruption Events, the Calculation Agent shall, on such fifth Index
Business Day, calculate an amount which, in its reasonable opinion, fairly
reflects the value of the Underlying Stocks on such day in order to determine
the Cash Settlement Value.
"Market Disruption Event" means with respect to any Valuation Date the
occurrence or existence during the one-half hour period that ends at the
determination of the Closing Index Value for such Index Business Day of:
(i) a suspension, material limitation or absence of
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trading on the NYSE, AMEX or the over-the-counter market of 20% or more of
the Underlying Stocks which then compromise the Index or Successor Index
during the one-half hour period preceding the close of trading on the
applicable exchange; or
(ii) the suspension or material limitation on the Chicago Board
Options Exchange (the "CBOE"), the Chicago Mercantile Exchange (the "CME")
or any other major futures or securities market of trading in futures or
options contracts related to the Index or a Successor Index during the one-
half hour period preceding the close of trading on the applicable exchange.
For the purposes of determining whether a Market Disruption Event has
occurred: (i) a limitation on the hours or number of days of trading will not
constitute a Market Disruption Event if it results from an announced change in
the regular business hours of the relevant exchange, (ii) a decision to
permanently discontinue trading in the relevant futures or options contract will
not constitute a Market Disruption Event, (iii) a suspension in trading in a
futures or options contract on the Index by a major securities market by reason
of (a) a price change violating limits set by such securities market, (b) an
imbalance of orders relating to such contracts or (c) a disparity in bid and ask
quotes relating to such contracts will constitute a suspension or material
limitation of trading in futures or options contracts related to the Index, (iv)
an absence of trading on an exchange will not include any time when such
exchange is closed for trading under ordinary circumstances, and (v) the
occurrence of an Extraordinary Event described in Section 2.04(a)(i) will not
constitute, and will supersede the occurrence of, a Market Disruption Event.
(d) With respect to all Warrants as to which the Valuation Date has been
postponed as described above in this Section 2.04, the Company shall make
available to the Warrant Agent not later than 3:00 p.m., New York City time, on
the fourth New York Business Day following the date on which the Cash Settlement
Value has been calculated (the "Postponed Settlement Date"), funds in an amount
equal to the aggregate Cash Settlement Value of such Warrants. Subject to such
funds having been made available as provided in the preceding sentence, the
Warrant Agent shall be responsible for making a payment to the Depository, after
3:00 p.m., New York City time, but prior to the close of business on, the
Postponed Settlement Date, in an amount equal to the aggregate Cash Settlement
Value of such exercised Warrants.
SECTION 2.05. Covenant of the Company. The Company covenants, for
-----------------------
the benefit of the Holders, that it shall not seek the delisting of the Warrants
from, or suspension of their
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trading on, the American Stock Exchange.
SECTION 2.06. Return of Global Warrant Certificate. At such time as
------------------------------------
all of the Warrants have been exercised, deemed automatically exercised or
otherwise cancelled, the Warrant Agent shall destroy the cancelled Global
Warrant Certificate unless the Company directs it to return it.
SECTION 2.07. Return of Money Held Unclaimed for Two Years. Any
--------------------------------------------
money deposited with or paid to the Warrant Agent for the payment of the Cash
Settlement Value of any Warrants and not applied but remaining unclaimed for two
years after the date upon which such Cash Settlement Value shall have become due
and payable, shall be repaid by the Warrant Agent to the Company and the Holder
of such Warrants shall thereafter look only to the Company for any payment which
such Holder may be entitled to collect and all liability of the Warrant Agent
with respect to such money shall thereupon cease; provided, however, that the
Warrant Agent, before making any such repayment, may at the expense of the
Company notify the Holders concerned that said money has not been so applied and
remains unclaimed and that after a date named therein any unclaimed balance of
said money then remaining shall be returned to the Company.
SECTION 2.08. Designation of Agent for Receipt of Notice. The
------------------------------------------
Company may from time to time designate in writing to the Warrant Agent a
designee for receipt of all notices required to be given by the Warrant Agent
pursuant to this Article II and all such notices thereafter shall be given in
the manner herein provided by the Warrant Agent to such designee.
ARTICLE III
OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS
SECTION 3.01. Holder of Warrant May Enforce Rights. Notwithstanding
------------------------------------
any of the provisions of this Agreement, any Holder, without the consent of the
Warrant Agent, may, in and for his own behalf, enforce, and may institute and
maintain any suit, action or proceeding against the Company suitable to enforce,
or otherwise in respect of, his right to exercise, and to receive payment for,
his Warrants as provided in the Global Warrant Certificate and in this
Agreement.
