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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
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The Bear Stearns Companies Inc.
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(Exact Name of Registrant as Specified in its Charter)
Delaware 13-3286161
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(State of Incorporation (I.R.S. Employer Identification No.)
or Organization)
245 Park Avenue
New York, New York
(212) 272-2000 10167
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(Address of Principle Executive Offices) (Zip Code)
If this Form relates to the registration of a class of debt securities and
is effective upon filing pursuant to General Instruction A(c)(1) please
check the following box. [_]
If this Form relates to the registration of a class of debt securities and
is to become effective simultaneously with the effectiveness of a
concurrent registration statement under the Securities Act of 1933 pursuant
to General Instruction A(c)(2) please check the following box. [_]
Securities to be registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
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Vantage Point Portfolio American Stock Exchange
Call Warrants
Expiring August , 1997
Securities to be registered pursuant to Section 12(g) of the Act:
NONE
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(Title of Class)
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ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
The Registrant hereby incorporates by reference the
description of the Vantage Point Portfolio Call Warrants registered
hereby (the "Securities") as set forth in the following documents
previously filed or to be filed by the Registrant with the Securities
and Exchange Commission (the "Commission") under the Securities Act of
1933, as amended (the Securities Act"):
(1) the description set forth under the caption
"Description of Warrants," on pages 11 through 13 of the Registrant's
Registration Statement on Form S-3 (Registration No. 33-63561); and
(2) the description set forth under the caption
"Description of the Warrants" in the final Prospectus Supplement
relating to the Securities to be filed with the Commission pursuant to
Rule 424(b) under the Securities Act.
ITEM 2. EXHIBITS.
1.1 - Form of Warrant Agreement relating to the Vantage
Point Portfolio Warrants, among the Registrant, Chemical Bank, as
Warrant Agent, and Bear, Stearns & Co. Inc., as Determination Agent.
NYFS04...:\25\22625\0282\1324\FRM2016W.430
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this registration
statement to be signed on its behalf by the undersigned, thereto duly
authorized.
THE BEAR STEARNS COMPANIES INC.
Date: February 12, 1996 By:/s/ Samuel L. Molinaro. Jr.
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Name: Samuel L. Molinaro, Jr.
Title: Senior Vice President
- Finance
NYFS04...:\25\22625\0282\1324\FRM2016W.430
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INDEX TO EXHIBITS
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Sequential
Exhibit No. Description Page
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No.
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1.1 Form of Warrant Agreement relating to the Vantage
Point Portfolio Call Warrants made among the
Registrant, Chemical Bank, as Warrant Agent, and
Bear Stearns & Co. Inc., as Determination Agent.
NYFS04...:\25\22625\0282\1324\FRM2016W.430
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THE BEAR STEARNS COMPANIES INC.
and
CHEMICAL BANK, Warrant Agent
and
BEAR, STEARNS & CO. INC., Determination Agent
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WARRANT AGREEMENT
dated as of February __, 1996
Vantage Point Portfolio Call Warrants
Expiring August __, 1997
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TABLE OF CONTENTS
Page
PARTIES.................................................................1
RECITALS................................................................1
ARTICLE I
ISSUANCE OF WARRANTS AND FORM,
EXECUTION, DELIVERY AND REGISTRATION
OF WARRANT CERTIFICATES AND
GLOBAL WARRANT CERTIFICATE
SECTION 1.01. Issuance of Warrants.............................. 1
SECTION 1.02. Form, Execution and Delivery of Warrant
Certificates...................................... 2
SECTION 1.03. Warrant Certificates.............................. 3
SECTION 1.04. Registration of Transfers and Exchanges........... 3
SECTION 1.05. Mutilated or Missing Warrant
Certificates...................................... 4
SECTION 1.06. Registered Holders................................ 5
SECTION 1.07. Conversion Option 5
SECTION 1.08. Global Warrant Certificate........................ 7
ARTICLE II
DURATION AND EXERCISE OF WARRANTS
SECTION 2.01. Duration of Warrants; Minimum
Exercise Amounts; Exercise Notice................. 9
SECTION 2.02. Exercise, Valuation and Delivery of
Warrants.......................................... 11
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SECTION 2.03. Automatic Exercise of Warrants; Exercise
upon an Extension Event, an
Extraordinary Event or an Exercise
Limitation Event................................. 24
SECTION 2.04. Limitation of Number of Exercisable
Warrants......................................... 32
SECTION 2.05. Covenant of the Company.......................... 33
SECTION 2.06. Return of Money Held Unclaimed for Two
Years............................................ 33
SECTION 2.07. Return of Global Warrant Certificate............. 34
ARTICLE III
OTHER PROVISIONS RELATING TO
RIGHTS OF WARRANTHOLDERS
SECTION 3.01. Warrantholder May Enforce Rights................. 34
ARTICLE IV
WARRANTS ACQUIRED BY THE COMPANY;
PAYMENT OF TAXES................................................ 35
SECTION 4.01. Warrants Acquired by the Company................. 35
SECTION 4.02. Payment of Taxes................................. 35
ARTICLE V
CONCERNING THE WARRANT AGENT.................................... 35
SECTION 5.01. Warrant Agent.................................... 35
SECTION 5.02. Conditions of Warrant Agent's
Obligations...................................... 36
SECTION 5.03. Resignation and Appointment of
Successor........................................ 38
ARTICLE VI
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MISCELLANEOUS
SECTION 6.01. Amendment........................................ 39
SECTION 6.02. Notices and Demands to the Company, the
Warrant Agent and the Determination
Agent............................................ 40
SECTION 6.03. Addresses for Notices............................ 40
SECTION 6.04. Notices to Holders............................... 40
SECTION 6.05. Obtaining of Approvals........................... 41
SECTION 6.06. Persons Having Rights Under This
Agreement........................................ 41
SECTION 6.07. Inspection of Agreement.......................... 41
SECTION 6.08. Headings......................................... 41
SECTION 6.09. Counterparts..................................... 41
SECTION 6.10. Applicable Law................................... 41
EXHIBIT A - Form of Warrant Certificate
EXHIBIT A-1 - Form of Global Warrant Certificate
EXHIBIT A-2 - Exercise Notice For Warrants Represented by the
Global Warrant Certificate
EXHIBIT B - Confirmation of Exercise For Warrants Represented
by Warrant Certificates
EXHIBIT B-1 - Notice of Rejection of Exercise Notice for
Warrants Represented by Warrant Certificates
EXHIBIT B-2 - Confirmation of Exercise For Warrants Represented
by the Global Warrant Certificate
EXHIBIT B-3 - Notice of Rejection of Exercise Notice for
Warrants Represented by the Global Warrant
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Certificate
EXHIBIT C-1 - Notice of Rejection Relating to Limit Option For
Warrants Represented by Warrant Certificates
EXHIBIT C-2 - Notice of Rejection Relating to Limit Option For
Warrants Represented by the Global Warrant
Certificate
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WARRANT AGREEMENT
THIS AGREEMENT, dated as of February __, 1996, is among
THE BEAR STEARNS COMPANIES INC., a corporation organized and existing under the
laws of the State of Delaware (the "Company"), CHEMICAL BANK, a New York banking
corporation (the "Warrant Agent"), and BEAR, STEARNS & CO. INC., a corporation
organized and existing under the laws of the State of Delaware (the
"Determination Agent").
WHEREAS, the Company proposes to sell from time to time
Vantage Point Portfolio Call Warrants (the "Warrants" or, individually, a
"Warrant") representing the right to receive from the Company on exercise
(including automatic exercise) an amount equal to the Cash Settlement Value or
Alternative Settlement Amount, as the case may be (each, as defined below),
determined by reference to increases in the Spot Portfolio Value (as defined
herein) of the Vantage Point Portfolio (as defined herein), on the terms and
conditions set forth in this Agreement; and
WHEREAS, the Company desires the Warrant Agent to act
on behalf of the Company, and the Warrant Agent is willing so to act, in
connection with the issuance, transfer and exercise of the Warrants, and the
Company desires 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, the parties hereto agree as follows:
ARTICLE I
ISSUANCE OF WARRANTS AND FORM,
EXECUTION, DELIVERY AND REGISTRATION
OF WARRANT CERTIFICATES AND
GLOBAL WARRANT CERTIFICATE
SECTION 1.01. Issuance of Warrants. (a) The Warrants
are unsecured contractual obligations of the Company and will rank on a parity
with the Company's other unsecured contractual obligations and with the
Company's unsecured and unsubordinated debt.
(b) Each Warrant entitles a Registered Holder (as
defined herein, a "Warrantholder") to receive upon exercise (including automatic
exercise), subject to the provisions contained herein, the Cash Settlement Value
or the Alternative Settlement Amount, as the case may be (each as defined
herein), of such Warrant. A Warrant will not require or entitle a
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Warrantholder to purchase or take delivery from the Company of any shares of any
component stocks of the Vantage Point Portfolio (the "Portfolio Securities"), or
any other securities. Upon exercise of a Warrant, the Company will make only a
cash payment in the amount of the Cash Settlement Value or Alternative
Settlement Amount, if any and as applicable, of such Warrant. The Company is
under no obligation to, nor will it, sell or deliver to any Warrantholder any
shares of any of the Portfolio Securities or any other securities in connection
with the exercise of any Warrants. Warrantholders will not receive any interest
on any Cash Settlement Value or Alternative Settlement Amount, and the Warrants
will not entitle the Warrantholders to any of the rights of holders of any of
the Portfolio Securities or any other securities.
SECTION 1.02. Form, Execution and Delivery of Warrant
Certificates. (a) The Warrants, whenever issued, shall be represented by
certificates in registered form substantially in the form set forth in Exhibit A
hereto (the "Warrant Certificates"), with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Agreement, and may represent any whole number 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 which 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 self-regulatory organization (an "SRO") on
which the Warrants may be listed, or of any securities depository, or to conform
to usage. Warrant Certificates shall be signed on behalf of the Company by its
chairman, its president, its chief financial officer, its treasurer or one of
its managing directors and attested by its secretary or an assistant secretary.
The signature of any of such officers may be either manual or facsimile.
Typographical and other minor errors or defects in any such signature shall not
affect the validity or enforceability of any Warrant Certificate that has been
duly countersigned and delivered by the Warrant Agent.
(b) In case any officer of the Company who shall have
signed a Warrant Certificate, either manually or by facsimile signature, shall
cease to be such officer before such Warrant Certificate shall have been
countersigned and delivered by the Warrant Agent to the Company or delivered by
the Company, such
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Warrant Certificate nevertheless may be countersigned and delivered as though
the person who signed such Warrant Certificate had not ceased to be such officer
of the Company; and the Warrant Certificate may be signed on behalf of the
Company by any person who, at the actual date of the execution of such Warrant
Certificate, shall be a proper officer of the Company to sign such Warrant
Certificate, although at the date of the execution of this Warrant Agreement any
such person was not such officer.
SECTION 1.03. Warrant Certificates. Each Warrant
Certificate, when executed on behalf of the Company in accordance with Section
1.02, shall be delivered to the Warrant Agent, which shall manually countersign
and deliver the same to or upon the order of the Company. After the initial
original issuance of Warrants hereunder, additional Warrant Certificates may be
issued on original issuance upon two (2) Business Days (as defined herein) prior
notice to the Warrant Agent. Each Warrant Certificate shall be dated the date of
its countersignature. A Warrant Certificate shall not be valid for any purpose,
and no Warrant evidenced thereby shall be exercisable, unless and until such
Warrant Certificate has been countersigned by the manual signature of an
authorized officer of the Warrant Agent. Such countersignature by an authorized
officer of the Warrant Agent upon any Warrant Certificate signed by the Company
in accordance with Section 1.02 shall be conclusive evidence that the Warrant
Certificate so countersigned has been duly issued hereunder.
SECTION 1.04. Registration of Transfers and Exchanges.
(a) Except as otherwise provided herein or in the Warrant Certificate, the
Warrant Agent shall from time to time register the transfer of any outstanding
Warrant Certificates upon the records to be maintained by it for that purpose
(the "Warrant Register") at the Warrant Agent's Office (as defined herein),
subject to such reasonable regulations as the Company or the Warrant Agent may
prescribe, upon surrender thereof at the Warrant Agent's Window (as defined
herein), Attention: Transfer Department, duly endorsed by, or accompanied by a
written instrument or instruments of transfer in form satisfactory to the
Warrant Agent and the Company duly executed by, the Registered Holder(s) (as
defined herein) thereof or by the duly appointed legal representative thereof or
by a duly authorized attorney, such signature to be guaranteed by a bank or
trust company with a correspondent office in The City of New York or by a broker
or dealer which is a member of the National Association of Securities Dealers,
Inc. (the "NASD") or by a member of a national securities exchange. Upon any
such registration of
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transfer, a new Warrant Certificate shall be issued to the transferee(s) and the
surrendered Warrant Certificate shall be cancelled by the Warrant Agent.
(b) At the option of a Warrantholder, unexercised
Warrant Certificates may be exchanged for other Warrant Certificates,
representing a like number of Warrants, upon surrender to the Warrant Agent of
the Warrant Certificates to be exchanged at the Warrant Agent's Window,
Attention: Transfer Department. The "Warrant Agent's Window" shall be the window
of the Warrant Agent maintained for purposes of transfer and tender in the
Borough of Manhattan, The City of New York or at the address of any successor
Warrant Agent (as provided in Section 5.03) and which is, on the date of this
Agreement, Chemical Bank/Geoserve, Corporate Trust Securities Window, 55 Water
Street, Room 234, North Building, New York, New York 10041, Attention: Tender
Department. Upon surrender of any unexercised Warrant Certificate for exchange,
the Warrant Agent shall cancel such Warrant Certificate, and the Company shall
execute, and the Warrant Agent shall countersign and deliver, in accordance with
Sections 1.02 and 1.03, one or more new Warrant Certificates of like tenor and
representing a like number of unexercised Warrants.
(c) Warrant Certificates issued upon transfer or
exchange pursuant to Section 1.04(a) or (b) shall be valid obligations of the
Company, evidencing the same obligations of the Company as the Warrant
Certificates surrendered for transfer or exchange, and entitled to the same
benefits under this Agreement as were such Warrant Certificates prior to such
surrender.
(d) Except as provided in Section 1.05, no service
charge shall be made for any registration of transfer or 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 transfer or exchange of Warrant Certificates, other than
exchanges pursuant to this Section 1.04 not involving any transfer.
(e) In the event that upon any exercise of Warrants
evidenced by a Warrant Certificate the number of Warrants exercised shall be
less than the total number of Warrants evidenced by such Warrant Certificate,
there shall be issued to the Registered Holder thereof or his assignee a new
Warrant Certificate evidencing the number of Warrants not exercised.
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SECTION 1.05. Mutilated or Missing Warrant
Certificates. (a) If any Warrant Certificate is mutilated, lost, stolen or
destroyed, the Company may in its discretion execute, and the Warrant Agent may
countersign and deliver, in exchange and substitution for, and upon cancellation
of, the mutilated Warrant Certificate, or in replacement of the Warrant
Certificate lost, stolen or destroyed, a new Warrant Certificate of like tenor
and representing an equivalent number of Warrants, bearing an identification
number not contemporaneously outstanding, but only (in case of loss, theft or
destruction) upon receipt of evidence satisfactory to the Company and the
Warrant Agent of such loss, theft or destruction of such Warrant Certificate and
security or indemnity, if requested, also satisfactory to them. Applicants for
such substitute Warrant Certificates shall also comply with such other
reasonable regulations and pay such other reasonable charges as the Company or
the Warrant Agent may prescribe.
(b) In case any such mutilated, lost, stolen or
destroyed Warrant Certificate has been or is about to be exercised, or deemed to
be exercised, the Company in its absolute discretion may, instead of issuing a
new Warrant Certificate, direct the Warrant Agent to treat the same as if it had
received the Warrant Certificate together with an irrevocable Exercise Notice
(as defined herein) in proper form in respect thereof, as provided herein, or as
being subject to automatic exercise, as the case may be.
(c) Each new Warrant Certificate issued pursuant to
this Section 1.05 in lieu of any lost, stolen or destroyed Warrant Certificate
shall be an original, additional contractual obligation of the Company, and
shall be entitled to the same benefits under this Agreement as the Warrant
Certificate that was lost, stolen or destroyed.
(d) Upon the issuance of any new Warrant Certificate
in accordance with this Section 1.05, the Company may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses of
the Warrant Agent) connected therewith.
(e) The provisions of this Section 1.05 are exclusive
and shall preclude (to the extent lawful) any other rights and remedies with
respect to the replacement or payment of mutilated, lost, stolen or destroyed
Warrant Certificates.
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SECTION 1.06. Registered Holders. Prior to due
presentment for registration of transfer, 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 shall be registered in the Warrant Register (a
"Registered Holder") as the absolute owner of the Warrants evidenced thereby
(notwithstanding any notation of ownership or other writing on the Warrant
Certificate) for any purpose whatsoever, and as the person entitled to exercise
the rights represented by the Warrants evidenced thereby, 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. This Section 1.06 shall
be without prejudice to the rights of Warrantholders as described elsewhere
herein.
SECTION 1.07. Conversion Option. (a) Commencing on
the one hundred eightieth calendar day following February __, 1996, each
Warrantholder will have the option (the "Conversion Option") to convert the form
in which such Warrantholder holds his Warrants from definitive to book-entry
form. The Company shall notify each Warrantholder as soon as practicable after
the initial original issuance of the Warrants (i) that Warrant Certificates (as
defined herein) must be delivered to an entity (a "Participant") entitled to
execute, clear and settle transactions through The Depository Trust Company, New
York, New York (the "Depository", which term, as used herein, includes any
successor securities depository selected by the Company) in proper form for
deposit in order for Warrants to be converted into book-entry form, (ii) of the
date on which such conversions will commence (which shall be such 180th calendar
day (the "Initial Conversion Date")), (iii) of the date on which such
conversions will end (which date shall be the forty-fifth calendar day after the
Initial Conversion Date (the "Final Conversion Date")) and (iv) of the CUSIP
number assigned to the Warrants. The Warrant Agent, at the request and expense
of the Company and on behalf of the Company, shall mail such notice to each
Warrantholder. The period from the Initial Conversion Date to and including the
Final Conversion Date is referred to herein as the "Conversion Option Period".
Warrants in book-entry form shall not be exchangeable for Warrant Certificates,
except as provided herein.
(b) During the Conversion Option Period, the
Depository will credit the account of each Participant that deposits Warrant
Certificates with the quantity of Warrants evidenced by such Warrant
Certificates either by the close of business on the Business Day on which such
Warrant Certificates
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are deposited (if received by the Depository by its then applicable cut-off time
for same-day credit) or on the following Business Day (if received by the
Depository by its then applicable cut-off time for next-day credit), all in
accordance with the provisions of the Letter of Representations relating to the
Warrants, among the Company, the Warrant Agent and the Depository (the
"Representations Letter").
(c) As more fully described in the Representations
Letter, the Depository will deliver daily to the Warrant Agent Warrant
Certificates deposited at the Depository on the previous Business Day. If the
Warrant Agent accepts such Warrant Certificates for conversion, it shall
promptly cancel such Warrant Certificates, debit the accounts of the
Warrantholders registered on its books, and credit the account of the Depository
with the aggregate quantity of Warrants evidenced by the cancelled Warrant
Certificates. On the first day during the Conversion Option Period that the
Warrant Agent credits Warrants to the Depository's account, the Warrant Agent
shall countersign a global certificate evidencing such Warrants (the "Global
Warrant Certificate") in the manner provided herein. On each subsequent day
during the Conversion Option Period that the Warrant Agent credits Warrants to
the Depository's account, the Warrant Agent may (i) as provided in the Fast
Automated Securities Transfer Balance Certificate Agreement between Chemical
Bank and the Depository (the "FAST Agreement"), countersign a new Global Warrant
Certificate or (ii) endorse the existing Global Warrant Certificate to evidence
the increased quantity of Warrants credited to the Depository's account. If the
Warrant Agent countersigns a new Global Warrant Certificate, it shall cancel the
existing Global Warrant Certificate. Only one Global Warrant Certificate
evidencing Warrants credited to the Depository's account shall be outstanding at
any time.
(d) If (i) the Depository is at any time unwilling or
unable to continue as securities depository for the Warrants and a successor
Depository is not appointed by the Company within 90 days, or (ii) the Company
shall be adjudged a bankrupt or insolvent or make an assignment for the benefit
of its creditors or institute proceedings to be adjudicated a 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 Federal bankruptcy
laws or any other similar applicable Federal or State 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
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they mature, or if a receiver or custodian of it or all or any substantial part
of its property shall be appointed, or if a 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 reissue Warrant
Certificates in exchange for the Global Warrant Certificate registered in the
names provided by the Depository to the Warrant Agent in writing. 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 Warrant Certificates
in exchange for the Global Warrant Certificate registered in the names provided
by the Depository to the Warrant Agent in writing. In any such instance, and in
accordance with the provisions of this Agreement, each Warrantholder will be
entitled to have a number of Warrants equivalent to such Warrantholder's
beneficial interest in the Global Warrant Certificate registered in the name of
the Warrantholder and will be entitled to physical delivery of such Warrants in
definitive form. The provisions of Section 1.08 shall apply only if and when the
Conversion Option is utilized and a Global Warrant Certificate is issued
hereunder. Unless the context shall otherwise require, and subject to the
provisions of Section 1.08, all references in this Agreement to the Warrant
Certificates (other than in Sections 1.02, 1.03, 1.04 and 1.08) shall include
the Global Warrant Certificate in the event that the Global Warrant Certificate
is issued.
SECTION 1.08. Global Warrant Certificate. (a) Any
Global Warrant Certificate issued in accordance with this Section
1.08 shall be substantially in the form set forth in Exhibit A-1
hereto, with such appropriate insertions, omissions, substitu-
tions and other variations as are required or permitted by this
Agreement, and may represent any number of whole Warrants. Each
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 which 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 any securities depository referred to herein, or to
conform to usage. Each Global Warrant Certificate shall be
signed on behalf of the Company upon the same conditions, in
substantially the same manner and with the same effect as the
Warrant Certificates.
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(b) The Warrant Agent is authorized, from time to time
during the Conversion Option Period, upon receipt of a Global Warrant
Certificate from the Company, duly executed on behalf of the Company, to
countersign such Global Warrant Certificate. The Global Warrant Certificate
shall be manually countersigned and dated the date of its countersignature by
the Warrant Agent and shall not be valid for any purpose unless so
countersigned. The Warrant Agent shall deliver the Global Warrant Certificate to
or upon the order of the Depository against receipt of an appropriate amount of
Definitive Warrants (as defined herein) (such Definitive Warrants shall be
disposed of in accordance with instructions provided by the Company). One or
more Global Warrant Certificates may be executed by the Company and delivered to
the Warrant Agent on or after the date of execution of this Agreement; provided
that only one Global Warrant Certificate shall be outstanding at any one time.
The Company reserves the right to issue, from time to
time after the date of execution of this Agreement, additional Warrants, and in
connection therewith the Global Warrant Certificate may be exchanged for a new
Global Warrant Certificate to reflect the issuance by the Company of such
additional Warrants. To effect such an exchange the Company shall deliver to the
Warrant Agent a new Global Warrant Certificate duly executed on behalf of the
Company as provided in Section 1.02. The Warrant Agent shall countersign the new
Global Warrant Certificate as provided in this Section and shall deliver the new
Global Warrant Certificate to the Depository in exchange for, and upon receipt
of, the Global Warrant Certificate then held by the Depository. The Warrant
Agent shall cancel the Global Warrant Certificate delivered to it by the
Depository, dispose of such Global Warrant Certificate and provide a certificate
of disposition to the Company.
(c) The Global Warrant Certificate will initially be
registered in the name of a nominee of the Depository. The Warrant holdings of
the Participants will be recorded on the books of the Depository. The holdings
of customers of the Participants and the identity of the Warrantholders will be
reflected on the books and records of such Participants and will not be known to
the Warrant Agent, the Company or the Depository. The Global Warrant Certificate
will be held by the Depository or its agent.
Neither the Company nor the Warrant Agent will have any
responsibility or liability for any aspect of the records
relating to beneficial ownership interests in the Global Warrant
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Certificate or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
The Company may from time to time select a new entity
to act as Depository with respect to the Warrants 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 below as promptly as possible. Appropriate changes may be made in the
forms of the Global Warrant Certificate, the Exercise Notice and the related
notices to be delivered in connection with an exercise to reflect the selection
of the new Depository.
