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As filed with the Securities and Exchange Commission on May 28, 1997
Registration No. 333-______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
DEAN WITTER, DISCOVER & CO.
(to be renamed Morgan Stanley, Dean Witter, Discover & Co. )
(Exact name of registrant as specified in its charter)
Delaware 36-3145972
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
Two World Trade Center
New York, New York 10048
(212) 392-2222
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Christine A. Edwards, Esq.
Executive Vice President and General
Counsel
Dean Witter, Discover & Co.
Two World Trade Center
New York, New York 10048
(212) 392-2222
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies To:
Joseph W. Armbrust, Esq. John M. Brandow, Esq.
Brown & Wood LLP Davis Polk & Wardwell
One World Trade Center 450 Lexington Avenue
New York, New York 10048 New York, New York 10017
Approximate date of commencement of proposed sale to the
public: As soon as practicable after this registration statement becomes
effective.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this Form are to
be offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, as amended (the "Securities Act"), other than
securities offered only in connection with dividend or interest reinvestment
plans, check the following box. [X]
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering.[ ]
If this form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant
to Rule 434, please check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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Title of each Proposed maximum Proposed maximum
class of securities Amounts to offering price aggregate offering Amount of
to be registered be registered per security (1) price (1) registration fee
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Currency Warrants, Index Warrants
and Interest Rate Warrants....... $1,000,000 100% $1,000,000 $304
===================================================================================================================================
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee.
(2) This registration statement also relates to offers and sales of warrants
in connection with market-making transactions by and through affiliates
of the Registrant.
As previously disclosed in Dean Witter, Discover & Co.'s
Current Report on Form 8-K dated February 4, 1997, Dean Witter, Discover & Co.
and Morgan Stanley Group Inc. announced a definitive agreement to merge (the
"Merger"). It is expected that, effective May 31, 1997, Morgan Stanley Group
Inc. will merge with and into Dean Witter, Discover & Co., which will be the
surviving corporation in the Merger and will continue its corporate existence
under Delaware law under the name "Morgan Stanley, Dean Witter, Discover &
Co." The following Prospectus relates to Morgan Stanley, Dean Witter,
Discover & Co. giving effect to the completion of the Merger.
The Registrant hereby amends this registration statement on
such date or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act or until the registration statement shall
become effective on such date as the Securities and Exchange Commission (the
"Commission"), acting pursuant to Section 8(a), may determine.
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PROSPECTUS (Subject to Completion, Issued May 28, 1997)
Morgan Stanley, Dean Witter, Discover & Co.
CURRENCY WARRANTS
INDEX WARRANTS
INTEREST RATE WARRANTS
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Morgan Stanley, Dean Witter, Discover & Co. (the "Company") may
offer and issue from time to time (i) warrants entitling the holders thereof
to receive from the Company, upon exercise, an amount in cash determined by
reference to the right to purchase ("Currency Call Warrants") or the right to
sell ("Currency Put Warrants" and, together with the Currency Call Warrants,
the "Currency Warrants") a specified amount or specified amounts of one or
more currencies or currency units or any combination thereof for a specified
amount or specified amounts of one or more different currencies or currency
units or any combination thereof, (ii) warrants entitling the holders thereof
to receive from the Company, upon exercise, an amount in cash determined by
reference to decreases ("Index Put Warrants") or increases ("Index Call
Warrants" and, together with the Index Put Warrants, the "Index Warrants") in
the level of a specified index (an "Index") or in the levels (or relative
levels) of two or more Indices or combinations of Indices, which Index or
Indices may be based on one or more stocks, bonds or other securities, one or
more interest rates, one or more currencies or currency units, or any
combination of the foregoing, and (iii) warrants entitling the holders thereof
to receive from the Company, upon exercise, an amount in cash determined by
reference to decreases ("Interest Rate Put Warrants") or increases ("Increase
Rate Call Warrants" and, together with the Interest Rate Put Warrants, the
"Interest Rate Warrants") in the yield or closing price of one or more
specified debt instruments issued either by the United States government or by
a foreign government (the "Debt Instrument"), in the interest rate, interest
rate swap rate or other rate established from time to time by one or more
specified financial institutions (the "Rate") or in any combination of Debt
Instruments and/or Rates. This Prospectus relates to the issuance of Currency
Warrants, Index Warrants and Interest Rate Warrants (collectively, the
"Warrants") having an aggregate initial offering price of up to U.S.
$1,000,000 or the equivalent thereof if the offering price of the Warrants is
denominated in a foreign currency or currency unit. The Warrants will be
offered on terms to be determined at the time of the offering. A Warrant will
not entitle the holder of a Warrant (a "Warrantholder") to take delivery of or
to make delivery of any currency, currency unit or security.
The Warrants involve a high degree of risk. See "Risk Factors Relating to
the Warrants" beginning on page 4 of this Prospectus.
The accompanying Prospectus Supplement will set forth the
specific terms of the Warrants offered thereby, including whether such
Warrants are Currency Warrants, Index Warrants or Interest Rate Warrants, the
specific designation, aggregate number of Warrants, the currency or currency
unit for which the Warrants may be purchased, the currency or currency unit in
which the cash settlement value or the exercise price (if applicable) is
payable, the method of calculation of the cash settlement value, the first and
last dates on which such Warrants may be exercised, provisions, if any, for
the automatic exercise and/or cancellation prior to the expiration date, the
manner in which such Warrants may be exercised, the securities exchange on
which such Warrants will be listed, the initial public offering price, a
discussion of certain United States federal income tax or other special
considerations applicable thereto and any other terms in connection with such
Warrants.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
The Warrants may be offered through dealers, underwriters or
agents designated from time to time, as set forth in the accompanying
Prospectus Supplement. Net proceeds to the Company will be the purchase price
in the case of sales to a dealer, the public offering price less discount in
the case of sales to an underwriter or the purchase price less commission in
the case of sales through an agent -- in each case, less other expenses
attributable to issuance and distribution. See "Plan of Distribution" for
possible indemnification arrangements for dealers, underwriters and agents.
Following the initial distribution of an issue of Warrants,
Dean Witter Reynolds Inc. ("DWR"), Morgan Stanley & Co. Incorporated ("MS &
Co."), Dean Witter International Ltd. ("DWIL"), Morgan Stanley International
Limited ("MSIL") and other affiliates of the Company may offer and sell
previously issued Warrants in the course of their businesses as
broker-dealers. DWR, MS & Co., DWIL, MSIL and such other affiliates may act as
a principal or agent in such transactions. This Prospectus and the
accompanying Prospectus Supplement may be used by DWR, MS & Co., DWIL, MSIL
and such other affiliates in connection with such transactions. Such sales,
if any, will be made at varying prices related to prevailing market prices at
the time of sale.
MORGAN STANLEY DEAN WITTER
June , 1997
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL
OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
No dealer, salesman or any other person has been authorized to
give any information or to make any representations other than those contained
or incorporated by reference in this Prospectus or in the Prospectus
Supplement and, if given or made, such information or representations must not
be relied upon as having been authorized by the Company or any underwriter,
dealer or agent. Neither this Prospectus nor the Prospectus Supplement
constitute an offer to sell or a solicitation of an offer to buy Warrants by
anyone in any jurisdiction in which such offer or solicitation is not
authorized or in which the person making such offer or solicitation is not
qualified to do so or to any person to whom it is unlawful to make such offer
or solicitation.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the Securities
and Exchange Commission (the "Commission"). Reports, proxy statements and
other information filed by the Company with the Commission can be inspected
and copied at the public reference facilities maintained by the Commission at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 or at its Regional
Offices located at Suite 1400, Citicorp Center, 500 West Madison Street,
Chicago, Illinois 60661 and at Seven World Trade Center, 13th Floor, New York,
New York 10048, and copies of such material can be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. In addition, the Commission maintains a Website
that contains reports, proxy and other information regarding registrants that
file electronically, such as the Company. The address of the Commission's
Website is http:/www.sec.gov. The Company's Common Stock, par value $0.01 per
share (the "Common Stock"), is listed on the New York Stock Exchange, Inc.
(the "NYSE") and the Pacific Stock Exchange, Inc. Reports, proxy statements
and other information concerning the Company can be inspected at the offices
of the NYSE, 20 Broad Street, New York, New York 10005 and the Pacific Stock
Exchange, Inc., 301 Pine Street, San Francisco, California 94104 or 618 South
Spring Street, Los Angeles, California 90014.
This Prospectus constitutes a part of a Registration Statement
filed by the Company with the Commission under the Securities Act of 1933, as
amended (the "Securities Act"). This Prospectus omits certain of the
information contained in the Registration Statement in accordance with the
rules and regulations of the Commission. Reference is hereby made to the
Registration Statement and related exhibits for further information with
respect to the Company and the Warrants. Statements contained herein
concerning the provisions of any document are not necessarily complete and, in
each instance, reference is made to the copy of such document filed as an
exhibit to the Registration Statement or otherwise filed with the Commission.
Each such statement is qualified in its entirety by such reference.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed with the Commission
under the Exchange Act by Dean Witter, Discover & Co. ("Dean Witter Discover")
(to be renamed Morgan Stanley, Dean Witter, Discover & Co. on May 31, 1997 in
connection with the merger of Morgan Stanley Group Inc. ("Morgan Stanley")
with and into Dean Witter Discover) are incorporated herein by reference:
(a) Annual Report on Form 10-K for the fiscal period ended
December 31, 1996;
(b) Quarterly Report on Form 10-Q for the quarter ended March
31, 1997; and
(c) Current Reports on Form 8-K dated January 22, 1997, February
4, 1997 (two reports), February 20, 1997, February 27, 1997, February 28,
1997, April 15, 1997, April 17, 1997 (two reports), April 30, 1997 and June 2,
1997.
The following documents previously filed with the Commission
under the Exchange Act by Morgan Stanley, a predecessor of the Company, are
incorporated herein by reference:
(a) Annual Report on Form 10-K for the fiscal period ended
November 30, 1996;
(b) Quarterly Report on Form 10-Q for the quarter ended February
28, 1997; and
(c) Current Reports on Form 8-K dated December 18, 1996,
December 26, 1996, January 7, 1997, January 24, 1997, February 4, 1997,
February 5, 1997, February 20, 1997, February 21, 1997, February 28, 1997,
March 27, 1997, April 14, 1997, April 17, 1997 and April 30, 1997.
All documents filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the later of (i) the termination of the offering of
the Warrants and (ii) the date on which DWR, MS & Co., DWIL, MSIL and other
affiliates of the Company cease offering and selling previously issued
Warrants shall be deemed to be incorporated by reference in this Prospectus
and to be a part hereof from the date of filing of such documents.
Any statement contained herein or in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any subsequently filed document that also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
Copies of the above documents (excluding exhibits) may be
obtained upon request without charge from the Company, 1585 Broadway, New
York, New York 10036, Attention: Investor Relations (telephone number (212)
762-8131).
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CERTAIN PERSONS PARTICIPATING IN THE OFFERING OF THE WARRANTS
MAY ENGAGE IN TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE
PRICE OF THE WARRANTS OR OTHER SECURITIES THE PRICES OF WHICH MAY BE USED TO
DETERMINE PAYMENTS ON THE WARRANTS. SPECIFICALLY, THE UNDERWRITERS SPECIFIED
IN THE RELEVANT PROSPECTUS SUPPLEMENT MAY OVER-ALLOT IN CONNECTION WITH THE
OFFERING, AND MAY BID FOR, AND PURCHASE, THE WARRANTS OR OTHER SECURITIES THE
PRICES OF WHICH MAY BE USED TO DETERMINE PAYMENTS ON THE WARRANTS IN THE OPEN
MARKET. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "PLAN OF DISTRIBUTION" IN
THIS PROSPECTUS AND "PLAN OF DISTRIBUTION" OR "UNDERWRITING" IN THE RELEVANT
PROSPECTUS SUPPLEMENT.
THE COMPANY
Dean Witter, Discover & Co. ("Dean Witter Discover") and Morgan
Stanley Group Inc. ("Morgan Stanley") have entered into a merger agreement
pursuant to which the parties agreed to merge Morgan Stanley with and into Dean
Witter Discover (the "Merger"). The Merger is subject to customary closing
conditions, including the approval of the stockholders of both companies.
Meetings of the stockholders of both companies were held on May 28, 1997 and
stockholder approvals were obtained. The Merger is expected to be effective
as of May 31, 1997. The following description of the Company, and all
references to the Company in this Registration Statement, assume that the
Merger has occurred. Pursuant to the Merger, the combined company will be
named Morgan Stanley, Dean Witter, Discover & Co.
