SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
---------------
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
ADVANTICA RESTAURANT GROUP, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 13-3487402
(State of Incorporation or Organization) (I.R.S. Employer Identification No.)
203 EAST MAIN ST., SPARTANBURG,SC 29319-9966
(Address of Principal Executive Offices) (ZIP Code)
If this form relates to the If this form relates to the
registration of a class of securities registration of a class of
pursuant to Section 12(b) of the securities pursuant to
Exchange Act and is effective Section 12(g) of the
pursuant to General Instruction A.(c), Exchange Act and is
please indicate by check mark. effective pursuant to
------- General Instruction A.(d),
please indicate by check
mark. X
-------
Securities Act registration statement file number to which this
form relates: ___________________ (if applicable)
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
NONE NONE
- -------------------------------- -------------------------------
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock Warrants expiring January 7, 2005
- -------------------------------------------------------------------------------
(Title of Class)
- -------------------------------------------------------------------------------
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ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
Pursuant to the Amended Joint Plan (as defined and described below),
and as of January 7, 1998, the Amended Joint Plan's effective date (the
"Effective Date"), the Registrant (formerly known as Flagstar Companies, Inc.)
will issue warrants (the "Warrants") to purchase in the aggregate, 4,000,000
shares of common stock of the Registrant, par value $.01 per share (the "Common
Stock").
The Warrants were authorized and will be issued as of the Effective
Date pursuant to the Amended Joint Plan of Reorganization (the "Amended Joint
Plan") of the Registrant and Flagstar Corporation, a wholly-owned subsidiary of
the Registrant, dated July 11, 1997 (amended November 7, 1997) and confirmed by
order of the United States Bankruptcy Court for the District of South Carolina
entered on November 12, 1997, pursuant to Chapter 11 of Title 11 of the United
States Code.
The Warrants will be issued pursuant to a Warrant Agreement (the
"Warrant Agreement") between the Registrant and Continental Stock Transfer &
Trust Company, as Warrant Agent (the "Warrant Agent"). Each Warrant, when
exercised, will entitle the holder thereof to purchase one fully paid and
non-assessable share of the Common Stock (such shares, the "Warrant Shares") at
an exercise price of $14.60 per share (the "Exercise Price"). The Exercise Price
and the number of Warrant Shares are both subject to adjustment in certain cases
referred to below.
The Warrants will be exercisable on or after the Effective Date and
prior to 5:00 p.m., Eastern Time, on January 7, 2005, (the "Expiration Date").
The holders of the Warrants will have no right to vote on matters
submitted to the stockholders of the Registrant and will have no right to
receive dividends. The holders of the Warrants will not be entitled to share in
the assets of the Registrant in the event of the liquidation, dissolution or
winding up of the Registrant. In the event a subsequent bankruptcy or
reorganization is commenced by or against the Registrant, a bankruptcy court may
hold that unexercised Warrants are executory contracts which may be subject to
rejection by the Registrant with approval of the bankruptcy court, and the
holders of the Warrants may, even if sufficient funds are available, receive
nothing or a lesser amount as a result of any such bankruptcy case than they
would be entitled to if they had exercised their Warrants prior to the
commencement of any such case.
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ADJUSTMENTS
The number of Warrant Shares purchasable upon exercise of Warrants and
the Exercise Price will be subject to adjustment in certain events including:
(i) the issuance by the Registrant of dividends (and other distributions) on its
Common Stock payable in the Common Stock, (ii) subdivisions, combinations and
reclassifications of the Common Stock, (iii) the issuance to all holders of the
Common Stock of rights, options or warrants entitling them to subscribe for the
Common Stock or securities convertible into, or exchangeable or exercisable for,
the Common Stock within sixty (60) days after the record date for such issuance
of rights, options or warrants at an offering price (or with an initial
conversion, exchange or exercise price plus such offering price) which is less
than the current market price per share (as defined in the Warrant Agreement) of
the Common Stock, (iv) the distribution to all holders of the Common Stock of
any of the Registrant's assets (including cash), debt securities, preferred
stock or any rights or warrants to purchase any such securities, (excluding
those rights and warrants referred to in clause (iii) above), (v) the issuance
of shares of the Common Stock for a consideration per share less than the
current market price per share (excluding securities issued in transactions
referred to in clauses (i) through (iv) above), and (vi) the issuance of
securities convertible into or for the Common Stock for a conversion or exchange
price (plus the amount per share of Common Stock paid for such security) that is
less than the current market price for a share of the Common Stock (excluding
securities issued in transactions referred to in clauses (iii) or (iv) above).
The events described in clauses (v) and (vi) above are subject to certain
exceptions described in the Warrant Agreement including, without limitation, (A)
certain bona fide public offerings and private placements to persons that are
not affiliates of the Registrant and (B) the Common Stock (and options
exercisable therefor) issued to the Registrant's employees and directors under
bona fide employee benefit plans in an aggregate amount not to exceed 10% of the
Common Stock outstanding at the time of issuance.
No adjustment in the Exercise Price will be required unless such
adjustment would require an increase or decrease of at least one percent (1%) in
the Exercise Price; provided, however, that any adjustment that is not made will
be carried forward and taken into account in any subsequent adjustment. In
addition, the Registrant may at any time reduce the Exercise Price to any amount
(but not less than the par value of the Common Stock) for any period of time
(but not less than twenty (20) business days) deemed appropriate by the Board of
Directors of the Registrant.
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In the case of certain consolidations or mergers of the Registrant, or
the sale of all or substantially all of the assets of the Registrant to another
corporation, each Warrant will thereafter be exercisable for the right to
receive the kind and amount of shares of stock or other securities or property
to which such holder would have been entitled as a result of such consolidation,
merger or sale had the Warrants been exercised immediately prior thereto.
AMENDMENT
From time to time, the Registrant and the Warrant Agent, without the
consent of the holders of the Warrants, may amend or supplement the Warrant
Agreement for certain purposes, including curing defects or inconsistencies or
making any change that does not materially adversely affect the rights of any
holder. Any amendment or supplement to the Warrant Agreement that has a material
adverse effect on the interests of the holders of the Warrants will require the
written consent of the holders of a majority of the then outstanding Warrants
(excluding the Warrants held by the Registrant or any of its Affiliates). The
consent of each holder of the Warrants affected will be required for any
amendment pursuant to which (a) the Exercise Price would be increased, (b) the
time to exercise the Warrants would be shortened or (c) the number the Warrant
Shares purchasable upon exercise of the Warrants would be decreased (other than
pursuant to adjustments provided in the Warrant Agreement).
ITEM 2. EXHIBITS.
Listed below are all Exhibits filed as a part of this registration
statement. Certain of the Exhibits to this registration statement, indicated by
an asterisk, are hereby incorporated by reference to other documents on file
with the Commission, to be a part hereof as of their respective dates.
Exhibit Number Description
*2.1 Amended Joint Plan of Reorganization of the
Registrant and Flagstar Corporation
(incorporated by reference to Exhibit 2.1 of
the Form 8-K dated November 12, 1997).