(d) 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 its records (which may be
maintained electronically), subject to such reasonable regulations as the
Company or the Warrant Agent may prescribe, only to the Depository, to another
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, or accompanied by a written instrument or instruments of transfer in
form satisfactory to the Warrant Agent and the Company, duly executed by the
Registered Holder thereof or by the duly appointed legal representative thereof,
or by its duly authorized attorney. Such signature shall be guaranteed by a bank
or trust company with a correspondent office in The City of New York or by a
broker or dealer which is a member of the NASD or by a member of a national
securities exchange. Upon any such registration of transfer, a new Global
Warrant Certificate shall be issued to the transferee and the surrendered Global
Warrant Certificate shall be cancelled by the Warrant Agent.
The Global Warrant Certificate may be transferred as
provided in paragraph (d) above, when surrendered to the Warrant Agent's Window,
Attention: Transfer Department, or at the address of any successor Warrant Agent
(as provided in Section 5.03), for another Global Warrant Certificate of like
tenor and representing a like number of unexercised Warrants.
ARTICLE II
DURATION AND EXERCISE OF WARRANTS
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SECTION 2.01. Duration of Warrants; Minimum Exercise
Amounts; Exercise Notice. (a) Subject to the limitations set forth herein and in
Sections 2.02 and 2.03, each Warrant may be irrevocably exercised in whole but
not in part, immediately upon issuance. Subject to the limitations set forth
herein and except in the case of automatic exercise or following an Extension
Event, each Warrant shall be irrevocably exercised either (A) in the case of
Warrants represented by Warrant Certificates ("Definitive Warrants"), including
Definitive Warrants held through CEDEL (as defined herein) or Euroclear (as
defined herein), on any Business Day during the period from the date of issuance
until 3:00 P.M., New York City time, on the earlier of (i) the third Business
Day immediately preceding the Expiration Date (as defined herein), and (ii) the
Business Day immediately preceding any Delisting Date (as defined herein) by
delivering or causing to be delivered to the Warrant Agent (at the Warrant
Agent's Window, Attention: Tender Department) the Warrant Certificate
representing such Warrant, with the Exercise Notice duly completed and executed
by the Registered Holder of such Warrant (or in the case of Definitive Warrants
held through the facilities of CEDEL or Euroclear, by an entity entitled to
execute, clear and settle transactions through CEDEL or Euroclear (a "CEDEL or
Euroclear Participant"), as the case may be) or (B) in the case of Warrants
represented by a Global Warrant Certificate ("Book-entry Warrants"), on any
Business Day during the period from the Initial Conversion Date until 3:00 P.M.,
New York City time, on the earlier of (i) the third Business Day immediately
preceding the Expiration Date, and (ii) the Business Day immediately preceding
any Delisting Date by causing (x) such Warrants to be transferred free to the
Warrant Agent on the records of the Depository in accordance with the
Depository's Deposit/Withdrawal at Custodian procedures, as provided in the
Representations Letter, and (y) a duly completed and executed Exercise Notice to
be received by the Warrant Agent (the Warrant Agent's facsimile transmission
number for such purpose is (212) 946-7682) from a Participant, in the case of
Book-Entry Warrants held through the Depository, or a CEDEL or Euroclear
Participant, in the case of such Warrants held through CEDEL or Euroclear,
acting, directly or indirectly, on behalf of the Warrantholder (such form of
Exercise Notice may be obtained from the Warrant Agent); provided, however, that
Exercise Notices are subject to rejection by the Warrant Agent as provided
herein. The "Expiration Date" shall be August __, 1997. Neither the Warrant
Agent nor the Determination Agent will be responsible for any losses resulting
from a failure of a brokerage firm, a Participant or a CEDEL or Euroclear
Participant to properly exercise Warrants on behalf of a Warrantholder.
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(b) No fewer than 500 Warrants may be exercised by or
on behalf of any one Warrantholder at any one time, except that no such minimum
exercise amount shall apply in the case of automatic exercise on or following
the Expiration Date or on any Delisting Date, or in the case of cancellation of
the Warrants as a result of an Extraordinary Event (as defined herein). A
Warrantholder shall not combine Definitive Warrants and Book- entry Warrants or
Book-entry Warrants held through more than one Participant to meet the 500
Warrant minimum exercise requirement provided herein. With the exception of the
Limit Option, an Exercise Notice shall be unconditional. Except as provided in
Section 2.02(c), the Warrant Agent shall be entitled, with no duty of inquiry,
to rely conclusively on any Exercise Notice received by it and on any
representation of the exercising Warrantholder contained therein.
(c) "Exercise Notice" means an irrevocable notice of
exercise to the Warrant Agent at the Warrant Agent's Window, Attention: Tender
Department (or by facsimile transmission in accordance with Section
2.01(a)(B)(y) in the case of Exercise Notices for Book-entry Warrants), which
notice (A) for Definitive Warrants, shall be on the reverse of the Warrant
Certificate or such other form as the Company and the Warrant Agent may approve
and (B) for Book-entry Warrants, shall be substantially in the form set forth in
Exhibit A-2 hereto or such other form as the Company and the Warrant Agent may
approve and may be given by facsimile transmission.
SECTION 2.02. Exercise, Valuation and Delivery of
Warrants. (a) Except for Warrants subject to automatic exercise, or Warrants
subject to the Limit Option or following an Extension Event, the "Exercise Date"
for a Warrant will be (A) in the case of Warrants other than those held through
the facilities of Cedel Societe Anonyme ("CEDEL") or Euroclear System
("Euroclear") (i) the Business Day on which the Warrant Agent receives at the
Warrant Agent's Window, Attention: Tender Department, the Warrant Certificate
(or transfer of such Warrant through the Depository in the case of Book-entry
Warrants) and Exercise Notice (by facsimile transmission in accordance with
Section 2.01(a)(B)(y) in the case of Exercise Notices for Book- entry Warrants)
in proper form with respect to such Warrant, if received at or prior to 3:00
P.M., New York City time, on such day, or (ii) if the Warrant Agent receives
such Warrant Certificate (or transfer of such Warrant through the Depository in
the case of Book-entry Warrants) or Exercise Notice after 3:00 P.M., New York
City time, on a Business Day, then the Business Day next succeeding the Business
Day on which such Warrant or
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Exercise Notice is received (B) in the case of Warrants held through the
facilities of CEDEL or Euroclear, (i) the Business Day on which the Warrant
Agent receives the Exercise Notice in proper form with respect to such Warrant
Certificate (or transfer of such Warrant through the Depository in the case of
Book-entry Warrants) if such Exercise Notice is received at or prior to 3:00
P.M., New York City time, on such day, provided that the Warrant Certificate (or
transfer of such Warrant through the Depository) is received by the Warrant
Agent by 3:00 P.M., New York City time, on the Valuation Date, or (ii) if the
Warrant Agent receives such Exercise Notice after 3:00 P.M., New York City time,
on a Business Day, then the Business Day next succeeding such Business Day,
provided that the Warrant Certificate (or transfer of such Warrant through the
Depository in the case of Book-entry Warrants) is received by 3:00 P.M., New
York City time, on the Valuation Date relating to exercises of Warrants on such
succeeding Business Day; provided, further, however, in the case of exercises by
Euroclear Participants, Euroclear must by facsimile to the Warrant Agent by 9:00
A.M., New York City time, on the Valuation Date confirm that the Warrants will
be received by the Warrant Agent on such date (the "Euroclear Confirmations"),
provided, that if such facsimile is received after 9:00 A.M., New York City
time, on the Valuation Date, the Company will be entitled to direct the Warrant
Agent to reject the related notice of exercise or waive the requirement for
timely delivery of such facsimile. In the event that the Warrant Certificate (or
transfer of such Warrant through the Depository in the case of Book-entry
Warrants) is received after 3:00 P.M., New York City time, on the Valuation
Date, then the Exercise Date for such Warrant will be the day on which such
Warrant is received or, if such day is not a Business Day, the next succeeding
Business Day.
(b) The "Valuation Date" for a Warrant shall be the
first Business Day following the applicable Exercise Date (subject to
postponement upon the occurrence of an Extraordinary Event or Exercise
Limitation Event (as defined herein) or as a result of the exercise of a number
of Warrants exceeding the limits on exercise set forth herein).
(c) The Warrant Agent shall, in the case of Warrants
other than Warrants held through CEDEL or Euroclear, following receipt of proper
and timely delivery of a Warrant in accordance with Section 2.02(a)(A)
accompanied by a completed Exercise Notice and, in the case of Warrants held
through CEDEL or Euroclear, following receipt of proper delivery of a completed
Exercise Notice in accordance with Section 2.02(a)(B):
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(i) promptly (1) for Definitive Warrants not held
through CEDEL or Euroclear, determine whether such Exercise Notice
has been duly completed and is in proper form duly executed by the
Registered Holder thereof or by the duly appointed legal
representative thereof or by a duly authorized attorney, (2) for
Definitive Warrants held through CEDEL or Euroclear, determine
whether such Exercise Notice has been duly completed and is in proper
form duly executed by the CEDEL or Euroclear Participant tendering
such Warrant, as applicable, (3) for Book-entry Warrants not held
through CEDEL or Euroclear, determine whether such Exercise Notice
has been duly completed and is in proper form, (4) for Book-Entry
Warrants held through CEDEL or Euroclear, determine whether such
Exercise Notice has been duly completed and is in proper form duly
executed by the CEDEL or Euroclear Participant tendering such
Warrant, as applicable; and if the Warrant Agent determines that the
Exercise Notice has not been duly completed or is not in proper form
or, in the case of Definitive Warrants, has not been so executed, the
Warrant Agent (A) promptly shall reject such Exercise Notice and
shall send to the entity that executed such Exercise Notice a notice
of rejection substantially in the form set forth in Exhibit B-1 or
Exhibit B-3 hereto, as the case may be, and, in the case of
Definitive Warrants, shall return to the Registered Holder that
submitted such Exercise Notice, by first class mail, the Warrant
Certificates evidencing such Warrants (to the extent received in the
case of Warrants held through CEDEL or Euroclear), or, in the case of
Book-entry Warrants, shall re-deliver such Warrants (to the extent
received in the case of Warrants held through CEDEL or Euroclear)
free through the facilities of the Depository to the account from
which they were transferred to the Warrant Agent and (B) in either
case, shall not take the actions required by clauses (ii)- (vii)
below with respect to such Exercise Notice or the related Warrants;
provided, however, that the Warrant Agent shall deliver a copy of the
Exercise Notice relating to such Warrants to the Company as required
by Section 2.02(c)(viii) below and the Company may waive any defect
in the form of such Exercise Notice;
(ii) notify the Company and the Determination Agent (and
such other parties (not to exceed two) as the Company shall designate
in writing) by 5:00 P.M., New York City time, on the Business Day
that such Exercise Notice has been received (or shall be deemed to
have been received) of (A) the total number of Warrants covered by
such Exercise
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Notice, (B) the number of such Warrants subject to the Limit Option
(as defined herein) ("Contingently Tendered Warrants") and (C) the
number of such Warrants not subject to the Limit Option;
(iii) with respect to Warrants held through Euroclear,
determine whether the Warrant Agent has received by 9:00 a.m., New
York City time, on the Valuation Date relating to such Warrants,
Euroclear Confirmations with respect to such Warrants, and if the
Warrant Agent has not received any of such Euroclear Confirmations by
such time, notify the Company (and such other parties (not to exceed
two) as the Company shall designate in writing) by 10:00 a.m., New
York City time, on such Valuation Date of the number of such Warrants
in respect of which the Warrant Agent has not received such Euroclear
Confirmations and (except to the extent the Company has notified the
Warrant Agent that it has waived the timing requirement of timely
delivery of such Euroclear Confirmation) send to the Euroclear
Participant that executed such Exercise Notice for which no related
Euroclear Confirmation was received (at the address specified in such
notice) a notice of rejection substantially in the form set forth in
Exhibit B-1 or Exhibit B-3 hereto, as the case may be;
(iv) if any of the Warrants covered by such Exercise
Notice constitute Contingently Tendered Warrants, by 10:00 A.M., New
York City time, on the Business Day next succeeding the Valuation
Date, (A) except as provided in Section 2.02(k)(i), determine the
Limit Option Reference Index (as defined herein) for such Warrants
(based on the applicable Limit Option Reference Index provided by the
Determination Agent pursuant to Section 2.02(j)); (B) determine in
accordance with Section 2.02(k) (based on the applicable Spot
Portfolio Value provided by the Determination Agent pursuant to
2.02(j)) whether such Contingently Tendered Warrants will be subject
to exercise after giving effect to the Limit Option and, if such
Warrants will not be subject to exercise, send, in the case of
Definitive Warrants, to the Registered Holder (or the entity that
executed the Exercise Notice, in the case of Definitive Warrants held
through CEDEL or Euroclear) or, in the case of Book-entry Warrants to
the Participant, that submitted such Exercise Notice a notice of
rejection substantially in the form set forth in Exhibit C-1 or
Exhibit C-2 hereto, as appropriate, with respect to such Warrants and
return to the Registered Holder (to the extent
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received in the case of Warrants held through CEDEL or Euroclear)
that submitted such Exercise Notice, by first class mail, the Warrant
Certificates evidencing such Warrants (to the extent received in the
case of Warrants held through CEDEL or Euroclear), or, in the case of
Book- entry Warrants (to the extent received in the case of Warrants
held through CEDEL or Euroclear), redeliver the Warrants free through
the facilities of the Depository to the account of such Participant;
and (C) notify the Company and the Determination Agent as to whether
such Contingently Tendered Warrants will be subject to exercise;
(v) by 10:00 A.M., New York City time, on the Business
Day next succeeding the Valuation Date,(A) determine the sum of (1)
the number of such Warrants not subject to the Limit Option (i.e.,
the number of Warrants determined pursuant to clause (ii)(C) above)
plus (2) the number of such Warrants that are Contingently Tendered
Warrants that will be subject to exercise notwithstanding the Limit
Option (i.e., the number of Warrants so identified pursuant to clause
(iv)(B) above) (all of such Warrants, the "Exercised Warrants") and
(B) notify the Company and the Determination Agent of the total
number of Exercised Warrants so determined (if such number is zero,
the Warrant Agent shall not take the actions required by clauses
(vi), (vii) and (viii) of this Section 2.02(c) with respect to such
Exercise Notice or the related Warrants);
(vi) by 10:00 A.M., New York City time, on the Business
Day next succeeding the Valuation Date determine the Cash Settlement
Value of the Exercised Warrants based on the Spot Portfolio Value
provided by the Determination Agent pursuant to Section 2.02(j) and
in the manner set forth in Section 2.02(e);
(vii) notify the Company (and such other parties (not to
exceed two) as the Company shall designate in writing) by 12:00 noon,
New York City time, on the Business Day next succeeding the Valuation
Date of the aggregate Cash Settlement Value payable in respect of the
Exercised Warrants (unless the Cash Settlement Value shall be
calculated by the Determination Agent), and send notices of
confirmation substantially in the form included in Exhibit B or
Exhibit B-2 hereto, as the case may be, to the Registered Holder (or
the entity that executed the Exercise Notice, in the case of
Definitive Warrants held through CEDEL or Euroclear) or Participant;
and
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(viii) promptly deliver a copy of each Exercise Notice to
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 Section 2.03 shall be by telephone (promptly
confirmed in writing) or facsimile transmission.
Except in the case of Warrants subject to automatic
exercise, Warrants that upon exercise entitle the holder thereof to receive an
Alternative Settlement Amount and Warrants deemed worthless following an
Extension Event, if on any Valuation Date the Cash Settlement Value for any
Warrants then exercised would be zero, then the attempted exercise of any such
Warrants shall be void and of no effect and (i) for Definitive Warrants, the
Warrant Certificate evidencing such Warrants (to the extent received in the case
of Warrants held through CEDEL or Euroclear) shall be promptly returned by the
Warrant Agent to the Registered Holder (or the entity that executed the Exercise
Notice, in the case of Definitive Warrants held through CEDEL or Euroclear) by
first class mail at the Company's expense or (ii) for Book-entry Warrants, the
Warrants will be transferred by the Warrant Agent back to the Participant that
submitted them free on the records of the Depository (to the extent received in
the case of Warrants held through CEDEL or Euroclear) and, in either case such
Warrantholder shall be permitted to re-exercise such Warrants prior to the
Expiration Date or any Delisting Date, as the case may be.
(d) Except for Warrants subject to automatic exercise,
Warrants that upon exercise entitle the holder thereof to receive an Alternative
Settlement Amount and Warrants deemed worthless following an Extension Event, if
the Company has made adequate New York Clearing House or next day 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 second Business Day following a
Valuation Date (the "Funding Date"), the Warrant Agent will be responsible for
making its payment available (i) for Definitive Warrants, to each Registered
Holder of an Exercised Warrant in the form of a cashier's check or an official
bank check, or (in the case of payments of at least $100,000) by wire transfer
to a U.S. Dollar account maintained by such Registered Holder in the United
States (at such Registered Holder's election as specified in the applicable
Exercise Notice) prior to the close of business on the first Business Day
immediately succeeding such Funding Date (the "Settlement Date") or (ii) for
Book-entry Warrants, to each appropriate Participant
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in the form of a cashier's check or an official bank check, or (in the case of
payments of at least $100,000) by wire transfer to a U.S. Dollar account
maintained by such Participant in the United States (at the Participant's
election as specified in the Exercise Notice) prior to the close of business on
the Settlement Date. For either clause (i) or (ii) above, such payment shall be
in the amount of the aggregate Cash Settlement Value in respect of the Warrant
Certificates or Warrants that were delivered to the Warrant Agent (together with
the related Exercise Notice) as provided in Sections 2.01 and 2.02(a), (b) and
(c). Each Participant will be responsible for disbursing such payments to the
Warrantholders that it represents and to each brokerage firm for which it acts
as agent.
(e) The "Cash Settlement Value" of an Exercised
Warrant will be an amount in U.S. Dollars equal to the product (rounded down to
the nearest cent) of (A) the quotient obtained by dividing (i) the amount, if
any, by which the Spot Portfolio Value for the applicable Valuation Date for
such Warrant exceeds the Original Portfolio Value (as defined herein) by (ii)
the Original Portfolio and (B) $35. The Original Portfolio Value has been set at
100. The Cash Settlement Value is calculated using the following formula:
Cash Settlement Value = the greater of
(i) $0 and (ii) Spot Portfolio Value - 100
__________________________ x $35
100
The "Spot Portfolio Value" will be determined by the Determination Agent, and
will equal the sum of the products of the Market Price (as defined herein) of
each Portfolio Security (as defined herein) and the then applicable Multiplier
(as defined herein) for that Portfolio Security. The applicable multiplier (the
"Multiplier") for each Portfolio Security is as specified under the caption
"Description of Warrants -- Portfolio Securities" in the Company's Prospectus
Supplement dated February __, 1996 relating to the Warrants (the "Prospectus
Supplement") and indicates the number of shares (or fraction of one share) of
that Portfolio Security included in the calculation of the Spot Portfolio Value.
The "Portfolio Securities" are the common stocks of the 43 corporations which
are listed under the caption "Description of Warrants -- Portfolio Securities"
in the Prospectus Supplement. Each Multiplier will remain constant for the term
of the Warrants unless adjusted for certain corporate events described herein.
If a Market Disruption Event (as
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defined herein) occurs or is continuing with respect to a Portfolio Security on
a Valuation Date, then the calculation of the Market Price of that Portfolio
Security will be based on the Business Day immediately preceding that Valuation
Date that does not have a Market Disruption Event with respect to that Portfolio
Security.
(f) "Market Price," which will be determined by the
Determination Agent based on information reasonably available to it, means (i)
for a Valuation Date on or prior to the third Business Day immediately preceding
the Expiration Date, the following:
A. If the Portfolio Security is listed on a national
securities exchange or is a NASDAQ security, Market Price means the
last reported sale price of that Portfolio Security on the Valuation
Date (or the preceding Business Day if that Portfolio Security is not
traded on the Valuation Date) on the principal national securities
exchange on which such Portfolio Security is listed or admitted to
trading or on NASDAQ, as the case may be.
B. If the Portfolio Security is not listed on a national
securities exchange and is not a NASDAQ security, Market Price means
the last reported bid price of that Portfolio Security in the
over-the-counter market on the Valuation Date.
and (ii) for any Valuation Date after the third Business Day immediately
preceding the Expiration Date, the following:
A. If the Portfolio Security is listed on a national
securities exchange or is a NASDAQ security, Market Price means the
opening sales price of that Portfolio Security on the Valuation Date
(or the preceding Business Day if that Portfolio Security is not
traded on the Valuation Date) on the principal national securities
exchange on which such Portfolio Security is listed or admitted to
trading or on NASDAQ, as the case may be.
B. If the Portfolio Security is not listed on a national
securities exchange and is not a NASDAQ security, Market Price means
the first reported bid price of that Portfolio Security in the
over-the-counter market on the Valuation Date.
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(g) "Market Disruption Event" with respect to a Portfolio Security
means any of the following events, in each case as determined by the
Determination Agent:
(i) the suspension of or material limitation in trading in
that Portfolio Security for more than two hours of trading or during
the one-half hour period immediately preceding the time that
Portfolio Security is to be priced (for purposes of this definition,
limitations pursuant to New York Stock Exchange ("NYSE") Rule 80A (or
any applicable rule or regulation enacted or promulgated by the NYSE,
any other self-regulatory organization or the Securities and Exchange
Commission that is deemed of similar scope by the Determination
Agent) on trading during significant market fluctuations shall be
considered "material"),
(ii) the suspension of or material limitation (whether by
reason of movements in price that exceed levels permitted by the
relevant exchange or otherwise) in trading in option contracts
related to a Portfolio Security traded on any exchange for more than
two hours of trading or during the one-half hour period immediately
preceding the time that Portfolio Security is to be priced,
(iii) a banking moratorium has been declared by
federal or any state authorities.
For purposes of this definition, a limitation on the hours in a trading day
and/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.
(h) The Multiplier with respect to any Portfolio
Security and the Portfolio will be adjusted by the Determination Agent as
follows:
(i) If a Portfolio Security is subject to a stock split or
reverse stock split then, once the split has become effective, the
Multiplier relating to that Portfolio Security will be adjusted to
equal the product of (x) the number of shares of the Portfolio
Security outstanding after the split has become effective with
respect to each share of such Portfolio Security outstanding
immediately prior to the effectiveness of such split and (y) the
prior Multiplier.
(ii) If a Portfolio Security is subject to a stock
dividend or stock distribution (other than a stock dividend
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elected by a holder of that Portfolio Security in lieu of an ordinary
cash dividend) that is given equally to all holders of that Portfolio
Security, then, once that Portfolio Security is trading ex-dividend,
the Multiplier will be adjusted so that the new Multiplier shall
equal the former Multiplier plus the product of (i) the number of
shares of that Portfolio Security issued with respect to one such
share of that Portfolio Security and (ii) the prior Multiplier.
(iii) If the issuer of a Portfolio Security is being
liquidated or dissolved or is subject to a proceeding under any
applicable bankruptcy, insolvency or similar law, that Portfolio
Security will continue to be included in the Portfolio so long as a
Market Price for that Portfolio Security is available. Subject to
paragraph (vii) below, if a Market Price is no longer available for a
Portfolio Security for whatever reason, including the liquidation or
dissolution of the issuer of that Portfolio Security or the
subjection of the issuer to a proceeding under any applicable
bankruptcy, insolvency or similar law, then, for so long as a Market
Price is unavailable for that Portfolio Security, the value of that
Portfolio Security will be deemed to be zero for the purposes of
calculating the Spot Portfolio Value, and no attempt will be made to
find a replacement Portfolio Security or increase the value of the
Portfolio to compensate for the deletion of such Portfolio Security.
(iv) If the issuer of a Portfolio Security has been subject
to a merger or consolidation and is not the surviving entity and
holders of that Portfolio Security are entitled to receive cash or
securities in exchange for that Portfolio Security, then a value for
that Portfolio Security will be determined (w) in the case of cash,
at the time of receipt by those holders and will equal the amount of
such cash, and (x) in the case of securities, on the first Business
Day on which those securities are traded regular way, and will equal
the Market Price of those securities (in each of (w) and (x), the
"Cash Component"); provided, that if those securities do not have a
Market Price, the Cash Component shall be the fair market value of
those securities, as determined by the Determination Agent. The Cash
Component, as adjusted for the accrual of interest described below,
will be constant for the remaining term of the Warrants. No
adjustment will be made to the Multiplier relating to the Portfolio
Security.