Morgan Stanley, Dean Witter, Discover & Co. is a preeminent
global financial services firm that maintains leading market positions in
each of its three primary businesses -- securities, asset management and
credit services. The Company is a combination of Dean Witter Discover and
Morgan Stanley pursuant to a merger (the "Merger") that was effected on May
31, 1997 in which Morgan Stanley was merged with and into Dean Witter
Discover. The Company combines three well recognized brands in the financial
services industry: Discover([Registered]) Card, Morgan Stanley and Dean
Witter. The Company combines Morgan Stanley's global strengths in investment
banking, including in the origination of quality underwritten public offerings
and mergers and acquisitions, institutional sales and trading and global asset
management with Dean Witter Discover's strengths in providing investment and
asset management services to its customers and in providing quality consumer
credit products to its customers, primarily through its Discover Card brand.
At December 31, 1996, the Company had the third largest account executive
sales organization in the United States, with approximately 9,100 professional
account executives and 371 branches, and one of the largest global asset
management operations, with total assets under management and administration
of approximately $271 billion. In addition, based on its approximately 39
million general purpose credit card accounts as of December 31, 1996, the
Company is the nation's largest credit card issuer as measured by number of
accounts and cardmembers.
The Company conducts its business from its head office in New
York City, regional offices and branches throughout the United States, and
through 28 principal offices in 19 countries outside the United States. Dean
Witter Discover was incorporated under the laws of the State of Delaware in
1981 and its predecessor companies date back to 1924. Morgan Stanley was
incorporated under the laws of the State of Delaware in 1975 and its
predecessor companies date back to 1935. The Company's principal executive
offices are at 1585 Broadway, New York, New York 10036, and its telephone
number is (212) 761-4000. Unless the context otherwise requires, the term
"Company" means Morgan Stanley, Dean Witter, Discover & Co. and its
consolidated subsidiaries.
USE OF PROCEEDS
Substantially all of the net proceeds from the issue of the
Warrants will be used to hedge the obligations represented by the Warrants.
Any remaining net proceeds will be used for general corporate purposes.
RISK FACTORS RELATING TO THE WARRANTS
The Warrants are speculative and involve a high degree of risk,
including the risk that the Warrants will expire worthless except for the
minimum expiration value, if any, of such Warrants. Investors should therefore
be prepared to sustain a total loss of the purchase price of the Warrants.
Investors who consider purchasing Warrants should be experienced with respect
to interest rate, currency and option transactions and reach an investment
decision only after carefully considering, with their advisors, the
suitability of the Warrants in the light of their particular circumstances and
the information set forth below and under "Description of the Warrants" as
well as additional information contained in the Prospectus Supplement.
The Warrants are not standardized options of the type issued by
The Options Clearing Corporation (the "OCC"), a clearing agency regulated by
the Commission. Unlike purchasers of OCC standardized options, who have the
credit benefits of guarantees and margin and collateral deposits by OCC
clearing members to protect the OCC from a clearing member's failure,
purchasers of Warrants must look solely to the Company for performance of its
obligations to pay the Cash Settlement Value, Minimum Expiration Value or
Cancellation Amount (as each such term may be defined in the applicable
Prospectus Supplement), as applicable, upon exercise, expiration or
cancellation of the Warrants, as the case may be. The Warrants are unsecured
contractual obligations of the Company and will rank pari passu with the
Company's other unsecured contractual obligations and with the Company's
unsecured and unsubordinated debt. Further, the market for the Warrants is
not expected to be generally as liquid as the market for some OCC standardized
options.
Options and warrants pose risks to investors as a result of
fluctuations in the value of the underlying investment interests. In general,
certain of the risks associated with the Warrants are similar to those
generally applicable to other options or warrants of private corporate or
sovereign issuers. However, unlike options or warrants on equity or debt
securities, which are priced primarily on the basis of the value of a single
underlying security, the trading value of a Warrant is likely to reflect, in
part, the present and expected values of the applicable currency, index,
interest rate or security.
The purchaser of a Warrant, other than a Warrant having a
Minimum Expiration Value, may lose its entire investment. This risk reflects
the nature of a Warrant as an asset which tends to decline in value over time
and which may, depending on the level of the applicable currency, index,
interest rate or security, become worthless when it expires or is canceled
except to the extent of the Minimum Expiration Value, if any, of such Warrant.
Assuming all other factors are held constant, the more a Warrant is
out-of-the-money and the shorter its remaining term to expiration or
cancellation, the greater the risk that a purchaser of the Warrant will lose
all (except to the extent of any Minimum Expiration Value) or part of its
investment. This means that the purchaser of a Warrant who does not sell it
in the secondary market or exercise it prior to expiration or cancellation
could lose its entire investment (except to the extent of any Minimum
Expiration Value) in the Warrant upon expiration or cancellation if, in the
case of a put Warrant, the value of the applicable currency, index, interest
rate or security at expiration or cancellation is greater than or equal to the
exercise price, and, in the case of a call Warrant, such value is less than or
equal to the exercise price.
The fact that Warrants may become significantly less valuable
upon expiration or cancellation means that a purchaser of a Warrant must
generally be correct about both the direction and magnitude of any anticipated
change in the applicable currency, index, interest rate or security and also
correct about when that change will occur. If the value of the applicable
currency, index, interest rate or security does not decline in the case of a
put Warrant, or increase in the case of a call Warrant, before such Warrant
expires or is canceled to an extent sufficient (after giving effect to any
relevant currency exchange rate movements in the case of a Warrant whose Cash
Settlement Value depends on currency exchange rates) to cover an investor's
cost of purchasing the Warrant (i.e., the purchase price plus transaction
costs, if any), the investor may lose all (except to the extent of any Minimum
Expiration Value) or a part of its investment in the Warrant upon expiration
or cancellation.
DESCRIPTION OF THE WARRANTS
The following description sets forth certain general terms and
provisions of the Warrants to which any Prospectus Supplement may relate. The
particular terms of each issue of Warrants will be described in the Prospectus
Supplement relating to such Warrants. Accordingly, for a description of the
terms of a particular issue of Warrants, reference must be made to the
Prospectus Supplement relating thereto and to the descriptions set forth
below. The Company will have the right to "reopen" a previous issue of
Warrants and to issue additional Warrants of such issue.
The Currency Warrants, Index Warrants and Interest Rate
Warrants are to be issued under separate warrant agreements (each a "Warrant
Agreement" and respectively a "Currency Warrant Agreement", an "Index Warrant
Agreement" and an "Interest Rate Warrant Agreement") to be entered into among
the Company, MS & Co., as determination agent, and one or more banks or trust
companies, as warrant agent (each a "Warrant Agent" and respectively a
"Currency Warrant Agent", an "Index Warrant Agent" and an "Interest Rate
Warrant Agent"), all as shall be set forth in the Prospectus Supplement
relating to the Warrants being offered thereby. MS & Co. is a wholly-owned
subsidiary of the Company.
Currency Warrants
The Company may issue Currency Warrants (a) in the form of
Currency Put Warrants, entitling the Warrantholder to receive from the Company
in cash upon exercise the Currency Warrant Cash Settlement Value (as shall be
defined in the Prospectus Supplement), which amount shall be determined by
reference to the right to sell a specified amount or amounts of one or more
currencies or currency units or any combination thereof (a "Base Currency" or
the "Base Currencies") for a specified amount or amounts of one or more
different currencies or currency units or any combination thereof (a
"Reference Currency" or the "Reference Currencies"), (b) in the form of
Currency Call Warrants, entitling the Warrantholder to receive from the
Company in cash upon exercise the Currency Warrant Cash Settlement Value,
which amount shall be determined by reference to the right to purchase a
specified amount or amounts of a Base Currency or Base Currencies for a
specified amount or amounts of a Reference Currency or Reference Currencies,
or (c) in such other form as shall be specified in the applicable Prospectus
Supplement. The Prospectus Supplement for an issue of Currency Warrants will
set forth the formula pursuant to which the Currency Warrant Cash Settlement
Value will be determined, including any multipliers, if applicable.
The Prospectus Supplement will describe the terms of the
Currency Warrants offered thereby and the Currency Warrant Agreement relating
to such Currency Warrants, including the following: (1) the title or
designation of such Currency Warrants; (2) the aggregate amount of such
Currency Warrants; (3) the initial offering price of such Currency Warrants;
(4) the exercise price, if any; (5) the currency or currency unit in which the
initial offering price, the exercise price, if any, and the Currency Warrant
Cash Settlement Value of such Currency Warrants is payable; (6) the Base
Currency and the Reference Currency for such Currency Warrants; (7) whether
such Currency Warrants shall be Currency Put Warrants, Currency Call Warrants
or otherwise; (8) the formula for determining the Currency Warrant Cash
Settlement Value of each Currency Warrant; (9) whether and under what
circumstances a Minimum and/or Maximum Expiration Value (each as shall be
defined in the Prospectus Supplement) is applicable upon the expiration of
such Currency Warrants; (10) the effect or effects, if any, of the occurrence
of an Exercise Limitation Event or Extraordinary Event (each as shall be
defined in the Prospectus Supplement) and the circumstances that constitute
such events; (11) the date on which the right to exercise such Currency
Warrants shall commence and the date (the "Currency Warrant Expiration Date")
on which such right shall expire; (12) any minimum number of Currency Warrants
which must be exercised at any one time, other than upon automatic exercise;
(13) the maximum number, if any, of such Currency Warrants that may, subject
to election by the Company, be exercised by all Warrantholders on any day; (14)
any provisions for the automatic exercise of such Currency Warrants other than
at expiration; (15) whether and under what circumstances such Currency
Warrants may be canceled by the Company prior to the Currency Warrant
Expiration Date; (16) any other procedures and conditions relating to the
exercise of such Currency Warrants; (17) the identity of the Currency Warrant
Agent; (18) any national securities exchange on which such Currency Warrants
will be listed; (19) whether such Currency Warrants will be issued in
certificated or book-entry form and, to the extent they differ from or add to
the provisions set forth in this Prospectus, provisions relating to issuing
such Currency Warrants in certificated or book-entry form; (20) if such
Currency Warrants are not issued in book-entry form, the place or places and
time or times at which payments in respect of such Currency Warrants are to be
made by the Company; (21) if applicable, a discussion of certain United States
federal income tax or other special considerations applicable thereto; and
(22) any other terms of such Currency Warrants.
Other important information concerning Currency Warrants is set
forth below under "Certain Items Applicable to All Warrants".
Index Warrants
The Company may issue Index Warrants (a) in the form of Index
Put Warrants, entitling the Warrantholder to receive from the Company in cash
upon exercise the Index Warrant Cash Settlement Value (as shall be defined in
the Prospectus Supplement), which amount will be determined by reference to
the amount, if any, by which the Strike Level or Base Value (as the applicable
term shall be defined in the Prospectus Supplement) on the applicable
valuation date following exercise exceeds the Spot Value (as shall be defined
in the Prospectus Supplement), (b) in the form of Index Call Warrants,
entitling the Warrantholder to receive from the Company in cash upon exercise
the Index Warrant Cash Settlement Value, which amount will be determined by
reference to the amount, if any, by which the Spot Value on the applicable
valuation date following exercise exceeds the Strike Level or Base Value, as
applicable, or (c) in such other form as shall be specified in the applicable
Prospectus Supplement. The Prospectus Supplement for an issue of Index
Warrants will set forth the formula pursuant to which the Index Warrant Cash
Settlement Value will be determined, including any multipliers, if applicable.
The Prospectus Supplement will describe the terms of the Index
Warrants offered thereby and the Index Warrant Agreement relating to such
Index Warrants, including the following: (1) the title or designation of such
Index Warrants; (2) the aggregate amount of such Index Warrants; (3) the
initial offering price of such Index Warrants; (4) the exercise price, if any;
(5) the currency or currency unit in which the initial offering price, the
exercise price, if any, and the Index Warrant Cash Settlement Value of such
Index Warrants is payable; (6) the Index or Indices for such Index Warrants,
which Index or Indices may be based on one or more U.S. or foreign stocks,
bonds, or other securities, one or more U.S. or foreign interest rates, one or
more currencies or currency units, or any combination of the foregoing, and
may be a preexisting U.S. or foreign Index or an Index based on one or more
securities, interest rates or currencies selected by the Company solely in
connection with the issuance of such Index Warrants, and certain information
regarding such Index or Indices and the underlying securities, interest rates
or currencies (including, to the extent possible, the policies of the
publisher of the Index with respect to additions, deletions and substitutions
of such securities, interest rates or currencies); (7) whether such Index
Warrants shall be Index Put Warrants, Index Call Warrants or otherwise; (8) the
method of providing for a substitute Index or Indices or otherwise determining
the amount payable in connection with the exercise of such Index Warrants if
the Index changes or ceases to be made available by the publisher of the Index;
(9) the formula for determining the Index Warrant Cash Settlement Value of
each Index Warrant (including the definition of the Spot Value and the Strike
Level or Base Value for such Index Warrants); (10) the circumstances, if any,
under which a Minimum and/or Maximum Expiration Value is applicable upon the
expiration of such Index Warrants; (11) the effect or effects, if any, of the
occurrence of an Exercise Limitation Event or Extraordinary Event and the
circumstances that constitute such events; (12) the date (the "Index Warrant
Exercise Date") on which the right to exercise such Index Warrants shall
commence and the date (the "Index Warrant Expiration Date") on which such
right shall expire; (13) any minimum number of Index Warrants which must be
exercised at any one time, other than upon automatic exercise; (14) the
maximum number, if any, of such Index Warrants that may, subject to election
by the Company, be exercised by all Warrantholders on any day; (15) any
provisions for the automatic exercise of such Index Warrants other than at
expiration; (16) whether and under what circumstances such Index Warrants may
be canceled by the Company prior to the Index Warrant Expiration Date; (17)
any provisions permitting a Warrantholder to condition any exercise notice on
the absence of certain specified changes in the Spot Value or the Base Value
after the Index Warrant Exercise Date; (18) any other procedures and
conditions relating to the exercise of such Index Warrants; (19) the identity
of the Index Warrant Agent; (20) any national securities exchange on which
such Index Warrants will be listed; (21) whether such Index Warrants will be
issued in certificated or book-entry form and, to the extent they differ from
or add to the provisions set forth in this Prospectus, provisions relating to
issuing such Index Warrants in certificated or book-entry form; (22) if such
Index Warrants are not issued in book-entry form, the place or places and time
or times at which payments in respect of such Index Warrants are to be made by
the Company; (23) if applicable, a discussion of certain United States federal
income tax or other special considerations applicable thereto; and (24) any
other terms of such Index Warrants.