*3.1 Restated Certificate of Incorporation of
Advantica Restaurant Group, Inc., dated
January 7, 1998, (incorporated by reference
to Exhibit 3.1 to Form 8-A, filed January 7,
1998, with respect to
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Registrant's Common Stock).
*3.2 Bylaws of Advantica Restaurant Group, Inc.,
as amended through January 7, 1998,
(incorporated by reference to Exhibit 3.2 to
Form 8-A, filed January 7, 1998, with
respect to Registrant's Common Stock).
10.1 Warrant Agreement, dated January 7, 1998,
between Advantica Restaurant Group, Inc.,
and Continental Stock Transfer & Trust
Company.
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.
ADVANTICA RESTAURANT GROUP, INC.
Date: January 7, 1998 By: /s/Rhonda J. Parish
----------------------------------------
Rhonda J. Parish
Senior Vice President
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EXECUTION COPY
ADVANTICA RESTAURANT GROUP, INC.
and
CONTINENTAL STOCK TRANSFER
& TRUST COMPANY
AS
WARRANT AGENT
WARRANT AGREEMENT
Dated as of January 7, 1998
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INDEX
Section 1. Appointment of Warrant Agent........................................1
Section 2. Form of Warrant Certificates........................................1
Section 3. Signature and Registration..........................................2
Section 4. Transfer, Split Up, Combination and Exchange of Warrant
Certificates; Mutilated, Destroyed, Lost or Stolen Warrant
Certificates........................................................2
Section 5. Subsequent Issue of Warrant Certificates............................3
Section 6. Exercise of Warrants; Exercise Price; Expiration Date...............3
Section 7. Cancellation and Destruction of Warrant Certificates................4
Section 8. Reservation and Availability of Common Stock........................4
Section 9. Common Stock Record Date............................................5
Section 10. Adjustment of Exercise Price, Number of Shares or Number of
Warrants...........................................................5
Section 11. Certification of Adjusted Exercise Price and Number of Shares
Issuable..........................................................12
Section 12. Consolidation, Merger or Sale of Assets...........................13
Section 13. Fractional Shares.................................................13
Section 14. Rights of Action..................................................14
Section 15. Agreements, Representations and Warranties and Indemnity
Obligations of Warrant Certificate Holders........................14
Section 16. Warrant Agent.....................................................14
Section 17. Change of Warrant Agent...........................................15
Section 18. Issuance of New Warrant Certificates..............................16
Section 19. Notice of Proposed Actions........................................16
Section 20. Reports...........................................................17
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Section 21. Notices to Company, Warrant Agent and Warrant Holders.............17
Section 22. Supplements and Amendments........................................18
Section 23. Successors........................................................18
Section 24. Benefits of This Agreement........................................18
Section 25. New York Contract.................................................18
Section 26. Counterparts......................................................19
Section 27. Descriptive Headings..............................................19
EXHIBIT A: Form of Warrant Certificate......................................A-1
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WARRANT AGREEMENT
This Warrant Agreement, dated as of January 7, 1998 (this "Warrant
Agreement" or "Agreement"), is between ADVANTICA RESTAURANT GROUP, INC., a
Delaware corporation (the "Company"), and CONTINENTAL STOCK TRANSFER & TRUST
COMPANY (the "Warrant Agent").
W I T N E S S E T H:
WHEREAS, pursuant to Flagstar Companies, Inc.'s and Flagstar Corporation's
Amended Joint Plan of Reorganization dated as of July 11, 1997 (amended November
7, 1997) confirmed by order of the United States Bankruptcy Court for the
District of South Carolina entered November 12, 1997, the Company proposes, as
of the date hereof and in conjunction with the emergence of the Company from the
protection provided by Chapter 11 of Title 11 of the United States Code, to
issue warrants as hereinafter described (the "Warrants") to purchase up to an
aggregate of 4,000,000 shares, subject to adjustment as hereinafter provided
(the "Warrant Shares"), of the Company's common stock, par value $.01 per share
(the "Common Stock"), each Warrant entitling the holder thereof to purchase one
share of Common Stock, upon the terms and subject to the conditions hereinafter
set forth;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
SECTION 1. APPOINTMENT OF WARRANT AGENT. The Company hereby appoints the
Warrant Agent to act as agent for the Company in accordance with the terms and
conditions hereinafter set forth in this Agreement and the Warrant Agent hereby
accepts such appointment. The Company may from time to time appoint such
co-warrant agents as it may deem necessary or desirable.
SECTION 2. FORM OF WARRANT CERTIFICATES. The Warrant Certificates (the
"Warrant Certificates") (and the forms of election to purchase shares and
assignment to be attached on the reverse thereof) shall be substantially of the
tenor and purport recited in Exhibit A hereto and may have such letters, numbers
or other marks of identification or designation and such legends, summaries or
endorsements printed, lithographed or engraved thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Warrant
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 from time to time be listed, or to conform to
usage. Subject to the provisions of Section 18 hereof, the Warrant Certificates
shall be dated as of the date of issuance thereof by the Company, either upon
initial issuance or upon transfer or exchange, and each Warrant shall entitle
the holder thereof to purchase one share of Common Stock each at the price per
share set forth therein (the "Exercise Price"), but the number of such shares
and the Exercise Price per share shall be subject to adjustments as provided
herein.
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SECTION 3. SIGNATURE AND REGISTRATION. The Warrant Certificates shall be
executed on behalf of the Company by the Chief Executive Officer or any Vice
President, by facsimile signature and have affixed thereto a facsimile of the
Company's seal which shall be attested by the Secretary or an Assistant
Secretary of the Company by facsimile signature. The Warrant Certificates shall
be manually countersigned by the Warrant Agent and shall not be valid for any
purpose unless so countersigned. In case any officer of the Company who shall
have signed any of the Warrant Certificates shall cease to be such officer of
the Company before countersignature by the Warrant Agent and issuance and
delivery by the Company, such Warrant Certificates, nevertheless, may be
countersigned by the Warrant Agent and issued and delivered with the same force
and effect as though the person who signed such Warrant Certificates had not
ceased to be such officer of the Company and any Warrant Certificate may be
signed on behalf of the Company by any person who, at the actual date of the
execution of such Warrant Certificate, shall be a proper officer of the Company
to sign each Warrant Certificate, although at the date of the execution of this
Warrant Agreement any such person was not such an officer.
The Warrant Agent will keep or cause to be kept, at its principal place
of business, books for registration and transfer of the Warrant Certificates
issued hereunder. Such books shall show the names and addresses of the
respective holders of the Warrant Certificates, the number of Warrants evidenced
on its face by each of the Warrant Certificates and the date of each of the
Warrant Certificates.
SECTION 4. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF WARRANT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN WARRANT CERTIFICATES. Subject
to the provisions of Section 13 hereof, any Warrant Certificate, with or without
other Warrant Certificates, may be transferred, split up, combined or exchanged
for another Warrant Certificate or Warrant Certificates, entitling the
registered holder to purchase a like number of shares of Common Stock as the
Warrant Certificate or Warrant Certificates surrendered then entitled such
holder to purchase. Subject to any restriction on transferability that may
appear on a Warrant Certificate in accordance with the terms hereof or any
"stop-transfer" instructions issued by the Company, any registered holder
desiring to register the transfer of, or to split up, combine or exchange any
Warrant Certificate shall make such request in writing delivered to the Warrant
Agent, and shall surrender such Warrant Certificate or Warrant Certificates at
the stock transfer office of the Warrant Agent. Thereupon the Warrant Agent
shall deliver to the person entitled thereto a Warrant Certificate or Warrant
Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or exchange of
Warrant Certificates.