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The Cash Component will accrue interest at a rate equal to
the London Inter-Bank Offered Rate ("LIBOR"), with a term equal to
the period of time from the Interest Commencement Date (as defined
herein) to the LIBOR Maturity Date (the "Specified Maturity"),
determined and fixed on the first London Business Day (the "LIBOR
Determination Date") that is immediately following the date of
determination of such Cash Component. LIBOR will accrue on such Cash
Component commencing (y) in the case of cash, on the second London
Business Day following such LIBOR Determination Date and (z) in the
case of securities, on the third London Business Day following such
LIBOR Determination Date (in each of (y) and (z), the "Interest
Commencement Date") up to and including the Specified Maturity.
LIBOR will be determined by the Determination Agent in
accordance with the following provisions:
A. On the relevant LIBOR Determination Date,
LIBOR will be determined through the application of linear
interpolation by reference to the offered rates for
deposits of not less than $1,000,000 having a maturity
immediately before and immediately after the Specified
Maturity, commencing on the Interest Commencement Date,
which appear either (a) if the Specified Maturity is one
year or less from the relevant LIBOR Determination Date, on
the display designated as Page 3750 on the Dow Jones
Telerate Service (or such other page as may replace Page
3750 on that service for the purpose of displaying London
Interbank Offered Rates of major banks) ("Telerate Page
3750"), or (b) if the Specified Maturity is more than one
year from the relevant LIBOR Determination Date, on each of
Telerate Page 3750 and on the display designated as page
"SWAP" on the Reuter Monitor Money Rates Service (or such
other page as may replace the SWAP page on that service for
the purpose of displaying London Interbank offered rates of
major banks) ("Reuters-SWAP"), in each case as of 11:00
A.M., London time; provided that if there is an offered
rate for the Specified Maturity, then LIBOR will be such
offered rate. If such offered rates do not appear, LIBOR
with respect to such LIBOR Determination Date will be
determined as described in B below.
B. With respect to a LIBOR Determination Date on
which no such offered rates appear on Telerate Page
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3750 or Reuters SWAP as described in A above, LIBOR will be
determined on the basis of the rates at approximately 11:00
A.M., London time, on such LIBOR Determination Date, at
which deposits in U.S. dollars having the Specified
Maturity are offered to prime banks in the London Interbank
market by four major banks in the London Interbank market
selected by the Determination Agent commencing on the
Interest Commencement Date and in a principal amount equal
to an amount not less than $1,000,000 that in the
Determination Agent's judgment is representative for a
single transaction in such market at such time (a
"Representative Amount"). The Determination Agent will
request the principal London office of each of such banks
to provide a quotation of its rate. If at least two such
quotations are provided, LIBOR with respect to such LIBOR
Determination Date will be calculated by reference to the
arithmetic mean of such quotations. If fewer than two
quotations are provided, LIBOR with respect to such LIBOR
Determination Date will be calculated by reference to the
arithmetic mean of the rates quoted at approximately 11:00
A.M., New York City time, on such LIBOR Determination Date
by three major banks in New York City, selected by the
Determination Agent, for loans in U.S. dollars to leading
European banks having the Specified Maturity commencing on
the Interest Commencement Date and in a Representative
Amount; provided, however, that if fewer than three banks
selected as aforesaid by the Determination Agent are
quoting as mentioned in this sentence, LIBOR with respect
to such Cash Component will be the LIBOR as last in effect.
"London Business Day" means any day on which dealings
in U.S. dollars are transacted in the London interbank
market.
The value as of any given day of any Portfolio Security
converted into a Cash Component will equal the sum of the Cash
Component and all interest accrued thereon through that day. The
interest that has accrued on any given day will be reflected only in
the Spot Portfolio Value quoted by the AMEX at the end of that day
and not in the values disseminated at interim periods during the day.
Interest will not be compounded.
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(v) If all the Portfolio Securities of any class or series
of an issuer are converted into or exchanged for the same or a
different number of shares of any class or classes of equity security
of that issuer other than such Portfolio Security, whether by capital
reorganization, recapitalization, reclassification or otherwise,
then, once that conversion or exchange has become effective, the
former Portfolio Security will be removed from the Portfolio and the
new equity securities will be added to the Portfolio as new Portfolio
Securities. The Multiplier relating to each such new Portfolio
Security will equal the product of (x) the last value of the
Multiplier with respect to the former Portfolio Security and (y) the
number of shares of the new Portfolio Security issued with respect to
one share of the former Portfolio Security.
(vi) If the issuer of a Portfolio Security distributes to
all of its shareholders equity securities of any other issuer, then
such new equity securities will be added to the Portfolio as a new
Portfolio Security. The Multiplier for the new Portfolio Security
will equal the product of (x) the last value of the Multiplier
relating to the Portfolio Security in respect of which the new
Portfolio Security is being distributed and (y) the number of shares
of the new Portfolio Security distributed with respect to one share
of the former Portfolio Security.
(vii) If a Portfolio Security is subject to an
extraordinary dividend or an extraordinary distribution (including
upon liquidation or dissolution) of cash or other property of any
kind (other than any such dividend or distribution otherwise
addressed in the preceding paragraphs) that is received equally by
all holders of that Portfolio Security, then the Determination Agent
shall determine the fair market value, if any, of the cash or other
property received in respect of each share of that Portfolio Security
and the Portfolio shall thereafter be deemed to include an amount
equal to the product of the Multiplier relating to that Portfolio
Security on that date and the fair market value as so determined.
No adjustments of any Multiplier of a Portfolio
Security will be required unless that adjustment would require a change of at
least 1% in the Multiplier in effect. The Multiplier resulting from any of the
adjustments specified above will be rounded to the nearest one thousandth with
five ten- thousandths being rounded upward.
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All determinations made by the Determination Agent
shall be at the sole discretion of the Determination Agent and, in the absence
of manifest error, shall be conclusive for all purposes and binding on the
Company and the holders of the Warrants, and the Determination Agent shall have
no liability therefor.
For purposes of this Agreement, "Business Day" means
any day other than a Saturday, Sunday or a day on which either the American
Stock Exchange, Inc. (the "AMEX") is not open for securities trading or
commercial banks in New York City are required or authorized by law or executive
order to remain closed.
(i) In the case of exercise of Book-Entry Warrants,
the Warrant Agent shall cause its records, which may be kept electronically, to
be marked to reflect the reduction in the number of Warrants represented by the
Global Warrant Certificate by the number of Warrants that were delivered to the
Warrant Agent and for which payment has been made as provided in Section 2.02(d)
promptly after such delivery and payment. Absent manifest error, the Warrant
Agent's records shall be conclusive evidence of such matters.
(j) The Company hereby appoints Bear, Stearns & Co.
Inc. and Bear, Stearns & Co. Inc. accepts such appointment, to be the Company's
Determination Agent to determine the Spot Portfolio Value in accordance with
this Section 2.02(j) and to make such calculations as may be required upon the
occurrence of any of the circumstances described in Section 2.03, including,
without limitation, calculation of the Limit Option Reference Index, Cash
Settlement Value or the Alternative Settlement Amount, as applicable, of a
Warrant. The Determination Agent shall act as an independent expert and not as
an agent of the Company, and, unless otherwise provided by this Agreement, its
calculations and determinations under this Agreement shall, absent manifest
error, be final and binding on the Company, the Warrant Agent, the
Warrantholders and any Participant. Any such calculations will be made available
to a Warrantholder for inspection at the Warrant Agent's Office.
The Company agrees, for the benefit of the Warrant-
holders that there shall at all times be a Determination Agent hereunder until
all the Warrants are no longer outstanding or until monies for the payment of
all outstanding Warrants, if any, shall have been paid to the Warrant Agent and
shall have been returned to the Company as provided in Section 2.06, whichever
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occurs earlier. Resignation, removal and appointment of the Determination Agent
shall be in accordance with the procedures set forth for the resignation,
removal and appointment of the Warrant Agent, as provided in Section 5.03,
except that a successor Determination Agent need not be a banking institution
with offices in the Borough of Manhattan, The City of New York, and may only be
appointed if such successor has been nominated by the Company and approved by
the predecessor Determination Agent.
The Company agrees promptly to pay the Determination
Agent the compensation to be agreed upon with the Company for all services
rendered by the Determination Agent hereunder. The Company also agrees to
indemnify the Determination Agent for, and to hold it harmless against, any
loss, liability, cost or expense (including reasonable attorneys' fees and
expenses) incurred by the Determination Agent by reason of its being made a
party to a suit or claim arising out of this Agreement; provided, however, that
such indemnity shall in no event apply to the extent that any such loss,
liability, cost or expense is a result of the negligence, bad faith or breach of
this Agreement on its part in connection with the services rendered by it
hereunder. The indemnity obligation of the Company shall continue
notwithstanding the termination of this Agreement or the resignation or removal
of the Determination Agent.
Provided that the Determination Agent has received the
Warrant Agent's notice pursuant to Section 2.02(c)(ii), the Determination Agent
shall provide to the Warrant Agent by (i) 10:00 A.M., New York City time, on the
Business Day following its receipt of such notice, the Limit Option Reference
Index applicable to any Contingently Exercised Warrants specified in such
notice, and (ii) by 9:00 A.M., New York City time, on the Business Day next
succeeding the Business Day referred to in clause (i), the Spot Portfolio Value
for the Business Day that but for the provisions of Section 2.02(k) would be the
Valuation Date for any Contingently Exercised Warrants specified in such notice.
(k) Except for Warrants subject to automatic exercise,
Warrants with respect to which payments of any Alternative Settlement Amount are
made and Warrants deemed worthless following an Extension Event (all as
described in Section 2.03 below) each Warrantholder, in connection with any
exercise of Warrants (including an exercise with a postponed Valuation Date
following an Extraordinary Event or an Exercise Limitation Event), shall have
the option (the "Limit Option") to specify in the related Exercise Notice that
such exercise be subject to the
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condition that the Spot Portfolio Value that would otherwise be used to
determine the Cash Settlement Value of such Warrants not be three or more points
lower than the Limit Option Reference Index for such Warrants. "Limit Option
Reference Index", with respect to any Contingently Tendered Warrants, means, the
Spot Portfolio Value on the relevant Exercise Date. If a Warrantholder elects
the Limit Option in connection with any exercise of Warrants, the following
provisions shall apply:
(i) To be valid, such election must be specified in the
related Exercise Notice. Each of the Warrant Agent and the Company
shall be entitled to rely conclusively on such Exercise Notice, as
received by the Warrant Agent, in determining whether such election
has been validly made. In connection with any exercise of 1,000 or
more Warrants, a Warrantholder may elect to subject only a portion of
such Warrants to the Limit Option; provided that the number of such
Warrants subject to the Limit Option and the number of such Warrants
not subject to the Limit Option shall in each case not be less than
500; provided, further that, a Warrantholder shall not combine
Definitive Warrants and Book-entry Warrants or Book-entry Warrants
held through more than one Participant to meet the 500 Warrant
minimum exercise requirement. Registered Holders and Participants
shall be required to certify that the number of Warrants exercised on
behalf of any Warrantholder pursuant to the related Exercise Notice
that are subject to the Limit Option is an amount that is not less
than 500.
(ii) Except as otherwise provided in this Section
2.02(k), the Limit Option Reference Index shall be determined by the
Warrant Agent, which determination shall be conclusive and binding
for all purposes relating to such
exercise.
(iii) In the event that the Spot Portfolio Value for the
first Business Day following the relevant Exercise Date is three or
more points lower than the Limit Option Reference Index for such
Warrants, such Warrants (A) shall not be subject to exercise and
shall be treated for all purposes of this Agreement and the Warrant
Certificates and Global Warrant Certificate as if the related
Exercise Notice had never been received by the Warrant Agent, and (B)
shall not constitute "Exercised Warrants" for purposes of Section
2.02(c). If such Spot Portfolio Value is not three or more points
lower than such Limit Option Reference Index, such Warrants shall be
subject to exercise as provided in this
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Section 2.02 and shall be deemed to be "Exercised Warrants" for such
purposes. The Warrant Agent's determination shall be conclusive and
binding for all purposes relating to such Warrants.
(iv) Except as provided in Section 2.03(b), the Limit
Option (based on the Limit Option Reference Index as determined for
the relevant Exercise Date, shall continue to be applicable to any
Exercised Warrant for which the Valuation Date has been postponed as
a result of the occurrence of an Extraordinary Event or an Exercise
Limitation Event until the Warrants are cancelled as provided in
Section 2.03(b) or until the Expiration Date or any Delisting Date.
SECTION 2.03. Automatic Exercise of Warrants; Exercise
upon an Extension Event, an Extraordinary Event or an Exercise Limitation Event.
(a) Subject to the provisions of Section 2.03(b) regarding Extension Events, all
Warrants for which the Warrant Agent has not received a valid Exercise Notice in
proper form at or prior to 3:00 P.M., New York City time, on (i) the third
Business Day immediately preceding the Expiration Date or (ii) with respect to
any date prior to the Expiration Date, the Business Day immediately preceding
the last Business Day prior to the effective date on which the Warrants are
delisted from, or permanently suspended from trading (within the meaning of the
Securities Exchange Act of 1934 (the "Exchange Act") and the rules and
regulations of the Securities and Exchange Commission thereunder) on the AMEX,
and not accepted prior thereto or at the same time for trading pursuant to the
rules of another SRO that are filed with the Securities and Exchange Commission
under the Exchange Act (such last Business Day prior to the effective date being
a "Delisting Date"), or for which the Warrant Agent has received a valid
Exercise Notice in proper form but with respect to which timely delivery of the
relevant Warrants has not been made by such time, or for which the Valuation
Date has as of such time been postponed as provided in Section 2.03(b), shall be
deemed to be automatically exercised as of such Expiration Date or Delisting
Date, as the case may be, without any requirement of delivery of an Exercise
Notice to the Warrant Agent. If such Delisting Date occurs on or after the
Expiration Date and prior to any Extended Expiration Date (as defined in Section
2.03(b)(ii)), the Warrants will be deemed worthless. However, if the Company
first receives notice of the delisting or suspension of the Warrants on the same
day on which such Warrants are delisted or suspended, such day will be deemed a
Delisting Date for purposes of this Agreement. The Exercise Date for such
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Warrants shall be the Expiration Date or Delisting Date, as the case may be, or,
if such date is not a Business Day, the next succeeding Business Day and the
Valuation Date for such Warrants shall be the first Business Day following such
date.
The Warrant Agent shall by 5:00 P.M., New York City
time, on the Expiration Date or any earlier date on which the Warrant Agent
receives notice of any delisting of the Warrants, as the case may be, notify the
Company and the Determination Agent (and such other parties (not to exceed two)
as the Company shall designate in writing) of the number of Warrants to be
automatically exercised. By 12:00 noon, New York City time, on the Business Day
next succeeding the Valuation Date for such Warrants, the Warrant Agent shall
(i) determine the Cash Settlement Value (in the manner provided in Section
2.02(e)) of the Warrants to be automatically exercised; (ii) by 5:00 P.M., New
York City time, on the Business Day next succeeding such Valuation Date, notify
the Company (and such other parties (not to exceed two) as the Company shall
designate in writing) of the Cash Settlement Value payable in respect of such
exercised Warrants; and (iii) advise the Company of such other matters relating
to the exercised Warrants as the Company shall reasonably request.
The Determination Agent shall by 10:00 A.M., New York
City time, on the Business Day next succeeding the applicable Valuation Date,
notify the Warrant Agent of the Spot Portfolio Value applicable to the Warrants
to be automatically exercised.
In the case of Definitive Warrants subject to automatic
exercise (other than Definitive Warrants subject to postponed exercise following
the occurrence of an Extraordinary Event, Exercise Limitation Event or Extension
Event as described in Section 2.03(b)), if the Company has made adequate New
York Clearing House or next day 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 second Business Day following the Valuation Date for automatically exercised
Warrants (in any such case, the "Automatic Funding Date"), the Warrant Agent
will be responsible for making its payment available to the appropriate
Registered Holder in the form of a cashier's check or an official bank check, or
(in the case of payments of at least $100,000) by wire transfer to a U.S. Dollar
account maintained by such Registered Holder in the United States (at such
Registered Holder's election upon written notice to the Company and the Warrant
Agent) prior to the close of business on the Automatic Funding Date (or, in the
case of payments made by wire transfer,
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prior to the close of business on the Business Day next succeeding the Automatic
Funding Date), against receipt by the Warrant Agent at the Warrant Agent's
Window, Attention: Tender Department, from such Registered Holder of its Warrant
Certificates. Such payment shall be in the amount of the aggregate Cash
Settlement Value in respect of the Warrants, evidenced by such Warrant
Certificates, that were exercised automatically on the Expiration Date or on any
Delisting Date, as the case may be. Warrant Certificates delivered to the
Warrant Agent shall thereafter be promptly cancelled by the Warrant Agent.
In the case of Book-entry Warrants subject to automatic
exercise (other than Warrants subject to postponed exercise following the
occurrence of an Extraordinary Event, Exercise Limitation Event or Extension
Event as described in Section 2.03(b)), if the Company has made adequate New
York Clearing House or next day 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 Automatic Funding Date, the Warrant Agent will be responsible for making
funds available to the securities depository, against receipt of the Global
Warrant Certificate, prior to the close of business, on the Automatic Funding
Date. Such funds are to be in an amount equal to the aggregate Cash Settlement
Value of the Warrants subject to such automatic exercise.
The Company will advise the Warrant Agent as soon as
practicable of the date of any expected delisting or permanent suspension of
trading of the Warrants and will immediately inform the Warrant Agent after the
Company has received notice that such delisting or suspension is occurring, but
in no event will notice of such delisting or suspension be given to the Warrant
Agent later than 9:30 A.M., New York City time, on the first Business Day
following the date on which such delisting or suspension occurs. The Company
will use its best efforts to notify the Warrantholders, or cause the
Warrantholders to be notified, as promptly as practicable of any expected
delisting or suspension of trading of the Warrants.
(b) (i) Subject to the provisions of Section
2.03(b)(ii), if the Company determines that an Extraordinary Event or Exercise
Limitation Event has occurred and is continuing on any Business Day that would
otherwise be the Valuation Date with respect to an exercise of Warrants (the
"Applicable Business Day") then the Cash Settlement Value with respect to such
exercise of Warrants shall be calculated on the basis that the
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Valuation Date shall be the next Business Day following such Applicable Business
Day on which there is no Extraordinary Event or Exercise Limitation Event;
provided, that if the Valuation Date has not occurred on or prior to the
Expiration Date or any Delisting Date, then the Warrantholders will receive, in
lieu of the Cash Settlement Value, the Alternative Settlement Amount (as defined
herein) which shall be calculated as if the Warrants had been cancelled on the
Expiration Date or such Delisting Date, as the case may be.
Upon the occurrence of an Extraordinary Event or an
Exercise Limitation Event, the Company shall use its best efforts to notify the
Warrant Agent and the Determination Agent promptly that an Extraordinary Event
or Exercise Limitation Event, as the case may be, has occurred and shall
promptly give notice to the Warrantholders, by publication in a United States
newspaper with a national circulation (currently expected to be The Wall Street
Journal), that an Extraordinary Event or an Exercise Limitation Event has
occurred.
If the Company determines that an Extraordinary Event
or an Exercise Limitation Event has occurred and is continuing on the Expiration
Date or on any earlier Delisting Date, the Company shall so notify the Warrant
Agent and the Determination Agent, and the Cash Settlement Value with respect to
the exercised Warrants shall be equal to, and be calculated in the same manner
as, an "Alternative Settlement Amount", in accordance with Section 2.03(d)
herein (treating the Expiration Date or such Delisting Date, as the case may be,
as the date on which the Warrants were cancelled for the purposes of this
Section 2.03(b)).
If the Company determines that an Extraordinary Event
has occurred and is continuing, and if that Extraordinary Event is expected by
the Company to continue, the Company, prior to the Expiration Date, may
immediately cancel the Warrants by notifying the Warrant Agent of such
cancellation (the date such notice is given being the "Cancellation Date"), and
each Warrantholder's rights with respect to the Warrants and under this
Agreement shall thereupon cease; provided, that each Warrant shall be exercised
(even if such Warrant would not otherwise be exercis- able on such date because
of the Limit Option) on the basis that the Valuation Date for such Warrant shall
be the Cancellation Date and each Warrantholder shall receive, in lieu of the
Cash Settlement Value of such Warrant, the Alternative Settlement Amount,
determined by the Determination Agent.
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If, following the determination by the Company that an
Extraordinary Event or Exercise Limitation Event has occurred and is continuing,
the Company determines that such Extraordinary Event or Exercise Limitation
Event has ceased and that no additional Extraordinary Event or Exercise
Limitation Event has occurred or is continuing, the Company shall so notify the
Warrant Agent and the Determination Agent.
(ii) If the Company determines that an event described in
clause (i) of the definition of Exercise Limitation Event below has occurred and
is continuing on the Expiration Date (an "Extension Event"), then the term of
any outstanding Warrants shall be automatically extended for a period of 30 days
(the thirtieth day following the Expiration Date being the "Extended Expiration
Date"), except that if the Cash Settlement Value or the Intrinsic Value (as
defined below) used in calculating the Alternative Settlement Amount, as the
case may be, of such Warrants would have been zero if the Warrants had been
exercised such that the Valuation Date for such exercise was the Measurement
Date (as defined below), then the term of the Warrants shall not be extended,
the Warrants shall be deemed to be worthless and the Company shall not be
required to make any payments in respect thereof. Any such automatic extension
shall be deemed to have been revoked and the Warrants shall expire on the
earlier of (x) the next Business Day on which there is no Extension Event (the
"Early Extended Expiration Date") and (y) any Delisting Date occurring on or
after the Expiration Date. The Company will give the Warrant Agent prompt notice
by telephone or facsimile transmission and will give prompt notice to the
Warrantholders by publication in a United States newspaper with a national
circulation (currently expected to be The Wall Street Journal) of the occurrence
of an Extension Event, any Extended Expiration Date, any Early Extended
Expiration Date and any Delisting Date occurring on or after the Expiration
Date, but in no event will such notice to the Warrant Agent be given later than
9:30 A.M., New York City time, on the Business Day following the Extension
Event, Extended Expiration Date, Early Extended Expiration Date or Delisting
Date, as applicable.
Any Warrants that expire on an Early Extended
Expiration Date, as described in clause (x) of the preceding paragraph, will be
deemed to be exercised on such Early Extended Expiration Date (even if such
Warrants would not otherwise be exercisable on such date because of the Limit
Option) on the basis that the Valuation Date for such exercise shall be such
Early Extended Expiration Date, and the holder of each such Warrant will receive
an Alternative Settlement Amount, whether or
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not an Extraordinary Event or an Exercise Limitation Event is continuing on such
Early Extended Expiration Date. Any Warrants that expire on a Delisting Date
occurring on or after the Expiration Date and prior to the Extended Expiration
Date, as described in clause (y) of the preceding paragraph, shall be deemed to
be worthless and the Company shall not be required to make any payments in
respect thereof.
If the term of the Warrants has been extended pursuant
to the second preceding paragraph but the Company determines that an Extension
Event is continuing when the Warrants expire on the Extended Expiration Date,
the Warrants shall be deemed to be worthless and the Company shall not be
required to make any payments in respect thereof. The Company shall give prompt
notice of any such determination to the Warrant Agent by telephone or facsimile
transmission and to the Warrantholders by publication in a United States
newspaper with a national circulation (currently expected to be The Wall Street
Journal).
"Measurement Date" means the Business Day occurring
most recently prior to the Expiration Date on which none of the events described
in clause (i) of the definition of Exercise Limitation Event below had occurred
or was continuing.
(c) For purposes of this Agreement, "Extraordinary
Event" means any of the following events:
(i) a suspension, material limitation or absence of
trading of all of the Portfolio Securities;
(ii) the enactment, publication, decree or other promulgation
of any statute, regulation, rule or order of any court of any
jurisdiction, any administrative agency or any other governmental
authority that would make it unlawful for the Company to perform any
of its obligations under this Agreement or the Warrants or that has
had or is reasonably expected to have a material adverse effect on
the ability of (A) the Company to perform its obligations under the
Warrants or to hedge or modify the hedge of its position with respect
to the Portfolio; or (B) any affiliate of the Company to hedge or
modify the hedge of its position with respect to any hedging
transaction entered into with the Company in connection with the
Company's obligations under the Warrants; or
(iii) any outbreak or escalation of hostilities or other
national or international calamity or crisis (including,
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without limitation, natural calamities that in the opinion of the
Company may materially and adversely affect the economy of the United
States or the trading of securities generally on the AMEX, NYSE or
NASDAQ, or any other securities exchange) that has had or is
reasonably expected to have a material adverse effect on the ability
of (A) the Company to perform its obligations under the Warrants or
to modify the hedge of its position with respect to the Portfolio or
(B) any affiliate of the Company to hedge or modify the hedge of its
position with respect to any hedging transaction entered into with
the Company in connection with the Company's obligations under the
Warrants.