Other important information concerning Index Warrants is set
forth below under "Certain Items Applicable to All Warrants".
Interest Rate Warrants
The Company may issue Interest Rate Warrants (a) in the form of
Interest Rate Put Warrants, entitling the Warrantholder to receive from the
Company in cash upon exercise the Interest Rate Cash Settlement Value (as shall
be defined in the Prospectus Supplement), which amount will be determined by
reference to the amount, if any, by which the Spot Amount (as shall be defined
in the Prospectus Supplement) is less than the Strike Amount or Base Amount
(as the applicable term shall be defined in the Prospectus Supplement) on the
applicable valuation date following exercise, (b) in the form of Interest Rate
Call Warrants, entitling the Warrantholder to receive from the Company in cash
upon exercise the Interest Rate Cash Settlement Value, which amount will be
determined by reference to the amount, if any, by which the Spot Amount on the
applicable valuation date following exercise exceeds the Strike Amount or Base
Amount, as applicable, or (c) in such other form as shall be specified in the
applicable Prospectus Supplement. The Prospectus Supplement for an issue of
Interest Rate Warrants will set forth the formula pursuant to which the
Interest Rate Cash Settlement Value will be determined, including any
multipliers, if applicable. The Strike Amount will be a fixed yield or price
of a Debt Instrument, a Rate or any combination of prices and/or yields and/or
Rates. The Base Amount will be a yield, price or Rate that varies during the
term of the Interest Rate Warrants in accordance with a schedule or formula.
The Debt Instrument will be one or more instruments specified in the applicable
Prospectus Supplement issued either by the United States government or by a
foreign government. The applicable Rate will be one or more interest rates or
interest rate swap rates or other rates established from time to time by one
or more financial institutions specified in the applicable Prospectus
Supplement.
The Prospectus Supplement will describe the terms of the
Interest Rate Warrants offered thereby and the Interest Rate Warrant Agreement
relating to such Interest Rate Warrants, including the following: (1) the
title or designation of such Interest Rate Warrants; (2) the aggregate amount
of such Interest Rate Warrants; (3) the initial offering price of such
Interest Rate Warrants; (4) the exercise price, if any; (5) the currency or
currency unit in which the initial offering price, the exercise price, if any,
and the Interest Rate Cash Settlement Value of such Interest Rate Warrants is
payable; (6) the Debt Instrument (which may be one or more debt instruments
issued either by the United States government or by a foreign government), the
Rate (which may be one or more interest rates or interest rate swap rates
established from time to time by one or more specified financial institutions)
or the other yield, price or rate utilized for such Interest Rate Warrants,
and certain information regarding such Debt Instrument or Rate; (7) whether
such Interest Rate Warrants shall be Interest Rate Put Warrants, Interest Rate
Call Warrants or otherwise; (8) the Strike Amount, the method of determining
the Spot Amount and the method of expressing movements in the yield or closing
price of the Debt Instrument or in the level of the Rate as a cash amount in
the currency in which the Interest Rate Cash Settlement Value of such Interest
Rate Warrants is payable; (9) the formula for determining the Interest Rate
Cash Settlement Value of each Interest Rate Warrant; (10) whether and under
what circumstances a Minimum and/or Maximum Expiration Value is applicable
upon the expiration of such Interest Rate Warrants; (11) the effect or effects,
if any, of the occurrence of an Exercise Limitation Event or Extraordinary
Event and the circumstances that constitute such events; (12) the date (the
"Interest Rate Warrant Exercise Date") on which the right to exercise such
Interest Rate Warrants shall commence and the date (the "Interest Rate Warrant
Expiration Date") on which such right shall expire; (13) any minimum number of
Interest Rate Warrants which must be exercised at any one time, other than upon
automatic exercise; (14) the maximum number, if any, of such Interest Rate
Warrants that may, subject to election by the Company, be exercised by all
Warrantholders on any day; (15) any provisions for the automatic exercise of
such Interest Rate Warrants other than at expiration; (16) whether and under
what circumstances such Interest Rate Warrants may be canceled by the Company
prior to the Interest Rate Warrant Expiration Date; (17) any provisions
permitting a Warrantholder to condition any exercise on the absence of certain
specified changes in the Spot Amount after the Interest Rate Warrant Exercise
Date; (18) any other procedures and conditions relating to the exercise of
such Interest Rate Warrants; (19) the identity of the Interest Rate Warrant
Agent; (20) any national securities exchange on which such Interest Rate
Warrants will be listed; (21) whether such Interest Rate Warrants will be
issued in certificated or book-entry form and, to the extent they differ
from or add to the provisions set forth in this Prospectus, provisions
relating to issuing such Interest Rate Warrants in certificated or book-
entry form; (22) if such Interest Rate Warrants are not issued in book-
entry form, the place or places and time or times at which payments in
respect of such Interest Rate Warrants are to be made by the Company; (23)
if applicable, a discussion of certain United States federal income tax or
other special considerations applicable thereto; and (24) any other terms
of such Interest Rate Warrants.
Other important information concerning Interest Rate Warrants
is set forth below under "Certain Items Applicable to All Warrants".
Certain Items Applicable to all Warrants
Modifications
Each Warrant Agreement and the terms of each issue of Warrants
may be amended by the Company, the Determination Agent and the applicable
Warrant Agent, without the consent of the holders, for the purpose of curing
any ambiguity, or of curing, correcting or supplementing any defective or
inconsistent provision contained therein, or in any other manner which the
Company may deem necessary or desirable and which will not adversely affect the
interests of the owners of the then outstanding unexercised Warrants in any
material respect.
The Company, the Determination Agent and the applicable Warrant
Agent may also modify or amend the applicable Warrant Agreement and the terms
of the related Warrants, with the consent of the owners of not less than a
majority in number of the then outstanding unexercised Warrants affected,
provided that no such modification or amendment that reduces the amount
receivable upon exercise, cancellation or expiration, shortens the period of
time during which the Warrants may be exercised or otherwise materially and
adversely affects the exercise rights of the owners of the Warrants or reduces
the percentage of outstanding Warrants, the consent of whose owners is required
for modification or amendment of the applicable Warrant Agreement or the terms
of the Warrants, may be made without the consent of the owners affected
thereby.
Enforceability of Rights; Governing Law
Each Warrant Agent will act solely as an agent of the Company
in connection with the issuance and exercise of the applicable Warrants and
will not assume any obligation or relationship of agency or trust for or with
any owner of a beneficial interest in any Warrant or with the registered
holder thereof. A Warrant Agent shall have no duty or responsibility in case
of any default by the Company in the performance of its obligations under the
applicable Warrant Agreement including, without limitation, any duty or
responsibility to initiate any proceedings at law or otherwise or to make any
demand upon the Company. Warrantholders may, without the consent of the
applicable Warrant Agent, enforce by appropriate legal action, on their own
behalf, their right to exercise their Warrants, and to receive payment, if
any, for their Warrants. Except as may otherwise be provided in the
Prospectus Supplement relating thereto, each issue of Warrants and the
applicable Warrant Agreement will be governed by and construed in accordance
with the law of the State of New York.
Unsecured Obligations of the Company
The Warrants are unsecured contractual obligations of the
Company and will rank pari passu with the Company's other unsecured
contractual obligations and with the Company's unsecured and unsubordinated
debt. Most of the assets of the Company are owned by its subsidiaries.
Therefore, the Company's rights and the rights of its creditors, including
Warrantholders, to participate in the distribution of assets of any subsidiary
upon such subsidiary's liquidation or recapitalization will be subject to the
prior claims of such subsidiary's creditors, except to the extent that the
Company may itself be a creditor with recognized claims against the
subsidiary. In addition, dividends, loans and advances from certain
subsidiaries to the Company are restricted by legal requirements, including
(in the case of DWR and MS & Co.) net capital requirements under the Exchange
Act and under rules of certain exchanges and other regulatory bodies and (in
the case of Greenwood Trust Company and other bank subsidiaries) by banking
regulations.
Exercise of Warrants
Except as may otherwise be provided in the applicable
Prospectus Supplement relating thereto, (a) each Warrant will entitle the
owner, upon payment of the exercise price, if any, to receive the applicable
Cash Settlement Value of such Warrant, on the applicable Exercise Date and (b)
if not exercised prior to expiration, the Warrants will be deemed
automatically exercised at expiration. As described below, Warrants may also
be deemed to be automatically exercised if they are delisted. Procedures for
exercise of the Warrants will be set out in the applicable Prospectus
Supplement.
Exercise Limitation Events and Extraordinary Events
If so specified in the applicable Prospectus Supplement,
following the occurrence of an Exercise Limitation Event or Extraordinary
Event (as each term shall be defined therein), the Cash Settlement Value of a
Warrant may be determined on a different basis than upon normal exercise of a
Warrant. In addition, if so specified in the applicable Prospectus
Supplement, Warrants may, in certain circumstances, be canceled by the Company
prior to the Expiration Date and the holders thereof will be entitled to
receive only the applicable Cancellation Amount (as such term shall be defined
therein). The Cancellation Amount may be either a fixed amount or an amount
that varies during the term of the Warrants in accordance with a schedule or
formula.
Settlement Currency
Warrants will be settled only in U.S. dollars (unless
settlement in a foreign currency is specified in the applicable Prospectus
Supplement and is permissible under applicable law) and accordingly will not
require or entitle an owner to sell, deliver, purchase or take delivery of the
currency, security or other instrument underlying such Warrants.
Warrantholders will not receive any interest on any payments made with respect
to the Warrants and the Warrants will not entitle the Warrantholders to any
rights of holders of currencies, securities or other instruments underlying the
Warrants. If any of the Warrants are sold for, or if the exercise price, if
any, is payable in, foreign currencies or foreign currency units or if the
amount payable by the Company in respect of any issue of Warrants is payable
in foreign currencies or foreign currency units, the restrictions, elections,
tax consequences, specific terms and other information with respect to such
issue of Warrants and such currencies or currency units will be set forth in
the applicable Prospectus Supplement relating thereto.
Listing
Unless otherwise provided in the Prospectus Supplement, each
issue of Warrants will be listed on a national securities exchange, as
specified in the applicable Prospectus Supplement, subject only to official
notice of issuance. In the event that such Warrants are delisted from, or
permanently suspended from trading on, such exchange, and, at or prior to such
delisting or suspension, such Warrants shall not have been listed on another
national securities exchange, any such Warrants not previously exercised will
be deemed automatically exercised on the date such delisting or permanent
trading suspension becomes effective. The Cash Settlement Value to be paid in
such event will be as set forth in the applicable Prospectus Supplement. The
Company will notify holders of such Warrants as soon as practicable of such
delisting or permanent trading suspension. The applicable Warrant Agreement
will contain a covenant of the Company not to seek delisting of such Warrants
from, or permanent suspension of their trading on, the exchange on which they
are listed.
Form of Warrants
The Company intends to issue Warrants in registered,
certificated form ("Definitive Warrants") or in book-entry form. In the event
the Company originally issues Definitive Warrants, it may provide that
Warrantholders may convert Definitive Warrants into Warrants in book-entry
form. The Prospectus Supplement will indicate and further describe the form
in which the Company will issue the Warrants and whether and on what terms the
option to convert Warrants from definitive to book-entry form will be
available.
Book-entry Form
In the event any Warrants are issued in book-entry form, such
Warrants will be represented by a single global warrant certificate (the
"Global Warrant Certificate"). Each Global Warrant Certificate will be
registered in the name of the nominee of the depository for the Warrants.