Upon receipt by the Company and the Warrant Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Warrant Certificate, and, in case of loss, theft or destruction, of indemnity
or security reasonably satisfactory to them, and reimbursement to the Company
and the Warrant Agent of all reasonable
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expenses incidental thereto, and upon surrender and cancellation of the Warrant
Certificate if mutilated, the Company will make and deliver a new Warrant
Certificate of like tenor to the Warrant Agent for delivery to the registered
owner in lieu of the Warrant Certificate so lost, stolen, destroyed or
mutilated.
SECTION 5. SUBSEQUENT ISSUE OF WARRANT CERTIFICATES. Subsequent to
their original issuance, no Warrant Certificates shall be issued except (a)
Warrant Certificates issued upon any transfer, combination, split up or exchange
of Warrants pursuant to Section 4 hereof, (b) Warrant Certificates issued in
replacement of mutilated, destroyed, lost or stolen Warrant Certificates
pursuant to Section 4 hereof, (c) Warrant Certificates issued pursuant to
Section 6 hereof upon the partial exercise of any Warrant Certificate to
evidence the unexercised portion of such Warrant Certificate and (d) Warrant
Certificates issued pursuant to Section 18 hereof. Nothing contained in this
Agreement shall prohibit the Company from issuing from time to time additional
Warrants, each representing the right to purchase Common Stock upon the terms
and subject to the conditions set forth herein, or other warrants, options or
rights to purchase securities issued by the Company.
SECTION 6. EXERCISE OF WARRANTS; EXERCISE PRICE; EXPIRATION DATE. (a)
The registered holder of any Warrant Certificate may exercise the Warrants
evidenced thereby in whole or in part at any time upon surrender of the Warrant
Certificates, with the form of election to purchase on the reverse side thereof
duly executed, to the Warrant Agent at the stock transfer office of the Warrant
Agent in New York, New York, together with payment of the Exercise Price for
each share of Common Stock as to which the Warrants are exercised, at or prior
to 5:00 p.m. (Eastern Time) on January 7, 2005 (the "Expiration Date"), which is
the date on which the right to exercise the Warrants will expire.
(b) The Exercise Price for each Warrant Share purchased pursuant to the
exercise of a Warrant shall initially be $14.60 and shall be subject to
adjustment as provided in Section 10 hereof and shall be payable (i) in the form
of cash or by certified or official bank check payable to the order of the
Company, (ii) by tendering additional Warrants having a fair market value (equal
to the closing sales price on the day prior to the date of such tender on the
principal trading market therefor, if any, and otherwise as determined in good
faith by the Board of Directors of the Company) equal to the Exercise Price or
(iii) any combination of cash or Warrants.
(c) Upon receipt of a Warrant Certificate, with the form of election to
purchase duly executed, accompanied by payment of the Exercise Price for the
shares to be purchased and an amount equal to any applicable transfer tax, the
Warrant Agent shall thereupon promptly (i) requisition from any transfer agent
of the Common Stock of the Company certificates for the number of whole shares
of Common Stock to be purchased and, when appropriate, for the number of
fractional shares to be sold by the Warrant Agent, and the Company hereby
irrevocably authorizes its transfer agent to comply with all such requests, (ii)
when appropriate, requisition from the Company the amount of cash to be paid in
lieu of issuance of fractional shares, and (iii) promptly after
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receipt of such certificates cause the same to be delivered to or upon the order
of the registered holder of such Warrant Certificate, registered in such name or
names as may be designated by such holder, and, when appropriate, promptly after
receipt deliver such cash to or upon the order of the registered holder of such
Warrant Certificate.
(d) In case the registered holder of any Warrant Certificate shall
exercise less than all the Warrants evidenced thereby, a new Warrant Certificate
evidencing Warrants equivalent to the Warrants remaining unexercised shall be
issued by the Warrant Agent to the registered holder of such Warrant Certificate
or to his duly authorized assigns, subject to the provisions of Section 13
hereof.
(e) The Warrant Agent shall account promptly to the Company with
respect to any Warrant exercise and concurrently pay to the Company all monies
received for the purchase of the Common Stock through the exercise of Warrants.
SECTION 7. CANCELLATION AND DESTRUCTION OF WARRANT CERTIFICATES. All
Warrant Certificates surrendered for the purpose of exercise, exchange,
substitution or registration of transfer shall, if surrendered to the Company or
to any of its agents, be delivered to the Warrant Agent for cancellation, or if
surrendered to the Warrant Agent shall be cancelled by it, and no Warrant
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Warrant Agreement. The Company shall deliver to
the Warrant Agent for cancellation and retirement, and the Warrant Agent shall
so cancel and retire, any other Warrant Certificate purchased or acquired by the
Company otherwise than upon the exercise, exchange, substitution or registration
of transfer thereof. The Warrant Agent shall deliver all cancelled Warrant
Certificates to the Company or shall, at the written request of the Company,
destroy such cancelled Warrant Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
SECTION 8. RESERVATION AND AVAILABILITY OF COMMON STOCK. The Company
covenants and agrees that it will cause to be reserved and kept available, out
of its authorized and unissued Common Stock or its authorized and issued Common
Stock held in its treasury, the number of shares of Common Stock that will be
sufficient to permit the exercise in full of all outstanding Warrants.
For so long as the Common Stock issuable upon the exercise of Warrants
may be listed on any national securities exchange or on the NASDAQ National
Market, the Company shall use its best efforts to cause all shares reserved for
such issuance to be listed upon official notice of issuance upon such exercise.
The Company covenants and agrees that it will take all such action as
may be necessary to insure that all Common Stock delivered upon exercise of
Warrants shall, at the time of delivery of the certificates for such shares
(subject to payment of the Exercise Price), be duly and validly authorized and
issued and fully paid and nonassessable shares.
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The Company further covenants and agrees that it will pay when due and
payable, any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Warrant Certificates or of
any certificates of Common Stock shares upon the exercise of Warrants. The
Company shall not, however, be required to pay any transfer tax which may be
payable in respect of any transfer involved in the transfer or delivery of
Warrant Certificates or the issuance or delivery of certificates for Common
Stock in a name other than that of the registered holder of the Warrant
Certificate evidencing Warrants surrendered for exercise or to issue or deliver
any certificates for Common Stock upon the exercise of any Warrants until any
such tax shall have been paid (any such tax being payable by the holder of such
Warrant Certificate at the time of surrender) or until it has been established
to the Company's satisfaction that no such tax is due.
SECTION 9. COMMON STOCK RECORD DATE. Each person in whose name any
certificate for Common Stock is issued upon the exercise of Warrants shall for
all purposes be deemed to have become the holder of record of the Common Stock
represented thereby on, and such certificate shall be dated, the date upon which
the Warrant Certificate evidencing such Warrants was duly surrendered and
payment of the Exercise Price (and any applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the Common Stock transfer books of the Company are closed, such person
shall be deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding business day on which the Common
Stock transfer books of the Company are open.