For the purpose of determining whether an Extraordinary
Event has occurred: (1) a limitation on the hours or number of days of trading
will not constitute an Extraordinary Event if it results from an announced
change in the regular business hours of the AMEX, NYSE, NASDAQ or any other
securities exchange on which a Portfolio Security is traded, as the case may be,
and (2) an "absence of trading" on the AMEX, NYSE, NASDAQ or any other
securities exchange on which a Portfolio Security is traded, as the case may be,
will not include any time when the AMEX, NYSE, or NASDAQ or such other
securities exchange, as the case may be, is closed for trading under ordinary
circumstances.
(d) For purposes of this Agreement, "Exercise
Limitation Event" means either of the following events:
(i) a suspension, material limitation or absence of trading
on the AMEX, NYSE, NASDAQ or any other securities exchange on which a
Portfolio Security is traded of 20% or more in number of the
Portfolio Securities; or
(ii) the suspension or material limitation on the AMEX or any
other major futures, options or securities market of trading in
futures or options contracts related to the Portfolio.
For the purposes of determining whether an Exercise
Limitation Event has occurred: (1) a limitation on the hours or number of days
of trading will not constitute an Exercise Limitation Event if it results from
an announced change in the regular business hours of the relevant exchange, (2)
a decision to permanently discontinue trading in the relevant futures or options
contract will not constitute an Exercise Limitation Event, (3) a suspension of
trading in a Portfolio Security or in a futures or options contract referred to
in clauses (i) and (ii)
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above, by reason of (x) a price change violating limits set by the AMEX or other
futures or securities market on which futures or options contracts related to
the Portfolio are traded or such other futures or securities market or (y) an
imbalance of orders relating to Portfolio Securities or such contracts will
constitute a suspension or material limitation of trading, (4) an "absence of
trading" on the AMEX, NYSE or NASDAQ, or any other securities exchange will not
include any time when the AMEX, NYSE OR NASDAQ, or such other securities
exchange is closed for trading under ordinary circumstances and (5) the
occurrence of an Extraordinary Event described in clause (i) of the definition
of Extraordinary Event will not constitute, and will supersede the occurrence
of, an Exercise Limitation Event.
The "Alternative Settlement Amount" is the amount
calculated using the formula set forth below:
Alternative Settlement Amount = Intrinsic Value +
(T/2 x A/B)
where
Intrinsic Value = the Cash Settlement Value of the Warrants
determined as described under Section
2.02(e), but calculated with a Spot Portfolio
Value determined by the Determination Agent
which, subject to approval by the Company
(such approval not to be unreasonably
withheld), in the reasonable opinion of the
Determination Agent, fairly reflects the
value of the Portfolio Securities on the
Cancellation Date, Expiration Date, Delisting
Date or Early Extended Expiration Date,
whichever has given rise to the payment of
the Alternative Settlement Amount;
T = U.S. $____, the maximum initial offering
price per Warrant;
A = the total number of days from but
excluding the Cancellation Date or
Delisting Date, whichever has given
rise to the payment of the Alternative
Settlement Amount for such Warrants,
to and including the Expiration Date;
and
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B = the total number of days from, but
excluding the date on which sales of
the Warrants were initially confirmed,
to and including the Expiration Date.
Where an Expiration Date or an Early Extended
Expiration Date has given rise to the payment of the Alternative Settlement
Amount, such Alternative Settlement Amount shall equal
the Intrinsic Value.
For the purposes of determining "Intrinsic Value" in
the above formula, in the event that the Determination Agent and the Company are
required, but have not, after good faith consultation with each other and within
five days following the first day on which such Alternative Settlement Amount
may be calculated in accordance with the above formula, agreed upon a Spot
Portfolio Value which fairly reflects the value of the Portfolio Securities on
the Cancellation Date, Expiration Date, Delisting Date or Early Extended
Expiration Date, whichever gives rise to the payment of the Alternative
Settlement Amount, then the Determination 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 Determination
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 Determination Agent and the Warrantholders. Any such
calculations will be made available to a Warrantholder 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.
(e) With respect to all Warrants as to which the
Valuation Date has been postponed (other than Warrants that have been deemed
worthless following an Extension Event) or which have been cancelled as
described above, the Company shall make 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 second Business Day following the date on which the Cash Settlement
Value or Alternative Settlement Amount, as the case may be, has been calculated
(the "Alternative Funding Date"), New York Clearing House Funds or next day
funds in an amount equal to, and for the payment of, the aggregate Cash
Settlement Value or Alternative Settlement Amount, as applicable, of such
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Warrants. Subject to such funds having been made available as provided in the
preceding sentence, the Warrant Agent will thereafter be responsible for making
its payment available in the manner set forth in Section 2.03(a), (i) in the
case of Definitive Warrants, to each Registered Holder that submitted a Warrant
Certificate for exercise (and in the case of cancellation as described above, to
each Registered Holder) or (ii) in the case of Book-entry Warrants, to the
Depository, prior to the close of business on the Alternative Funding Date, in
an amount equal to the aggregate Cash Settlement Value or Alternative Settlement
Amount (as applicable) of such exercised Warrants (and in the case of
cancellation as described above, of all previously unexercised Warrants).
SECTION 2.04. Limitation of Number of Exercisable
Warrants. All exercises of Warrants (other than on automatic exercise or
following an Extension Event) are subject, at the Company's option, to the
limitation that not more than 750,000 Warrants in total may be exercised on any
Exercise Date and not more than 250,000 Warrants 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 Business Day would otherwise,
under the terms hereof, be the Exercise Date in respect of more than 750,000
Warrants, then at the Company's election (by giving notice thereof to the
Warrant Agent not later than 11:00 A.M., New York City time, on the Business Day
immediately following such Exercise Date), 750,000 of such Warrants shall be
deemed exercised on such Exercise Date (selected by the Warrant Agent on a pro
rata basis, but if, as a result of such pro rata selection, any Registered
Holders would be deemed to have exercised less than 500 Warrants, then the
Warrant Agent shall first select an additional amount of such holders' Warrants
so that no holder shall be deemed to have exercised less than 500 Warrants), and
the remainder of such Warrants (the "Remaining Warrants") shall be deemed
exercised on the following Business Day (notwithstanding the provisions of
Section 2.01(b) and subject to successive applications of this Section 2.04);
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 in
respect of which an Exercise Notice was delivered on a later Exercise Date. If
any beneficial owner of Warrants attempts to exercise more than 250,000 Warrants
on any Business Day, individually or in concert, then at the Company's election
(as notified to the Warrant Agent by giving notice thereof to the Warrant Agent
not later than 11:00 A.M., New York City time, on the Business Day following
such Business Day) 250,000 of such Warrants shall be deemed
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exercised on such Business Day and the remainder shall be deemed exercised on
the following Business Day (notwithstanding the provisions of Section 2.01(b)
and subject to successive applications of this Section 2.04). The date on which
any Warrant is deemed exercised under the preceding two sentences shall for all
purposes of this Agreement be the "Exercise Date" in respect of such Warrants.
SECTION 2.05. Covenant of the Company. The Company
covenants, for the benefit of the Warrantholders, that it will not seek the
delisting of the Warrants from, or suspension of their trading on, the AMEX
unless the Company has, at the same time, arranged for the Warrants to be traded
pursuant to the rules of another SRO that are filed with the Securities and
Exchange Commission under the Exchange Act.
SECTION 2.06. Return of Money Held Unclaimed for Two
Years. Except as otherwise provided herein, any money deposited with or paid to
the Warrant Agent for the payment of the Cash Settlement Value or Alternative
Settlement Amount of any Warrants and not applied but remaining unclaimed for
two years after the date upon which such Cash Settlement Value or Alternative
Settlement Amount shall have become due and payable shall be repaid by the
Warrant Agent to the Company, at the Company's request, and the holders of such
Warrants shall thereafter look only to the Company for any payment which such
holders may be entitled to collect and all liability of the Warrant Agent with
respect to such money shall thereupon cease; provided that the Warrant Agent,
before making any such repayment, may at the expense of the Company notify (i)
in the case of Definitive Warrants, the Registered Holders or (ii) in the case
of Book- entry Warrants, the Participants concerned, that said money has not
been so applied and remains unclaimed and that after a date named in the
notification any unclaimed balance of said money then remaining will be returned
to the Company.
SECTION 2.07. Return of Global Warrant Certificate.
In the event a Global Warrant Certificate is issued, at such time as all of the
Warrants evidenced by such Certificate have been exercised (including pursuant
to an automatic exercise) or otherwise cancelled and all payments to the
Participants made as provided herein, the Warrant Agent shall dispose of the
cancelled Global Warrant Certificate in accordance with its customary procedures
(unless instructed by the Company to deliver the Global Warrant Certificate to
the Company) and shall provide a certificate of disposition to the Company.
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ARTICLE III
OTHER PROVISIONS RELATING TO
RIGHTS OF WARRANTHOLDERS
SECTION 3.01. Warrantholder May Enforce Rights.
Notwithstanding any of the provisions of this Agreement, any Warrantholder,
without the consent of the Warrant Agent, may, in and for its own behalf,
enforce, and may institute and maintain, any suit, action or proceeding against
the Company suitable to enforce, or otherwise in respect of, its right to
exercise, and to receive payment for, its Warrants as provided in this
Agreement.
ARTICLE IV
WARRANTS ACQUIRED BY THE COMPANY;
PAYMENT OF TAXES
SECTION 4.01. Warrants Acquired by the Company. In
the event the Company shall purchase or otherwise acquire Warrants, such
Warrants may, at the option of the Company, be (i) in the case of Definitive
Warrants, delivered to the Warrant Agent, and if so delivered, the Warrant Agent
shall promptly cancel such Warrants on the records of the Warrant Agent or (ii)
in the case of Book-entry Warrants, surrendered free through a Participant to
the Depository for credit to the account of the Warrant Agent maintained at the
Depository, and if so credited, the Warrant Agent shall promptly note the
cancellation of such Warrants by notation on the records of the Warrant Agent
and the Warrant Agent shall cause its records to be marked to reflect the
reduction in the number of Warrants represented by the Global Warrant
Certificate by the number of Warrants so cancelled promptly after such account
is credited. In the case of Book- entry Warrants, such Warrants may also, at the
option of the Company, be resold by the Company directly or to or through any of
its affiliates in lieu of being surrendered to the Depository. No Warrant
Certificate shall be countersigned in lieu of or in exchange for any Warrant
which is cancelled as provided herein, except as otherwise expressly permitted
by this Agreement.
Any cancelled Warrant Certificate held by the Warrant
Agent under this Agreement shall be disposed of by the Warrant Agent in
accordance with its customary procedures unless otherwise directed by the
Company, and the Warrant Agent shall
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deliver a certificate of disposition to the Company evidencing
the same.
SECTION 4.02. Payment of Taxes. The Company will pay
all stamp, withholding and other duties, if any, attributable to the initial
issuance of Warrants; provided, however, that, anything in this Agreement to the
contrary notwithstanding, the Company shall not be required to pay any tax or
other governmental charge which may be payable in respect of any transfer
involving any beneficial or record interest in, or ownership interest of, any
Warrants, Warrant Certificates or Global Warrant Certificate.
ARTICLE V
CONCERNING THE WARRANT AGENT
SECTION 5.01. Warrant Agent. (a) The Company hereby
appoints Chemical Bank as Warrant Agent of the Company in respect of the
Warrants upon the terms and subject to the conditions set forth herein; and
ChemicaL Bank hereby accepts such appointment. The Warrant Agent shall have the
powers and authority granted to and conferred upon it in this Agreement and such
further powers and authority to act on behalf of the Company as the Company may
hereafter grant to or confer upon it with its consent. All of the terms and
provisions with respect to such powers and authority contained in any Warrant
Certificates or the Global Warrant Certificate are subject to and governed by
the terms and provisions hereof.
(b) Chemical covenants and agrees to maintain an
office staffed by qualified personnel, with adequate facilities for the
discharge of its responsibilities under this Agreement, including, without
limitation, the computation of the Cash Settlement Value 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, including the following, to all of which the
Company agrees and to all of which the rights hereunder of the holders 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
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for all services rendered by the Warrant Agent and to reimburse the
Warrant Agent for its reasonable out-of-pocket expenses (including
attorneys' 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 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 its acting as such
Warrant Agent hereunder, as well as the reasonable costs and expenses
of defending against any claim of liability in the premises.
(b) In acting under this Agreement, 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 (including counsel to the Company), 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 thing suffered by
it in reliance upon any 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 any 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 behalf of, or as depository, trustee or agent
for, any committee or body of owners or holders of Warrants or other
obligations of the Company as freely as if it were not the Warrant
Agent hereunder.
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(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 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 responsibility
with respect to the validity or sufficiency of this Agreement or the
execution and delivery hereof (except the due authorization,
execution and delivery hereof by the Warrant Agent) or with respect
to the validity or execution of the Warrant Certificates or the
Global Warrant Certificate (except its countersignature thereof).
(h) The recitals contained herein and in the Warrant
Certificates or the Global Warrant Certificate (except as to the
Warrant Agent's countersignature 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 such
duties as are herein specifically set forth, and no implied duties or
obligations shall be read into this Agreement 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 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 in this Agreement or in any Warrant
Certificate or 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, 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, except as provided
in Section 6.02 hereof, to make any demand upon the Company.
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
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no longer outstanding or until monies for the payment of all outstanding
Warrants, if any, shall have been paid to the Warrant Agent and shall have been
returned to the Company as provided in Section 2.06, whichever occurs earlier.
(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,
have a combined capital and surplus of at least $100,000,000 (as set forth in
its most recent reports of condition published pursuant to law or to the
requirements of any United States federal or state regulatory or supervisory
authority) and having an office 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.
(c) In case at any time the Warrant Agent shall give
notice of its intent to resign, or shall be removed, or shall become incapable
of acting, or shall be adjudged a 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 of 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 promptly appointed by the Company by an instrument in writing, filed
with the successor
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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 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 (including, without limitation, the Warrant Register), as the
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 the corporate agency assets and 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
terms of the Warrants may be amended by the Company, the Warrant Agent and the
Determination Agent, without the consent of the Warrantholders, for the purpose
of curing any ambiguity, or of curing, correcting or supplementing any defective
or inconsistent provision contained herein or therein or in any other manner
which the Company may deem necessary or desirable and which will not materially
and adversely affect the interests of the owners or holders of the Warrants.
Notwithstanding anything in this Section 6.01 to the contrary, this Agreement
may not be amended
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to provide for the countersigning by the Warrant Agent or Warrant Certificates
evidencing in the aggregate in excess of 1,150,000 Warrants unless and until the
Warrant Agent has received notice from the AMEX or any successor United States
national securities exchange that the additional Warrants in excess of 1,150,000
have been approved for listing on such exchange.
(b) The Company, the Warrant Agent and the Determina-
tion Agent may modify or amend this Agreement, with the consent of
Warrantholders (by vote of Registered Holders or, in the case of Warrants held
through the Depository, acting through a Participant or the Depository) holding
not less than a majority in number of the then outstanding Warrants affected by
such modification or amendment, for any purpose; provided, however, that no such
modification or amendment that increases the Original Portfolio Value, shortens
the period of time during which the Warrants may be exercised, or otherwise
materially and adversely affects the exercise rights of the Warrantholders or
reduces the percentage of the number of outstanding Warrants, the consent of
whose holders is required for modification or amendment of this Agreement, may
be made without the consent of each Warrantholder affected thereby. In the case
of Warrants evidenced by a Global Warrant Certificate, the Company and the
Warrant Agent shall be entitled to rely upon certification in form satisfactory
to each of them that any requisite consent has been obtained from holders of
beneficial ownership interests in the relevant Global Warrant Certificate. Such
certification may be provided by Participants acting on behalf of such
beneficial owners of Warrants, provided that any such certification is
accompanied by a certification from the Depository as to the Warrant holdings of
such Participants.
SECTION 6.02. Notices and Demands to the Company, the
Warrant Agent and the Determination Agent. If the Warrant Agent or the
Determination Agent shall receive any notice or demand addressed to the Company
by any Registered Holder or Participant pursuant to the provisions of this
Agreement, the Warrant Agent or the Determination Agent, as the case may be,
shall promptly forward such notice or demand to the Company.
SECTION 6.03. Addresses for Notices. Any
communications to the Warrant Agent with respect to this Agreement shall be
addressed to 450 West 33rd Street, New York, New York 10001, Attention:
Corporate and Municipal Agency Department (the "Warrant Agent's Office") and any
communications to the Company with respect to this Agreement shall be addressed
to The Bear Stearns Companies Inc., 245 Park Avenue, New York,
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New York 10167, Attention: Secretary, and any communications to
the Determination Agent with respect to this Agreement shall be
addressed to Bear, Stearns & Co. Inc., 245 Park Avenue, New York,
New York 10167 telephone number: 212-272-3000; facsimile number:
212-272-3092(or such other address as shall be specified in
writing by the Warrant Agent, the Company or the Determination
Agent, respectively) telephone number: 212-946-7655; facsimile
number: 212-946-7682.
SECTION 6.04. Notices to Holders. The Company may
cause to have notice given to the holders of Warrants by providing the Warrant
Agent with a form of notice to be distributed by (i) in the case of Definitive
Warrants, the Warrant Agent to Registered Holders or (ii) in the case of Book-
entry Warrants, the Depository to be distributed by the Depository to
Participants in accordance with the custom and practices of the Depository.
SECTION 6.05. Obtaining of Approvals. The Company
will from time to time take all action which may be necessary to obtain and keep
effective (a) any and all permits, consents and approvals of governmental
agencies and authorities and the AMEX or any successor SRO and (b) any and all
filings or notices under United States Federal and State securities laws, which
may be or become required in connection with the issuance, sale, trading,
transfer or delivery of the Warrant Certificates, the Global Warrant Certificate
or the exercise of the Warrants.
SECTION 6.06. Persons Having Rights Under This
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, the Registered Holder of the Global Warrant
Certificate and the Warrantholders 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 contained in this Agreement shall be for the sole and exclusive
benefit of the Company, the Warrant Agent, and their respective successors, the
Registered Holder of the Global Warrant Certificate and the Warrantholders.
SECTION 6.07. Inspection of Agreement. A copy of this
Agreement shall be available at all reasonable times at the Warrant Agent's
office for inspection by the Warrantholders, Participants or any person
certified by any Participant to be an indirect participant of the Depository or
any person certified by
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any Participant to be a Warrantholder, in each case, on behalf of whom such
Participant holds Warrants.
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. Applicable Law. This Agreement and each
Warrant shall be deemed to be a contract under the laws of the State of New
York, and for all purposes shall be construed in accordance with the laws of
said State, excluding choice of law provisions.
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IN WITNESS WHEREOF, this Agreement has been duly
executed by the parties hereto as of the day and year first above
written.
THE BEAR STEARNS COMPANIES INC.
By
Name:
Title:
CHEMICAL BANK
By
Name:
Title:
BEAR, STEARNS & CO. INC.
By
Name:
Title:
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EXHIBIT A
FORM OF WARRANT CERTIFICATE
FACE
NO. C- CUSIP
THE BEAR STEARNS COMPANIES INC.
Vantage Point Portfolio Call Warrants
Expiring August __, 1997
This Warrant Certificate certifies that ___________, or
registered assigns, is the Registered Holder of __________ Vantage Point
Portfolio Call Warrants Expiring August __, 1997 (the "Warrants"). Upon receipt
by the Warrant Agent of this Warrant Certificate and the Exercise Notice on the
reverse hereof (or an Exercise Notice in substantially identical form delivered
herewith), duly completed and executed, at the Warrant Agent's Window,
Attention: Tender Department, in the Borough of Manhattan, The City of New York,
each Warrant evidenced hereby entitles the registered owner hereof (each a
"Warrantholder") to receive, subject to the terms and conditions set forth
herein and in the Warrant Agreement, from The Bear Stearns Companies Inc. (the
"Company") the Cash Settlement Value of such Warrant, except that, under the
circumstances described below, such Warrantholder may instead receive the
Alternative Settlement Amount for such Warrant or, in certain circumstances
following an Extension Event, the Warrants will be deemed to be worthless. The
Cash Settlement Value of an Exercised Warrant will be an amount (the "Cash
Settlement Value") equal to the product (rounded down to the nearest cent of (A)
the quotient obtained by dividing (i) the amount, if any, by which the Spot
Portfolio Value for the applicable Valuation Date for such Warrant exceeds the
Original Portfolio Value (as defined herein) by (ii) the Original Portfolio and
(B) $35. The Original Portfolio Value has been set at 100.
The Cash Settlement Value is calculated using the following formula:
Cash Settlement Value = the greater of
(i) $0 and (ii) Spot Portfolio Value - 100
__________________________ x $35
100
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A Warrant will not require or entitle a Warrantholder
to sell or deliver to the Company any shares of any component stocks of the
Portfolio (the "Portfolio Securities"), or any other securities. Upon exercise
of a Warrant, the Company will make only a cash payment in the amount of the
Cash Settlement Value or Alternative Settlement Amount, if any and as
applicable, of such Warrant. The Company is under no obligation to, nor will it,
purchase or take delivery from any Warrantholder of any shares of any of the
Portfolio Securities or any other securities in connection with the exercise of
any Warrants. Warrantholders will not receive any interest on any Cash
Settlement Value, and the Warrants will not entitle the Warrantholders to any of
the rights of holders of any of the Portfolio Securities (as defined herein) or
other securities.
Subject to the terms and conditions set forth herein
and in the Warrant Agreement, each Warrant may be exercised, on any Business Day
during the period from its date of issuance until 3:00 P.M., New York City time,
on the earlier of (i) the third Business Day immediately preceding the
Expiration Date (as defined below) and (ii) the Business Day immediately
preceding any Delisting Date (as defined herein). The "Expiration Date" shall be
August __, 1997. Except under certain circumstances following an Extension
Event, any Warrant not exercised (including by reason of any postponed exercise
as described on the reverse hereof or in the Warrant Agreement) at or before
3:00 P.M., New York City time, on the earlier of (i) the third Business Day
immediately preceding the Expiration Date and (ii) the Business Day immediately
preceding any Delisting Date, will be automatically exercised.
Reference is hereby made to the further provisions of
this Warrant Certificate set forth on the reverse hereof and such further
provisions shall for all purposes have the same effect as though fully set forth
in this place.
This Warrant Certificate shall not be valid unless
countersigned by the Warrant Agent.
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IN WITNESS WHEREOF, The Bear Stearns Companies Inc. has
caused this instrument to be duly executed.
Dated:_________________ THE BEAR STEARNS COMPANIES INC.
By________________________
Name:
Title:
Attest:
By_____________________
Secretary
Countersigned as of the date above written:
CHEMICAL BANK
as Warrant Agent
By_____________________
Authorized Officer
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[REVERSE]
THE BEAR STEARNS COMPANIES INC.
The Warrants evidenced by this Warrant Certificate are
part of a duly authorized issue of Warrants issued by the Company pursuant to a
Warrant Agreement, dated as of February __, 1996 (the "Warrant Agreement"),
among the Company, Chemical Bank (the "Warrant Agent") and Bear, Stearns & Co.
Inc. (the "Determination Agent") and are subject to the terms and provisions
contained in the Warrant Agreement, to all of which terms and provisions each
Warrantholder consents by acceptance of this Warrant Certificate and which
Warrant Agreement is hereby incorporated by reference in and made a part of this
Warrant Certificate. A copy of the Warrant Agreement is on file at the Warrant
Agent's Office.
The Warrants are unsecured contractual obligations of
the Company and rank on a parity with the Company's other unsecured contractual
obligations and with the Company's unsecured and unsubordinated debt.
Subject to the provisions hereof and the Warrant
Agreement, each Warrant may be exercised during the period from its date of
issuance until 3:00 P.M., New York City time, on the earlier of (i) the third
Business Day immediately preceding the Expiration Date and (ii) the Business Day
immediately preceding any Delisting Date by delivering or causing to be
delivered this Warrant Certificate and attached Exercise Notice (or an Exercise
Notice in substantially identical form), duly completed and executed, to the
Warrant Agent's Window, in the Borough of Manhattan, The City of New York (the
"Warrant Agent's Window"), which is, on the date hereof (unless otherwise
specified herein), Chemical Bank/Geoserve, Corporate Trust Securities Window, 55
Water Street, Room 234, North Building, New York, New York 10041, Attention:
Tender Department, or at such other address as the Warrant Agent may specify
from time to time.