Initially, the depository (the "Depository") will be The Depository Trust
Company ("DTC"). The Company has been informed by DTC that initially its
nominee will be CEDE & Co. ("CEDE"). Accordingly, CEDE is expected to be the
registered holder of such Warrants. No Warrantholder will be entitled to
receive a certificate representing such holder's interest in such Warrants
except as set forth herein or in the Prospectus Supplement.
DTC is a limited purpose trust company organized under the New
York Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to Section 17A of the Exchange Act. DTC was
created to hold securities for its participating organizations
("Participants") and to facilitate the clearance and settlement of securities
transactions between Participants through electronic book entry, thereby
eliminating the need for physical movement of certificates. Participants
include securities brokers and dealers, banks, trust companies and clearing
corporations, and may include certain other organizations. Indirect access to
the DTC system is also available to others such as banks, brokers, dealers and
trust companies that clear through or maintain a custodial relationship with a
Participant, either directly or indirectly ("Indirect Participants").
Warrantholders that are not Participants or Indirect
Participants but desire to purchase, sell or otherwise transfer ownership of,
or other interests in, Warrants may do so only through Participants and
Indirect Participants. In addition, Warrantholders will receive the Cash
Settlement Value and, if applicable, the Cancellation Amount or Minimum and/or
Maximum Expiration Value payable in respect of any Warrant from the Warrant
Agent through Participants. Warrantholders may experience a delay of a few
business days in their receipt of payments, since such payments will be
forwarded by the Warrant Agent to DTC, and DTC will forward such payments to
Participants. Such Participants will then forward such payments to Indirect
Participants or Warrantholders. In the case of automatic exercise or
cancellation of the Warrants, a delay of a few business days may also occur
since such payments will be forwarded by the Warrant Agent to DTC, and DTC
will then forward such payments to Participants for delivery to Indirect
Participants or Warrantholders. Warrantholders will not be recognized by the
Warrant Agent as registered holders of Warrants. Warrantholders that are not
Participants will be permitted to exercise their rights as beneficial owners
of the Warrants only indirectly through Participants.
Under the rules, regulations and procedures creating and
affecting DTC and its operations, DTC will be required to (a) make book entry
transfers of Warrants among Participants and (b) receive and transmit payments
of the Cash Settlement Value and, if applicable, the Cancellation Amount or
Minimum and/or Maximum Expiration Value payable in respect of any Warrant.
Participants and Indirect Participants with which Warrantholders have accounts
with respect to the Warrants similarly will be required to direct that book
entry transfers be made and receive and transmit such payments on behalf of
their respective Warrantholders.
If Warrants are in book-entry form, Warrantholders may
experience a delay of a few business days in receipt of payments, since, in
the case of exercise by Warrantholders, such payments will be forwarded by the
Warrant Agent to DTC, and DTC will then forward such payment to its
Participants. Participants will then forward such payments to Indirect
Participants or Warrantholders. In the case of automatic exercise or
cancellation of the Warrants, a delay of a few business days may also occur
since such payments will be forwarded by the Warrant Agent to DTC, and DTC
will then forward such payments to Participants for delivery to Indirect
Participants or Warrantholders. Because DTC can only act on behalf of
Participants, who in turn may act on behalf of Indirect Participants, and on
behalf of certain banks, trust companies and other approved persons, the
ability of a Warrantholder to pledge Warrants in book-entry form to persons or
entities that do not participate in the DTC system, or to otherwise act with
respect to such Warrants, may be limited due to the absence of physical
certificates for such Warrants.
DTC has advised the Company that it will take any action
permitted to be taken by a Warrantholder under the Warrant Agreement only at
the direction of one or more Participants to whose accounts with DTC the
Warrants are credited.
Unless otherwise specified in the Prospectus Supplement,
Warrants in book-entry form will be converted into Definitive Warrants only
(i) if the Company advises the Warrant Agent in writing that DTC is no longer
willing or able to discharge properly its responsibilities as depository with
respect to the Warrants and a successor depository is not appointed by the
Company within 90 days, (ii) the Company, at its option, elects not to have
the Warrants represented by Global Warrant Certificates, or (iii) in the event
the Company is adjudged bankrupt or insolvent or certain other bankruptcy or
insolvency events occur.
Upon the occurrence of any event described in the immediately
preceding paragraph, DTC is required to notify all Participants of the
availability through DTC of Definitive Warrants. Upon surrender by DTC of the
Global Warrant Certificate representing the affected Warrants and instructions
for re-registration, the Warrant Agent will reissue such Warrants as
Definitive Warrants, and thereafter the Warrant Agent will recognize the
holders of such Definitive Warrants as registered holders of Warrants entitled
to the benefits of the applicable Warrant Agreement.
Definitive Warrants
In the event Definitive Warrants are issued, the Warrant Agent
will from time to time register the transfer of any outstanding Definitive
Warrant certificate upon surrender thereof at the Warrant Agent's office duly
endorsed by, or accompanied by a written instrument or instruments of transfer
in form satisfactory to the Warrant Agent duly executed by, the registered
holder thereof, a duly appointed legal representative or a duly authorized
attorney. Such signature must be guaranteed by a bank or trust company having
a correspondent office in New York City 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 Definitive Warrant
certificate will be issued to the transferee upon any such registration of
transfer.
At the option of a Warrantholder, Definitive Warrant
certificates may be exchanged for other Definitive Warrant certificates
representing a like number of Definitive Warrants, upon surrender to the
Warrant Agent at the Warrant Agent's office of the Definitive Warrant
certificates to be exchanged. The Company will thereupon execute, and the
Warrant Agent will countersign and deliver, one or more new Definitive Warrant
certificates of like tenor and representing such like number of Definitive
Warrants.
In the event that, after any exercise of Definitive Warrants
evidenced by a Definitive Warrant certificate, the number of Definitive
Warrants exercised is fewer than the total number of Definitive Warrants
evidenced by such certificate, a new Definitive Warrant certificate evidencing
the number of Definitive Warrants not exercised will be issued to the
registered holder or his assignee.
If any Definitive 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
such mutilated Definitive Warrant certificate or in replacement for such lost,
stolen or destroyed Definitive Warrant certificate, a new Definitive Warrant
certificate representing a like number of Definitive Warrants, but only (in
the case of loss, theft or destruction) upon receipt of evidence satisfactory
to the Company and the Warrant Agent of loss, theft or destruction of such
Definitive Warrant certificate and security or indemnity, if requested,
satisfactory to them. Warrantholders requesting replacement Definitive
Warrant certificates must also comply with such other reasonable regulations
and pay such reasonable charges as the Company or the Warrant Agent may
prescribe. In case all of the Definitive Warrants represented by any such
mutilated, lost, stolen or destroyed Definitive Warrant certificate have been
or are about to be exercised (including upon automatic exercise), the Company
in its discretion may, instead of issuing a new Definitive Warrant
certificate, direct the Warrant Agent to treat such Definitive Warrant
certificate the same as if the Warrant Agent had received an exercise notice
in proper form in respect thereof or as being subject to automatic exercise,
as the case may be.
No service charge will be made for any registration of transfer
or exchange of Definitive Warrant certificates, 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. In the case of the replacement of mutilated, lost, stolen or
destroyed Definitive Warrant certificates, 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.
PLAN OF DISTRIBUTION
The Company may sell the Warrants being offered hereby in three
ways: (i) through agents, (ii) through underwriters and (iii) through
dealers. Any such underwriters, dealers or agents in the United States will
include DWR and/or MS & Co., and any such underwriters, dealers or agents
outside the United States will include DWIL, MSIL or other affiliates of the
Company.
Offers to purchase Warrants may be solicited by agents
designated by the Company from time to time. Any such agent, who may be
deemed to be an underwriter as that term is defined in the Securities Act,
involved in the offer or sale of the Warrants in respect of which this
Prospectus is delivered will be named, and any commissions payable by the
Company to such agent will be set forth, in the Prospectus Supplement. Unless
otherwise indicated in the Prospectus Supplement, any such agent will be
acting on a reasonable efforts basis for the period of its appointment.
Agents may be entitled under agreements which may be entered into with the
Company to indemnification by the Company against certain civil liabilities,
including liabilities under the Securities Act, and may be customers of,
engage in transactions with or perform services for the Company in the
ordinary course of business.
If any underwriters are utilized in the sale of the Warrants in
respect of which this Prospectus is delivered, the Company will enter into an
underwriting agreement with such underwriters at the time of sale to them and
the names of the underwriters and the terms of the transaction will be set
forth in the Prospectus Supplement, which will be used by the underwriters to
make resales of the Warrants in respect of which this Prospectus is delivered
to the public. The underwriters may be entitled, under the relevant
underwriting agreement, to indemnification by the Company against certain
liabilities, including liabilities under the Securities Act and may be
customers of, engage in transactions with or perform services for the Company
in the ordinary course of business.
If a dealer is utilized in the sale of the Warrants in respect
of which this Prospectus is delivered, the Company will sell such Warrants to
the dealer, as principal. The dealer may then resell such Warrants to the
public at varying prices to be determined by such dealer at the time of
resale. Dealers may be entitled to indemnification by the Company against
certain liabilities, including liabilities under the Securities Act, and may
be customers of, engage in transactions with or perform services for the
Company in the ordinary course of business.
In order to facilitate the offering of the Warrants, the
underwriters may engage in transactions that stabilize, maintain or otherwise
affect the price of the Warrants or other securities the prices of which may
be used to determine payments on such Warrants. Specifically, the
underwriters may over-allot in connection with the offering, creating a short
position in the Warrants for their own accounts. In addition, to cover
over-allotments or to stabilize the price of the Warrants or of any such other
securities, the underwriters may bid for, and purchase, the Warrants or any
such other securities in the open market. Finally, in any offering of the
Warrants through a syndicate of underwriters, the underwriting syndicate may
reclaim selling concessions allowed to an underwriter or a dealer for
distributing the Warrants in the offering if the syndicate repurchases
previously distributed Warrants in transactions to cover syndicate short
positions, in stabilization transactions or otherwise. Any of these
activities may stabilize or maintain the market price of the Warrants above
independent market levels. The underwriters are not required to engage in
these activities, and may end any of these activities at any time.
If so indicated in the Prospectus Supplement, the Company will
authorize agents, underwriters or dealers to solicit offers by certain
purchasers to purchase Warrants from the Company at the public offering price
set forth in the Prospectus Supplement pursuant to delayed delivery contracts
providing for payment and delivery on a specified date in the future. Such
contracts will be subject to only those conditions set forth in the Prospectus
Supplement, and the Prospectus Supplement will set forth the commission
payable for solicitation of such offers.
Any underwriters, agents or dealers utilized in the initial
offering of Warrants will not confirm sales to accounts over which they
exercise discretionary authority.
DWR, MS & Co., DWIL and MSIL are wholly owned subsidiaries of
the Company. Each initial offering of Warrants in which DWR and/or MS & Co.
participates will be conducted in compliance with the requirements of Rule
2720 of the National Association of Securities Dealers, Inc. (the "NASD").
Under the provisions of Rule 2720, when a NASD member such as DWR or MS & Co.
distributes securities of an affiliate that are not equity securities for which
a bona fide independent market exists or a class of securities rated
investment grade or better, the price of the securities can be no higher than
that recommended by a "Qualified Independent Underwriter" meeting certain
standards. Unless otherwise specified in the Prospectus Supplement,
Donaldson, Lufkin & Jenrette Securities Corporation will act as the Qualified
Independent Underwriter for the Warrants in respect of which this Prospectus
is delivered and will receive a fee for such services specified in the
applicable Prospectus Supplement. Under guidelines adopted by the NASD, the
underwriting compensation payable in connection with any issue of Warrants
under this Prospectus may not exceed 8%. Following the initial distribution
of any Warrants, DWR, MS & Co., DWIL, MSIL and other affiliates of the Company
may offer and sell such Warrants in the course of their business as
broker-dealers. DWR, MS & Co., DWIL, MSIL and such other affiliates may act
as principals or agents in such transactions. This Prospectus may be used by
DWR, MS & Co., DWIL, MSIL and such other affiliates in connection with such
transactions. Such sales, if any, will be made at varying prices related to
prevailing market prices at the time of sale or otherwise. None of DWR, MS &
Co., DWIL, MSIL or any such other affiliate is obligated to make a market in
any Warrants and may discontinue any market-making activities at any time
without notice.
LEGAL MATTERS
The validity of the Warrants will be passed upon for the
Company by Brown & Wood LLP, or other counsel who is satisfactory to DWR, MS &
Co., DWIL or MSIL, as the case may be, and who may be an officer of the
Company. Certain legal matters relating to the Warrants will be passed upon
for the Underwriters by Davis Polk & Wardwell. Davis Polk & Wardwell has in
the past represented and continues to represent the Company on a regular basis
and in a variety of matters, including in connection with its merchant banking
and leveraged capital activities.