PRIOR TO THE EXERCISE OF THE WARRANTS EVIDENCED THEREBY, THE HOLDER OF
A WARRANT CERTIFICATE SHALL NOT BE ENTITLED TO ANY RIGHTS OF A STOCKHOLDER OF
THE COMPANY WITH RESPECT TO SHARES FOR WHICH THE WARRANTS SHALL BE EXERCISABLE,
INCLUDING, WITHOUT LIMITATION, THE RIGHT TO VOTE, TO RECEIVE DIVIDENDS OR OTHER
DISTRIBUTIONS OR TO EXERCISE ANY PREEMPTIVE RIGHTS, AND SHALL NOT BE ENTITLED TO
RECEIVE ANY NOTICE OF ANY PROCEEDINGS OF THE COMPANY, EXCEPT AS PROVIDED HEREIN.
SECTION 10. ADJUSTMENT OF EXERCISE PRICE, NUMBER OF SHARES OR NUMBER OF
WARRANTS. The Exercise Price, the number of Warrant Shares covered by each
Warrant and the number of Warrants outstanding are subject to adjustments from
time to time upon the occurrence of the events enumerated in this Section 10.
(a) In case the Company shall at any time after the date of this
Agreement (i) declare a dividend on the Common Stock payable in Common Stock,
(ii) subdivide the outstanding Common Stock into a greater number of shares,
(iii) combine the outstanding Common Stock into a smaller number of shares, or
(iv) issue any shares of its capital stock in a reclassification of the Common
Stock (including any such reclassification in connection with a consolidation or
merger in which the Company is the surviving corporation), the Exercise Price in
effect at the time of the record date for such dividend
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or of the effective date of such subdivision, combination or reclassification,
shall be proportionately adjusted so that the holder of any Warrant thereafter
exercised may receive the aggregate number and kind of shares of capital stock
of the Company which such holder would have owned immediately following such
action if such Warrant had been exercised immediately prior to such action. If
after an adjustment a holder of a Warrant, upon exercise of it, may receive
shares of two or more classes of capital stock of the Company, the Company shall
determine the allocation of the adjusted Exercise Price between the classes of
capital stock. After such allocation, the exercise privilege and the Exercise
Price of each class of capital stock shall thereafter be subject to adjustment
on terms comparable to those applicable to Common Stock in this Section. Such
adjustment shall be made successively whenever any event listed above shall
occur.
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Common Stock entitling them (for a
period expiring within 60 days after such record date) to subscribe for or
purchase Common Stock (or securities convertible into or exchangeable or
exercisable for Common Stock) at a price per share of Common Stock (or having an
initial conversion, exchange or exercise price per share of Common Stock, if a
security convertible into or exchangeable or exercisable for Common Stock) less
than the current market price per share of Common Stock (as defined in Section
10(f)) on such record date, the Exercise Price shall be adjusted in accordance
with the following formula:
E' = E x ((O + ((N x P)/M))/(O + N))
where:
E'= the adjusted Exercise Price.
E = the current Exercise Price.
O = the number of shares of Common Stock outstanding on the record
date.
N = the number of additional shares of Common Stock offered.
P = the offering price per share of the additional shares.
M = the current market price per share of Common Stock on the record
date.
The adjustment shall be made successively whenever any such rights,
options or warrants are issued and shall become effective immediately after the
record date for the determination of stock- holders entitled to receive the
rights, options or warrants. If at the end of the period during which such
rights, options or warrants are exercisable, not all rights, options or warrants
shall have been exercised, the Exercise Price shall be immediately readjusted to
what it would have been if "N" in the above formula had been the number of
shares actually issued.
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(c) In case the Company shall fix a record date for the making of a
distribution to all holders of Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
surviving corporation) of the Company's assets (including cash), debt
securities, preferred stock or rights or warrants (excluding those referred to
in Section 10(b)), the Exercise Price shall be adjusted in accordance with the
following formula:
E' = E x ((M - F)/M)
where:
E'= the adjusted Exercise Price.
E = the current Exercise Price.
M = the current market price per share of Common Stock on the record
date.
F = the fair market value on the record date of the assets,
securities, preferred stock, rights or warrants applicable to one
share of Common Stock and distributed to all holders of Common
Stock. The fair market value shall be determined in good faith by
the members of the Board of Directors of the Company (the "Board of
Directors" or the "Board").
The adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of stockholders entitled to receive the distribution.
This subsection (c) does not apply to rights, options or warrants referred to in
subsection (b) of this Section 10 or to the payment of dividends or
distributions payable out of consolidated earnings or earned surplus of the
Company.
(d) If the Company issues shares of Common Stock for a consideration
per share less than the current market price per share on the date the Company
fixes the offering price of such additional shares, the Exercise Price shall be
adjusted in accordance with the following formula:
E' = E x ((O + (P/M))/A)
where:
E'= the adjusted Exercise Price.
E = the then current Exercise Price.
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O = the number of shares outstanding immediately prior to the
issuance of such additional shares.
P = the aggregate consideration received for the issuance of
such additional shares.
M = the current market price per share on the date of issuance
of such additional shares.
A = the number of shares outstanding immediately after the
issuance of such additional shares.
The adjustment shall be made successively whenever any such issuance is
made, and shall become effective immediately after such issuance.
The subsection (d) does not apply to:
(1) any of the transactions described in subsections (a), (b)
and (c) of this Section 10;
(2) the exercise of Warrants, or the conversion or exchange of
other securities convertible or exchangeable for Common Stock;
(3) Common Stock issued to the Company's employees under bona
fide employee benefit plans adopted by the Board of Directors and approved by
the holders of Common Stock when required by law, if such Common Stock would
otherwise be covered by this subsection (d) (but only to the extent that the
aggregate number of shares excluded hereby and issued after the date of this
Warrant Agreement, together with the number then issuable pursuant to options
contemplated by Section 10(e)(4) hereof, shall not exceed 10% of the Common
Stock outstanding on a fully diluted basis at the time of the adoption of each
such plan, exclusive of antidilution adjustments thereunder);
(4) Common Stock issued upon the exercise of rights, options
or warrants;
(5) Common Stock issued in a bona fide public offering
pursuant to a firm commitment underwriting;
(6) Common Stock issued in a bona fide private placement
through a placement agent which is a member firm of the National Association of
Securities Dealers, Inc. (except to the extent that any discount from the
current market price attributable to restrictions on transferability of the
Common Stock, as determined in good faith by the Board of Directors, shall
exceed 10%); or
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<PAGE>
(7) Common Stock issued to acquire, or in the acquisition of,
all or any portion of a business as a going concern, whether such acquisition
shall be effected by purchase of assets, exchange of securities, merger,
consolidation or otherwise.