Each Warrant entitles the Warrantholder to receive,
upon exercise (including automatic exercise), the Cash Settlement Value of such
Warrant, except that, under the circumstances described below, such
Warrantholder may instead receive the Alternative Settlement Amount for such
Warrant or, in certain circumstances following an Extension Event, the Warrants
will be deemed to be worthless. The "Cash Settlement Value" of an Exercised
Warrant will be an amount equal to the product (rounded down to the nearest cent
of (A) the quotient obtained by dividing
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(i) the amount, if any, by which the Spot Portfolio Value for the applicable
Valuation Date for such Warrant exceeds the Original Portfolio Value (as defined
herein) by (ii) the Original Portfolio and (B) $35. The Original Portfolio Value
has been set at 100.
The Cash Settlement Value is calculated using the
following formula:
Cash Settlement Value = the greater of
(i) $0 and (ii) (Spot Portfolio Value - 100) X $35
----------------------------
100
The Company has appointed Bear, Stearns & Co. Inc. to
be its Determination Agent to determine the Spot Portfolio Value as provided in
the Warrant Agreement and herein and to make such calculations as may be
required upon the occurrence of certain circumstances, as described in the
Warrant Agreement and herein. The Determination Agent shall act as an
independent expert and not as an agent of the Company, and, unless otherwise
provided by the Warrant Agreement, its calculations and determinations under the
Warrant Agreement and this Warrant Certificate shall, absent manifest error, be
final and binding on the Company, the Warrant Agent and the Warrantholders. Any
such calculations will be made available to a Warrantholder for inspection at
the Warrant Agent's office. The Determination Agent will have no responsibility
for good faith errors or omissions in calculating or disseminating information
regarding the Spot Portfolio Value, the Cash Settlement Value or the Alternative
Settlement Amount, as applicable.
The "Spot Portfolio Value" will be determined by the
Determination Agent, and will equal the sum of the products of the Market Price
(as defined herein) of each Portfolio Security (as defined herein) and the then
applicable Multiplier (as defined herein) for that Portfolio Security. The
applicable multiplier (the "Multiplier") for each Portfolio Security is as
specified under the caption "Description of Warrants -- Portfolio Securities" in
the Company's Prospectus Supplement dated February __, 1996 relating to the
Warrants (the "Prospectus Supplement") and indicates the number of shares (or
fraction of one share) of that Portfolio Security included in the calculation of
the Spot Portfolio Value. The "Portfolio Securities" are the common stocks of 43
corporations which are listed under the caption "Description of Warrants --
Portfolio Securities" in the Prospectus Supplement. Each Multiplier will remain
constant for
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the term of the Warrants unless adjusted for certain corporate events described
herein. If a Market Disruption Event (as defined herein) occurs or is continuing
with respect to a Portfolio Security on a Valuation Date, then the calculation
of the Market Price of that Portfolio Security will be based on the Business Day
immediately preceding that Valuation Date that does not have a Market Disruption
Event with respect to that Portfolio Security.
"Market Price," which will be determined by the
Determination Agent based on information reasonably available to it, means (i)
for a Valuation Date on or prior to the third Business Day immediately preceding
the Expiration Date, the following:
A. If the Portfolio Security is listed on a national
securities exchange or is a NASDAQ security, Market Price means the
last reported sale price of that Portfolio Security on the Valuation
Date (or the preceding Business Day if that Portfolio Security is not
traded on the Valuation Date) on the principal national securities
exchange on which such Portfolio Security is listed or admitted to
trading or on NASDAQ, as the case may be.
B. If the Portfolio Security is not listed on a
national securities exchange and is not a NASDAQ security,
Market Price means the last reported bid price of that
Portfolio Security in the over-the-counter market on the
Valuation Date,
and (ii) for any Valuation Date after the third Business Day immediately
preceding the Expiration Date, the following:
A. If the Portfolio Security is listed on a national
securities exchange or is a NASDAQ security, Market Price means the
opening sales price of that Portfolio Security on the Valuation Date
(or the preceding Business Day if that Portfolio Security is not
traded on the Valuation Date) on the principal national securities
exchange on which such Portfolio Security is listed or admitted to
trading or on NASDAQ, as the case may be.
B. If the Portfolio Security is not listed on a national
securities exchange and is not a NASDAQ security, Market Price means
the first reported bid price of that Portfolio Security in the
over-the-counter market on the Valuation Date.
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"Market Disruption Event" with respect to a Portfolio
Security means any of the following events, in each case as determined by the
Determination Agent:
(i) the suspension of or material limitation in trading in
that Portfolio Security for more than two hours of trading or during
the one-half hour period immediately preceding the time that
Portfolio Security is to be priced (for purposes of this definition,
limitations pursuant to New York Stock Exchange ("NYSE") Rule 80A (or
any applicable rule or regulation enacted or promulgated by the NYSE,
any other self-regulatory organization ("SRO") or the Securities and
Exchange Commission that is deemed of similar scope by the
Determination Agent) on trading during significant market
fluctuations shall be considered "material"),
(ii) the suspension of or material limitation (whether by
reason of movements in price that exceed levels permitted by the
relevant exchange or otherwise) in trading in option contracts
related to a Portfolio Security traded on any exchange for more than
two hours of trading or during the one-half hour period immediately
preceding the time that Portfolio Security is to be priced.
(iii) a banking moratorium has been declared by federal
or any state authorities.
For purposes of this definition, a limitation on the hours in a trading day
and/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.
The Multiplier with respect to any Portfolio Security
and the Portfolio will be adjusted by the Determination Agent as
follows:
1. If a Portfolio Security is subject to a stock split or
reverse stock split then, once the split has become effective, the
Multiplier relating to that Portfolio Security will be adjusted to
equal the product of (i) the number of shares of the Portfolio
Security outstanding after the split has become effective with
respect to each share of such Portfolio Security outstanding
immediately prior to the effectiveness of such split and (ii) the
prior Multiplier.
2. If a Portfolio Security is subject to a stock
dividend or stock distribution (other than a stock dividend
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elected by a holder of that Portfolio Security in lieu of an ordinary
cash dividend) that is given equally to all holders of that Portfolio
Security, then, once that Portfolio Security is trading ex-dividend,
the Multiplier will be adjusted so that the new Multiplier shall
equal the former Multiplier plus the product of (i) the number of
shares of that Portfolio Security issued with respect to one such
share of that Portfolio Security and (ii) the prior Multiplier.
3. If the issuer of a Portfolio Security is being
liquidated or dissolved or is subject to a proceeding under any
applicable bankruptcy, insolvency or similar law, that Portfolio
Security will continue to be included in the Portfolio so long as a
Market Price for that Portfolio Security is available. Subject to
paragraph 7 below, if a Market Price is no longer available for a
Portfolio Security for whatever reason, including the liquidation or
dissolution of the issuer of that Portfolio Security or the
subjection of the issuer to a proceeding under any applicable
bankruptcy, insolvency or similar law, then, for so long as a Market
Price is unavailable for that Portfolio Security, the value of that
Portfolio Security will be deemed to be zero for the purposes of
calculating the Spot Portfolio Value, and no attempt will be made to
find a replacement Portfolio Security or increase the value of the
Portfolio to compensate for the deletion of such Portfolio Security.
4. If the issuer of a Portfolio Security has been subject
to a merger or consolidation and is not the surviving entity and
holders of that Portfolio Security are entitled to receive cash or
securities in exchange for that Portfolio Security, then a value for
that Portfolio Security will be determined (i) in the case of cash,
at the time of receipt by those holders and will equal the amount of
such cash, and (ii) in the case of securities, on the first Business
Day on which those securities are traded regular way, and will equal
the Market Price of those securities (in each of (i) and (ii), the
"Cash Component"); provided, that if those securities do not have a
Market Price, the Cash Component shall be the fair market value of
those securities, as determined by the Determination Agent. The Cash
Component, as adjusted for the accrual of interest described below,
will be constant for the remaining term of the Warrants. No
adjustment will be made to the Multiplier relating to the Portfolio
Security.
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The Cash Component will accrue interest at a rate equal
to the London Inter-Bank Offered Rate ("LIBOR"), with a term equal to the period
of time from the Interest Commencement Date (as defined herein) to the LIBOR
Maturity Date (the "Specified Maturity"), determined and fixed on the first
London Business Day (the "LIBOR Determination Date") that is immediately
following the date of determination of such Cash Component. LIBOR will accrue on
such Cash Component commencing (i) in the case of cash, on the second London
Business Day following such LIBOR Determination Date and (ii) in the case of
securities, on the third London Business Day following such LIBOR Determination
Date (in each of (i) and (ii), the "Interest Commencement Date") up to and
including the Specified Maturity.
LIBOR will be determined by the Determination Agent in
accordance with the following provisions:
(i) On the relevant LIBOR Determination Date, LIBOR will be
determined through the application of linear interpolation by
reference to the offered rates for deposits of not less than
$1,000,000 having a maturity immediately before and immediately after
the Specified Maturity, commencing on the Interest Commencement Date,
which appear either (a) if the Specified Maturity is one year or less
from the relevant LIBOR Determination Date, on the display designated
as Page 3750 on the Dow Jones Telerate Service (or such other page as
may replace Page 3750 on that service for the purpose of displaying
London Interbank offered rates of major banks) ("Telerate Page
3750"), or (b) if the Specified Maturity is more than one year from
the relevant LIBOR Determination Date, on each of Telerate Page 3750
and on the display designated as page "SWAP" on the Reuter Monitor
Money Rates Service (or such other page as may replace the SWAP page
on that service for the purpose of displaying London Interbank
offered rates of major banks) ("Reuters-SWAP"), in each case as of
11:00 A.M., London time; provided that if there is an offered rate
for the Specified Maturity, then LIBOR will be such offered rate. If
such offered rates do not appear, LIBOR with respect to such LIBOR
Determination Date will be determined as described in (ii) below.
(ii) With respect to a LIBOR Determination Date on which no
such offered rates appear on Telerate Page 3750 or Reuters SWAP as
described in (i) above, LIBOR will be determined on the basis of the
rates at approximately 11:00 A.M., London time, on such LIBOR
Determination Date,
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at which deposits in U.S. dollars having the Specified Maturity are
offered to prime banks in the London Interbank market by four major
banks in the London Interbank market selected by the Determination
Agent commencing on the Interest Commencement Date and in a principal
amount equal to an amount not less than $1,000,000 that in the
Determination Agent's judgment is representative for a single
transaction in such market at such time (a "Representative Amount").
The Determination Agent will request the principal London office of
each of such banks to provide a quotation of its rate. If at least
two such quotations are provided, LIBOR with respect to such LIBOR
Determination Date will be calculated by reference to the arithmetic
mean of such quotations. If fewer than two quotations are provided,
LIBOR with respect to such LIBOR Determination Date will be
calculated by reference to the arithmetic mean of the rates quoted at
approximately 11:00 A.M., New York City time, on such LIBOR
Determination Date by three major banks in New York City, selected by
the Determination Agent, for loans in U.S. dollars to leading
European banks having the Specified Maturity commencing on the
Interest Commencement Date and in a Representative Amount; provided,
however, that if fewer than three banks selected as aforesaid by the
Determination Agent are quoting as mentioned in this sentence, LIBOR
with respect to such Cash Component will be the LIBOR as last in
effect.
"London Business Day" means any day on which dealings
in U.S. dollars are transacted in the London interbank
market.
The value as of any given day of any Portfolio Security
converted into a Cash Component will equal the sum of the Cash Component and all
interest accrued thereon through that day. The interest that has accrued on any
given day will be reflected only in the Spot Portfolio Value quoted by the AMEX
at the end of that day and not in the values disseminated at interim periods
during the day. Interest will be compounded
5. If all the Portfolio Securities of any class or series
of an issuer are converted into or exchanged for the same or a
different number of shares of any class or classes of equity security
of that issuer other than such Portfolio Security, whether by capital
reorganization, recapitalization, reclassification or otherwise,
then, once that conversion or exchange has become effective, the
former Portfolio Security will be removed from the Portfolio and
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the new equity securities will be added to the Portfolio as new
Portfolio Securities. The Multiplier relating to each such new
Portfolio Security will equal the product of (i) the last value of
the Multiplier with respect to the former Portfolio Security and (ii)
the number of shares of the new Portfolio Security issued with
respect to one share of the former Portfolio Security.
6. If the issuer of a Portfolio Security distributes to all
of its shareholders equity securities of any other issuer, then such
new equity securities will be added to the Portfolio as a new
Portfolio Security. The Multiplier for the new Portfolio Security
will equal the product of (i) the last value of the Multiplier
relating to the Portfolio Security in respect of which the new
Portfolio Security is being distributed and (ii) the number of shares
of the new Portfolio Security distributed with respect to one share
of the former Portfolio Security.
7. If a Portfolio Security is subject to an extraordinary
dividend or an extraordinary distribution (including upon liquidation
or dissolution) of cash or other property of any kind (other than any
such dividend or distribution otherwise addressed in the preceding
paragraphs) that is received equally by all holders of that Portfolio
Security, then the Determination Agent shall determine the fair
market value, if any, of the cash or other property received in
respect of each share of that Portfolio Security and the Portfolio
shall thereafter be deemed to include an amount equal to the product
of the Multiplier relating to that Portfolio Security on that date
and the fair market value as so determined.
No adjustments of any Multiplier of a Portfolio
Security will be required unless that adjustment would require a change of at
least 1% in the Multiplier in effect. The Multiplier resulting from any of the
adjustments specified above will be rounded to the nearest one thousandth with
five ten- thousandths being rounded upward.
All determinations made by the Determination Agent
shall be at the sole discretion of the Determination Agent and, in the absence
of manifest error, shall be conclusive for all purposes and binding on the
Company and the holders of the Warrants, and the Determination Agent shall have
no liability therefor.
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Subject to the Warrant Agreement and this Warrant
Certificate, the "Valuation Date" for a Warrant shall be the first Business Day
following the applicable Exercise Date, subject to postponement upon the
occurrence of an Extraordinary Event or Exercise Limitation Event or as a result
of the exercise of a number of Warrants exceeding the limits on exercise, all as
described below. Except for Warrants subject to automatic exercise, or Warrants
subject to the Limit Option or following an Extension Event, the "Exercise Date"
for a Warrant will be (A) in the case of Warrants other than those held through
the facilities of Cedel Societe Anonyme ("CEDEL") or Euroclear System
("Euroclear") (i) the Business Day on which the Warrant Agent receives at the
Warrant Agent's Window, Attention: Tender Department, the Warrant (or transfer
of such Warrant through the Depository in the case of Book-entry Warrants) and
Exercise Notice (by facsimile transmission in accordance with the Warrant
Agreement in the case of Exercise Notices for Book-entry Warrants) in proper
form with respect to such Warrant, if received at or prior to 3:00 P.M., New
York City time, on such day, or (ii) if the Warrant Agent receives such Warrant
Certificate (or transfer of such Warrant through the Depository in the case of
Book-entry Warrants) or Exercise Notice after 3:00 P.M., New York City time, on
a Business Day, then the Business Day next succeeding the Business Day on which
such Warrant or Exercise Notice is received (B) in the case of Warrants held
through the facilities of CEDEL or Euroclear, (i) the 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 3:00 P.M., New York
City time, on such day, provided that the Warrant Certificate (or transfer of
such Warrant through the Depository in the case of Book-entry Warrants) is
received by the Warrant Agent by 3:00 P.M., New York City time, on the Valuation
Date, or (ii) if the Warrant Agent receives such Exercise Notice after 3:00
P.M., New York City time, on a Business Day, then the Business Day next
succeeding such Business Day, provided that the Warrant Certificate (or transfer
of such Warrant through the Depository in the case of Book-entry Warrants) is
received by 3:00 P.M., New York City time, on the Valuation Date relating to
exercises of Warrants on such succeeding Business Day. In the event that the
Warrant Certificate (or transfer of such Warrant through the Depository in the
case of Book-entry Warrants) is received after 3:00 P.M., New York City time, on
the Valuation Date, then the Exercise Date for such Warrant will be the day on
which such Warrant Certificate (or transfer of such Warrant through the
Depository in the case of Book-entry Warrants) is received or, if such day is
not a Business Day, the next succeeding Business Day;
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provided, further, however, in the case of exercises by Euroclear Participants,
Euroclear must by facsimile to the Warrant Agent by 9:00 a.m., New York City
time, on the Valuation Date confirm that the Warrants will be received by the
Warrant Agent on such date, provided, that if such facsimile is received after
9:00 a.m., New York City time, on the Valuation Date, the Company will be
entitled to direct the Warrant Agent to reject the related notice of exercise or
waive the requirement for timely delivery of such facsimile.
Subject to the provisions of the Warrant Agreement
relating to Extension Events, all Warrants for which the Warrant Agent has not
received a valid Exercise Notice in proper form at or prior to 3:00 P.M., New
York City time, on (i) the third Business Day immediately preceding the
Expiration Date or (ii) the Business Day immediately preceding any Delisting
Date prior to the Expiration Date, as the case may be, 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 as of such time been postponed as described
below, will be automatically exercised as of such Expiration Date or Delisting
Date, as the case may be; without any requirement of delivery of an Exercise
Notice to the Warrant Agent. The "Delisting Date" shall be the last Business Day
prior to the effective date on which the Warrants are delisted from, or
permanently suspended from trading (within the meaning of the Securities
Exchange Act of 1934 (the "Exchange Act") and the rules and regulations of the
Securities and Exchange Commission thereunder) on the AMEX, and not accepted
prior thereto or at the same time for trading pursuant to the rules of another
SRO that are filed with the Securities and Exchange Commission under the
Exchange Act. However, if the Company first receives notice of the delisting or
suspension of the Warrants on the same day on which such Warrants are delisted
or suspended, such day will be deemed a Delisting Date. The Exercise Date for
such Warrants will be the Expiration Date or any Delisting Date, as the case may
be, or, if such date is not a Business Day, the next succeeding Business Day.
The Warrant Agent will obtain the Spot Portfolio Value (determined as of the
first Business Day following such date, which will be the Valuation Date for
such Warrants except in the case of a postponed exercise following the
occurrence of an Extraordinary Event or an Exercise Limitation Event) and will
determine the Cash Settlement Value, if any, of such Warrants.
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No fewer than 500 Warrants may be exercised by or on
behalf of any one Warrantholder at any one time, except that no such minimum
exercise amount shall apply in the case of automatic exercise on or following
the Expiration Date or on any Delisting Date or in the case of cancellation of
the Warrants as a result of an Extraordinary Event. With the exception of the
Limit Option, an Exercise Notice shall be unconditional. Except as provided in
the Warrant Agreement, the Warrant Agent shall be entitled, with no duty of
inquiry, to rely conclusively on any Exercise Notice received by it and on any
representation of the exercising Warrantholder contained therein. A
Warrantholder shall not combine Definitive Warrants and Book-entry Warrants or
Book-entry Warrants held through more than one Participant to meet the 500
Warrant minimum exercise requirement provided in the Warrant Agreement and
herein.
If the Exercise Notice is not rejected as provided in
the Warrant Agreement, then the Warrant Agent or the Determination Agent, as the
case may be, will determine the Cash Settlement Value of the exercised Warrants
in accordance with the terms of the Warrant Agreement. Except in the case of
Warrants subject to automatic exercise, Warrants that upon exercise entitle the
holder thereof to receive an Alternative Settlement Amount in lieu of the Cash
Settlement Value and Warrants deemed worthless following an Extension Event, if
on any Valuation Date the Cash Settlement Value for any Warrants then exercised
would be zero, then the attempted exercise of any such Warrants shall be void
and of no effect and the Warrant Certificate evidencing such Warrants will be
returned to the Registered Holder of the Warrant by first class mail at the
Company's expense and such holder shall be permitted to re-exercise such
Warrants prior to the Expiration Date or any Delisting Date, as the case may be.
Except in the case of Warrants subject to automatic
exercise, Warrants that upon exercise entitle the holder thereof to receive an
Alternative Settlement Amount and Warrants deemed worthless following an
Exercise Event, if the Company has made adequate New York Clearing House or next
day 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 second Business Day
following the Valuation Date (the "Funding Date"), the Warrant Agent will be
responsible for making its payment available to each Registered Holder of an
Exercised Warrant in the form of a cashier's check or an official bank check, or
(in the case of payments of at least $100,000) by wire transfer to a U.S. Dollar
account maintained by such Registered Holder in the United States (at the
Registered Holder's election as specified
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in the applicable Exercise Notice) prior to the close of business on the first
Business Day immediately succeeding such Funding Date (the "Settlement Date")
against receipt by the Warrant Agent at the Warrant Agent's Window, of such
Registered Holder's Warrant Certificates. Such payment shall be in an amount
equal to the aggregate Cash Settlement Value of such holder's exercised
Warrants.
With respect to automatically exercised Warrants (other
than Warrants subject to postponed exercise following the occurrence of an
Extraordinary Event or an Exercise Limitation Event) if the Company has made
adequate New York Clearing House or next day 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 second Business Day following the Valuation Date for such
automatically exercised Warrants (the "Automatic Funding Date"), the Warrant
Agent will be responsible for making its payment available to each Registered
Holder of an Exercised Warrant in the form of a cashier's check or an official
bank check, or (in the case of payments of at least $100,000) by wire transfer
to a U.S. Dollar bank account maintained by such Registered Holder in the United
States (at such holder's election and upon proper notice being given to the
Company and the Warrant Agent) prior to the close of business on such Automatic
Funding Date (or in the case of payments made by wire transfer, prior to the
close of business on the Business Day next succeeding the Automatic Funding
Date), against receipt by the Warrant Agent at the Warrant Agent's Window of
such Registered Holder's Warrant Certificates. Such payment shall be in the
amount equal to the aggregate Cash Settlement Value in respect of the Warrants
evidenced by such Warrant Certificates. Warrant Certificates delivered to the
Warrant Agent shall thereafter be promptly cancelled by the Warrant Agent.
Neither the Warrant Agent nor the Determination Agent
will be responsible for any losses resulting from a failure of a brokerage firm
or a Participant to properly exercise Warrants on behalf of a Warrantholder.
Subject to the provisions of Section 2.03(b)(ii) of the
Warrant Agreement, if the Company determines that an Extraordinary Event or an
Exercise Limitation Event has occurred and is continuing on any Business Day
that would otherwise be the Valuation Date with respect to an exercise of
Warrants (the "Applicable Business Day"), then the Cash Settlement Value with
respect to such exercise of Warrants shall be calculated on the basis that the
Valuation Date shall be the next Business Day
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following such Applicable Business Day on which there is no Extraordinary Event
or Exercise Limitation Event; provided that if the Valuation Date has not
occurred on or prior to the Expiration Date or any Delisting Date, then the
Warrantholders will receive, in lieu of the Cash Settlement Amount, the
Alternative Settlement Amount which shall be calculated as if the Warrants had
been cancelled on the Expiration Date or such Delisting Date, as the case may
be.
Upon the occurrence of an Extraordinary Event or an
Exercise Limitation Event, the Company shall use its best efforts to notify the
Warrant Agent and the Determination Agent promptly that an Extraordinary Event
or Exercise Limitation Event, as the case may be, has occurred and shall
promptly give notice to the Warrantholders by publication in a United States
newspaper with a national circulation (currently expected to be The Wall Street
Journal), that an Extraordinary Event or an Exercise Limitation Event has
occurred.
If the Company determines that an Extraordinary Event
or an Exercise Limitation Event has occurred and is continuing on the Expiration
Date or on any earlier Delisting Date, the Company shall so notify the Warrant
Agent and the Determination Agent, and the Cash Settlement Value with respect to
the exercised Warrants shall be equal to, and be calculated in the same manner
as, an Alternative Settlement Amount, in accordance with the Warrant Agreement
(treating the Expiration Date or such Delisting Date, as the case may be, as the
date on which the Warrants were cancelled).
If the Company determines that an Extraordinary Event
has occurred and is continuing, and if the Extraordinary Event is expected by
the Company to continue, the Company, prior to the Expiration Date, may
immediately cancel the Warrants by notifying the Warrant Agent of such
cancellation (the date such notice is given being the "Cancellation Date"), and
each Warrantholder's rights under the Warrants and the Warrant Agreement shall
thereupon cease; provided, that, subject to an automatic extension of the term
of the Warrants or to a determination that the Warrants are worthless, each
Warrant shall be exercised (even if such Warrant would not otherwise be
exercisable on such date because of the Limit Option) on the basis that the
Valuation Date for such Warrant shall be the Cancellation Date and the holder of
each such Warrant will receive the Alternative Settlement Amount determined by
the Determination Agent.