EXPERTS
The supplemental consolidated financial statements and
supplemental financial statement schedule of the Company and its subsidiaries,
except Morgan Stanley, as of fiscal year end 1996 and 1995 and for each of the
three years in the period ended fiscal year end 1996 included in the Company's
Current Report on Form 8-K dated June 2, 1997 have been audited by Deloitte &
Touche LLP, independent auditors, as set forth in their report thereon and
incorporated herein by reference. The financial statements and financial
statement schedule of Morgan Stanley (supplementally consolidated with those
of the Company) have been audited by Ernst & Young LLP, independent auditors,
as stated in their reports incorporated herein by reference. Such
supplemental consolidated financial statements and supplemental financial
statement schedule have been incorporated herein by reference in reliance upon
the respective reports given upon the authority of such firms as experts in
accounting and auditing.
The consolidated financial statements of Dean Witter Discover
incorporated by reference and included in Dean Witter Discover's Annual Report
on Form 10-K for the fiscal year ended December 31, 1996 have been audited by
Deloitte & Touche LLP, independent auditors, as set forth in their reports
thereon and incorporated herein by reference. Such consolidated financial
statements have been incorporated herein by reference in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
The consolidated financial statements of Morgan Stanley
incorporated by reference and included in Morgan Stanley's Annual Report on
Form 10-K for the fiscal year ended November 30, 1996 have been audited by
Ernst & Young LLP, independent auditors, as stated in their report thereon and
incorporated herein by reference. Such consolidated financial statements have
been incorporated herein by reference in reliance upon such report given upon
the authority of such firm as experts in accounting and auditing.
With respect to the unaudited interim financial information of
Dean Witter Discover for the periods ended March 31, 1997 and 1996, which is
incorporated herein by reference, Deloitte & Touche LLP have applied limited
procedures in accordance with professional standards for review of such
information. However, as stated in their report included in Dean Witter
Discover's Quarterly Report on Form 10-Q for the quarter ended March 31, 1997
and incorporated by reference herein, they did not audit and they do not
express an opinion on that interim financial information. Accordingly, the
degree of reliance on their report on such information should be restricted in
light of the limited nature of the review procedures applied. Deloitte &
Touche LLP are not subject to the liability provisions of Section 11 of the
Securities Act for their reports on the unaudited interim financial
information because these reports are not "reports" or a "part" of the
registration prepared or certified by an accountant within the meaning of
Sections 7 and 11 of the Securities Act.
MORGAN STANLEY, DEAN WITTER,
DISCOVER & CO.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution*
Commission Registration Fee................. $ 304.00
Stock Exchange Listing Fees................. **
Accounting Fees............................. **
Warrant Agent's Fees and Expenses........... **
Blue Sky Fees and Expenses.................. **
Printing and Engraving Fees................. **
NASD Fee.................................... 600.00
Legal Fees and Expenses..................... **
Miscellaneous............................... **
Total...................................... $ **
- ----------
* All amounts are estimated except for the Commission registration fee
and the NASD fee.
** To be filed by amendment.
Item 15. Indemnification of Directors and Officers
Article VIII of the Amended and Restated Certificate of
Incorporation ("Certificate of Incorporation") of the Company and Section 6.07
of the Amended and Restated By-Laws ("By-Laws") of the Company, each as amended
to date, provide for the indemnification of directors and officers. Under
these provisions, any person who is a director or officer of the Company or a
corporation the majority of the capital stock (other than directors'
qualifying shares) of which is owned directly or indirectly by the Company (a
"Subsidiary") shall be indemnified by the Company, to the fullest extent
permitted by applicable law. The Company's Certificate of Incorporation and
By-Laws also provide that the Company may, by action of the Board of
Directors, provide indemnification to any person who is or was an employee or
agent (other than a director or officer) of the Company or a Subsidiary and to
any person serving as a director, officer, partner, member, employee or agent
of another corporation, partnership, limited liability company, joint venture,
trust or other enterprise at the request of the Company or a Subsidiary, to
the same scope and effect as the foregoing indemnification of directors and
officers of the Company.
The right to indemnification under the By-Laws includes the
right to be paid the expenses incurred in connection with any proceeding in
advance of its final disposition upon receipt (unless the Company upon
authorization of the Board of Directors waives said requirement to the extent
permitted by applicable law) of an undertaking by or on behalf of such person
to repay such amount if it shall ultimately be determined that such person is
not entitled to be indemnified by the Company.
Under the By-Laws, the Company has the power to purchase and
maintain insurance, at its expense, to protect itself and any person who is or
was a director, officer, partner, member, employee or agent of the Company or a
Subsidiary, or of another corporation, partnership, limited liability company,
joint venture, trust or other enterprise, against any expense, liability or
loss, whether or not the Company or a Subsidiary would have the power to
indemnify him against such expense, liability or loss under the provisions of
applicable law.
The Company has in effect insurance policies in the amount of
$75 million for general officers' and directors' liability insurance and $25
million for fiduciary liability insurance covering all of the Company's
directors and officers in certain instances where by law they may not be
indemnified by the Company.
The form of Underwriting Agreement filed as Exhibit 1 hereto,
and incorporated herein by reference, contains certain provisions relating to
the indemnification of the Company's directors, officers and controlling
persons.
Item 16. Exhibits
1 -- Form of Underwriting Agreement.
4.1 -- Form of Currency Warrant Agreement, with form of Definitive
and Global Currency Warrant Certificates attached as
Exhibits A and A-1 thereto.
4.2 -- Form of Index Warrant Agreement, with form of Definitive and
Global Index Warrant Certificates attached as Exhibits A
and A-1 thereto.
4.3 -- Form of Interest Rate Warrant Agreement, with form of
Definitive and Global Interest Rate Warrant Certificates
attached as Exhibits A and A-1 thereto.
5 -- Opinion of Brown & Wood LLP (to be filed by amendment).
15 -- Letter of Awareness from Deloitte & Touche LLP concerning
Unaudited Financial Information.
23.1 -- Consent of Ernst & Young LLP.
23.2 -- Consent of Deloitte & Touche LLP.
23.3 -- Consent of Brown & Wood LLP (included in Exhibit 5, which
will be filed by amendment).
24 -- Powers of Attorney (included on signature pages).
ITEM 17. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made of the warrants registered hereby, a post-effective
amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of this registration statement (or the most
recent post-effective amendment hereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement; and
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in this registration
statement or any material change to such information in this
registration statement;
provided, however, that the undertakings set forth in clauses (i) and (ii)
above do not apply if the information required to be included in a
post-effective amendment by those clauses is contained in periodic reports
filed by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, as amended, that are incorporated by
reference in this registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, as amended, each such post-effective amendment
shall be deemed to be a new registration statement relating to the warrants
offered therein, and the offering of such warrants at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of post-effective
amendment any of the warrants being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, as amended, each filing of the registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange
Act of 1934, as amended, that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the warrants offered herein, and the offering of such warrants at
that time shall be deemed to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under
the Securities Act of 1933, as amended, may be permitted to directors,
officers and controlling persons of the registrant pursuant to the provisions
described under Item 15 above, or otherwise, the registrant has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in such Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered hereby, the registrant will unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in such Act and
will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe
that it meets all the requirements for filing on Form S-3 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in The City of New York and State of New York, on
the 28th day of May, 1997.
DEAN WITTER, DISCOVER & CO.
(Registrant)
By: /s/ Philip J. Purcell
________________________________
Name: Philip J. Purcell
Title: Chairman of the Board, Chief
Executive Officer and Director
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS that each person whose
signature appears below hereby constitutes and appoints Christine A. Edwards,
Mitchell M. Merin, Ronald T. Carman and Michael T. Gregg and each of them
singly, his or her true and lawful attorney-in-fact and agent with full power
of substitution and resubstitution, for him or her and in his or her name,
place and stead, in any and all capacities, to sign any and all amendments,
including post-effective amendments, to this Registration Statement (any of
which amendments may make such changes and additions to this Registration
Statement as such attorneys-in-fact may deem necessary or appropriate) and to
file the same, with all exhibits thereto, and any other documents that may be
required in connection therewith, granting unto said attorneys-in-fact and
agents full power and authority to be done in and about the premises, as fully
to all intents and purposes as he or she might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or their
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirement of the Securities Act of 1933, as
amended, this registration statement has been signed below by the following
persons in the capacities indicated on the 28th day of May 1997.
Signature Title
- ----------------------------- ---------------------------------------------
/s/ Philip J. Purcell Chairman of the Board, Chief Executive
- ----------------------------- Officer, and Director (Principal Executive
Philip J. Purcell Officer)
/s/ Thomas C. Schneider Executive Vice President and Chief Financial
- ----------------------------- Officer and Director (Principal Financial
Thomas C. Schneider Officer)
/s/ Robert P. Seass Senior Vice President and Controller
- ----------------------------- (Principal Accounting Officer)
Robert P. Seass
/s/ Edward A. Brennan Director
- -----------------------------
Edward A. Brennan
/s/ C. Robert Kidder Director
- -----------------------------
C. Robert Kidder
/s/ Miles L. Marsh Director
- -----------------------------
Miles L. Marsh
/s/ Michael A. Miles Director
- -----------------------------
Michael A. Miles
/s/ Clarence B. Rogers, Jr. Director
- -----------------------------
Clarence B. Rogers, Jr.
EXHIBIT INDEX
Exhibit Sequentially
Number Description Numbered Page
- ------ ------------ -------------
1 Form of Underwriting Agreement.
4.1 Form of Currency Warrant Agreement, with form
of Definitive and Global Currency Warrant
Certificates attached as Exhibits A and A-1
thereto.
4.2 Form of Index Warrant Agreement, with form of
Definitive and Global Index Warrant Certificates
attached as Exhibits A and A-1 thereto.
4.3 Form of Interest Rate Warrant Agreement, with
form of Definitive and Global Interest Rate
Warrant Certificates attached as Exhibits A and
A-1 thereto.
5 Opinion of Brown & Wood LLP (to be filed by
amendment).
15 Letter of Awareness from Deloitte & Touche LLP concerning
Unaudited Financial Information.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Deloitte & Touche LLP.
23.3 Consent of Brown & Wood LLP (included in Exhibit 5,
which will be filed by amendment).
24 Powers of Attorney (included on signature pages).
Exhibit 1
UNDERWRITING AGREEMENT
____________, 199_
Morgan Stanley, Dean Witter, Discover & Co.
1585 Broadway
New York, New York 10036
Dear Sirs:
We (the "Manager") are acting on behalf of the underwriter or
underwriters (including ourselves) named below (such underwriter or
underwriters being herein called the "Underwriters"), and we understand that
Morgan Stanley, Dean Witter, Discover & Co., a Delaware corporation (the
"Company"), proposes to issue and sell to the several Underwriters [number and
title of warrants] Warrants (the "Firm Offered Warrants"). The Company also
proposes to issue and sell to the several Underwriters not more than an
additional [number of warrants for over-allotment and title of warrants]
Warrants (the "Additional Offered Warrants") if and to the extent that the
Underwriters shall have determined to exercise the right to purchase such
Additional Offered Warrants granted to the Underwriters in the third paragraph
hereof. The Firm Offered Warrants and the Additional Offered Warrants are
collectively referred to herein as the Offered Warrants. The Offered Warrants
are to be issued pursuant to the provisions of a Warrant Agreement (the
"Warrant Agreement") dated as of ____________, 199_ among the Company, [name
of Warrant Agent], as Warrant Agent and Morgan Stanley & Co. Incorporated, as
Determination Agent.
Subject to the terms and conditions set forth or incorporated by
reference herein, the Company hereby agrees to sell and the Underwriters agree
to purchase, severally and not jointly, the respective numbers of Firm Offered
Warrants set forth below opposite their names at a purchase price of U.S.
$[___] per Warrant:
Number of Firm
Name Offered Warrants
- ---- ----------------
[Dean Witter Reynolds Inc.]
[Morgan Stanley & Co. Incorporated]
[Other underwriters] -------------
Total.......................................... -------------
The Underwriters will pay for the Firm Offered Warrants upon
delivery thereof at the offices of Davis Polk & Waradwell at 10:00 a.m. (New
York time) on ____________, 199_, or at such other time, not later than 5:00
p.m. (New York time) on ____________, 199_, as shall be designated by the
Manager. The time and date of such payment and delivery are hereinafter
referred to as the Closing Date.
Subject to the terms and conditions set forth or
incorporated by reference herein, the Company agrees to sell to the
Underwriters the Additional Offered Warrants, and the Underwriters shall
have a one-time right to purchase, severally and not jointly, up to [number
of warrants for over-allotment] Additional Offered Warrants at the purchase
price. Additional Offered Warrants may be purchased solely for the purpose
of covering over-allotments made in connection with the offering of the
Firm Offered Warrants.