(e) If the Company issues any securities convertible into or
exchangeable or exercisable for Common Stock (other than securities issued in
transactions described in subsections (a), (b) and (c) of this Section 10) for
an aggregate consideration per share of Common Stock (which consideration shall
equal the sum of (i) the amount per share of Common Stock paid for such security
plus (ii) the amount per share of Common Stock payable upon exercise thereof)
less than the current market price per share on the date of issuance of such
securities, the Exercise Price shall be adjusted in accordance with the
following formula:
E' = E x ((O + (P/M))/(O + D))
where:
E'= the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares outstanding immediately prior to the
issuance of such securities.
P = the aggregate consideration received (which consideration
shall equal the sum of (i) the amount per share of Common
Stock paid for such security plus (ii) the amount per share of
Common Stock payable upon exercise thereof).
M = the current market price per share on the date of issuance of such
securities.
D = the maximum number of shares deliverable upon conversion or
in exchange for such securities at the initial conversion or
exchange rate.
The adjustment shall be made successively whenever any such issuance is
made, and shall become effective immediately after such issuance.
If all of the Common Stock deliverable upon conversion or exchange or
exercise of such securities has not been issued when such securities are no
longer outstanding, then the Exercise Price shall promptly be readjusted to the
Exercise Price which would then be in effect had the adjustment upon the
issuance of such securities been made on
9
<PAGE>
the basis of the actual number of shares of Common Stock issued upon conversion
or exchange or exercise of such securities.
This subsection (e) does not apply to:
(1) convertible securities issued in a bona fide public
offering pursuant to a firm commitment underwriting;
(2) convertible securities issued in a bona fide private
placement through a placement agent which is a member firm of the National
Association of Securities Dealers, Inc. (except to the extent that any discount
from the current market price attributable to restrictions on transferability of
Common Stock issuable upon conversion, as determined in good faith by the Board
of Directors, shall exceed 20%);
(3) convertible securities issued to acquire, or in the
acquisition of, all or any portion of a business as a going concern, whether
such acquisition shall be effected by purchase of assets, exchange of
securities, merger consolidation or otherwise;
(4) options to purchase Common Stock issued to the Company's
employees under stock option plans adopted by the Board of Directors and
approved by the holders of Common Stock when required by law, if such employee
stock options would otherwise be covered by this subsection (e) (but only to the
extent that the aggregate number of shares of Common Stock into which options
excluded hereby and issued after the date of this Warrant Agreement are
exercisable, together with the aggregate number of shares of Common Stock
excluded pursuant to Section 10(d)(3), shall not exceed 10% of the Common Stock
outstanding on a fully diluted basis at the time of the adoption of each such
plan, exclusive of antidilution adjustments thereunder.
(f) For the purpose of any computation under Section 10(b), (c), (d) or
(e), the current market price per share of Common Stock on any date shall be
deemed to be the average of Quoted Prices of the Common Stock for 20 consecutive
trading days commencing 30 trading days before the date in question. The "Quoted
Price" of the Common Stock is the last reported sales price of the Common Stock
as reported by NASDAQ National Market, or if the Common Stock is listed on a
securities exchange, the last reported sales price of the Common Stock on such
exchange which shall be for consolidated trading if applicable to such exchange,
or if neither so reported or listed, the last reported bid price of the Common
Stock. In the absence of such quotations on one or more such trading days, the
Board of Directors shall determine the Quoted Price for such trading days on the
basis of such quotations as it in good faith considers appropriate.
(g) No adjustment in the Exercise Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in such price;
provided, however, that any adjustments which by reason of this Section 10(g)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment.
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<PAGE>
All calculations under this Section 10 shall be made to the nearest cent or to
the nearest hundredth of a share as the case may be. Notwithstanding the first
sentence of this Section 10(g), any adjustment required by this Section 10 shall
be made no later than the earlier of two years from the date of the transaction
which mandates such adjustment or the Expiration Date.
(h) In the event that at any time, as a result of an adjustment made
pursuant to Section 10(a), the holder of any Warrant thereafter exercised shall
become entitled to receive any shares of capital stock of the Company other than
Common Stock, the number of such other shares so receivable upon exercise of any
Warrant shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to the
shares contained in Section 10(a) through (e), inclusive, and the provisions of
Sections 6, 8, 9 and 13 with respect to the Common Stock shall apply on like
terms to any such other shares.
(i) All Warrants originally issued by the Company subsequent to any
adjustment made to the Exercise Price hereunder shall evidence the right to
purchase, at the adjusted Exercise Price, the number of Warrant Shares into
which such Warrants are exercisable (after giving effect to any adjustment
thereto pursuant to Section 10(j) in connection with such adjustment to the
Exercise Price), all subject to further adjustment as provided herein.
(j) Unless the Company shall have exercised its election as provided in
Section 10(k), upon each adjustment of the Exercise Price as a result of the
calculations made in Section 10(a), (b), (c), (d) or (e), each Warrant
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Exercise Price, that number of
shares (calculated to the nearest hundredth) obtained by (i) multiplying the
number of Warrant Shares covered by a Warrant immediately prior to this
adjustment of the number of shares by the Exercise Price in effect immediately
prior to such adjustment of the Exercise Price and (ii) dividing the product so
obtained by the Exercise Price in effect immediately after such adjustment of
the Exercise Price.
(k) The Company may elect on or after the date of any adjustment of the
Exercise Price to adjust the number of Warrants in lieu of (but not in addition
to) any adjustment in the number of Warrant Shares as provided in Section 10(j).
Each of the Warrants outstanding after such adjustment of the number of Warrants
shall be exercisable for one Warrant Share. Each Warrant held of record prior to
such adjustment of the number of Warrants shall become that number of Warrants
(calculated to the nearest hundredth) obtained by dividing the Exercise Price in
effect prior to adjustment of the Exercise Price by the Exercise Price in effect
after adjustment of the Exercise Price. The Company shall make a public
announcement of its election to adjust the number of Warrants, indicating the
record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Exercise
Price is adjusted or any day thereafter, but shall be at least 10 days
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<PAGE>
later than the date of the public announcement. Upon each adjustment of the
number of Warrants pursuant to this subsection (k), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Warrant
Certificates on such record date Warrant Certificates evidencing, subject to
Section 13, the additional Warrants to which such holders shall be entitled as a
result of such adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement for the
Warrant Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Warrant Certificates
evidencing all the Warrants to which such holders shall be entitled after such
adjustment. Warrant Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the option
of the Company, the adjusted Exercise Price) and shall be registered in the
names of the holders of record of Warrant Certificates on the record date
specified in the public announcement.
(l) Irrespective of any adjustment or change in the Exercise Price or
the number of Warrant Shares, the Warrant Certificates theretofore and
thereafter issued may continue to express the Exercise Price per share and the
number of shares which were expressed upon the initial Warrant Certificates
issued hereunder.
(m) The Company may at any time reduce the Exercise Price to any amount
(but not less than the par value of the Common Stock) for any period of time
(but not less than 20 business days) deemed appropriate by the Board of
Directors of the Company.
(n) In any case in which this Section 10 shall require that an
adjustment in the Exercise Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Warrant exercised after such record date
the Common Stock and other capital stock of the Company, if any, issuable upon
such exercise over and above the Common Stock and other capital stock of the
Company, if any, issuable upon such exercise on the basis of the Exercise Price
in effect prior to such adjustment, provided, however, that the Company shall
deliver to such holder a due bill or other appropriate instrument evidencing
such holder's right to receive such additional shares upon the occurrence of the
event requiring such adjustment.