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With respect to all Warrant Certificates as to which
the Valuation Date has been postponed (other than Warrants that have been deemed
worthless following an Extension Event) or which have been cancelled as
described above, the Company shall make 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 second Business Day following the date on which the Cash Settlement
Value or Alternative Settlement Amount, as the case may be, has been calculated
(the "Alternative Funding Date") New York Clearing House Funds or next day funds
in an amount equal to, and for the payment of, the aggregate Cash Settlement
Value or Alternative Settlement Amount, as applicable, of such Warrants. Subject
to such funds having been made available as provided in the preceding sentence,
the Warrant Agent will thereafter be responsible for making its payment
available to each Registered Holder of the Warrants that submitted a Warrant
Certificate (and in the case of cancellation to each Registered Holder) in the
form of a cashier's check or an official bank check, or (in the case of payments
of at least $100,000) by wire transfer to a U.S. Dollar bank account maintained
by the Registered Holder in the United States (at such holder's election and
upon proper notice being given to the Company and the Warrant Agent) prior to
the close of business on the Alternative Funding Date (or, in the case of
payments made by wire transfer, prior to the close of business on the Business
Day next succeeding the Alternative Funding Date) against receipt by the Warrant
Agent at the Warrant Agent's Window, of such Registered Holder's Warrant
Certificates. Such payment shall be in the amount equal to the aggregate Cash
Settlement Value or Alternative Settlement Amount, as the case may be, of the
Warrants evidenced by such Warrant Certificates.
If the Company determines that an event described in
clause (i) of the definition of Exercise Limitation Event below has occurred and
is continuing on the Expiration Date (an "Extension Event") then the term of any
outstanding Warrants shall be automatically extended for a period of 30 days
(the thirtieth day following the Expiration Date being the "Extended Expiration
Date"), provided, however, that if the Cash Settlement Value or the Intrinsic
Value used in calculating the Alternative Settlement Amount, as the case may be,
of such Warrants would have been zero if the Warrants had been exercised such
that the Valuation Date for such exercise was the Measurement Date (as defined
below), then the term of the Warrants shall not be extended, the Warrants shall
be deemed to be worthless and the Company shall not be required to make any
payments in respect thereof. Any such automatic extension shall be deemed to
have
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been revoked and the Warrants shall expire on the earlier of (i) the next
Business Day on which there is no Extension Event (the "Early Extended
Expiration Date") and (ii) any Delisting Date occurring after the Expiration
Date. The Company will give the Warrant Agent prompt notice by telephone or
facsimile transmission and will give prompt notice to the Warrantholders by
publication in a United States newspaper with a national circulation (currently
expected to be The Wall Street Journal) of the occurrence of an Extension Event,
any Extended Expiration Date, any Early Extended Expiration Date and any
Delisting Date referred to in clause (ii) above, but in no event will such
notice to the Warrant Agent be given later than 9:30 A.M., New York City time,
the Business Day following the Expiration Day, on the Extended Expiration Date,
Early Extended Expiration Date or Delisting Date, as applicable.
Any Warrants that expire on an Early Extended
Expiration Date, as described in clause (i) of the preceding paragraph, will be
deemed to be exercised on such Early Extended Expiration Date (even if such
Warrants would not otherwise be exercisable on such date because of the Limit
Option) on the basis that the Valuation Date for such exercise shall be such
Early Extended Expiration Date and the holder of each such Warrant will receive
an Alternative Settlement Amount, whether or not an Extraordinary Event or an
Exercise Limitation Event is continuing on such Early Extended Expiration Date.
Any Warrants that expire on a Delisting Date occurring on or after the
Expiration Date and prior to the Extended Expiration Date, as described in
clause (ii) of the preceding paragraph, shall be deemed to be worthless and the
Company shall not be required to make any payments in respect thereof.
If the term of the Warrants has been extended pursuant
to the second preceding paragraph but the Company determines that an Extension
Event is continuing when the Warrants expire on the Extended Expiration Date,
the Warrants shall be deemed to be worthless and the Company shall not be
required to make any payments in respect thereof. The Company shall give prompt
notice of any such determination to the Warrant Agent by telephone or facsimile
transmission and to the Warrantholders by publication in a United States
newspaper with a national circulation (currently expected to be The Wall Street
Journal).
"Measurement Date" means the Business Day occurring
most recently prior to the Expiration Date on which none of the events described
in clause (i) of the definition of Exercise Limitation Event below had occurred
or was continuing.
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The "Alternative Settlement Amount" is the amount
calculated using the formula set forth below:
Alternative Settlement Amount = Intrinsic Value +
(T/2 x A/B)
where
Intrinsic the Cash Settlement Value of the
Value = Warrants determined as described above, but
calculated with a Spot Portfolio Value
determined by the Determination Agent
which, subject to approval by the
Company (such approval not to be
unreasonably withheld), in the
reasonable opinion of the
Determination Agent, fairly reflects
the value of the Portfolio Securities
on the Cancellation Date, Expiration
Date, Delisting Date or Early Extended
Expiration Date, whichever has given
rise to the payment of the Alternative
Settlement Amount;
T = U.S. $____, the maximum initial offering
price per Warrant;
A = the total number of days from but excluding
the Cancellation Date or Delisting Date,
whichever has given rise to the payment of
the Alternative Settlement Amount for such
Warrants, to and including the Expiration
Date; and
B = the total number of days from, but
excluding the date on which sales of
the Warrants were initially confirmed,
to and including the Expiration Date.
Where an Expiration Date or an Early Extended
Expiration Date has given rise to the payment of the Alternative Settlement
Amount, such Alternative Settlement Amount shall equal
the Intrinsic Value.
For the purposes of determining "Intrinsic Value" in
the above formula, in the event that the Determination Agent and the Company are
required, 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
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calculated in accordance with the above formula, agreed upon a Spot Portfolio
Value which fairly reflects the value of the Portfolio Securities on the
Cancellation Date, Expiration Date, Delisting Date or Early Extended Expiration
Date, whichever gives rise to the payment of the Alternative Settlement Amount,
then the Determination 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 Determination 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
Determination Agent and the Warrantholders. Any such calculations will be made
available to a Warrantholder 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.
An "Extraordinary Event" means any of the following
events:
(i) a suspension, material limitation or absence of
trading of all of the Portfolio Securities;
(ii) the enactment, publication, decree or other promulgation
of any statute, regulation, rule or order of any court of any
jurisdiction, any administrative agency or any other governmental
authority that would make it unlawful for the Company to perform any
of its obligations under the Warrant Agreement or the Warrants or
that has had or is reasonably expected to have a material adverse
effect on the ability of (A) the Company to perform its obligations
under the Warrants or to hedge or modify the hedge of its position
with respect to the Portfolio; or (B) any affiliate of the Company to
hedge or modify the hedge of its position with respect to any hedging
transaction entered into with the Company in connection with the
Company's obligations under the Warrants; or
(iii) any outbreak or escalation of hostilities or other
national or international calamity or crisis (including, without
limitation, natural calamities that in the opinion of the Company may
materially and adversely affect the economy of the United States or
the trading of securities generally on the AMEX, NYSE or NASDAQ, or
any other
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securities exchange) that has had or is reasonably expected to have a
material adverse effect on the ability of (A) the Company to perform
its obligations under the Warrants or to modify the hedge of its
position with respect to the Portfolio or (B) any affiliate of the
Company to hedge or modify the hedge of its position with respect to
any hedging transaction entered into with the Company in connection
with the Company's obligations under the Warrants.
For the purposes of determining whether an Extra-
ordinary Event has occurred: (1) a limitation on the hours or number of days of
trading will not constitute an Extraordinary Event if it results from an
announced change in the regular business hours of the AMEX, NYSE, NASDAQ or
other securities exchange on which a Portfolio Security is traded, as the case
may be, and (2) an "absence of trading" on the AMEX, NYSE, NASDAQ or other
securities exchange on which a Portfolio security is traded, as the case may be,
will not include any time when the AMEX, NYSE, NASDAQ or such other securities
exchange is closed for trading under ordinary circumstances.
"Exercise Limitation Event" means either of the follow-
ing events:
(i) a suspension, material limitation or absence of trading
on the AMEX, NYSE, NASDAQ or other securities exchange on which a
Portfolio security is traded of 20% or more in number of the
Portfolio Securities; or
(ii) the suspension or material limitation on the AMEX or any
other major futures, options or securities market of trading in
futures or options contracts related to the Portfolio.
For the purposes of determining whether an Exercise
Limitation Event has occurred: (1) a limitation on the hours or number of days
of trading will not constitute an Exercise Limitation Event if it results from
an announced change in the regular business hours of the relevant exchange, (2)
a decision to permanently discontinue trading in the relevant futures or options
contract will not constitute an Exercise Limitation Event, (3) a suspension of
trading in a Portfolio Security or in a futures or options contract referred to
in clauses (i) and (ii) above, by reason of (x) a price change violating limits
set by the AMEX or other futures or securities market on which futures or
options contracts related to the Portfolio are traded or such other futures or
securities market or (y) an imbalance of orders
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relating to a Portfolio Security or such contracts will constitute a suspension
or material limitation of trading, (4) an "absence of trading" on the AMEX, NYSE
or NASDAQ or other securities exchange will not include any time when the AMEX,
NYSE or NASDAQ or other securities exchange is closed for trading under ordinary
circumstances and (5) the occurrence of an Extraordinary Event described in
clause (i) of the definition of Extraordinary Event will not constitute, and
will supersede the occurrence of, an Exercise Limitation Event.
All exercises of Warrants (other than on automatic
exercise or following an Extension Event) are subject, at the Company's option,
to the limitation that not more than 750,000 Warrants in total may be exercised
on any Exercise Date and not more than 250,000 Warrants 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 Business Day would
otherwise, under the terms hereof, be the Exercise Date in respect of more than
750,000 Warrants, then at the Company's election (by giving notice thereof to
the Warrant Agent not later than by 11:00 A.M., New York City time on the
Business Day immediately following such Exercise Date), 750,000 of such Warrants
shall be deemed exercised on such Exercise Date (selected by the Warrant Agent
on a pro rata basis, but if, as a result of such pro rata selection, any
Registered Holders of Warrants would be deemed to have exercised less than 500
Warrants, then the Warrant Agent shall first select an additional amount of such
holders' Warrants so that no holder shall be deemed to have exercised less than
500 Warrants), and the remainder of such Warrants (the "Remaining Warrants")
shall be deemed exercised on the following Business Day (notwithstanding the
minimum exercise requirement and subject to successive applications of this
paragraph); 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. If any beneficial owner of Warrants attempts to exercise more than 250,000
Warrants on any Business Day individually or in concert, then at the Company's
election (as notified to the Warrant Agent by giving notice thereof to the
Warrant Agent not later than 11:00 A.M., New York City time, on the Business Day
following such Business Day), 250,000 of such Warrants shall be deemed exercised
on such Business Day and the remainder shall be deemed exercised on the
following Business Day (notwithstanding the minimum exercise requirements and
subject to successive applications of this paragraph). The date on which any
Warrant is deemed exercised under the preceding two sentences shall for
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all purposes of this Warrant Certificate be deemed to be the "Exercise Date" in
respect of such Warrants.
Prior to due presentment for registration of transfer,
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 whatsoever, 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.
The Warrant Agent will, in accordance with the Warrant
Agreement, from time to time register the transfer of this Warrant Certificate
upon surrender hereof at the Warrant Agent's Window, Attention: Transfer
Department, accompanied by a written instrument or instruments of transfer in
form satisfactory to the Warrant Agent and the Company duly executed by the
Registered Holder(s) hereof, a duly appointed legal representative thereof or by
its duly authorized attorney. Such signature shall be guaranteed by a bank or
trust company having a correspondent office in The City of New York or by a
broker or dealer which is a member of the National Association of Securities
Dealers, Inc. (the "NASD") or by a member of a national securities exchange. A
new Warrant Certificate shall be issued to the transferee(s) upon any such
registration of transfer, and this Warrant Certificate shall be cancelled by the
Warrant Agent.
Commencing on the one hundred eightieth calendar day
following February __, 1996 each Warrantholder will have the option (the
"Conversion Option") to convert the form in which such Warrantholder holds his
Warrants from definitive to book-entry form. The Conversion Option will be
available for 45 calendar days (the "Conversion Option Period").
In order to be exchanged for a Warrant in book-entry
form, a Warrant Certificate must be delivered to the Depository Trust Company
(the "Depository"), in proper form for deposit, by a Participant. Accordingly, a
Warrantholder who is not a Participant (other than a Warrantholder holding
Warrants through CEDEL or Euroclear) must deliver his Warrant Certificate, in
proper form for deposit, to a Participant, either directly or through an
indirect participant (such as a bank, brokerage firm, dealer or trust company
that clears through, or maintains a custodial relationship with, a Participant)
or brokerage firm
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which maintains an account with a Participant, in order to have its Warrant
Certificate exchanged for a Warrant in book-entry form.
Warrant Certificates received by the Depository for
exchange during the Conversion Option Period will be exchanged for Warrants in
book-entry form by the close of business on the Business Day that such
Certificates are received by the Depository (if received by the Depository by
its then applicable cut-off time for same day credit) or on the following
Business Day (if received by the Depository by its then applicable cut-off time
for next day credit). Warrants surrendered at any time for exchange for
book-entry Warrants may not be exercised or delivered for settlement or transfer
until such exchange has been effected. Once a Warrantholder has elected the
Conversion Option, such Warrantholder may hold his Warrants only in book-entry
form and will not be able to change his election or withdraw from the book-entry
system during the Conversion Option Period or thereafter.
Except for Warrants subject to automatic exercise,
Warrants with respect to which payments of any Alternative Settlement Amount are
made and Warrants deemed worthless following an Extension Event, each
Warrantholder, in connection with any exercise of Warrants (including a
postponed exercise following an Extraordinary Event or an Exercise Limitation
Event), shall have the option (the "Limit Option") to specify in the related
Exercise Notice that such Warrants are not to be exercised if the Spot Portfolio
Value that would otherwise be used to determine the Cash Settlement Value of
such Warrants is three or more points lower than the Limit Option Reference
Index. A Warrantholder's election of the Limit Option must be specified in the
applicable Exercise Notice delivered to the Warrant Agent. The Limit Option
Reference Index will be the Spot Portfolio Value on the relevant Exercise Date.
If an Exercise Notice and the related Warrants are received after 3:00 P.M., New
York City time, on a given day, the applicable Limit Option Reference Index will
be determined as of the next day that is also a Business Day.
Following receipt of an Exercise Notice and the related
Warrants subject to the Limit Option, the Warrant Agent shall obtain from the
Determination Agent the applicable Limit Option Reference Index and will
determine whether such Warrants will not be exercised because of the Limit
Option. Warrants that are not exercised will be treated as not having been
tendered for exercise and the Warrant Certificate evidencing such Warrants
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will be returned to the Registered Holder by first class mail at the Company's
expense. To exercise such Warrants, a Warrant- holder will be required to cause
an Exercise Notice and the related Warrants to be submitted again to the Warrant
Agent. In the case of a postponed Valuation Date, the Limit Option will continue
to apply once elected by a Warrantholder in connection with an exercise of
Warrants on the basis of the Limit Option Reference Index as initially
determined for such Warrants, except when such Valuation Date is postponed until
the Expiration Date, any Delisting Date or the Cancellation Date or following an
Extension Event. Such Warrants will either (i) be exercised on a delayed basis
if the applicable Spot Portfolio Value on the postponed Valuation Date is not
three or more points less than the Limit Option Reference Index or (ii) be
excluded from being exercised if, on any applicable postponed Valuation Date,
the applicable Spot Portfolio Value is three or more points less than the Limit
Option Reference Index. In connection with any exercise of 1,000 or more
Warrants, a Warrantholder may elect to subject the exercise of only a portion of
such Warrants to the Limit Option; provided that the number of Warrants subject
to the Limit Option and the number of Warrants not subject to the Limit Option
shall in each case not be less than 500.
As provided in the Warrant Agreement and subject to
certain limitations, this Warrant Certificate may be exchanged for other Warrant
Certificates, representing a like number of Warrants, upon surrender to the
Warrant Agent at the Warrant Agent's Window, Attention: Transfer Department, of
this Warrant Certificate. The Company will thereupon execute, and the Warrant
Agent will countersign and deliver, one or more new Warrant Certificates
representing such like number of Warrants. Upon surrender of this Warrant
Certificate for exchange, the Warrant Agent shall cancel this Warrant
Certificate.
No service charge will be made for any registration of
transfer or exchange of this Warrant Certificate, but the Company may require
the payment of a sum sufficient to cover any tax or governmental charge that may
be imposed in relation thereto, other than exchanges not involving any transfer.
Capitalized terms included herein but not defined
herein have the meanings assigned thereto in the Warrant
Agreement.
As used herein, "Business Day" means any day other than
a Saturday, Sunday or a day on which either the American Stock
Exchange, Inc. is not open for securities trading or commercial
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banks in New York City are required or authorized by law or executive order to
remain closed. References in this Certificate to "U.S. Dollar", "U.S.$" or "$"
are to the lawful currency of the United States of America.
The Warrant Agreement and the terms of the Warrants are
subject to amendment, as provided in the Warrant Agreement.
This Warrant Certificate shall be governed by, and
interpreted in accordance with, the laws of the State of New
York.
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Exercise Notice
Chemical Bank/Geoserve
Corporate Trust Securities Window
55 Water Street, Room 234
North Building
New York, New York 10041
Attention: Tender Department
1. This Notice DOES / DOES NOT relate to
"Contingently Tendered Warrants" subject to a Limit Option, as provided for in
the Warrant Agreement. If this Exercise Notice relates to any Contingently
Tendered Warrants, ______ of such Warrants are Contingently Tendered Warrants
and ______ are not. If the Spot Portfolio Value used to determine the Cash
Settlement Value of Contingently Tendered Warrants is less than the Limit Option
Reference Index by three points or more, an Exercise Notice with respect to such
Contingently Tendered Warrants shall be void and of no effect (and shall be
disregarded for all purposes of the Warrant Agreement).
2. Subject to paragraph 1, the undersigned (the
"Owner") hereby irrevocably exercises Warrants (the "Exercised Warrants") and
delivers to you herewith a Warrant Certificate or Certificates, registered in
the Owner's name, representing a number of Warrants at least equal to the number
of Exercised Warrants. Each Owner of Warrants that is exercising Warrants
pursuant to this Exercise Notice is exercising no fewer than 500 Warrants and no
Owner is acting in concert with any other Owner in relation to the exercise of
the Exercised Warrants.
3. Each Owner of Warrants that is exercising Warrants
pursuant to this Exercise Notice is exercising no more than 250,000 Warrants on
the date of this Exercise Notice individually or in concert.
4. Each Owner that is exercising Warrants pursuant to
this Exercise Notice certifies that the number of Contingently Tendered Warrants
and the number of Warrants not subject to the Limit Option shall in each case be
not less than 500; provided that, such Owner has not combined Definitive
Warrants and Book- entry Warrants or Book-entry Warrants held through more than
one Participant to meet such requirement.
5. The Owner hereby directs the Warrant Agent (a) to
pay the Cash Settlement Value, if any, with respect to the
Exercised Warrants:
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By cashier's check or an official bank check:
or
By wire transfer to the following U.S. dollar bank
account in the United States:
(Minimum payments of $100,000 only)
Bank: _________________________________
ABA Routing No.: ______________________
Account No.: ______________ Reference: ________
and (b) if the number of Exercised Warrants is less than the number of Warrants
represented by the enclosed Warrant Certificate, to deliver a Warrant
Certificate representing the unexercised Warrants to
Dated: , 19
---------------------------
(Owner)
by _______________________
Authorized Signature
Address:
Telephone ( )
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EXHIBIT A-1
FORM OF GLOBAL WARRANT CERTIFICATE
No. _____-1
CUSIP No.
Unless this Global Warrant Certificate is presented by
an authorized representative of The Depository Trust Company (55 Water Street,
New York, New York) to the Company or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of
Cede & Co. or such other name as requested by an authorized representative of
The Depository Trust Company and any payment is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest
herein.
THE BEAR STEARNS COMPANIES INC.
Global Warrant Certificate Representing
Vantage Point Portfolio Call Warrants
Expiring August __, 1997
This certifies that CEDE & CO., or registered assigns,
is the Registered Holder of the number of Vantage Point Portfolio Call Warrants
Expiring August __, 1997 (the "Warrants") set forth from time to time on
Schedule A hereto. Each Warrant entitles the beneficial owner thereof (each a
"Warrantholder") to receive, subject to the conditions set forth herein and in
the Warrant Agreement referred to below, from The Bear Stearns Companies Inc.
(the "Company") the Cash Settlement Value of such Warrant, except that, under
the circumstances described below, such Warrantholder may instead receive the
Alternative Settlement Amount for such Warrant or, in certain circumstances
following an Extension Event, the Warrants will be deemed to be worthless. The
Cash Settlement Value of an Exercised Warrant will be an amount (the "Cash
Settlement Value") equal to the greater of (i) zero and (ii) the product
(rounded down to the nearest cent of (A) the quotient obtained by dividing (i)
the amount, if any, by which the Spot Portfolio Value for the applicable
Valuation Date for such Warrant exceeds the Original Portfolio Value (as defined
herein) by (ii) the Original Portfolio and (B) $35. The Original Portfolio Value
has been set at 100. The Cash Settlement Value is calculated using the following
formula:
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Cash Settlement Value = the greater of
(i) $0 and (ii) (Spot Portfolio Value - 100)
______________________________________ x $35
100
A Warrant will not require or entitle a Warrantholder
to sell or deliver to the Company any shares of any component stocks of the
Portfolio (the "Portfolio Securities"), or any other securities. Upon exercise
of a Warrant, the Company will make only a cash payment in the amount of the
Cash Settlement Value or Alternative Settlement Amount, if any and as
applicable, of such Warrant. The Company is under no obligation to, nor will it,
purchase or take delivery from any Warrantholder of any shares of any of the
Portfolio Securities or any other securities in connection with the exercise of
any Warrants. Warrantholders will not receive any interest on any Cash
Settlement Value, and the Warrants will not entitle the Warrantholders to any of
the rights of holders of any of the Portfolio Securities or other securities.
Subject to the terms and conditions set forth herein
and in the Warrant Agreement, each Warrant may be exercised, on any Business Day
during the period from its date of issuance until 3:00 P.M., New York City time,
on the earlier of (i) the third Business Day immediately preceding the
Expiration Date (as defined below) and (ii) the Business Day immediately
preceding any Delisting Date. Except under certain circumstances following an
Extension Event, any Warrant not exercised (including by reason of any postponed
exercise as described herein and in the Warrant Agreement) at or before 3:00
P.M., New York City time, on the earlier of the (i) third Business Day
immediately preceding the Expiration Date and (ii) the Business Day immediately
preceding any Delisting Date, shall be automatically exercised. The "Expiration
Date" shall be August __, 1997.
This Global Warrant Certificate shall not be valid
unless countersigned by the Warrant Agent.
The Warrants evidenced by this Global Warrant
Certificate are part of a duly authorized issue of Warrants issued by the
Company pursuant to a Warrant Agreement, dated as of February __, 1996 (the
"Warrant Agreement") among the Company, Chemical Bank (the "Warrant Agent") and
Bear, Stearns & Co. Inc. (the "Determination Agent"), and is subject to the
terms and provisions contained in the Warrant Agreement, to all of which terms
and provisions the Warrantholders, the entities through which such
Warrantholders hold their beneficial interests in the
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Warrants and the Registered Holder of this Global Warrant Certificate consent by
acceptance of this Global Warrant Certificate by the Depository and which
Warrant Agreement is hereby incorporated by reference in and made a part of this
Global Warrant Certificate. A copy of the Warrant Agreement is on file at the
Warrant Agent's Office.
The Warrants are unsecured contractual obligations of
the Company and rank on a parity with the Company's other unsecured contractual
obligations and with the Company's unsecured and unsubordinated debt.
Subject to the provisions hereof and the Warrant
Agreement, each Warrant represented by this Global Warrant Certificate (each a
"Book-entry Warrant") may be exercised on any New York Business Day during the
period from the Initial Conversion Date until 3:00 P.M., New York City time, on
the earlier of the Business Day immediately preceding (i) the Expiration Date
and (ii) any Delisting Date, by causing (x) such Warrant to be transferred free
to the Warrant Agent on the records of the Depository in accordance with the
Depository's Deposit/Withdrawal at Custodian procedures, as provided in the
Representations Letter, and (y) a duly completed and executed Exercise Notice to
be received by the Warrant Agent from a Participant, in the case of Book-entry
Warrants held through the Depository, or a Cedel Societe Anonyme ("CEDEL") or
Euroclear System ("Euroclear") Participant, in the case of such Warrants held
through CEDEL or Euroclear, acting, directly or indirectly, on behalf of the
Warrantholder; provided, however, that Exercise Notices are subject to rejection
by the Warrant Agent as provided herein and in the Warrant Agreement.