SECTION 3.02. Merger, Consolidation, Sale, Transfer or Conveyance.
---------------------------------------------------
The Company may consolidate with, or sell, lease or convey all or substantially
all of its assets to, or merge with or into any other corporation, provided that
in any such case, either the Company shall be the continuing corporation, or the
successor corporation shall be a corporation organized and existing under the
laws of the United States of America or a
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State thereof and such successor corporation shall expressly assume the payment
of the Cash Settlement Value with respect to all unexercised Warrants, according
to their tenor, and the due and punctual performance and observance of all of
the covenants and conditions of this Agreement and the Global Warrant
Certificate to be performed by the Company. Such successor or assuming
corporation thereupon may cause to be signed, and may issue either in its own
name or in the name of the Company, a new Global Warrant Certificate
representing the Warrants not theretofore exercised, in exchange and
substitution for the Global Warrant Certificate theretofore issued. Such Global
Warrant Certificate shall in all respects have the same legal rank and benefit
under this Agreement as the Global Warrant Certificate theretofore issued in
accordance with the terms of this Agreement as though such new Global Warrant
Certificate had been issued at the date of the execution hereof. In any case of
any such consolidation, merger, sale, lease or conveyance of substantially all
of the assets of the Company, such changes in phraseology and form (but not in
substance) may be made in the new Global Warrant Certificate as may be
appropriate.
The Warrant Agent may receive a written opinion of legal counsel as
conclusive evidence that any such consolidation, merger, sale, lease or
conveyance of substantially all of the assets of the Company complies with the
provisions of this Section 3.02 and that the assumption of this Agreement by the
successor or assuming corporation is effective.
ARTICLE IV
CANCELLATION OF WARRANTS
SECTION 4.01. Cancellation of Warrants. In the event the Company
------------------------
shall purchase or otherwise acquire Warrants, such Warrants may, at the option
of the Company and upon notification to the Warrant Agent, be surrendered free
through a Depository Participant for credit to the Warrant Account and if so
credited the Warrant Agent shall promptly note the cancellation of such Warrants
by notation on the records of the Warrant Agent. No Warrant shall be issued in
lieu of or in exchange for any Warrant which is cancelled as provided herein,
except as otherwise expressly permitted by this Agreement.
SECTION 4.02. Treatment of Holders. The Company, the Warrant Agent
--------------------
and any agent of the Company or the Warrant Agent may deem and treat the person
in whose name a Warrant Certificate or the Global Warrant Certificate shall be
registered in the records of the Warrant Agent as the absolute owner of such
Warrant Certificate or Global Warrant Certificate, as the case may be
(notwithstanding any notation of ownership or other writing thereon) (the
"Holder") for any purpose and as the person
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<PAGE>
entitled to exercise the rights represented by the Warrants evidenced hereby,
and neither the Company nor the Warrant Agent, nor any agent of the Company or
the Warrant Agent shall be affected by any notice to the contrary, except that
the Warrant Agent and the Company shall be entitled to rely on and act pursuant
to instructions of Depository Participants as contemplated by Article II of this
Agreement. This Section 4.02 shall be without prejudice to the rights of
Holders as described elsewhere herein.
ARTICLE V
CONCERNING THE WARRANT AGENT
SECTION 5.01. Warrant Agent. (a) The Company hereby appoints
-------------
Citibank, N.A. as Warrant Agent of the Company in respect of the Warrants and
Global Warrant Certificate upon the terms and subject to the conditions set
forth herein and in the Global Warrant Certificate; and Citibank, N.A. hereby
accepts such appointment. The Warrant Agent shall have the powers and authority
granted to and conferred upon it in the Global Warrant Certificate and hereby
and such further powers and authority acceptable to it to act on behalf of the
Company as the Company may hereafter grant to or confer upon it. All of the
terms and provisions with respect to such powers and authority contained in the
Global Warrant Certificate are subject to and governed by the terms and
provisions hereof.
(b) The Warrant Agent covenants and agrees to maintain offices, staffed by
qualified personnel, with adequate facilities for the discharge of its
responsibilities under this Warrant Agreement, including without limitation the
computation of the Cash Settlement Values and the timely settlement of the
Warrants upon exercise thereof.