SECTION 11. CERTIFICATION OF ADJUSTED EXERCISE PRICE AND NUMBER OF
SHARES ISSUABLE. Whenever the Exercise Price and the number of Warrant Shares
are adjusted as provided in Section 10 above, the Company shall (a) promptly
obtain a certificate of a firm of independent public accountants of recognized
standing selected by the Board of Directors (who may be the regular auditors of
the Company) setting forth the Exercise Price as so adjusted, the number of
shares of Common Stock issuable upon the exercise of each Warrant as so adjusted
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Warrant Agent and with each transfer agent for
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<PAGE>
the Common Stock a copy of such certificate, and (c) mail a brief summary
thereof to each holder of a Warrant Certificate in accordance with Section 21.
SECTION 12. CONSOLIDATION, MERGER OR SALE OF ASSETS. If the Company
shall at any time consolidate or merge with one or more other corporations or
transfer or lease all or substantially all of its assets to another person
(other than a merger or consolidation of the Company in which the Company is the
surviving corporation and which does not result in any reclassification or
change of outstanding Common Stock), upon confirmation of such transaction the
Warrants shall automatically become exercisable for the kind and amount of
securities, cash or other assets which the holder of the Warrants would have
owned immediately after the consolidation, merger, transfer or lease if the
holder had exercised the Warrants before the effective date of the transaction.
Concurrently with the consummation of such transaction, the corporation formed
by or surviving any such consolidation or merger, or the person to which such
sale conveyance shall have been made, shall enter into a supplemental warrant
agreement so providing and further providing for adjustments which shall be as
nearly equivalent as may be practical to the adjustments provided for in Section
10. The successor company shall mail to holders of Warrants a notice describing
the supplemental warrant agreement. If this Section 12 applies, Section 10 of
this Agreement will not apply to the specific transaction, but shall apply
thereafter.
SECTION 13. FRACTIONAL SHARES. (a) The Company shall not be required to
issue fractions of shares upon an exercise of Warrants or to distribute share
certificates which evidence fractional shares, nor shall the Company be required
to make any cash adjustment in respect of a fractional interest in a share, but
the fractional interest to which any person is entitled shall be sold in the
manner set forth in subsection (b) of this Section 13 by the Warrant Agent,
acting as agent for the person entitled to such fractional interest, except as
otherwise provided in such subsection.
(b) The Warrant Agent shall remit to such person the proceeds of the
sale of any such fractional interest sold by it as such agent. Fractional
interests shall be non-transferable except by or to the Company acting as herein
authorized. The Warrant Agent may sell fractional interests on the basis of
market prices of the Common Stock as determined by the Company in its sole
discretion. In lieu of making an actual sale of a fractional interest, the
Company may value fractional interests without actual sale on the basis of the
current market price of the Common Stock as determined by the Company in its
sole discretion.
(c) The holder of a Warrant, by the acceptance of the Warrant,
expressly waives his right to receive any fractional share upon exercise of a
Warrant.
SECTION 14. RIGHTS OF ACTION. All rights of action in respect of this
Agreement are vested in the respective registered holders of the Warrant
Certificates; and any registered holder of any Warrant Certificate, without the
consent of the holder of any other Warrant Certificate, may, in his own behalf
and for his own benefit, enforce, and
13
<PAGE>
may institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the Warrants
evidenced by such Warrant Certificate in the manner provided in such Warrant
Certificate and in this Agreement.
SECTION 15. AGREEMENTS, REPRESENTATIONS AND WARRANTIES AND INDEMNITY
OBLIGATIONS OF WARRANT CERTIFICATE HOLDERS. Every holder of a Warrant
Certificate by accepting the same acknowledges, consents and agrees with, and
represents and warrants to the Company and with every other holder of a Warrant
Certificate that:
(a) transfer of the Warrant Certificates shall be registered on the
registry books of the Warrant Agent only if surrendered at the stock transfer
office of the Warrant Agent, duly endorsed or accompanied by a proper instrument
of transfer; and
(b) prior to due presentment for registration of transfer, the Company
and the Warrant Agent may deem and treat the person in whose name the Warrant
Certificate is registered as the absolute owner thereof and of the Warrants
evidenced thereby (notwithstanding any notations of ownership or writing on the
Warrant Certificate made by anyone other than the Company or the Warrant Agent)
for all purposes whatsoever, and the Company shall not be affected by any notice
to the contrary.
SECTION 16. WARRANT AGENT. The Warrant Agent undertakes the duties and
obligations of registrar for the Warrants imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Warrants by their acceptance thereof, shall be bound:
(a) The statements contained herein and in the Warrant Certificates
shall be taken as statements of the Company and the Warrant Agent assumes no
responsibility for the correctness of any of the same except such as describe
the Warrant Agent or action taken or to be taken by it. The Warrant Agent
assumes no responsibility with respect to the distribution of the Warrant
Certificates except as herein otherwise provided;
(b) The Warrant Agent shall not be responsible for the failure of the
Company to comply with any of the covenants contained in this Agreement or on
the Warrant Certificates to be complied with by the Company;
(c) The Warrant Agent may consult at any time with counsel satisfactory
to it and shall incur no liability or responsibility to any holder of any
Warrant Certificate in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with the opinion or the advice of such
counsel, provided the Warrant Agent shall have exercised reasonable care in the
selection and continued employment of such counsel;
(d) The Warrant Agent shall incur no liability or responsibility to the
Company or to any holder of any Warrant Certificate for any action taken in
reliance on any notice, resolution, waiver, consent, order, certificate, or
14
<PAGE>
other paper, document or instrument believed by it to be genuine and to have
been signed, sent or presented by the proper party or parties;
(e) The Company agrees to pay to the Warrant Agent reasonable
compensation for the services rendered by the Warrant Agent in the execution of
this Agreement. The Company also agrees to reimburse the Warrant Agent for all
expenses, taxes and governmental charges and other charges of any kind and
nature incurred by the Warrant Agent in the execution of this Agreement and to
indemnify the Warrant Agent and save it harmless against any and all
liabilities, including judgments, expenses and counsel fees, for anything done
or omitted by the Warrant Agent in the execution of this Agreement except as a
result of the Warrant Agent's negligence or bad faith;
(f) The Warrant Agent and any stockholder, director, officer or
employee of the Warrant Agent may buy, sell or deal in any of the Warrants or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to or otherwise act as fully and freely as though it were not Warrant
Agent under this Agreement. Nothing herein shall preclude the Warrant Agent from
acting in any other capacity for the Company or for any other legal entity;
(g) Except as set forth in Section 13, the Warrant Agent shall act
hereunder solely as agent for the Company, and its duties shall be determined
solely by the provisions hereof. The Warrant Agent shall not be liable for
anything which it may do or refrain from doing in connection with this Agreement
except for its own negligence or bad faith; and
(h) The Warrant Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chief Executive Officer of the Company, or any Senior Vice President or the
Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer.