Bear, Stearns & Co. Inc., as Determination Agent, shall
determine the Spot Portfolio Value as provided in the Warrant Agreement and
herein and shall make such calculations as may be required upon the occurrence
of certain circumstances, as described in the Warrant Agreement and herein. The
Determination Agent shall act as an independent expert and not as an agent of
the Company, and, unless otherwise provided by the Warrant Agreement, its
calculations and determinations under the Warrant Agreement and this Global
Warrant Certificate shall, absent manifest error, be final and binding on the
Company, the Warrant Agent and the Warrantholders. Any such calculations will be
made available to a Warrantholder for inspection at the Warrant Agent's Office.
The Determination Agent will have no responsibility for good faith errors or
omissions in calculating or disseminating information regarding the Spot
Portfolio Value,
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the Cash Settlement Value or the Alternative Settlement Amount,
as applicable.
The "Spot Portfolio Value" will be determined by the Determination
Agent, and will equal the sum of the products of the Market Price (as defined
herein) of each Portfolio Security (as defined herein) and the then applicable
Multiplier (as defined herein) for that Portfolio Security. The applicable
multiplier (the "Multiplier") for each Portfolio Security is as specified under
the caption "Description of Warrants -- Portfolio Securities" in the Company's
Prospectus Supplement dated February __, 1996 relating to the Warrants (the
"Prospectus Supplement") and indicates the number of shares (or fraction of one
share) of that Portfolio Security included in the calculation of the Spot
Portfolio Value. The "Portfolio Securities" are the common stocks of 43
corporations which are listed under the caption "Description of Warrants --
Portfolio Securities" in the Prospectus Supplement. Each Multiplier will remain
constant for the term of the Warrants unless adjusted for certain corporate
events described herein. If a Market Disruption Event (as defined herein) occurs
or is continuing with respect to a Portfolio Security on a Valuation Date, then
the calculation of the Market Price of that Portfolio Security will be based on
the Business Day immediately preceding that Valuation Date that does not have a
Market Disruption Event with respect to that Portfolio Security.
"Market Price," which will be determined by the
Determination Agent based on information reasonably available to it, means: (i)
for a Valuation Date on or prior to the third Business Day immediately preceding
the Expiration Date the following:
A. If the Portfolio Security is listed on a national
securities exchange or is a NASDAQ security, Market Price means the
last reported sale price of that Portfolio Security on the Valuation
Date (or the preceding Business Day if that Portfolio Security is not
traded on the Valuation Date) on the principal national securities
exchange on which such Portfolio Security is listed or admitted to
trading or on NASDAQ, as the case may be.
B. If the Portfolio Security is not listed on a national
securities exchange and is not a NASDAQ security, Market Price means
the last reported bid price of that Portfolio Security in the
over-the-counter market on the Valuation Date.
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and (ii) for any Valuation Date after the third Business Day immediately
preceding the Expiration Date, the following:
A. If the Portfolio Security is listed on a national
securities exchange or is a NASDAQ security, Market Price means the
opening sales price of that Portfolio Security on the Valuation Date
(or the preceding Business Day if that Portfolio Security is not
traded on the Valuation Date) on the principal national securities
exchange on which such Portfolio Security is listed or admitted to
trading or on NASDAQ, as the case may be.
B. If the Portfolio Security is not listed on a national
securities exchange and is not a NASDAQ security, Market Price means
the first reported bid price of that Portfolio Security in the
over-the-counter market on the Valuation Date.
"Market Disruption Event" with respect to a Portfolio
Security means any of the following events, in each case as determined by the
Determination Agent:
(i) the suspension of or material limitation in trading in
that Portfolio Security for more than two hours of trading or during
the one-half hour period immediately preceding the time that
Portfolio Security is to be priced (for purposes of this definition,
limitations pursuant to New York Stock Exchange ("NYSE") Rule 80A (or
any applicable rule or regulation enacted or promulgated by the NYSE,
any other self regulatory organization ("SRO") or the Securities and
Exchange Commission that is deemed of similar scope by the
Determination Agent) on trading during significant market
fluctuations shall be considered "material"),
(ii) the suspension of or material limitation (whether by
reason of movements in price that exceed levels permitted by the
relevant exchange or otherwise) in trading in option contracts
related to a Portfolio Security traded on any exchange for more than
two hours of trading or during the one-half hour period immediately
preceding the time that Portfolio Security is to be priced,
(iii) a banking moratorium has been declared by federal
or any state authorities.
For purposes of this definition, a limitation on the hours in a
trading day and/or number of days of trading will not
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constitute a Market Disruption Event if it results from an announced change in
the regular business hours of the relevant exchange.
The Multiplier with respect to any Portfolio Security
and the Portfolio will be adjusted by the Determination Agent as
follows:
1. If a Portfolio Security is subject to a stock split or
reverse stock split then, once the split has become effective, the
Multiplier relating to that Portfolio Security will be adjusted to
equal the product of (i) the number of shares of the Portfolio
Security outstanding after the split has become effective with
respect to each share of such Portfolio Security outstanding
immediately prior to the effectiveness of such split and (ii) the
prior Multiplier.
2. If a Portfolio Security is subject to a stock dividend
or stock distribution (other than a stock dividend elected by a
holder of that Portfolio Security in lieu of an ordinary cash
dividend) that is given equally to all holders of that Portfolio
Security, then, once that Portfolio Security is trading ex-dividend,
the Multiplier will be adjusted so that the new Multiplier shall
equal the former Multiplier plus the product of (i) the number of
shares of that Portfolio Security issued with respect to one such
share of that Portfolio Security and (ii) the prior Multiplier.
3. If the issuer of a Portfolio Security is being
liquidated or dissolved or is subject to a proceeding under any
applicable bankruptcy, insolvency or similar law, that Portfolio
Security will continue to be included in the Portfolio so long as a
Market Price for that Portfolio Security is available. Subject to
paragraph 7 below, if a Market Price is no longer available for a
Portfolio Security for whatever reason, including the liquidation or
dissolution of the issuer of that Portfolio Security or the
subjection of the issuer to a proceeding under any applicable
bankruptcy, insolvency or similar law, then, for so long as a Market
Price is unavailable for that Portfolio Security, the value of that
Portfolio Security will be deemed to be zero for the purposes of
calculating the Spot Portfolio Value, and no attempt will be made to
find a replacement Portfolio Security or increase the value of the
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Portfolio to compensate for the deletion of such Portfolio Security.
4. If the issuer of a Portfolio Security has been subject
to a merger or consolidation and is not the surviving entity and
holders of that Portfolio Security are entitled to receive cash or
securities in exchange for that Portfolio Security, then a value for
that Portfolio Security will be determined (i) in the case of cash,
at the time of receipt by those holders and will equal the amount of
such cash, and (ii) in the case of securities, on the first Business
Day on which those securities are traded regular way, and will equal
the Market Price of those securities (in each of (i) and (ii), the
"Cash Component"); provided, that if those securities do not have a
Market Price, the Cash Component shall be the fair market value of
those securities, as determined by the Determination Agent. The Cash
Component, as adjusted for the accrual of interest described below,
will be constant for the remaining term of the Warrants. No
adjustment will be made to the Multiplier relating to the Portfolio
Security.
The Cash Component will accrue interest at a rate equal
to the London Inter-Bank Offered Rate ("LIBOR"), with a term equal to the period
of time from the Interest Commencement Date (as defined herein) to the LIBOR
Maturity Date (the "Specified Maturity"), determined and fixed on the first
London Business Day (the "LIBOR Determination Date") that is immediately
following the date of determination of such Cash Component. LIBOR will accrue on
such Cash Component commencing (i) in the case of cash, on the second London
Business Day following such LIBOR Determination Date and (ii) in the case of
securities, on the third London Business Day following such LIBOR Determination
Date (in each of (i) and (ii), the "Interest Commencement Date") up to and
including the Specified Maturity.
LIBOR will be determined by the Determination Agent in
accordance with the following provisions:
(i) On the relevant LIBOR Determination Date, LIBOR will be
determined through the application of linear interpolation by
reference to the offered rates for deposits of not less than
$1,000,000 having a maturity immediately before and immediately after
the Specified Maturity, commencing on the Interest Commencement Date,
which appear either (a) if the Specified Maturity is one year or less
from the relevant LIBOR Determination Date, on the display
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designated as Page 3750 on the Dow Jones Telerate Service (or such
other page as may replace Page 3750 on that service for the purpose
of displaying London Interbank offered rates of major banks)
("Telerate Page 3750"), or (b) if the Specified Maturity is more than
one year from the relevant LIBOR Determination Date, on each of
Telerate Page 3750 and on the display designated as page "SWAP" on
the Reuter Monitor Money Rates Service (or such other page as may
replace the SWAP page on that service for the purpose of displaying
London Interbank offered rates of major banks) ("Reuters-SWAP"), in
each case as of 11:00 A.M., London time; provided that if there is an
offered rate for the Specified Maturity, then LIBOR will be such
offered rate. If such offered rates do not appear, LIBOR with respect
to such LIBOR Determination Date will be determined as described in
(ii) below.
(ii) With respect to a LIBOR Determination Date on which no
such offered rates appear on Telerate Page 3750 or Reuters SWAP as
described in (i) above, LIBOR will be determined on the basis of the
rates at approximately 11:00 A.M., London time, on such LIBOR
Determination Date, at which deposits in U.S. dollars having the
Specified Maturity are offered to prime banks in the London Interbank
market by four major banks in the London Interbank market selected by
the Determination Agent commencing on the Interest Commencement Date
and in a principal amount equal to an amount not less than $1,000,000
that in the Determination Agent's judgment is representative for a
single transaction in such market at such time (a "Representative
Amount"). The Determination Agent will request the principal London
office of each of such banks to provide a quotation of its rate. If
at least two such quotations are provided, LIBOR with respect to such
LIBOR Determination Date will be calculated by reference to the
arithmetic mean of such quotations. If fewer than two quotations are
provided, LIBOR with respect to such LIBOR Determination Date will be
calculated by reference to the arithmetic mean of the rates quoted at
approximately 11:00 A.M., New York City time, on such LIBOR
Determination Date by three major banks in New York City, selected by
the Determination Agent, for loans in U.S. dollars to leading
European banks having the Specified Maturity commencing on the
Interest Commencement Date and in a Representative Amount; provided,
however, that if fewer than three banks selected as aforesaid by the
Determination Agent are quoting
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as mentioned in this sentence, LIBOR with respect to such Cash
Component will be the LIBOR as last in effect.
"London Business Day" means any day on which dealings
in U.S. dollars are transacted in the London interbank
market.
The value as of any given day of any Portfolio Security
converted into a Cash Component will equal the sum of the Cash Component and all
interest accrued thereon through that day. The interest that has accrued on any
given day will be reflected only in the Spot Portfolio Value quoted by the AMEX
at the end of that day and not in the values disseminated at interim periods
during the day. Interest will be compounded
5. If all the Portfolio Securities of any class or series
of an issuer are converted into or exchanged for the same or a
different number of shares of any class or classes of equity security
of that issuer other than such Portfolio Security, whether by capital
reorganization, recapitalization, reclassification or otherwise,
then, once that conversion or exchange has become effective, the
former Portfolio Security will be removed from the Portfolio and the
new equity securities will be added to the Portfolio as new Portfolio
Securities. The Multiplier relating to each such new Portfolio
Security will equal the product of (i) the last value of the
Multiplier with respect to the former Portfolio Security and (ii) the
number of shares of the new Portfolio Security issued with respect to
one share of the former Portfolio Security.
6. If the issuer of a Portfolio Security distributes to all
of its shareholders equity securities of any other issuer, then such
new equity securities will be added to the Portfolio as a new
Portfolio Security. The Multiplier for the new Portfolio Security
will equal the product of (i) the last value of the Multiplier
relating to the Portfolio Security in respect of which the new
Portfolio Security is being distributed and (ii) the number of shares
of the new Portfolio Security distributed with respect to one share
of the former Portfolio Security.
7. If a Portfolio Security is subject to an extraordinary
dividend or an extraordinary distribution (including upon liquidation
or dissolution) of cash or other property of any kind (other than any
such dividend or distribution otherwise addressed in the preceding
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paragraphs) that is received equally by all holders of that Portfolio
Security, then the Determination Agent shall determine the fair
market value, if any, of the cash or other property received in
respect of each share of that Portfolio Security and the Portfolio
shall thereafter be deemed to include an amount equal to the product
of the Multiplier relating to that Portfolio Security on that date
and the fair market value as so determined.
No adjustments of any Multiplier of a Portfolio
Security will be required unless that adjustment would require a change of at
least 1% in the Multiplier in effect. The Multiplier resulting from any of the
adjustments specified above will be rounded to the nearest one thousandth with
five ten- thousandths being rounded upward.
All determinations made by the Determination Agent
shall be at the sole discretion of the Determination Agent and, in the absence
of manifest error, shall be conclusive for all purposes and binding on the
Company and the holders of the Warrants, and the Determination Agent shall have
no liability therefor.
Subject to the Warrant Agreement and this Global
Warrant Certificate, the "Valuation Date" for a Warrant shall be the first
Business Day following the applicable Exercise Date (subject to postponement
upon the occurrence of an Extraordinary Event or Exercise Limitation Event or as
a result of the exercise of a number of Warrants exceeding the limits on
exercise set forth herein).
Except for Warrants subject to automatic exercise, or
Warrants subject to the Limit Option and except following an Extension Event,
the "Exercise Date" for a Warrant will be (A) in the case of Warrants other than
those held through the facilities of CEDEL or Euroclear (i) the Business Day on
which the Warrant Agent receives at the Warrant Agent's Window, Attention:
Tender Department, the Warrant (or transfer of such Warrant through the
Depository in the case of Book-entry Warrants) and Exercise Notice (by facsimile
transmission in accordance with the Warrant Agreement in the case of Exercise
Notices for Book-entry Warrants) in proper form with respect to such Warrant, if
received at or prior to 3:00 P.M., City time, on such day, or (ii) if the
Warrant Agent receives such Warrant Certificate (or transfer of such Warrant
through the Depository in the case of Book-entry Warrants) or Exercise Notice
after 3:00 P.M., New York City time, on a Business Day, then the Business Day
next
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succeeding the Business Day on which such Warrant or Exercise Notice is received
(B) in the case of Warrants held through the facilities of CEDEL or Euroclear,
(i) the 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 3:00 P.M., New York City time, on such day, provided that the
Warrant Certificate (or transfer of such Warrant through the Depository in the
case of Book-entry Warrants) is received by the Warrant Agent by 3:00 P.M., New
York City time, on the Valuation Date, or (ii) if the Warrant Agent receives
such Exercise Notice after 3:00 P.M., New York City time, on a Business Day,
then the Business Day next succeeding such Business Day, provided that the
Warrant Certificate (or transfer of such Warrant through the Depository in the
case of Book-entry Warrants) is received by 3:00 P.M., New York City time, on
the Valuation Date relating to exercises of Warrants on such succeeding Business
Day. In the event that the Warrant Certificate (or transfer of such Warrant
through the Depository in the case of Book-entry Warrants) is received after
3:00 P.M., New York City time, on the Valuation Date, then the Exercise Date for
such Warrant will be the day on which such Warrant Certificate (or transfer of
such Warrant through the Depository in the case of Book-entry Warrants) is
received or, if such day is not a Business Day, the next succeeding Business
Day; provided, further, however, in the case of exercises by Euroclear
Participants, Euroclear must by facsimile to the Warrant Agent by 9:00 a.m., New
York City time, on the Valuation Date confirm that the Warrants will be received
by the Warrant Agent on such date, provided, that if such facsimile is received
after 9:00 a.m., New York City time, on the Valuation Date, the Company will be
entitled to direct the Warrant Agent to reject the related notice of exercise or
waive the requirement for timely delivery of such facsimile.
Subject to the provisions of the Warrant Agreement
relating to Extension Events, all Warrants for which the Warrant Agent has not
received a valid Exercise Notice at or prior to 3:00 P.M., New York City time,
on (i) the third Business Day immediately preceding the Expiration Date or (ii)
the Business Day immediately preceding any Delisting Date prior to the
Expiration Date, as the case may be, 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 as of such time been postponed as described below, shall be
automatically exercised as of such Expiration Date or Delisting Date, as the
case may be; without any requirement of delivery of an
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Exercise Notice to the Warrant Agent. The "Delisting Date" shall be the last
Business Day prior to the effective date on which the Warrants are delisted
from, or permanently suspended from trading (within the meaning of the
Securities Exchange Act of 1934 (the "Exchange Act") and the rules and
regulations of the Securities and Exchange Commission thereunder) on the AMEX,
and not accepted prior thereto or at the same time for trading pursuant to the
rules of another SRO that are filed with the Securities and Exchange Commission
under the Exchange Act. However, if the Company first receives notice of the
delisting or suspension of the Warrants on the same day on which such Warrants
are delisted or suspended, such day will be deemed a Delisting Date. The
Exercise Date for such Warrants will be the Expiration Date or any Delisting
Date, as the case may be, or, if such date is not a Business Day, the next
succeeding Business Day. The Warrant Agent will obtain the Spot Portfolio Value
(determined as of the first Business Day following such date, which will be the
Valuation Date for such Warrants except in the case of a postponed exercise
following the occurrence of an Extraordinary Event or an Exercise Limitation
Event) and will determine the Cash Settlement Value, if any, of such Warrants.
No fewer than 500 Warrants may be exercised by or on
behalf of any one Warrantholder at any one time, except that no such minimum
exercise amount shall apply in the case of automatic exercise on or following
the Expiration Date or on any Delisting Date or in the case of cancellation of
the Warrants as a result of an Extraordinary Event. A Warrantholder shall not
combine Definitive Warrants and Book-entry Warrants or Book-entry Warrants held
through more than one Participant to meet the 500 Warrant minimum exercise
requirement. With the exception of the Limit Option, an Exercise Notice shall be
unconditional. Except as provided in the Warrant Agreement, the Warrant Agent
shall be entitled, with no duty of inquiry, to rely conclusively on any Exercise
Notice received by it and on any representation of the exercising Warrantholder
contained therein.
If the Exercise Notice is not rejected as provided in
the Warrant Agreement, then the Warrant Agent or the Determination Agent, as the
case may be, will determine the Cash Settlement Value of the exercised Warrants
in accordance with the terms of the Warrant Agreement. Except in the case of
Warrants subject to automatic exercise, Warrants that upon exercise entitle the
holder thereof to receive an Alternative Settlement Amount in lieu of the Cash
Settlement Value and Warrants deemed worthless following an Extension Event, if
on any Valuation Date the Cash Settlement Value for any Warrants then exercised
would
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be zero, then in such case, the attempted exercise of such Warrants shall be
void and of no effect and the Warrants will be transferred by the Warrant Agent
back to the Participant that submitted them free on the records of the
Depository and, in either case such Warrantholder shall be permitted to
re-exercise such Warrants prior to the Expiration Date or any Delisting Date, as
the case may be.
Except in the case of Warrants subject to automatic
exercise, Warrants that upon exercise entitle the holder thereof to receive an
Alternative Settlement Amount and Warrants deemed worthless following an
Extension Event, if the Company has made adequate New York Clearing House or
next day 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 second New York
Business Day following a Valuation Date (the "Funding Date"), the Warrant Agent
will be responsible for making its payment available to each appropriate
Participant in the form of a cashier's check or an official bank check, or (in
the case of payments of at least $100,000) by wire transfer to a U.S. Dollar
account maintained by such Participant in the United States (at the
Participant's election as specified in the Exercise Notice) prior to the close
of business, on the first Business Day immediately succeeding such Funding Date
(the "Settlement Date"). Such payment shall be in an amount equal to the
aggregate Cash Settlement Value of such holder's exercised Warrants.
With respect to automatically exercised Warrants (other
than Warrants subject to postponed exercise following the occurrence of an
Extraordinary Event or an Exercise Limitation Event), if the Company has made
adequate New York Clearing House or next day 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 Automatic Funding Date, the Warrant Agent will be
responsible for making funds available to the Depository, against receipt of the
Global Warrant Certificate, prior to the close of business, on the Automatic
Funding Date. Such funds are to be in an amount equal to the aggregate Cash
Settlement Value of the Warrants subject to such automatic exercise.
Neither the Warrant Agent nor the Determination Agent
will be responsible for any losses resulting from a failure of a brokerage firm
or a Participant to properly exercise Warrants on behalf of a Warrantholder.
Subject to the provisions of Section 2.03(b)(ii) of the
Warrant Agreement, if the Company determines that an Extra-
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ordinary Event or Exercise Limitation Event has occurred and is continuing on
any Business Day that would otherwise be the Valuation Date with respect to an
exercise of Warrants (the "Applicable Business Day"), then the Cash Settlement
Value with respect to such exercise of Warrants shall be calculated on the basis
that the Valuation Date shall be the next Business Day following such Applicable
Business Day on which there is no Extraordinary Event or Exercise Limitation
Event; provided, that if the Valuation Date has not occurred on or prior to the
Expiration Date or any Delisting Date, then the Warrantholders will receive, in
lieu of the Cash Settlement Amount, the Alternative Settlement Amount, which
shall be calculated as if the Warrants had been cancelled on the Expiration Date
or such Delisting Date, as the case may be.
Upon the occurrence of an Extraordinary Event or an
Exercise Limitation Event, the Company shall use its best efforts to notify the
Warrant Agent and the Determination Agent promptly that an Extraordinary Event
or Exercise Limitation Event, as the case may be, has occurred and shall
promptly give notice to the Warrantholders by publication in a United States
newspaper with a national circulation (currently expected to be The Wall Street
Journal), that an Extraordinary Event or an Exercise Limitation Event has
occurred.
If the Company determines that an Extraordinary Event
or an Exercise Limitation Event has occurred and is continuing on the Expiration
Date or on any earlier Delisting Date, the Company shall so notify the Warrant
Agent and the Determination Agent, and the Cash Settlement Value with respect to
the exercised Warrants shall be equal to, and be calculated in the same manner
as, an Alternative Settlement Amount, in accordance with the Warrant Agreement
(treating the Expiration Date or such Delisting Date, as the case may be, as the
date on which the Warrants were cancelled).
If the Company determines that an Extraordinary Event
has occurred and is continuing, and if that Extraordinary Event is expected by
the Company, prior to the Expiration Date to continue, the Company may
immediately cancel the Warrants by notifying the Warrant Agent of such
cancellation (the date such notice is given being the "Cancellation Date"), and
each Warrant- holder's rights with respect to the Warrants and under the Warrant
Agreement shall thereupon cease; provided, that, subject to an automatic
extension of the term of the Warrants or to a determination that the Warrants
are worthless, each Warrant shall be exercised (even if such Warrant would not
otherwise be
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exercisable on such date because of the Limit Option) on the basis that the
Valuation Date for such Warrant shall be the Cancellation Date and each
Warrantholder shall have the right to receive, in lieu of the Cash Settlement
Value of such Warrant, the Alternative Settlement Amount, determined by the
Determination Agent.
An "Extraordinary Event" means any of the following
events:
(i) a suspension, material limitation or absence of
trading of all the Portfolio Securities;
(ii) the enactment, publication, decree or other promulgation
of any statute, regulation, rule or order of any court of any
jurisdiction, any administrative agency or any other governmental
authority that would make it unlawful for the Company to perform any
of its obligations under the Warrant Agreement or the Warrants or
that has had or is reasonably expected to have a material adverse
effect on the ability of (A) the Company to perform its obligations
under the Warrants or to hedge or modify the hedge of its position
with respect to the Portfolio; or (B) any affiliate of the Company to
hedge or modify the hedge of its position with respect to any hedging
transaction entered into with the Company in connection with the
Company's obligations under the Warrants; or
(iii) any outbreak or escalation of hostilities or other
national or international calamity or crises (including, without
limitation, natural calamities that in the opinion of the Company may
materially and adversely affect the economy of the United States or
the trading of securities generally on the AMEX, NYSE or NASDAQ, or
any other securities exchange) that had or is reasonably expected to
have a material adverse effect on the ability of (A) the Company to
perform its obligations under the Warrants or to modify the hedge of
its position with respect to the Portfolio; or (B) any affiliate of
the Company to hedge or modify the hedge of its position with respect
to any hedging transaction entered into with the Company in
connection with the Company's obligations under the Warrants.