SECTION 5.02. Conditions of Warrant Agent's Obligations. The Warrant
-----------------------------------------
Agent accepts its obligations herein set forth upon the terms and conditions
hereof and of the Global Warrant Certificates including the following, to all of
which the Company agrees and to all of which the rights hereunder of the Holders
and beneficial owners from time to time of the Warrants shall be subject:
(a) The Company agrees promptly to pay the Warrant Agent the
compensation to be agreed upon with the Company for all services rendered
by the Warrant Agent and to reimburse the Warrant Agent for its reasonable
out-of-pocket expenses (including counsel fees and expenses) incurred by
the Warrant Agent without negligence, bad faith or breach of this Agreement
on its part in connection with the services rendered by it hereunder. The
Company also agrees to
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<PAGE>
indemnify the Warrant Agent for, and to hold it harmless against, any loss,
liability or expense (including reasonable attorneys' fees and expenses)
incurred without negligence, bad faith or breach of this Agreement on the
part of the Warrant Agent, arising out of or in connection with it acting
as such Warrant Agent hereunder or with respect to the Warrants or the
Global Warrant Certificate, as well as the reasonable costs and expenses of
defending against any claim of liability in the premises.
(b) In acting under this Agreement and in connection with the Global
Warrant Certificate, the Warrant Agent is acting solely as agent of the
Company and does not assume any obligation or relationship of agency or
trust for or with any of the owners or Holders of the Warrants.
(c) The Warrant Agent may consult with counsel satisfactory to it, and
the opinion of such counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with the opinion of such counsel.
(d) The Warrant Agent shall be protected and shall incur no liability
for or in respect of any action taken or omitted or thing suffered by it in
reliance upon any Global Warrant Certificate, notice, direction, consent,
certificate, affidavit, statement or other paper or document reasonably
believed by it to be genuine and to have been presented or signed by the
proper parties.
(e) The Warrant Agent, and its officers, directors and employees, may
become the owner of, or acquire an interest in, any Warrants or other
obligations of the Company, with the same rights that it or they would have
if it were not the Warrant Agent hereunder, and, to the extent permitted by
applicable law, it or they may engage or be interested in any financial or
other transaction with the Company and may act on, or as depositary,
trustee or agent for, any committee or body of Holders of Warrants or other
obligations of the Company as freely as if it were not the Warrant Agent
hereunder.
(f) The Warrant Agent shall not be under any liability for interest on
any monies at any time received by it pursuant to any of the provisions of
this Agreement or of the Global Warrant Certificate nor shall it be
obligated to segregate such monies from other monies held by it, except as
required by law. The Warrant Agent shall not be responsible for advancing
funds on behalf of the Company.
(g) The Warrant Agent shall not be under any
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<PAGE>
responsibility with respect to the validity or sufficiency of this
Agreement or the execution and delivery hereof (except the due execution
and delivery hereof by the Warrant Agent) or with respect to the validity
or execution of the Global Warrant Certificate (except its authentication
thereof).
(h) The recitals contained herein and in the Global Warrant
Certificate (except as to the Warrant Agent's authentication thereon) shall
be taken as the statements of the Company and the Warrant Agent assumes no
responsibility for the correctness of the same.
(i) The Warrant Agent shall be obligated to perform only such duties
as are herein and in the Global Warrant Certificate specifically set forth
and no implied duties or obligations shall be read into this Agreement or
the Global Warrant Certificate against the Warrant Agent. The Warrant
Agent shall not be under any obligation to take any action hereunder likely
to involve it in any expense or liability, the payment of which is not, in
its reasonable opinion, assured to it. The Warrant Agent shall not be
accountable or under any duty or responsibility for the use by the Company
of the Global Warrant Certificate authenticated by the Warrant Agent and
delivered by it to the Company pursuant to this Agreement or for the
application by the Company of any proceeds. The Warrant Agent shall have
no duty or responsibility in case of any default by the Company in the
performance of its covenants or agreements contained herein or in the
Global Warrant Certificate or in the case of the receipt of any written
demand from a Holder of a Warrant with respect to such default, except as
provided in Section 6.02 hereof, including, without limiting the generality
of the foregoing, any duty or responsibility to initiate or attempt to
initiate any proceedings at law or otherwise or to make any demand upon the
Company.
(j) Unless herein or in the Global Warrant Certificate otherwise
specifically provided, any order, certificate, notice, request, direction
or other communication from the Company made or given by the Company under
any provision of this Agreement shall be sufficient if signed by its
President, Chairman of the Board, officer serving as Chief Financial
Officer, Treasurer, any Executive Vice President or any Vice President.
SECTION 5.03. Resignation and Appointment of Successor. (a) The
----------------------------------------
Company agrees, for the benefit of the Holders from time to time of the
Warrants, that there shall at all times be a Warrant Agent hereunder until all
the Warrants are no longer exercisable.