SECTION 17. CHANGE OF WARRANT AGENT. The Warrant Agent may resign and
be discharged from its duties under this Agreement by giving to the Company
notice in writing, and by giving notice in writing by first class mail, postage
prepaid, to each registered holder of a Warrant Certificate at his address
appearing in the Warrant register, specifying a date when such resignation shall
take effect, which notice shall be sent at least 30 days prior to the date so
specified. The Company may remove the Warrant Agent or any successor warrant
agent upon 30 days' notice in writing, mailed to the Warrant Agent or successor
warrant agent and to each transfer agent of the Common Stock by registered or
certified mail, and to the holders of Warrant Certificates at their addresses
appearing in the Warrant register. If the Warrant Agent shall resign or shall
otherwise become incapable of acting, the Company shall appoint a successor to
15
<PAGE>
the Warrant Agent. If the Company shall fail to make such appointment within a
period of 30 days after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Warrant Agent or by the registered
holder of a Warrant Certificate, then the registered holder of any Warrant
Certificate may apply to any court of competent jurisdiction for the appointment
of a successor to the Warrant Agent. Pending appointment of a successor to the
Warrant Agent, either by the Company or by such a court, the duties of the
Warrant Agent shall be carried out by the Company. Any successor warrant agent,
whether appointed by the Company or by such a court, shall be a bank or trust
company in good standing, incorporated under the laws of any State of the United
States of America, and having its stock transfer office in New York, New York,
and having at the time of its appointment as warrant agent a combined capital
and surplus of at least $100,000,000. After appointment the successor warrant
agent shall be vested with the same powers, rights, duties and responsibilities
as if it had been originally named as warrant agent without further act or deed;
but the former Warrant Agent shall deliver and transfer to the successor warrant
agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Failure to
give any notice provided for in this Section, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of the
Warrant Agent or the appointment of the successor warrant agent, as the case may
be.
SECTION 18. ISSUANCE OF NEW WARRANT CERTIFICATES. Notwithstanding any
of the provisions of this Agreement or of the Warrants to the contrary, the
Company may, at its option, issue new Warrant Certificates evidencing Warrants
in such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Exercise Price per share and the number or kind or
class of shares of stock or other securities or property purchasable under the
several Warrant Certificates made in accordance with the provisions of this
Agreement.
SECTION 19. NOTICE OF PROPOSED ACTIONS. In case the Company shall
propose (a) to pay any dividend payable in stock of any class to the holders of
its Common Stock or to make any other distribution to the holders its Common
Stock (other than a cash dividend) or (b) to offer to the holders of its Common
Stock rights or warrants to subscribe for or to purchase any additional Common
Stock or shares of stock of any class or any other securities, rights or options
or (c) to effect any reclassification of its Common Stock (other than a
reclassification involving only the subdivision or combination of outstanding
Common Stock) or (d) to effect any consolidation, merger or sale, transfer or
other disposition of all or substantially all of the property, assets or
business of the Company or (e) to effect the liquidation, dissolution or winding
up of the Company, then, in each such case, the Company shall give to each
holder of a Warrant, in accordance with Section 21, a notice of such proposed
action, which shall specify the record date for the purposes of such stock
dividend, distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, disposition,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the Common Stock, if any such date is to
be fixed,
16
<PAGE>
and such notice shall be so given in the case of any action covered by clause
(a) or (b) above at least ten days prior to the record date for determining
holders of the Common Stock for purposes of such action, and in the case of any
such action, at least ten days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of Common Stock,
whichever shall be the earlier. The failure to give notice required by this
Section 19 or any defect therein shall not affect the legality or validity of
the action taken by the Company or the vote upon any such action.
SECTION 20. REPORTS. The Company shall cause copies of all annual and
other periodic reports, whether or not filed with the Securities and Exchange
Commission, and whether or not the Company is subject to the reporting
requirements of the Securities Exchange Act of 1934, as amended, to be mailed by
the Warrant Agent and to the holders of the Warrants at their addresses
appearing in the register maintained by the Warrant Agent to the same extent as
such reports are furnished to the holders of the Common Stock.
SECTION 21. NOTICES TO COMPANY, WARRANT AGENT AND WARRANT HOLDERS.
Notices or demands authorized by this Agreement to be given or made by the
holder of any Warrant Certificate to or on the Company shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed (until
notice of another address is given) as follows:
Advantica Restaurant Group, Inc.
203 East Main Street
Spartanburg, South Carolina 29319-9966
Attention: General Counsel
The principal office of the Warrant Agent where the Warrant
Certificates may be presented for registration, transfer, exchange or exercise
pursuant to the terms of this Agreement, and where notice and demands to or upon
the Company in respect of the Warrants, Warrant Certificates or this Agreement
may be served, shall be, as of the date hereof, as follows:
Continental Stock Transfer & Trust Company
2 Broadway
New York, New York 10004
Attention: Compliance Department
Any such notice or demand shall be sufficiently given if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing by
the Warrant Agent) to the Company or the Warrant Agent at said address.
Notices or demands authorized by this Agreement to be given or made by
the Company to the holder of any Warrant Certificate shall be sufficiently given
or made if
17
<PAGE>
sent by first-class mail, postage prepaid, addressed to such holder at the
address of such holder as shown on the registry books of the Company.
SECTION 22. SUPPLEMENTS AND AMENDMENTS. The Company and the Warrant
Agent may from time to time supplement or amend this Agreement without the
approval of any holders of Warrant Certificates in order to cure any ambiguity,
to correct or supplement any provision contained herein which may be defective
or inconsistent with any other provisions herein, or to make any other
provisions in regard to matters or questions arising hereunder which the Company
and the Warrant Agent may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Warrant Certificates. In
addition, the Company and the Warrant Agent may from time to time supplement or
amend this Agreement with the consent of the holders of not less the majority of
the Warrants (excluding Warrants held by the Company or any of its affiliates);
provided, however, that no such amendment or supplement shall increase the
Exercise Price, shorten the time within which holders may exercise their
Warrants or decrease the number of Warrant Shares purchasable upon exercise of
each Warrant (other than in accordance with Section 10) without the consent of
each holder of Warrants adversely affected thereby.
SECTION 23. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Warrant Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
SECTION 24. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company, the
Warrant Agent and the registered holders of the Warrant Certificates any legal
or equitable right, remedy, or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the Warrant Agent
and the registered holders of the Warrant Certificates.
SECTION 25. NEW YORK CONTRACT. This Agreement and each Warrant
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of New York and for all purposes shall be governed by and
construed in accordance with the laws of such state applicable to contracts to
be made and performed entirely within such state.
18
<PAGE>
SECTION 26. COUNTERPARTS. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
SECTION 27. DESCRIPTIVE HEADINGS. Descriptive headings of the several
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.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and attested, all as of the day and year first above written.
ADVANTICA RESTAURANT GROUP, INC.
By: /s/ Ronald B. Hutchison
-----------------------------------------
Ronald B. Hutchison
Vice President and Treasurer
CONTINENTAL STOCK TRANSFER
& TRUST COMPANY
By: /s/ William F. Seegraber
----------------------------------------
Authorized Officer
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EXHIBIT A
[Form of Face of Warrant Certificate]
NOT EXERCISABLE AFTER January 7, 2005
No. Warrants
------- -------
WARRANT CERTIFICATE
ADVANTICA RESTAURANT GROUP, INC.