If any Additional Offered Warrants are to be purchased, each
Underwriter agrees, severally and not jointly, to purchase the number of
Additional Offered Warrants (subject to such adjustments to eliminate
fractional Warrants as we may determine) that bears the same proportion to the
total number of Additional Offered Warrants to be purchased as the number of
Firm Offered Warrants set forth above opposite the name of such Underwriter
bears to the total number of Firm Offered Warrants. The Underwriters will pay
for any Additional Offered Warrants upon delivery thereof at the offices of
Davis Polk & Wardwell at 10:00 a.m. (New York time) on such date (which may be
the same as the Closing Date but shall in no event be earlier than the Closing
Date nor later than ten business days after the giving of notice hereinafter
referred to) as shall be designated in a written notice from us to the Company
of our determination, on behalf of the Underwriters, to purchase a number,
specified in said notice, of Additional Offered Warrants. The time and date
of such payment and delivery are hereinafter referred to as the Option Closing
Date. The notice of the determination to exercise the option to purchase
Additional Offered Warrants and of the Option Closing Date may be given at any
time within 30 days after the date of this Agreement. The several obligations
of the Underwriters to purchase Additional Offered Warrants are subject to the
delivery to us on the Option Closing Date of such documents as we may
reasonably request with respect to the good standing of the Company, the due
authorization and issuance of the Additional Offered Warrants and other
matters related to the issuance of the Additional Offered Warrants.
The Offered Warrants shall have the terms set forth in the
Prospectus dated June 2, 1997, and the Prospectus Supplement dated __________,
199_, including the following:
For Index Warrants:
Designation of the Series of Warrants: [ ] Index
[Call] [Put] Warrants
Aggregate Number of Firm Warrants:
Price to Public:
Index/Indices:
[Strike Level] [Base Value]:
First date upon which Warrants may be exercised:
Expiration Date:
Currency in which payments shall
be made:
Minimum number of Warrants exercisable by
any holder on any day:
Maximum number of Warrants exercisable on
any day: [In the aggregate] [by any
beneficial owner]
Formula for determining Cash Settlement Value:
Exchange Rate (or method of calculation):
Exchange on which Warrants are to be listed:
Other terms:
For Currency Warrants:
Designation of the Series of Warrants: [ ] Currency
[Call] [Put] Warrants
Aggregate Number of Firm Warrants:
Price to Public:
Base [Currency][Currencies]:
Reference [Currency][Currencies]::
First date upon which Warrants may be exercised:
Expiration Date:
Currency in which payments shall be made:
Minimum number of Warrants exercisable by
any holder on any day:
Maximum number of Warrants exercisable on any
day: [In the aggregate] [by any beneficial
owner]
Formula for determining Cash Settlement Value:
Exchange Rate (or method of calculation):
Exchange on which Warrants are to be listed:
Other terms:
For Interest Rate Warrants:
Designation of the Series of Warrants: [ ] Interest
Rate [Call] [Put] Warrants
Aggregate Number of Firm Warrants:
Price to Public:
Interest Rate, Interest Swap Rate or other Rate:
Debt Instrument:
[Strike] [Base] Amount:
First date upon which Warrants may be exercised:
Expiration Date:
Currency in which payments shall be made:
Minimum number of Warrants exercisable by any holder
on any day:
Maximum number of Warrants exercisable on any day:
[In the aggregate] [by any beneficial owner]
Formula for determining Cash Settlement Value:
Exchange Rate (or method of calculation):
Exchange on which Warrants are to be listed:
Other terms:
Capitalized terms used above and not defined herein shall have
the meanings set forth in the Prospectus and Prospectus Supplement referred to
above.
Except as set forth below, all provisions contained in the
document entitled Morgan Stanley, Dean Witter, Discover & Co. Inc.
Underwriting Agreement Standard Provisions (Warrants) dated June 2, 1997, a
copy of which is attached hereto, are herein incorporated by reference in
their entirety and shall be deemed to be a part of this Agreement to the
same extent as if such provisions had been set forth in full herein, except
that, (i) if any term defined in such document is otherwise defined herein,
the definition set forth herein shall control, (ii) all references in such
document to a type of warrant that is not an Offered Warrant shall not be
deemed to be a part of this Agreement and (iii) all references in such
document to a type of agreement that has not been entered into in
connection with the transactions contemplated hereby shall not be deemed to
be a part of this Agreement.
Please confirm your agreement by having an authorized officer
sign a copy of this Agreement in the space set forth below.
Very truly yours,
[DEAN WITTER REYNOLDS INC.]
[MORGAN STANLEY & CO.
INCORPORATED]
[Name of Other Underwriters]
On behalf of themselves and the other
Underwriters named herein
By MORGAN STANLEY & CO.
INCORPORATED
By:
---------------------------------------
Name:
Title:
- -----------------------------------------------------------------------------
Accepted:
MORGAN STANLEY, DEAN WITTER,
DISCOVER & CO.
By:
-----------------------------------
Name:
Title:
MORGAN STANLEY, DEAN WITTER, DISCOVER & CO.
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
(WARRANTS)
June 2, 1997
From time to time, Morgan Stanley, Dean Witter, Discover & Co.,
a Delaware corporation (the "Company"), may enter into one or more
underwriting agreements that provide for the sale of designated securities to
the several underwriters named therein. The standard provisions set forth
herein may be incorporated by reference in any such underwriting agreement (an
"Underwriting Agreement"). The Underwriting Agreement, including the
provisions incorporated therein by reference, is herein referred to as this
Agreement. Terms defined in the Underwriting Agreement are used herein as
therein defined.
The Company proposes to issue from time to time (i) warrants
entitling the holders thereof to receive from the Company, upon exercise, an
amount in cash determined by reference to decreases and/or increases in the
level of a specified index or in the levels (or relative levels) of two or
more indices or combinations of indices, which index or indices may be based
on one or more U.S. or foreign stocks, bonds or other securities, one or more
U.S. or foreign interest rates, one or more currencies or currency units, or
any combination of the foregoing ("Index Warrants"), (ii) warrants entitling
the holders thereof to receive from the Company, upon exercise, an amount in
cash determined by reference to the right to purchase and/or the right to sell
a specified amount or specified amounts of one or more currencies or currency
units or any combination thereof for a specified amount or specified amounts
of one or more different currencies or currency units or combination thereof
("Currency Warrants") and (iii) warrants entitling the holders thereof to
receive from the Company, upon exercise, an amount in cash determined by
reference to decreases and/or increases in the yield or closing price of one
or more specified debt instruments issued either by the United States
government or by a foreign government, in the interest rate or interest rate
swap rate or other rate established from time to time by one or more specified
financial institutions or in any specified combination of the foregoing
("Interest Rate Warrants"). Such Index Warrants, Currency Warrants and
Interest Rate Warrants are hereinafter collectively referred to as "Warrants."
Such Warrants are to be issued pursuant to the provisions of a Warrant
Agreement specified in the Underwriting Agreement. The Warrants will have
varying designations, expiration dates, exercise prices, minimum and maximum
limits on exercise of Warrants and exchange rates to determine U.S. dollar
value upon exercise and other terms, all of which are specified in the
Underwriting Agreement.
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement including a prospectus
relating to the Warrants and has filed with, or transmitted for filing to, or
shall promptly hereafter file with or transmit for filing to, the Commission a
prospectus supplement (the "Prospectus Supplement") specifically relating to
the Offered Warrants pursuant to Rule 424 under the Securities Act of 1933, as
amended (the "Securities Act"). The term Registration Statement means the
registration statement, as amended to the date of this Agreement. The term
Basic Prospectus means the prospectus included in the Registration Statement.
The term Prospectus means the Basic Prospectus together with the Prospectus
Supplement. The term preliminary prospectus means a preliminary prospectus
supplement specifically relating to the Offered Warrants together with the
Basic Prospectus. As used herein, the terms "Basic Prospectus," "Prospectus"
and "preliminary prospectus" shall include in each case the documents, if any,
incorporated by reference therein. The terms "supplement," "amendment" and
"amend" as used herein shall include all documents deemed to be incorporated
by reference in the Prospectus that are filed subsequent to the date of the
Basic Prospectus by the Company with the Commission pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
The term Contract Warrants means the Offered Warrants, if any,
to be purchased pursuant to the delayed delivery contracts substantially in
the form of Schedule I hereto, with such changes therein as the Company may
approve (the "Delayed Delivery Contracts"). The term "Underwriters' Warrants"
means the Offered Warrants other than Contract Warrants.
1. Representations and Warranties. The Company represents and
warrants to each of the Underwriters as of the date of the Underwriting
Agreement that:
(a) The Registration Statement has become effective; no
stop order suspending the effectiveness of the Registration Statement is
in effect, and no proceedings for such purpose are pending before or
threatened by the Commission.
(b) (i) Each document, if any, filed or to be filed
pursuant to the Exchange Act and incorporated by reference in the
Prospectus complied or will comply when so filed in all material
respects with the Exchange Act and the applicable rules and regulations
of the Commission thereunder, (ii) each part of the Registration
Statement, when such part became effective, did not contain and each
such part, as amended or supplemented, if applicable, will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, (iii) the Registration Statement and the
Prospectus comply and, as amended or supplemented, if applicable, will
comply in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder and (iv)
the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in
this Section 1(b) do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information
concerning any Underwriter furnished to the Company in writing by such
Underwriter through the Manager expressly for use therein.
(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State
of Delaware, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its consolidated
subsidiaries, taken as a whole.
(d) Each subsidiary of the Company has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be
so qualified or be in good standing would not have a material adverse
effect on the Company and its consolidated subsidiaries, taken as a
whole.
(e) This Agreement has been duly authorized, executed and
delivered by the Company.
(f) The Warrant Agreement has been duly authorized and at
the Closing Date will have been duly executed and delivered by the
Company and will be a valid and binding agreement of the Company,
enforceable in accordance with its terms except as the enforceability
thereof (i) may be limited by bankruptcy, insolvency, reorganization,
liquidation, moratorium and other similar laws affecting creditors'
rights generally and (ii) is subject to general principles of equity,
regardless of whether such enforceability is considered in a proceeding
in equity or at law.
(g) The Offered Warrants have been duly authorized and,
when executed and countersigned in accordance with the provisions of the
Warrant Agreement and delivered to and paid for by the Underwriters in
accordance with the terms of the Underwriting Agreement or by
institutional investors in accordance with the terms of the Delayed
Delivery Contracts, if any, will be entitled to the benefits of the
Warrant Agreement and will be valid and legally binding obligations of
the Company, enforceable in accordance with their respective terms
except as the enforceability thereof (i) may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium and other similar
laws affecting creditors' rights generally and (ii) is subject to
general principles of equity, regardless of whether such enforceability
is considered in a proceeding in equity or at law.
(h) The Delayed Delivery Contracts, if any, have been
duly authorized, executed and delivered by the Company and are valid and
binding agreements of the Company, enforceable in accordance with their
respective terms except as the enforceability thereof (i) may be limited
by bankruptcy, insolvency, reorganization, liquidation, moratorium and
other similar laws affecting creditors' rights generally and (ii) is
subject to general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement, the
Warrant Agreement, the Offered Warrants and any Delayed Delivery
Contracts, will not contravene any provision of applicable law or the
restated certificate of incorporation or by-laws of the Company or any
agreement or other instrument binding upon the Company or any of its
subsidiaries that is material to the Company and its consolidated
subsidiaries, taken as a whole, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company
or any subsidiary, and no consent, approval or authorization or order of
or qualification with any governmental body or agency is required for
the performance by the Company of its obligations under this Agreement,
the Warrant Agreement, the Offered Warrants or any Delayed Delivery
Contracts except such as may be required by the securities or Blue Sky
laws of the various states in connection with the offer and sale of the
Offered Warrants.
(j) There has not occurred any material adverse change,
or any development involving a prospective material adverse change, in
the condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto effected subsequent to the date of the Underwriting
Agreement).
(k) There are no legal or governmental proceedings
pending or threatened to which the Company or any of its subsidiaries is
a party or to which any of the properties of the Company or any of its
subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or any
statutes, regulations, contracts or other documents that are required to
be described in the Registration Statement or the Prospectus or to be
filed or incorporated by reference as exhibits to the Registration
Statement that are not described, filed or incorporated as required.
(l) Each of the Company and its subsidiaries has all
necessary consents, authorizations, approvals, orders, certificates and
permits of and from, and has made all declarations and filings with, all
federal, state, local and other governmental authorities, all self-
regulatory organizations and all courts and other tribunals, to own,
lease, license and use its properties and assets and to conduct its
business in the manner described in the Prospectus, except to the extent
that the failure to obtain or file would not have a material adverse
effect on the Company and its consolidated subsidiaries, taken as a
whole.
(m) Dean Witter Reynolds Inc. is registered as a broker-
dealer and investment adviser with the Commission, is registered with
the Commodity Futures Trading Commission as a futures commission
merchant and is a member of the New York Stock Exchange, Inc. and the
National Association of Securities Dealers, Inc.
(n) Morgan Stanley & Co. Incorporated is registered as a
broker-dealer and investment adviser with the Commission, is registered
with the Commodity Futures Trading Commission as a futures commission
merchant and is a member of the New York Stock Exchange, Inc. and the
National Association of Securities Dealers, Inc.
(o) The Company has complied with all provisions of
Section 517.075, Florida Statutes relating to doing business with the
Government of Cuba or with any person or affiliate located in Cuba.