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<PAGE>
(b) The Warrant Agent may at any time resign as such agent by giving
written notice to the Company of such intention on its part, specifying the date
on which its desired resignation shall become effective, subject to the
appointment of a successor Warrant Agent, and acceptance of such appointment by
such successor Warrant Agent, as hereinafter provided. The Warrant Agent
hereunder may be removed at any time by the filing with it of an instrument in
writing signed by or on behalf of the Company and specifying such removal and
the date when it shall become effective. Such resignation or removal shall take
effect upon the appointment by the Company, as hereinafter provided, of a
successor Warrant Agent (which shall be a banking institution organized under
the laws of the United States of America, or one of the states thereof and
having an office or an agent's office south of Chambers Street in the Borough of
Manhattan, The City of New York) and the acceptance of such appointment by such
successor Warrant Agent. In the event a successor Warrant Agent has not been
appointed and accepted its duties within 90 days of the Warrant Agent's notice
of resignation, the Warrant Agent may apply to any court of competent
jurisdiction for the designation of a successor Warrant Agent. The obligation
of the Company under Section 5.02(a) shall continue to the extent set forth
therein notwithstanding the resignation or removal of the Warrant Agent and
shall survive the termination of this Agreement.
(c) In case at any time the Warrant Agent shall resign, or shall be
removed, or shall become incapable of acting, or shall be adjudged bankrupt or
insolvent, or make an assignment for the benefit of its creditors or consent to
the appointment of a receiver or custodian of all or any substantial part of its
property, or shall admit in writing its inability to pay or meet its debts as
they mature, or if a receiver or custodian of it or all or any substantial part
of its property shall be appointed, or if any public officer shall have taken
charge or control of the Warrant Agent or of its property or affairs, for the
purpose of rehabilitation, conservation or liquidation, a successor Warrant
Agent, qualified as aforesaid, shall be appointed by the Company by an
instrument in writing, filed with the successor Warrant Agent. Upon the
appointment as aforesaid of a successor Warrant Agent and acceptance by the
latter of such appointment, the Warrant Agent so superseded shall cease to be
Warrant Agent hereunder.
(d) Any successor Warrant Agent appointed hereunder shall execute,
acknowledge and deliver to its predecessor and to the Company an instrument
accepting such appointment hereunder, and thereupon such successor Warrant
Agent, without any further act, deed or conveyance, shall become vested with all
the authority, rights, powers, trusts, immunities, duties and obligations of
such predecessor with like effect as if originally named as Warrant Agent
hereunder, and such predecessor, upon payment of its charges and disbursements
then unpaid, shall
-26-
<PAGE>
thereupon become obligated to transfer, deliver and pay over, and such successor
Warrant Agent shall be entitled to receive, all monies, securities and other
property on deposit with or held by such predecessor, as Warrant Agent
hereunder.
(e) Any corporation into which the Warrant Agent hereunder may be
merged or converted or any corporation with which the Warrant Agent may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Warrant Agent shall be a party, or any corporation to
which the Warrant Agent shall sell or otherwise transfer all or substantially
all of the corporate trust business of the Warrant Agent, provided that it shall
be qualified as aforesaid, shall be the successor Warrant Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. Amendment. (a) This Agreement and the Global Warrant
---------
Certificate may be amended by the Company and the Warrant Agent, without the
consent of the Holder of the Global Warrant Certificate or the beneficial
owners, for the purpose of curing any ambiguity, or of curing, correcting or
supplementing any defective or inconsistent provision contained herein or
therein, for the purpose of appointing a successor Depository in accordance with
paragraph (d) of Section 1.01, for the purpose of issuing Warrants in definitive
form in accordance with paragraph (a) of Section 1.01, or in any other manner
which the Company may deem to be necessary or desirable and which will not
materially and adversely affect the interests of the Holders of the Warrants.
Notwithstanding anything in this Section 6.01 to the contrary, this Agreement
may not be amended to provide for the authentication by the Warrant Agent of one
or more Global Warrant Certificates evidencing in excess of 1,350,000 Warrants
originally issued unless and until the Warrant Agent has received notice from
the American Stock Exchange or any successor Self-Regulatory Organization that
additional Warrants in excess of 1,350,000 Warrants originally issued have
been approved for listing on such exchange.