This Warrant Certificate certifies that , or registered assigns, is the
registered holder of the number of Warrants set forth above (the "Warrants"),
each of which entitles the holder to purchase (subject to adjustment) one share
of Common Stock, par value $.01 per share (the "Common Stock"), of Advantica
Restaurant Group, Inc., a Delaware corporation (the "Company"). Each Warrant
expires on January 7, 2005 and entitles the holder upon exercise to receive from
the Company one fully paid and nonassessable share of Common Stock (a "Warrant
Share") at the exercise price (the "Exercise Price") of $14.60 payable in lawful
money of the United States of America (or, upon exercise and at the election of
the holder of the Warrant, by delivery of Warrants as set forth in the Warrant
Agreement referred to on the reverse hereof or any combination of cash and
Warrants) upon presentation and surrender of this Warrant Certificate with the
Form of Election to Purchase duly executed and payment of the Exercise Price to
the order of the Company at the stock transfer office of Continental Stock
Transfer & Trust Company (the "Warrant Agent"), but subject to the conditions
set forth herein and in the Warrant Agreement.
As provided in the Warrant Agreement, the Exercise Price and number of
Warrant Shares issuable upon exercise of the Warrants evidenced by this Warrant
Certificate are, upon the occurrence of certain events, subject to modification
and adjustment.
No Warrant may be exercised after 5:00 p.m., Eastern Time, on January
7, 2005 (the "Expiration Date"), and to the extent not exercised by such time,
such Warrants shall become void.
Neither the Warrants nor this Warrant Certificate entitles any holder
or transferee hereof to the right to vote for or to consent to, or to receive
notice as stockholder in respect of the meetings of stockholders for, the
election of directors of the Company or any other matter, or any rights
whatsoever of a stockholder of the Company.
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 at this place.
This Warrant Certificate shall not be valid unless countersigned by the
Warrant Agent.
IN WITNESS WHEREOF, Advantica Restaurant Group, Inc. has caused this
Warrant Certificate to be signed by its Chairman and by its Secretary and has
caused its corporate seal to be affixed hereunto or imprinted hereon.
Dated: ___________, ___
ADVANTICA RESTAURANT GROUP, INC.
By:
-----------------------------------------
Chairman of the Board and
Chief Executive Officer
ATTEST:
By:
-------------------------
Secretary
CONTINENTAL STOCK TRANSFER
& TRUST COMPANY
By:
-----------------------------------------
Authorized Officer
A-1
<PAGE>
[Form of Reverse of Warrant Certificate]
The Warrants evidenced by this Warrant Certificate are part of
a duly authorized issue of Warrants expiring January 7, 2005 entitling the
holder on exercise to receive shares of Common Stock, and are issued pursuant to
a Warrant Agreement dated as of January 7, 1998 (the "Warrant Agreement"),
between the Company and the Warrant Agent, which Warrant Agreement is hereby
incorporated by reference in and made a part of this instrument and is hereby
referred to for a description of the rights, limitation of rights, obligations,
duties and immunities thereunder of the Warrant Agent, the Company and the
holder (the words "holders" or "holder" meaning the registered holders or
registered holder) of the Warrants. A copy of the Warrant Agreement may be
obtained by the holder hereof upon written request to the Warrant Agent.
Warrants may be exercised at any time prior to 5:00 p.m. on
the Expiration Date. The holder of Warrants evidenced by this Warrant
Certificate may exercise them by surrendering this Warrant Certificate, with the
Form of Election to Purchase set forth hereon properly completed and executed,
together with payment of the Exercise Price in cash or by certified or official
bank check payable to the order of the Company or, upon exercise and at the
election of the Warrant holder, by delivery of Warrants as set forth in the
Warrant Agreement or, any combination of cash and Warrants, at the stock
transfer office of the Warrant Agent. In the event that upon any exercise of
Warrants evidenced hereby the number of Warrants exercised shall be less than
the total number of Warrants evidenced hereby, there shall be issued to the
holder hereof or his assignee a new Warrant Certificate evidencing the number of
Warrants not exercised. No adjustment shall be made for any cash dividends which
may have accrued on any shares of Common Stock issuable upon exercise of this
Warrant.
The Warrant Agreement provides that upon the occurrence of
certain events the Exercise Price set forth on the face hereof may, subject to
certain conditions, be adjusted. If the Exercise Price is adjusted, the Warrant
Agreement provides that either the number of shares of Common Stock issuable
upon the exercise of each Warrant or the number of Warrants held by each holder
also shall be adjusted. No fractions of a share of Common Stock will be issued
upon the exercise of any Warrant, but the Company will pay the amount, if any,
received upon sale by the Warrant Agent of such fractional share.
Warrant Certificates, when surrendered at the stock transfer
office of the Warrant Agent by the registered holder thereof in person or by
legal representative or attorney duly authorized in writing, may be exchanged in
the manner and subject to the limitations provided in the Warrant Agreement, but
without payment of any service charge, for another Warrant Certificate or
Warrant Certificates of like tenor evidencing in the aggregate a like number of
Warrants.
Upon due presentation for registration of transfer of this
Warrant Certificate at the stock transfer office of the Warrant Agent, a new
Warrant Certificate or Warrant Certificates of like tenor and evidencing in the
aggregate a like number of Warrants shall be issued to the transferee(s) in
exchange for this Warrant Certificate, subject to the limitations provided in
the Warrant Agreement, without charge except for any tax or other governmental
charge imposed in connection therewith.
The Warrant Agent and the Company may deem and treat the
registered holder(s) hereof as the absolute owner(s) of this Warrant Certificate
(notwithstanding any notation of ownership or other writing hereon made by
anyone), for the purpose of any exercise hereof, of any distribution to the
holder(s) hereof, and for all other purposes, and the Company shall not be
affected by any notice to the contrary.
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<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Warrant Certificate)
TO ADVANTICA RESTAURANT GROUP, INC.
The undersigned hereby irrevocably elects to exercise Warrants
represented by this Warrant Certificate to purchase the Common Stock issuable
upon the exercise of such Warrants and requests that certificates for such
shares be issued in the name of:
Please insert social security or other identifying number:
................................................................................
(Please print name and address)
If such number of Warrants shall not be all the Warrants evidenced by this
Warrant Certificate, a new Warrant Certificate for the remainder of such
Warrants shall be registered in the name of and delivered to:
Please insert social security or other identifying number:
................................................................................
(Please print name and address)
Dated: , 1997
--------------
............................................
Signature
(Signature must conform in all respects to name of holder as specified on
the face of this Warrant Certificate)
Signature Guaranteed:
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<PAGE>
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the
Warrant Certificate)
FOR VALUE RECEIVED .............................................................
hereby sells, assigns and transfers unto
................................................................................
(Please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint .............................
....................................... Attorney, to transfer the within Warrant
Certificate on the books of the within-named Company, with full power of
substitution.
Dated: .................., 1997
Signature
----------------------------------
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment must correspond to
the name as written upon the face of this Warrant Certificate in every
particular, without alteration or enlargement or any change whatsoever.
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<PAGE>