2. Delayed Delivery Contracts. If the Prospectus provides for
sales of Offered Warrants pursuant to Delayed Delivery Contracts, the
Company hereby authorizes the Underwriters to solicit offers to purchase
Contract Warrants on the terms and subject to the conditions set forth in
the Prospectus pursuant to Delayed Delivery Contracts. Delayed Delivery
Contracts may be entered into only with institutional investors approved by
the Company of the types set forth in the Prospectus. On the Closing Date,
the Company will pay to the Manager as compensation for the accounts of the
Underwriters the commission set forth in the Underwriting Agreement in
respect of the Contract Warrants. The Underwriters will not have any
responsibility in respect of the validity or the performance of any Delayed
Delivery Contracts.
If the Company executes and delivers Delayed Delivery Contracts
with institutional investors, the aggregate amount of Offered Warrants to be
purchased by the several Underwriters shall be reduced by the aggregate amount
of Contract Warrants; and such reduction shall be applied to the commitment of
each Underwriter pro rata in proportion to the amount of Offered Warrants set
forth opposite such Underwriter's name in the Underwriting Agreement, except
to the extent that the Manager determines that such reduction shall be applied
in other proportions and so advises the Company; provided, however, that the
total amount of Offered Warrants to be purchased by all Underwriters shall be
the aggregate amount set forth above, less the aggregate amount of Contract
Warrants.
3. Public Offering. The Company is advised by the Manager
that the Underwriters propose to make a public offering of their respective
portions of the Underwriters' Warrants as soon after this Agreement has
been entered into as in the Manager's judgment is advisable. The terms of
the public offering of the Underwriters' Warrants are set forth in the
Prospectus.
4. Purchase and Delivery. Except as otherwise provided in this
Section 4, payment for the Underwriters' Warrants shall be made in immediately
available funds at the time and place set forth in the Underwriting Agreement,
upon delivery to the Manager for the respective accounts of the several
Underwriters of the Underwriters' Warrants, registered in such names and in
such denominations as the Manager shall request in writing not less than one
full business day prior to the date of delivery, with any transfer taxes
payable in connection with the transfer of the Underwriters' Warrants to the
Underwriters duly paid.
Delivery on the Closing Date of any Underwriters' Warrants in
bearer form shall be effected only by delivery of a single permanent global
Warrant (the "Global Warrant") evidencing the Offered Warrants in bearer form,
in each case to a common depositary for Morgan Guaranty Trust Company of New
York, Brussels office, as operator of the Euro-clear System ("Euro-clear"),
and for Cedel Bank, Societe Anonyme ("Cedel") for credit to the respective
accounts at Euro-clear or Cedel of each Underwriter or to such other accounts
as such Underwriter may direct. Any Global Warrant shall be delivered to the
Manager not later than the Closing Date, against payment of funds to the
Company in the net amount due to the Company for such Global Warrant, as the
case may be, by the method and in the form set forth herein. Underwriters'
Warrants in bearer form shall be evidenced only by a Global Warrant until
their expiration.
5. Conditions to Closing. The several obligations of the
Underwriters hereunder are subject to the following conditions:
(a) Subsequent to the execution and delivery of the
Underwriting Agreement and prior to the Closing Date,
(i) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating accorded
any of the Company's securities by any "nationally recognized
statistical rating organization," as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or operations of
the Company and its subsidiaries, taken as a whole, from that set
forth in the Prospectus (exclusive of any amendments or supplements
thereto effected subsequent to the execution and delivery of the
Underwriting Agreement), that, in the judgment of the Manager, is
material and adverse and that makes it, in the judgment of the
Manager, impracticable to market the Offered Warrants on the terms
and in the manner contemplated in the Prospectus.
(b) the Manager shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer
of the Company, to the effect set forth in clause (a) (i) above and to
the effect that the representations and warranties of the Company
contained in this Agreement are true and correct as of the Closing Date
and that the Company has complied with all of the agreements and
satisfied all of the conditions on its part to be performed or satisfied
on or before the Closing Date.
The officer signing and delivering such certificate may rely
upon the best of his knowledge as to proceedings threatened.
(c) The Manager shall have received on the Closing Date
an opinion of Brown & Wood LLP, counsel to the Company, or of other
counsel satisfactory to the Manager and who may be an officer of the
Company, dated the Closing Date, to the effect set forth in Exhibit A.
(d) The Manager shall have received on the Closing Date
an opinion of Davis Polk & Wardwell, special counsel for the
Underwriters, dated the Closing Date, to the effect set forth in Exhibit
B.
(e) The Manager shall have received on the Closing Date
an opinion of Davis Polk & Wardwell, special United States tax counsel
for the Company, confirming the accuracy on the Closing Date of the
opinion of such counsel set forth under the caption "Certain United
States Federal Income Tax Considerations" in the Prospectus Supplement.
(f) The Manager shall have received on the Closing Date a
letter, dated the Closing Date, in form and substance satisfactory to
the Manager, from the Company's independent auditors, containing
statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in or
incorporated by reference into the Prospectus.
6. Covenants of the Company. In further consideration of the
agreements of the Underwriters contained herein, the Company covenants as
follows:
(a) To furnish the Manager, without charge, a conformed
copy of the Registration Statement (including exhibits and all
amendments thereto) and for delivery to each other Underwriter a
conformed copy of the Registration Statement (without exhibits thereto)
and, during the period mentioned in paragraph (c) below, as many copies
of the Prospectus, any documents incorporated by reference therein and
any supplements and amendments thereto or to the Registration Statement
as the Manager may reasonably request.
(b) Before amending or supplementing the Registration
Statement or the Prospectus with respect to the Offered Warrants, to
furnish to the Manager a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to
which the Manager reasonably objects.
(c) If, during such period after the first date of the
public offering of the Offered Warrants as in the opinion of counsel for
the Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall occur
or condition exist as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein, in
the light of the circumstances existing when the Prospectus is delivered
to a purchaser, not misleading, or if in the opinion of counsel for the
Underwriters, it is necessary to amend or supplement the Prospectus to
comply with law, forthwith to prepare and furnish, at its own expense,
to the Underwriters and to the dealers (whose names and addresses the
Manager will furnish to the Company) to which Offered Warrants may have
been sold by the Manager on behalf of the Underwriters and to any other
dealers upon request, either amendments or supplements to the
Prospectus, satisfactory in all respects to the Manager, so that the
statements in the Prospectus as so amended or supplemented will not, in
the light of the circumstances existing when the Prospectus is delivered
to a purchaser, be misleading or so that the Prospectus, as so amended
or supplemented, will comply with law and to cause such amendments or
supplements to be filed promptly with the Commission.
(d) To endeavor to qualify the Offered Warrants for offer
and sale under the securities or Blue Sky laws of such jurisdictions as
the Manager shall reasonably request and to maintain such qualifications
for as long as the Manager shall reasonably request.
(e) To make generally available to the Company's security
holders and to the Manager as soon as practicable an earning statement
covering a twelve month period beginning on the first day of the
Company's first full fiscal quarter next following the date of the
Underwriting Agreement that satisfies the provisions of Section 11(a) of
the Securities Act and the rules and regulations of the Commission
thereunder. If such fiscal quarter is the last fiscal quarter of the
Company's fiscal year, such earning statement shall be made available
not later than 90 days after the close of the period covered thereby and
in all other cases shall be made available not later than 45 days after
the close of the period covered thereby.
(f) During the period beginning on the date of the
Underwriting Agreement and continuing to and including the Closing Date,
not to offer, sell, contract to sell or otherwise dispose of any
warrants of the Company substantially similar to the Offered Warrants
(other than the Offered Warrants), without the prior written consent of
the Manager; provided that Call Warrants and Put Warrants shall not be
deemed to be similar for purposes of this paragraph.
(g) Whether or not any sale of Offered Warrants is
consummated, to pay all expenses incident to the performance of its
obligations under this Agreement, including: (i) the preparation and
filing of the Registration Statement and the Prospectus and all
amendments and supplements thereto, (ii) the preparation, issuance and
delivery of the Offered Warrants, (iii) the fees and disbursements of
the Company's counsel and accountants and of the Warrant Agent and its
counsel, (iv) the qualification of the Offered Warrants under securities
or Blue Sky laws in accordance with the provisions of Section 6(d),
including filing fees and the fees and disbursements of counsel for the
Underwriters in connection therewith and in connection with the
preparation of any Blue Sky or Legal Investment Memoranda, (v) the
printing and delivery to the Underwriters in quantities as hereinabove
stated of copies of the Registration Statement and all amendments
thereto and of the Prospectus and any amendments or supplements thereto,
(vi) the printing and delivery to the Underwriters of copies of any Blue
Sky or Legal Investment Memoranda, (vii) any fees charged by rating
agencies for the rating of the Offered Warrants, (viii) any expenses
incurred by the Company in connection with a "road show" presentation to
potential investors, (ix) all document production charges of counsel to
the Underwriters (but not including their fees for professional services
in connection with the preparation of this Agreement) and (x) any filing
fees in connection with any review of the offering of the Offered
Warrants by the National Association of Securities Dealers, Inc.
(h) To use its best efforts to accomplish and maintain the
listing of the Warrants on the exchange specified in the Underwriting
Agreement.
7. Covenants of the Underwriters. Each of the several
Underwriters represents to and agrees with the Company that:
(a) it has complied and will comply with all applicable
provisions of the laws of each jurisdiction in which the Warrants are
being offered with respect to anything done by it in relation to the
Warrants in, from or otherwise involving such jurisdictions.
(b) it will comply with or observe any other restrictions
or limitations set forth in the Prospectus on persons to whom, or the
jurisdictions in which, or the manner in which, the Warrants may be
offered, sold, resold or delivered.
8. Indemnification and Contribution. The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses incurred in connection with defending or investigating
any such action or claim) caused by any untrue statement or allegedly untrue
statement of a material fact contained in the Registration Statement or any
amendment thereof, any preliminary prospectus or the Prospectus (as amended
or supplemented if the Company shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission or
allegedly untrue statement or omission based upon such Underwriter through the
Manager expressly for use therein; provided, however, that the foregoing
indemnity agreement with respect to any preliminary prospectus shall not inure
to the benefit of any Underwriter from whom the person asserting any such
losses, claims, damages or liabilities purchased Offered Warrants, or any
person controlling such Underwriter, if a copy of the Prospectus (as then
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Underwriter
to such person, if required by law to have been delivered, at or prior to the
written confirmation of the sale of the Offered Warrants to such person, and
if the Prospectus (as so amended or supplemented) would have cured the defect
giving rise to such losses, claims, damages or liabilities.
Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the foregoing indemnity from the
Company to each Underwriter, but only with reference to information relating
to such Underwriter furnished to the Company by such Underwriter in writing
through the Manager expressly for use in the Registration Statement, any
preliminary prospectus, the Prospectus or any amendments or supplements
thereto.
In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either of the two preceding paragraphs,
such person (the "indemnified party") shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party") in
writing and the indemnifying party, upon request of the indemnified party,
shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of
such counsel related to such proceeding. In any such proceeding, any
indemnified party shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii)
the named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is
understood that the indemnifying party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for
the fees and expenses of more than one separate firm (in addition to any
local counsel) for all such indemnified parties and that all such fees and
expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by the Manager, in the case of parties indemnified
pursuant to the second preceding paragraph, and by the Company, in the case
of parties indemnified pursuant to the first preceding paragraph. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or
if there be a final judgment for the plaintiff, the indemnifying party
agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for fees
and expenses of counsel as contemplated by the third sentence of this
paragraph, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i)
such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with
such request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened proceeding in respect of which
any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such proceeding.
To the extent the indemnification provided for in the first or
second paragraph in this Section 8 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Underwriters from the
offering of the Offered Securities or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company and of the Underwriters
in connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the
Underwriters in connection with the offering of the Offered Warrants shall be
deemed to be in the same respective proportions as the net proceeds from the
offering of such Offered Warrants (before deducting expenses) received by the
Company and the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover of the
Prospectus Supplement, bear to the aggregate public offering price of the
Offered Warrants. The relative fault of the Company and of the Underwriters
shall be determined by reference to, among other things, whether the untrue or
allegedly untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Underwriters agree that it would not be
just or equitable if contribution pursuant to this Section 8 were determined
by pro rata allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this Section 8, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Offered Warrants underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages that such Underwriter has otherwise been required to pay by reason of
such untrue or allegedly untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
respective obligations to contribute pursuant to this Section 8 are several in
proportion to the respective principal amounts of Offered Warrants purchased
by each of such Underwriters and not joint. The remedies provided for in this
Section 8 are not exclusive and shall not limit any rights or remedies which
may otherwise be available to any indemnified party at law or in equity.