(b) The Company and the Warrant Agent may modify or amend this
Agreement and the Global Warrant Certificate, with the consent of the beneficial
owners of not fewer than a majority in number of the then outstanding
Unexercised Warrants affected by such modification or amendment, for any
purpose; provided, however, that no such modification or amendment that changes
the Index Strike Price so as to adversely affect the beneficial owners, shortens
the period of time during which the Warrants may
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<PAGE>
be exercised or otherwise materially and adversely affects the exercise rights
of the beneficial owners or reduces the percentage of the number of outstanding
Warrants the consent of the beneficial owners of which is required for
modification or amendment of this Agreement or the Global Warrant Certificate
may be made without the consent of the beneficial owners of Warrants affected
thereby.
SECTION 6.02. Notices and Demands to the Company and Warrant Agent.
----------------------------------------------------
If the Warrant Agent shall receive any notice or demand addressed to the Company
by any Holder pursuant to the provisions of the Global Warrant Certificate, the
Warrant Agent shall promptly forward such notice or demand to the Company.
SECTION 6.03. Addresses for Notices. Any communications from the
---------------------
Company to the Warrant Agent with respect to this Agreement shall be addressed
to Citibank, N.A., 120 Wall Street, New York, NY 10043, (facsimile: (212) 480-
1613) (telephone: (212) 412-6209), Attention: Corporate Trust Services; any
communications from the Warrant Agent to the Company with respect to this
Agreement shall be addressed to Merrill Lynch & Co., Inc., South Tower, World
Financial Center, 225 Liberty Street, New York, NY 10080-6107 (facsimile:
(212) 236-6004) (telephone: (212) 236-6112), Attention: Treasurer (first copy)
and Merrill Lynch & Co., Inc., 100 Church Street, 12th Floor, New York, NY 10007
(facsimile: (212) 602-8436) (telephone: (212) 602-8444), Attention: Corporate
Secretary (second copy); and any communications from the Warrant Agent to the
Calculation Agent with respect to this Agreement shall be addressed to Merrill
Lynch, Pierce, Fenner & Smith, World Financial Center, North Tower, 250 Vesey
Street, New York, NY, 100281 Attention: Steven Bodurtha (facsimile: (212) 449-
6576) (telephone: (212) 449-6577) (or such other address as shall be specified
in writing by the Warrant Agent, the Company or the Calculation Agent,
respectively).
SECTION 6.04. Notices to Holders. The Company or the Warrant Agent
------------------
may cause to have notice given to the beneficial owners of interests in the
Global Warrant Certificate by providing the Depository with a form of notice to
be distributed by the Depository to Depository Participants in accordance with
the customs and practices of the Depository.
SECTION 6.05. Applicable Law. The validity, interpretation and
--------------
performance of this Agreement and each Warrant issued hereunder and of the
respective terms and provisions thereof shall be governed by the laws of the
State of New York applicable to agreements made and to be performed in such
State.
SECTION 6.06. Obtaining of Governmental Approvals. The Company shall
-----------------------------------
from time to time take all actions which may be necessary to obtain and keep
effective any and all permits,
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<PAGE>
consents and approvals of governmental agencies and authorities and the American
Stock Exchange and securities acts filings under United States Federal and State
laws, which may be or become requisite in connection with the issuance, sale,
trading, transfer or delivery of the Warrants, the Global Warrant Certificate
and the exercise of the Warrants.
SECTION 6.07. Persons Having Rights Under Warrant Agreement. Nothing
---------------------------------------------
in this Agreement expressed or implied and nothing that may be inferred from any
of the provisions hereof is intended, or shall be construed, to confer upon, or
give to, any person or corporation other than the Company, the Warrant Agent,
and the Holders any right, remedy or claim under or by reason of this Agreement
or of any covenant, condition, stipulation, promise or agreement hereof; and all
covenants, conditions, stipulations, promises and agreements in this Agreement
contained shall be for the sole and exclusive benefit of the Company and the
Warrant Agent and their successors and of the registered Holders of the Warrant
Certificate.
SECTION 6.08. Headings. The descriptive headings of the several
--------
Articles and Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the provisions
hereof.
SECTION 6.09. Counterparts. This Agreement may be executed in any
------------
number of counterparts, each of which so executed shall be deemed to be an
original; but such counterparts shall together constitute but one and the same
instrument.
SECTION 6.10. Inspection of Agreement. A copy of this Agreement
-----------------------
shall be available at all reasonable times at the principal corporate trust
office of the Warrant Agent, for inspection by the Depository Participants and
the Holders.
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<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the day and year first above written.
MERRILL LYNCH & CO., INC.
By ____________________________
Joseph T. Willett
Senior Vice President
and Chief Financial Officer
CITIBANK, N.A.