For the purpose of determining whether an Extraordinary
Event has occurred: (1) a limitation on the hours or number of days of trading
will not constitute an Extraordinary Event if it results from an announced
change in the regular business hours of
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the AMEX, NYSE, NASDAQ or other securities exchange or which a Portfolio
Security is traded, as the case may be, and (2) an "absence of trading" on the
AMEX, NYSE, NASDAQ or other securities exchange or which a Portfolio Security is
traded, as the case may be, will not include any time when the AMEX, NYSE,
NASDAQ or such other securities exchange is closed for trading under ordinary
circumstances.
An "Exercise Limitation Event" means either of the
following events:
(i) a suspension, material limitation or absence of trading
on the AMEX, NYSE, NASDAQ or other securities exchange or which a
Portfolio Security is traded of 20% or more in number of the
Portfolio Securities; or
(ii) the suspension or material limitation on the AMEX or any
other major futures, options or securities market of trading in
futures or options contracts related to the Portfolio.
For the purposes of determining whether an Exercise
Limitation Event has occurred: (1) a limitation on the hours or number of days
of trading will not constitute an Exercise Limitation Event if it results from
an announced change in the regular business hours of the relevant exchange, (2)
a decision to permanently discontinue trading in the relevant futures or options
contract will not constitute an Exercise Limitation Event, (3) a suspension of
trading in a Portfolio Security or in a futures or options contract referred to
in clauses (i) and (ii) above, by reason of (x) a price change violating limits
set by the AMEX or other futures or securities market on which futures or
options contracts related to the Portfolio are traded or such other futures or
securities market or (y) an imbalance of orders relating to a Portfolio Security
or such contracts will constitute a suspension or material limitation of
trading, (4) an "absence of trading" on the AMEX, NYSE, NASDAQ or other
securities exchange or which a Portfolio Security is traded, as the case may be,
will not include any time when the AMEX, NYSE, NASDAQ or other securities
exchange or which a Portfolio Security is traded, as the case may be, is closed
for trading under ordinary circumstances and (5) the occurrence of an
Extraordinary Event described in clause (i) of the definition of Extraordinary
Event will not constitute, and will supersede the occurrence of, an Exercise
Limitation Event.
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The "Alternative Settlement Amount" is the amount
calculated using the formula set forth below:
Alternative Settlement Amount = Intrinsic Value +
(T/2 x A/B)
where
Intrinsic Value = the Cash Settlement Value of the Warrants
determined as described above but calculated
with a Spot Portfolio Value determined by the
Determination Agent which, subject to
approval by the Company (such approval not to
be unreasonably withheld), in the reasonable
opinion of the Determination Agent, fairly
reflects the value of the Portfolio
Securities on the Cancellation Date,
Expiration Date, Delisting Date or Early
Extended Expiration Date, whichever has given
rise to the payment of the Alternative
Settlement Amount;
T = U.S. $____, the maximum initial offering
price per Warrant;
A = the total number of days from but
excluding the Cancellation Date or
Delisting Date, whichever has given
rise to the payment of the Alternative
Settlement Amount for such Warrants,
to and including the Expiration Date;
and
B = the total number of days from, but
excluding the date on which sales of
the Warrants were initially confirmed,
to and including the Expiration Date.
Where an Expiration Date or an Early Extended
Expiration Date has given rise to the payment of the Alternative Settlement
Amount, such Alternative Settlement Amount shall equal
the Intrinsic Value.
For the purposes of determining "Intrinsic Value" in
the above formula, in the event that the Determination Agent and the Company are
required, but have not, after good faith consultation with each other and within
five days following the first day on which such Alternative Settlement Amount
may be
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calculated in accordance with the above formula, agreed upon a Spot Portfolio
Value which fairly reflects the value of the Portfolio Securities on the
Cancellation Date, Expiration Date, Delisting Date or Early Extended Expiration
Date, whichever gives rise to the payment of the Alternative Settlement Amount,
then the Determination 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 Determination 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
Determination Agent and the Warrantholders. Any such calculations will be made
available to a Warrantholder 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.
If the Company determines that an event described in
clause (i) of the definition of Exercise Limitation Event below has occurred and
is continuing on the Expiration Date (an "Extension Event") then the term of any
outstanding Warrants shall be automatically extended for a period of 30 days
(the thirtieth day following the Expiration Date being the "Extended Expiration
Date"), provided, however, that if the Cash Settlement Value or the Intrinsic
Value used in calculating the Alternative Settlement Amount, as the case may be,
of such Warrants would have been zero if the Warrants had been exercised such
that the Valuation Date for such exercise was the Measurement Date (as defined
below), then the term of the Warrants shall not be extended, the Warrants shall
be deemed to be worthless and the Company shall not be required to make any
payments in respect thereof. Any such automatic extension shall be deemed to
have been revoked and the Warrants shall expire on the earlier of (i) the next
Business Day on which there is no Extension Event (the "Early Extended
Expiration Date") and (ii) any Delisting Date occurring after the Expiration
Date. The Company will give the Warrant Agent prompt notice by telephone or
facsimile transmission and will give prompt notice to the Warrantholders by
publication in a United States newspaper with a national circulation (currently
expected to be The Wall Street Journal) of the occurrence of an Extension Event,
any Extended Expiration Date, any Early Extended Expiration Date and any
Delisting Date referred to in clause (ii) above, but in no event will such
notice to the Warrant Agent be given later than 9:30 A.M., New
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York City time, on the Business Day following the Expiration Day,
Extended Expiration Date, Early Extended Expiration Date or
Delisting Date, as applicable.
Any Warrants that expire on an Early Extended
Expiration Date, as described in clause (i) of the preceding paragraph, will be
deemed to be exercised on such Early Extended Expiration Date (even if such
Warrants would not otherwise be exercisable on such date because of the Limit
Option) on the basis that the Valuation Date for such exercise shall be such
Early Extended Expiration Date and the holder of each such Warrant will receive
an Alternative Settlement Amount, whether or not an Extraordinary Event or an
Exercise Limitation Event is continuing on such Early Extended Expiration Date.
Any Warrants that expire on a Delisting Date occurring on or after the
Expiration Date and prior to the Extended Expiration Date, as described in
clause (ii) of the preceding paragraph, shall be deemed to be worthless and the
Company shall not be required to make any payments in respect thereof.
If the term of the Warrants has been extended pursuant
to the second preceding paragraph but the Company determines that an Extension
Event is continuing when the Warrants expire on the Extended Expiration Date the
Warrants shall be deemed to be worthless and the Company shall not be required
to make any payments in respect thereof. The Company shall give prompt notice of
any such determination to the Warrant Agent by telephone or facsimile
transmission and to the Warrantholders by publication in a United States
newspaper with a national circulation (currently expected to be The Wall Street
Journal).
"Measurement Date" means the Business Day occurring
most recently prior to the Expiration Date on which none of the events described
in clause (i) of the definition of Exercise Limitation Event below had occurred
or was continuing.
With respect to all Warrants as to which the Valuation
Date has been postponed (other than Warrants that have been deemed worthless
following an Extension Event) or which have been cancelled as described above,
the Company shall make 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 second
Business Day following the date on which the Cash Settlement Value or
Alternative Settlement Amount, as the case may be, has been calculated (the
"Alternative Funding Date") New York Clearing House or next day funds in an
amount equal to, and for the payment of, the aggregate Cash Settlement Value or
Alternative
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Settlement Amount, as applicable, of such Warrants. Subject to such funds having
been made available as provided in the preceding sentence, the Warrant Agent
will thereafter be responsible for making its payment to the Depository prior to
the close of business on the Alternative Funding Date, in an amount equal to the
aggregate Cash Settlement Value or Alternative Settlement Amount (as applicable)
of such exercised Warrants (and in the case of cancellation as described above,
of all previously unexercised Warrants).
All exercises of Warrants (other than on automatic
exercise or following an Extension Event) are subject, at the Company's option,
to the limitation that not more than 750,000 Warrants in total may be exercised
on any Exercise Date and not more than 250,000 Warrants 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 Business Day would
otherwise, under the terms hereof, be the Exercise Date in respect of more than
750,000 Warrants, then at the Company's election (by giving notice thereof to
the Warrant Agent not later than 11:00 A.M., New York City time, on the Business
Day immediately following such Exercise Date), 750,000 of such Warrants shall be
deemed exercised on such Exercise Date (selected by the Warrant Agent on a pro
rata basis, but if, as a result of such pro rata selection, any Registered
Holders would be deemed to have exercised less than 500 Warrants, then the
Warrant Agent shall first select additional amounts of such holders' Warrants so
that no holder shall be deemed to have exercised less than 500 Warrants), and
the remainder of such Warrants (the "Remaining Warrants") shall be deemed
exercised on the following Business Day (notwithstanding the minimum exercise
requirement and subject to successive applications of this paragraph); 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 in
respect of which an Exercise Notice was delivered on a later Exercise Date. If
any beneficial owner of Warrants attempts to exercise more than 250,000 Warrants
on any Business Day individually or in concert, then at the Company's election
(as notified to the Warrant Agent by giving notice thereof to the Warrant Agent
not later than 11:00 A.M., New York City time, on the Business Day following
such Business Day), 250,000 of such Warrants shall be deemed exercised on such
Business Day and the remainder shall be deemed exercised on the following
Business Day (notwithstanding the minimum exercise requirement and subject to
successive applications of this paragraph). The date on which any Warrant is
deemed exercised under the preceding two sentences shall for
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all purposes of this Global Warrant Certificate be the "Exercise Date" in
respect of such Warrants.
Prior to due presentment for registration of transfer,
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 whatsoever, 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.
The Warrant Agent will, in accordance with the Warrant
Agreement, from time to time register the transfer of this Global Warrant
Certificate in its records (which may be maintained electronically) subject to
such reasonable regulations as the Company or the Warrant Agent may prescribe,
only to the Depository, to another 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, or accompanied by a written
instrument or instruments of transfer in form satisfactory to the Warrant Agent
and the Company, duly executed by the Registered Holder thereof or by the duly
appointed legal representative thereof, or by its duly authorized attorney. Such
signature shall be guaranteed by a bank or trust company with a correspondent
office in The City of New York or by a broker or a dealer, which is a member of
the National Association of Securities Dealers, Inc. (the "NASD") or by a member
of a national securities exchange. Upon any such registration of transfer, a new
Global Warrant Certificate shall be issued to the transferee and the surrendered
Global Warrant Certificate shall be cancelled by the Warrant Agent.
The Global Warrant Certificate may be transferred as
provided above when surrendered to the Warrant Agent's Window, Attention:
Transfer Department, or at the location of any successor Warrant Agent for
another Global Warrant Certificate of like tenor and representing a like number
of unexercised Warrants.
Except for Warrants subject to automatic exercise,
Warrants with respect to which payments of any Alternative Settlement Amount are
made and Warrants deemed worthless following an Extension Event, each
Warrantholder, in connection with any exercise of Warrants (including a
postponed exercise
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following an Extraordinary Event or an Exercise Limitation Event), will have the
option (the "Limit Option") to specify that such Warrants are not to be
exercised if the Spot Portfolio Value that would otherwise be used to determine
the Cash Settlement Value of such Warrants is three or more points lower than
the Limit Option Reference Index. A Warrantholder's election of the Limit Option
must be specified in the applicable Exercise Notice delivered to the Warrant
Agent. The Limit Option Reference Index will be the Spot Portfolio Value on the
relevant Exercise Date. If an Exercise Notice and the related Warrants are
received after 3:00 P.M., New York City time, on a given day, the applicable
Limit Option Reference Index will be determined as of the next day that is also
a Business Day.
Following receipt of an Exercise Notice and the related
Warrants subject to the Limit Option, the Warrant Agent shall obtain from the
Determination Agent the applicable Limit Option Reference Index and will
determine whether such Warrants will not be exercised because of the Limit
Option. Warrants that are not exercised will be treated as not having been
tendered for exercise and such Warrants will be redelivered free to the account
at the Depositary from which they were transferred to the Warrant Agent. To
exercise such Warrants, a Warrantholder will be required to cause an Exercise
Notice and the related Warrants to be submitted again to the Warrant Agent. In
the case of a postponed Valuation Date, the Limit Option will continue to apply
once elected by a Warrantholder in connection with an exercise of Warrants on
the basis of the Limit Option Reference Index as initially determined for such
Warrants, except when such Valuation Date is postponed until the Expiration
Date, any Delisting Date or the Cancellation Date or following an Extension
Event. Such Warrants will either (i) be exercised on a delayed basis if the
applicable Spot Portfolio Value on the postponed Valuation Date is not three or
more points less than the Limit Option Reference Index or (ii) be excluded from
being exercised if, on any applicable postponed Valuation Date, the applicable
Spot Portfolio Value is three or more points less than the Limit Option
Reference Index. In connection with any exercise of 1,000 or more Warrants, a
Warrantholder may elect to subject the exercise of only a portion of such
Warrants to the Limit Option, provided that the number of Warrants subject to
the Limit Option and the number of Warrants not subject to the Limit Option
shall in each case not be less than 500.
Capitalized terms included herein but not defined
herein have the meanings assigned thereto in the Warrant
Agreement.
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<PAGE>
As used herein, "Business Day" means any day other than
a Saturday or a Sunday or a day on which either the American Stock Exchange,
Inc. is not open for securities trading or commercial banks in New York City are
required or authorized by law or executive order to remain closed. References in
this Global Certificate to "U.S. Dollars", "U.S.$" or "$" are to the lawful
currency of the United States of America.
The Warrant Agreement and the terms of the Warrants are
subject to amendment, as provided in the Warrant Agreement.
This Global Warrant Certificate shall be governed by,
and interpreted in accordance with, the laws of the State of New
York.
IN WITNESS WHEREOF, The Bear Stearns Companies Inc. has
caused this instrument to be duly executed.
Dated: , 199_ THE BEAR STEARNS COMPANIES INC.
By_____________________
Name:
Title:
Attest:
By___________________
Name:
Title:
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Countersigned as of the date above written:
CHEMICAL BANK
as Warrant Agent
By_______________________
Authorized Officer
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<PAGE>
Schedule A
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Number of Warrants Represented by
Date this Global Warrant Certificate
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<PAGE>
<PAGE>
EXHIBIT A-2
EXERCISE NOTICE
For Warrants Represented by the Global Warrant Certificate
CUSIP No.:
Chemical Bank/Geoserve
Corporate Trust Securities Windows
55 Water Street
Room 234
North Building
New York, New York 10041
Attention: Tender Department
1. We refer to the Warrant Agreement dated as of
February __, 1996 (the "Warrant Agreement"), among The Bear Stearns Companies
Inc. (the "Company"), Chemical Bank, as Warrant Agent (the "Warrant Agent"), and
Bear, Stearns & Co. Inc., as Determination Agent (the "Determination Agent"). On
behalf of certain beneficial owners, each of whom we certify is exercising no
fewer than 500 Warrants that are covered by this Exercise Notice and whose
Warrants have been, or will be, transferred to the Warrant Agent in accordance
with the provisions of the Representations Letter relating to the Warrants, we
hereby irrevocably exercise ______ Warrants (the "Tendered Warrants"). We hereby
acknowledge that the Warrants being exercised and this Exercise Notice must be
received by you by 3:00 P.M., New York City time, on a Business Day in order for
the Valuation Date for the Tendered Warrants to be the Business Day following
such Business Day and that, if the Warrants being exercised and this Exercise
Notice are received by you after 3:00 P.M., New York City time, on a Business
Day (or, in the case of Warrants held through CEDEL or Euroclear, if the
Warrants are not received by 3:00 p.m., New York City time, on the first
Business Day following such Business Day) the Valuation Date of the Tendered
Warrants shall be the Business Day next succeeding such Business Day, in each
case subject to certain provisions of the Warrant Agreement.
2. If you determine that this Exercise Notice has not
been duly completed or is not in proper form, this Exercise Notice will be void
and of no effect and will be deemed not to have been delivered.
3. We hereby direct you to make payment to us of
amounts payable to our clients as a result of the exercise of the
Warrants hereunder as follows:
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By cashier's check or an official bank check;
Bywire transfer to the following U.S. Dollar
bank account in the United States:
(Minimum payments of $100,000 only)
Bank: __________________________________
Account No.: ___________________________
ABA Routing No.: _______________________
Reference: _____________________________
4. [ALL/PART OF] the Tendered Warrants covered hereby
[ARE/ARE NOT] subject to the Limit Option:
Number of Warrants subject to the Limit Option
(the "Contingently Tendered Warrants"): ____________
5. Each client on whose behalf we are exercising
Warrants pursuant to this Exercise Notice has certified to us that it is not
exercising in excess of 250,000 Warrants on behalf of any beneficial owner or in
concert with any other beneficial owner on the date of this Exercise Notice.
6. Each client on whose behalf we are exercising
Warrants pursuant to this Exercise Notice has certified that the number of
Contingency Tendered Warrants and the number of Warrants not subject to the
Limit Option shall in each case not be less than 500; provided that, such client
has not combined Definitive Warrants and Book-entry Warrants to meet such
requirement.
FOR PARTICIPANTS ONLY
7. 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.
-2-
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<PAGE>
Capitalized terms used but not defined herein have the
meanings assigned thereto in the Warrant Agreement.
Dated: , 19
NAME OF DEPOSITORY
PARTICIPANT
Participant Number
NAME OF EUROCLEAR
PARTICIPANT
Participant Number
NAME OF CEDEL
PARTICIPANT
Participant Number
By___________________________
Authorized Signature
Address:
Telephone: ( )
-3-
<PAGE>
<PAGE>
EXHIBIT B
CONFIRMATION OF EXERCISE
For Warrants Represented by Warrant Certificates
We hereby confirm receipt of your Exercise Notice with
respect to _____ Warrants (the "Exercised Warrants") and the related Warrant
Certificates, which we have found to be duly completed and in proper form. The
Valuation Date of the Exercised Warrants was the close of business on
________________, 19__.
We hereby confirm that the aggregate Cash Settlement
Value of the Exercised Warrants is U.S.$_______ ($________ per Warrant), which
will be made available to you in the form of a cashier's check or an official
bank check, or (in the case of payments of at least $100,000) by wire transfer
to the U.S. Dollar bank account specified in your irrevocable Exercise Notice,
for payment on the third Business Day following the Valuation Date for such
Warrants (or, if such Valuation Date is not a Business Day, on the third
Business Day following the Business Day next succeeding 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 February __, 1996, among The Bear Stearns Companies Inc.,
Chemical Bank, and Bear, Stearns & Co. Inc.
Dated: , 19
CHEMICAL BANK, as Warrant
Agent,
By______________________________
Authorized Signature
<PAGE>
<PAGE>
EXHIBIT B-1
NOTICE OF REJECTION
of
Exercise Notice
for
Warrants Represented by Warrant Certificates
You are hereby notified that [the Exercise Notice
delivered by you was determined by us not to have been duly completed in proper
form] [we did not receive from Euroclear a Euroclear confirmation that proper
delivery of the Warrants to which the Exercise Notice delivered by you relates
would be made on a timely basis, as set forth in the Warrant Agreement, dated as
of February __, 1996 among The Bear Stearns Companies Inc., Chemical Bank and
Bear, Stearns & Co., Inc.]. Accordingly, we have rejected your Exercise Notice
as being unsatisfactory as to form.
Capitalized terms used but not defined herein have the
meanings assigned thereto in the Warrant Agreement.
Dated: , 19
CHEMICAL BANK, as Warrant
Agent
By_________________________
Authorized Signature
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EXHIBIT B-2
CONFIRMATION OF EXERCISE
For Warrants Represented by the Global Warrant Certificate
Name of Depository Participant
Name of Euroclear Participant
Name of CEDEL Participant
Address
We hereby confirm receipt of your Exercise Notice with
respect to Warrants (the "Exercised Warrants") which were transferred by you (or
on your behalf) to our DTC Participant Account No._____________. Such Notice we
have found to be duly completed and in proper form. The Valuation Date of the
Exercised Warrants was the close of business on ______________, 19__.
[As set forth in your Exercise Notice, none of the
Warrants covered thereby is subject to the Limit Option. Accordingly, for
purposes hereof, all such Warrants shall constitute Exercised Warrants, which
number we hereby confirm to be _______________________.] [Your Exercise Notice
stated that the Warrants covered thereby are subject to the Limit Option. The
applicable Limit Option Reference Index for such Warrants is ___________________
and the Spot Portfolio Value for the date that would otherwise be the Valuation
Date for such Warrants is _______________. Such Spot Portfolio Value is not
lower than such Limit Option Reference Index by three or more points.
Accordingly, for purposes hereof, all such Warrants shall constitute Exercised
Warrants. We hereby confirm the number of such Exercised Warrants to be
_______________.]
We hereby confirm that the aggregate Cash Settlement
Value of the Exercised Warrants is U.S.$____________ (U.S.$______ per Warrant),
which will be made available to you in the form of a cashier's check or an
official bank check or by wire transfer to the bank account designated in your
irrevocable Exercise Notice for payment on the third Business Day following the
Valuation Date for such Warrants.
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<PAGE>
Capitalized terms included herein but not defined have
the meanings assigned thereto in the Warrant Agreement dated as of February __,
1996, among The Bear Stearns Companies Inc., Chemical Bank, as Warrant Agent,
and Bear, Stearns & Co. Inc., as Determination Agent.
Dated: , 19
CHEMICAL BANK, as Warrant
Agent
By_________________________
Authorized Signature
-2-
<PAGE>
<PAGE>
EXHIBIT B-3
NOTICE OF REJECTION
of
Exercise Notice
for
Warrants Represented
by the
Global Warrant Certificate
Name of Depository Participant
Name of Euroclear Participant
Name of CEDEL Participant
Address
You are hereby notified that [the Exercise Notice
delivered by you was determined by us not to have been duly completed in proper
form]. [Such Warrants were not transferred to our DTC Participant Account No.
___________.] [We did not receive from Euroclear a Euroclear Confirmation that
proper delivery of the Warrants to which the Exercise Notice delivered by you
relates would be made on a timely basis, as set forth in the Warrant Agreement,
dated as of February __, 1996, among The Bear Stearns Companies, Inc., Chemical
Bank, as Warrant Agent, and Bear, Stearns & Co. Inc.] Accordingly, we have
rejected your Exercise Notice as being unsatisfactory as to form.
Capitalized terms used but not defined herein have the
meanings assigned thereto in the Warrant Agreement.
Dated: , 19
CHEMICAL BANK, as Warrant
Agent
By_________________________
Authorized Signature
<PAGE>
<PAGE>
EXHIBIT C-1
NOTICE OF REJECTION
RELATING TO LIMIT OPTION
For Warrants Represented
by Warrant Certificates
We refer to your Exercise Notice dated _________, 199_,
with respect to Warrants that were subject to the Limit Option. The applicable
Limit Option Reference Index for such Warrants is _________________ and the Spot
Portfolio Value for the date that would otherwise be the Valuation Date for such
Warrants is ______________. Such Spot Portfolio Value is lower than the Limit
Option Reference Index on the Exercise Date (or if such date was not an Business
Day, on the Business Day prior to the Exercise Date for such Warrants) by three
points or more. Accordingly, we have rejected such Exercise Notice pursuant to
your exercise of the Limit Option.
Capitalized terms included herein but not defined have
the meanings assigned thereto in the Warrant Agreement dated as
of February __, 1996, among The Bear Stearns Companies Inc.,
Chemical Bank and Bear, Stearns & Co. Inc.
Dated: , 19
CHEMICAL BANK, as Warrant
Agent
By_________________________
Authorized Signature
<PAGE>
<PAGE>
EXHIBIT C-2
NOTICE OF REJECTION
RELATING TO LIMIT OPTION
For Warrants Represented
by the Global Warrant Certificate
Name of Depository Participant
Address
We refer to your Exercise Notice dated _________, 199_,
with respect to Warrants that were subject to the Limit Option. The applicable
Limit Option Reference Index for such Warrants is ____________ and the Spot
Portfolio Value for the date that would otherwise be the Valuation Date for such
Warrants is ___________. Such Spot Portfolio Value is lower than the Limit
Option Reference Index on the Exercise Date (or if such date was not an Business
Day, on the Business Day prior to the Exercise Date for such Warrants) by three
points or more. Accordingly, we have rejected such Exercise Notice pursuant to
your exercise of the Limit Option.
Capitalized terms included herein but not defined have
the meanings assigned thereto in the Warrant Agreement dated as
of February __, 1996, among The Bear Stearns Companies Inc.,
Chemical Bank, and Bear, Stearns & Co. Inc.
Dated: , 199_
CHEMICAL BANK, as Warrant
Agent
By_________________________
Authorized Signature