By ___________________________
Name:
Title:
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<PAGE>
EXHIBIT A
Form of Global Warrant
THIS WARRANT IS A GLOBAL WARRANT WITHIN THE MEANING OF THE WARRANT AGREEMENT
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE THEREOF. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
WARRANTS IN CERTIFICATED FORM, THIS WARRANT MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO A
NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A
NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS WARRANT IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY WARRANT ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No. CUSIP No.
GLOBAL WARRANT CERTIFICATE
representing up to 1,350,000 Russell 2000 Index Call Warrants Expiring
November 17, 1998
MERRILL LYNCH & CO., INC.
This certifies that CEDE & Co. or registered assigns is the registered
Holder of 1,350,000 Russell 2000 Index Call Warrants Expiring November 17, 1998
(the "Warrants") or such lesser amount as is indicated in the records of
Citibank, N.A., as Warrant Agent. Each Warrant entitles the beneficial owner
thereof, subject to the provisions contained herein and in the Warrant Agreement
referred to below, to receive from Merrill Lynch & Co., Inc. (the "Company") the
cash settlement value, if any, (the "Cash Settlement Value") specified in
Section 2.02(e), or the Alternative Settlement Amount specified in Section
2.04(a), of the Warrant Agreement. The Holder hereof shall not be entitled to
any interest on any Cash Settlement Value to which it is otherwise entitled
(unless the Company shall default in the payment of such Cash Settlement Value).
The Warrants may be exercised on any New York Business Day from their date of
issuance until 1:00 P.M., New York City time, on the earlier of (i) the fourth
schedule Index Calculation Day immediately preceding November 17, 1998 or (ii)
the date of earlier automatic exercise as further described below and as
provided in the Warrant Agreement. Except in the cases of automatic exercise or
cancellation, not fewer than 100 Warrants may be exercised by or on behalf of a
beneficial owner on any one day. All exercises of
<PAGE>
Warrants (other than on automatic exercise) are subject, at the Company's
option, to the limitation that not more than 20% of the Warrants originally
issued (provided, however, that no more than 10% of the Warrants originally
issued shall be exercised for the account of any beneficial owner) may be
exercised on any Exercise Date and not more than 10% of the Warrants originally
issued may be exercised by or on behalf of any beneficial owner, either
individually or in concert with any other beneficial owner, on any Exercise
Date. References herein to "U.S. dollars", "U.S.$" or "$" are to the currency of
the United States of America. The term "New York Business Day", as used herein,
means any day other than a Saturday or Sunday or a day on which commercial banks
in The City of New York are required or authorized by law or executive order to
be closed.
This Global Warrant Certificate is issued under and in accordance with
the Warrant Agreement, dated as of November 27, 1995 (the "Warrant Agreement"),
between the Company and the Warrant Agent, and is subject to the terms and
provisions contained in the Warrant Agreement, to all of which terms and
provisions all beneficial owners of the Warrants evidenced by this Global
Warrant Certificate and the Holder of this Global Warrant Certificate consent by
acceptance hereof by the Depository (as defined below). Copies of the Warrant
Agreement are on file at the Warrant Agent office of the Warrant Agent in The
City of New York. Except as provided in the Warrant Agreement, beneficial
owners of the Warrants evidenced by this Global Warrant Certificate shall not be
entitled to receive definitive Warrants evidencing their Warrants. Warrants
shall be held through a depository selected by the Company which initially is
The Depository Trust Company (the "Depository", which term, as used herein,
includes any successor depository selected by the Company as further provided in
the Warrant Agreement).
Capitalized terms included herein but not defined herein have the same
meaning assigned thereto in the Warrant Agreement.
Subject to the provisions hereof and of the Warrant Agreement, each
Warrant evidenced hereby may be irrevocably exercised at the option of the
Holder in whole but not in part on any New York Business Day from its date of
issuance until 1:00 P.M., New York City time, on the fourth scheduled Index
Calculation Day immediately preceding the Expiration Date. Except in the cases
of automatic exercise or cancellation, each Warrant evidenced hereby may be
exercised by written notice to the Warrant Agent from a Depository Participant
acting on behalf of the beneficial owner of such Warrant and upon receipt by the
Warrant Agent through delivery of such Warrant free on the records of the
Depository to the Warrant Agent's Depository Participant Account (entitled
Citibank, N.A. Corporate Trust Warrant Agent Account, No. 2659, or such other
account of the
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<PAGE>
Warrant Agent at the Depository as the Warrant Agent shall designate in writing
to the Company and to the Depository (the "Warrant Account")) ("Proper
Delivery"); provided, however, that notices of exercise are subject to rejection
by the Warrant Agent as provided in the Warrant Agreement.
The Warrant Agent shall promptly cause its records to be marked to
reduce the number of Unexercised Warrants evidenced by this Global Warrant
Certificate by the number of Warrants transferred to the Warrant Account from
time to time and for which payment of the Cash Settlement Value is made as
provided above.
All Warrants for which the Warrant Agent has not received a valid
Exercise Notice at or prior to 1:00 P.M., New York City time, on (i) the fourth
scheduled Index Calculation Day immediately preceding the Expiration Date or
(ii) the close of business on the Early Expiration Date shall be automatically
exercised, without any required delivery of notice of exercise or delivery of
the Warrants from any relevant Depository Participant to the Warrant Agent. The
first New York Business Day preceding such Expiration Date or Early Expiration
Date, as the case may be, shall be the Exercise Date for such automatically
exercised Warrants. The Company shall advise the Warrant Agent of the date of
any expected delisting or permanent suspension of trading of the Warrants as
soon as is practicable and shall immediately inform the Warrant Agent after the
Company has received notice that such delisting or suspension has occurred and
that the Warrants are not accepted for listing on another Self-Regulatory
Organization, but in no event will such notice be given to the Warrant Agent
later than 5:00 P.M., New York City time, on the New York Business Day preceding
the date that such delisting or suspension occurs.
The Company, the Warrant Agent and any agent of the Company or the
Warrant Agent may deem and treat the registered owner hereof as the absolute
owner of the Warrants evidenced hereby (notwithstanding any notation of
ownership or other writing hereon) for any purpose and as the person entitled to
exercise the rights represented by the Warrants evidenced hereby, and neither
the Company nor the Warrant Agent nor any agent of the Company or the Warrant
Agent shall be affected by any notice to the contrary, subject to certain
provisions of the Warrant Agreement, except that the Company and the Warrant
Agent shall be entitled to rely on and act pursuant to instructions of
Depository Participants as contemplated herein and in the Warrant Agreement.
Subject to the terms of the Warrant Agreement and certain restrictions
set forth above, upon due presentment for registration of transfer of this
Global Warrant Certificate at the Warrant Agent Office of the Warrant Agent in
New York City,
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<PAGE>
the Company shall execute and the Warrant Agent shall authenticate and deliver
in the name of the designated transferee a new Global Warrant Certificate of
like tenor and evidencing a like number of Unexercised Warrants as evidenced by
this Global Warrant Certificate at the time of such registration of transfer,
which shall be issued to the designated transferee in exchange for this Global
Warrant Certificate, subject to the limitations provided in the Warrant
Agreement, without charge.
This Global Warrant Certificate and the Warrant Agreement are subject
to amendment as provided in the Warrant Agreement.
This Global Warrant Certificate shall not be valid or obligatory for
any purpose until authenticated by the Warrant Agent.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
MERRILL LYNCH & CO., INC.
By
_____________________________
Joseph T. Willett
Senior Vice President
and Chief Financial Officer
[SEAL] Attest _________________________
Secretary
This is one of the Warrants
referred to in the within-mentioned
Warrant Agreement:
CITIBANK, N.A. as Warrant Agent
By _________________________
Authorized Officer
Date:
-4-
<PAGE>
Form of Transfer of Global Warrant Certificate
Citibank, N.A., as Warrant Agent
Corporate Trust Services
111 Wall Street
New York, New York 10043
, the registered Holder of the Global Warrant Certificate
representing all unexercised Merrill Lynch & Co., Inc. Russell 2000 Index Call
Warrants, Expiring November 17, 1998, hereby requests the transfer of such
Global Warrant Certificate to
[NAME OF REGISTERED HOLDER]
Dated:
By:
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<PAGE>
EXHIBIT B
Form of Irrevocable Notice of Exercise
Citibank, N.A.
as Warrant Agent
c/o Citicorp Data Distribution, Inc.
404 Sette Drive
Paramus, NJ 07652
Attention: Corporate Trust Services Department
(Facsimile: 201-262-7521)
(Telephone: 201-262-5444)
Re: Exercise of Merrill Lynch & Co., Inc.
Russell 2000 Index Call Warrants
Expiring November 17, 1998 ("Warrants")
---------------------------------------
1. We refer to the Warrant Agreement dated as of November 27, 1995
(the "Warrant Agreement") between Merrill Lynch & Co., Inc. (the "Company") and
Citibank, N.A. (the "Warrant Agent"). Capitalized terms used herein and not
otherwise defined shall have the meanings specified in the Warrant Agreement.
On behalf of certain clients, each of whom is exercising no fewer than 100
Warrants and whose Warrants are held in our name, we hereby irrevocably exercise
Warrants (the "Exercised Warrants"). We hereby certify that at the time this
notice is delivered to you, we hold in our name on behalf of each such client a
settled position of Warrants in an amount at least equal to the number of
Warrants that we are hereby exercising on behalf of such client. We hereby
acknowledge that this Irrevocable Notice of Exercise and delivery of the
Exercised Warrants free to the Warrant Account must be received by you by 1:00
P.M., New York City time, on the date hereof in order for the Exercise Date of
the Exercised Warrants to be such New York Business Day and that if this
Irrevocable Notice of Exercise or such Exercised Warrants are received by you
after 1:00 P.M., New York City time, the Exercise Date of the Exercised Warrants
shall be the next succeeding New York Business Day.
2. We hereby certify that we are a participant of The Depository
Trust Company (the "Depository") with the present right to use and receive its
services.
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<PAGE>
3. The Participant shall disburse the Cash Settlement Value, if any,
with respect to the Exercised Warrants in accordance with its standard
procedures.
Dated: , 199
[NAME OF DEPOSITARY
PARTICIPANT]
By _________________________
Authorized Signature
[Address]
Telephone:
Facsimile:
Participant
Number:
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<PAGE>
CONFIRMATION OF EXERCISE
We hereby confirm that the total number of Warrants mentioned above
(the "Exercised Warrants") have been exercised at a Index Spot Price of
and that the aggregate Cash Settlement Value of U.S. $ (U.S. $ per
Warrant) shall be made available to you in the form of a check four New York
Business Days after the Valuation Date for such Warrants.
Capitalized terms included herein but not defined have the meanings
assigned thereto in the Warrant Agreement, dated as of November 27, 1995,
between Merrill Lynch & Co., Inc. and Citibank, N.A., as Warrant Agent.
Dated: , 199
Citibank, N.A.
as Warrant Agent
By _________________________
Authorized Officer
NOTICE OF REJECTION
You are hereby notified that [the Irrevocable Notice of Exercise
delivered by you was determined by us not to have been [duly completed] [in
proper form]], in the manner set forth in the Warrant Agreement, dated as of
November 27, 1995, between Merrill Lynch & Co., Inc. and Citibank, N.A., as
Warrant Agent. Accordingly, we have rejected your Irrevocable Notice of
Exercise as being unsatisfactory as to form.
Dated: , 199
Citibank, N.A.
as Warrant Agent
By _________________________
Authorized Officer
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<PAGE>
Exhibit (5) & (23)
November 27, 1995
Merrill Lynch & Co., Inc.
World Financial Center
North Tower
New York, New York 10281-1220
Gentlemen:
As your counsel, we have examined a copy of the Restated Certificate of
Incorporation, as amended, of Merrill Lynch & Co., Inc. (hereinafter called the
"Company"), certified by the Secretary of State of the State of Delaware. We
are familiar with the corporate proceedings had in connection with the proposed
issuance and sale by the Company to the Underwriter named in the Terms Agreement
referred to below, pursuant to an Underwriting Agreement dated March 22, 1994
(the "Underwriting Agreement"), among the Company, Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S") and the other firms named
therein, as supplemented by the Terms Agreement dated November 20, 1995 (the
"Terms Agreement") between the Company and MLPF&S, of 1,350,000 of the Company's
Russell 2000 Index Call Warrants Expiring November 17, 1998 (the "Warrants").
We have also examined a copy of the Warrant Agreement between the Company and
Citibank, N.A., as Warrant Agent, dated as of November 27, 1995 (the "Warrant
Agreement"), and the Company's
<PAGE>
Registration Statement on Form S-3 (File No. 33-61559) relating to the Warrants
(the "Registration Statement").
Based upon the foregoing and upon such further investigation as we deemed
relevant in the premises, we are of the opinion that:
1. The Company has been duly incorporated under the laws of the State of
Delaware.
2. The Warrants have been duly and validly authorized by the Company and
when the Warrants have been duly executed and authenticated in accordance with
the terms of the Warrant Agreement and delivered against payment therefor as set
forth in the Underwriting Agreement, as supplemented by the Terms Agreement, the
Warrants will constitute valid and legally binding obligations of the Company in
accordance with their terms, except to the extent that enforcement thereof may
be limited by bankruptcy, insolvency, reorganization or other laws relating to
or affecting enforcement of creditors' rights or by general equity principles.
We consent to the filing of this opinion as an exhibit to the Registration
Statement and as an exhibit to the Current Report of the Company on Form 8-K
dated November 27, 1995.
Very truly yours,
/s/ Brown & Wood
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