9. Termination. This Agreement shall be subject to
termination in the Manager's absolute discretion, by notice given by the
Manager to the Company, if (a) after the execution and delivery of the
Underwriting Agreement and prior to the Closing Date (i) trading generally
shall have been suspended or materially limited on or by, as the case may
be, any of the New York Stock Exchange, the American Stock Exchange, the
National Association of Securities Dealers, Inc., the Chicago Board of
Options Exchange, the Chicago Mercantile Exchange, the Chicago Board of
Trade or the stock exchange to which the Offered Warrants relate, (ii)
trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by
either Federal or New York State authorities, (iv) there shall have
occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis that, in the judgment of the
Manager, is material and adverse or (v) a general moratorium in foreign
exchange trading or a moratorium in trading in the U.S. dollar or in the
currency of the country in which the stock exchange to which the Offered
Warrants relate is located by major international banks or persons shall
have been declared, and (b) in the case of any of the events specified in
clauses (a)(i) through (iv), such event, singly or together with any other
such event, makes it, in the judgment of the Manager, impracticable to
market the Offered Warrants on the terms and in the manner contemplated in
the Prospectus.
10. Defaulting Underwriters. If on the Closing Date or the
Option Closing Date, as the case may be, any one or more of the
Underwriters shall fail or refuse to purchase Offered Warrants that it has
or they have agreed to purchase on such date, and the aggregate amount of
Offered Warrants which such defaulting Underwriter or Underwriters agreed
but failed or refused to purchase is not more than one-tenth of the
aggregate amount of the Offered Warrants to be purchased on such date, the
other Underwriters shall be obligated severally in the proportions that the
amount of Firm Offered Warrants set forth opposite their respective names
in the Underwriting Agreement bears to the aggregate amount of Firm Offered
Warrants set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as the Manager may specify, to
purchase the Offered Warrants which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date;
provided that in no event shall the amount of Offered Warrants that any
Underwriter has agreed to purchase pursuant to the Underwriting Agreement
be increased pursuant to this Section 10 by an amount in excess of one-
ninth of such amount of Offered Warrants without the written consent of
such Underwriter. If on the Closing Date any Underwriter or Underwriters
shall fail or refuse to purchase Firm Offered Warrants and the aggregate
amount of Firm Offered Warrants with respect to which such default occurs
is more than one-tenth of the aggregate amount of Firm Offered Warrants to
be purchased on such date, and arrangements satisfactory to the Manager and
the Company for the purchase of such Firm Offered Warrants are not made
within 36 hours after such default, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter or the Company. In
any such case either the Manager or the Company shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in
order that the required changes, if any, in the Registration Statement and
in the Prospectus or in any other documents or arrangements may be
effected. If on the Option Closing Date any Underwriter or Underwriters
shall fail or refuse to purchase Additional Offered Warrants and the
aggregate amount of Additional Offered Warrants with respect to which such
default occurs is more than one-tenth of the aggregate amount of Additional
Offered Warrants to be purchased on such date, the non-defaulting
Underwriters shall have the option to (i) terminate their obligation
hereunder to purchase Additional Offered Warrants or (ii) purchase not less
than the number of Additional Offered Warrants that such non-defaulting
Underwriters would have been obligated to purchase in the absence of such
default. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or
any of them, because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of this Agreement,
or if for any reason the Company shall be unable to perform its obligations
under this Agreement, the Company will reimburse the Underwriters or such
Underwriters as have so terminated this Agreement with respect to
themselves, severally, for all out-of-pocket expenses (including the fees
and disbursements of their counsel) reasonably incurred by such
Underwriters in connection with this Agreement or the offering of the
Offered Warrants.
11. Representations and Indemnities to Survive. The respective
indemnity and contribution agreements and the representations, warranties
and other statements of the Company, its officers and the Underwriters set
forth in this Agreement will remain in full force and effect regardless of
(i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Underwriter or any person controlling any Underwriter or by
or on behalf of the Company, its directors or officers or any person
controlling the Company and (iii) acceptance of and payment for any of the
Offered Warrants.
12. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and
the officers, directors and controlling persons referred to in Section 8,
and no other person will have any right or obligation hereunder.
13. Counterparts. The Underwriting Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
14. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
15. Headings. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
EXHIBIT A
Opinion of Company Counsel
The opinion of Brown & Wood LLP, counsel to the Company or of
other counsel satisfactory to the Manager and who may be an officer of the
Company, to be delivered pursuant to Section 5(c) of the Underwriting
Agreement shall be to the effect that:
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
State of Delaware, has the corporate power and authority to own its
property and to conduct its business as described in the Prospectus
and is duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except
to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and
its consolidated subsidiaries, taken as a whole;
(ii) each of Dean Witter Reynolds, Inc., Greenwood Trust
Company, Morgan Stanley & Co. Incorporated and Morgan Stanley
International Incorporated (the "Material Subsidiaries") has been
duly incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has
the corporate power and authority to own its property and to conduct
its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its consolidated
subsidiaries, taken as a whole;
(iii) each of the Company and its Material Subsidiaries has
all necessary consents, authorizations, approvals, orders,
certificates and permits of and from, and has made all declarations
and filings with, all federal, state, local and other governmental
authorities, all self-regulatory organizations and all courts and
other tribunals, to own, lease, license and use its properties and
assets and to conduct its business in the manner described in the
Prospectus, except to the extent that the failure to obtain or file
would not have a material adverse effect on the Company and its
consolidated subsidiaries, taken as a whole;
(iv) the Warrant Agreement has been duly authorized,
executed and delivered by the Company and is a valid and binding
agreement of the Company, enforceable in accordance with its terms
except as the enforceability thereof (a) may be limited by
bankruptcy, insolvency, reorganization, liquidation, moratorium and
other similar laws affecting creditors' rights generally and (b) is
subject to general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law;
(v) the Offered Warrants have been duly authorized and,
when executed and countersigned in accordance with the provisions of
the Warrant Agreement and delivered to and paid for by the
Underwriters in accordance with the terms of the Underwriting
Agreement or by institutional investors in accordance with the terms
of the Delayed Delivery Contracts, if any, will be entitled to the
benefits of the Warrant Agreement and will be valid and binding
obligations of the Company, enforceable in accordance with their
terms except as the enforceability thereof (a) may be limited by
bankruptcy, insolvency, reorganization, liquidation, moratorium and
other similar laws affecting creditors' rights generally and (b) is
subject to general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law;
(vi) the Underwriting Agreement has been duly authorized,
executed and delivered by the Company;
(vii) the Delayed Delivery Contracts, if any, have been duly
authorized, executed and delivered by the Company and are valid and
binding agreements of the Company enforceable in accordance with
their respective terms except as the enforceability thereof (a) may
be limited by bankruptcy, insolvency, reorganization, liquidation,
moratorium and other similar laws affecting creditors' rights
generally and (b) is subject to general principles of equity,
regardless of whether such enforceability is considered in a
proceeding in equity or at law;
(viii) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Underwriting
Agreement, the Warrant Agreement, the Offered Warrants and any
Delayed Delivery Contracts, will not contravene any provision of
applicable law or the restated certificate of incorporation or by-
laws of the Company or any agreement or other instrument binding upon
the Company or any of its consolidated subsidiaries that is material
to the Company and its consolidated subsidiaries, taken as a whole,
or, to the best of such counsel's knowledge, any judgment, order or
decree of any governmental body, agency or court having jurisdiction
over the Company or any consolidated subsidiary, and no consent,
approval or authorization or order of or qualification with any
governmental body or agency is required for the performance by the
Company of its obligations under the Underwriting Agreement, the
Warrant Agreement, the Offered Warrants or any Delayed Delivery
Contract, except such as may be required by the securities or Blue
Sky laws of the various states in connection with the offer and sale
of the Offered Warrants;
(ix) the statements (1) in the Prospectus, as amended or
supplemented, if applicable, under the captions "Description of the
Warrants", "Underwriters" and "Plan of Distribution", (2) in the
Registration Statement under Item 15, (3) in "Item 3 - Legal
Proceedings" of the most recent annual reports on Form 10-K
incorporated by reference in the Prospectus and (4) in "Item 1 -
Legal Proceedings" of Part II of the quarterly reports on Form 10-Q,
if any, filed since such annual reports and incorporated by reference
in the Prospectus, in each case insofar as such statements constitute
summaries of the legal matters, documents or proceedings referred to
therein, fairly present the information called for with respect to
such legal matters, documents and proceedings and fairly summarize
the matters referred to therein;
(x) after due inquiry, such counsel does not know of any
legal or governmental proceedings pending or threatened to which the
Company or any of its subsidiaries is a party or to which any of the
properties of the Company or any of its subsidiaries is subject that
are required to be described in the Registration Statement or the
Prospectus and are not so described or of any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed or
incorporated by reference as exhibits to the Registration Statement
that are not described, filed or incorporated by reference as
required; and
(xi) such counsel (1) is of the opinion that each document,
if any, filed pursuant to the Exchange Act and incorporated by
reference in the Prospectus (except for financial statements and
schedules included therein as to which such counsel need not express
any opinion) complied when so filed as to form in all material
respects with the Exchange Act and the applicable rules and
regulations of the Commission thereunder, (2) has no reason to
believe that (except for financial statements and schedules as to
which such counsel need not express any belief) any part of the
Registration Statement when such part became effective contained, and
as of the date such opinion is delivered contains any untrue
statement of a material fact or omitted or omits to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading, (3) is of the opinion that the
Registration Statement and Prospectus, as amended or supplemented, if
applicable (except for financial statements and schedules included
therein as to which such counsel need not express any opinion),
comply as to form in all material respects with the Securities Act
and the applicable rules and regulations of the Commission thereunder
and (4) has no reason to believe that (except for financial
statements and schedules as to which such counsel need not express
any belief) the Prospectus, as of the date such opinion is delivered
contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading.
With respect to paragraph (xi) above, if such opinion is given
by counsel who is also an officer of the Company, such counsel may state that
his or her opinion and belief are based upon his or her participation, or the
participation of someone under his or her supervision, in the preparation of
the Registration Statement and Prospectus and any amendments or supplements
thereto and documents incorporated therein by reference and review and
discussion of the contents thereof, but are without independent check or
verification, except as specified. With respect to paragraph (xi) above, if
Brown & Wood LLP are giving such opinion, Brown & Wood LLP may state that
their opinion and belief are based upon their participation in the preparation
of the Registration Statement and Prospectus (but not including documents
incorporated therein by reference) and review and discussion of the contents
thereof (including documents incorporated therein by reference), but are
without independent check or verification, except as specified.
EXHIBIT B
Opinion of Davis Polk & Wardwell
Counsel for the Underwriters
The opinion of Davis Polk & Wardwell, counsel for the
Underwriters, to be delivered pursuant to Section 5(d) of the Underwriting
Agreement shall be to the effect that:
(i) the Warrant Agreement has been duly authorized,
executed and delivered by the Company and is a valid and binding
agreement of the Company, enforceable in accordance with its terms
except as the enforceability thereof (a) may be limited by
bankruptcy, insolvency, reorganization, liquidation, moratorium and
other similar laws affecting creditors' rights generally and (b) is
subject to general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law;
(ii) the Offered Warrants have been duly authorized and,
when executed and countersigned in accordance with the provisions of
the Warrant Agreement and delivered to and paid for by the
Underwriters in accordance with the terms of the Underwriting
Agreement or by institutional investors in accordance with the terms
of the Delayed Delivery Contracts, if any, will be entitled to the
benefits of the Warrant Agreement and will be valid and binding
obligations of the Company in each case enforceable in accordance
with their respective terms except as the enforceability thereof (a)
may be limited by bankruptcy, insolvency, reorganization,
liquidation, moratorium and other similar laws affecting creditors'
rights generally and (b) is subject to general principles of equity,
regardless of whether such enforceability is considered in a
proceeding in equity or at law;
(iii) the Underwriting Agreement has been duly authorized,
executed and delivered by the Company;
(iv) the Delayed Delivery Contracts, if any, have been duly
authorized, executed and delivered by the Company and are valid and
binding agreements of the Company, enforceable in accordance with
their respective terms except as the enforceability thereof (a) may
be limited by bankruptcy, insolvency, reorganization, liquidation,
moratorium and other similar laws affecting creditors' rights
generally and (b) is subject to general principles of equity,
regardless of whether such enforceability is considered in a
proceeding in equity or at law;
(v) the statements in the Prospectus as amended or
supplemented, if applicable, under "Description of Warrants,"
"Underwriters" and "Plan of Distribution," insofar as such statements
constitute summaries of the legal matters, documents or proceedings
referred to therein, fairly present the information called for with
respect to such legal matters, documents and proceedings and fairly
summarize the matters referred to therein; and
(vi) such counsel (1) has no reason to believe that (except
for financial statements and schedules as to which such counsel need
not express any belief) any part of the Registration Statement when
such part became effective contained, and as of the date such opinion
is delivered, contains any untrue statement of a material fact or
omitted or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading,
(2) is of the opinion that the Registration Statement and Prospectus,
as amended or supplemented, if applicable (except for financial
statements and schedules included therein as to which such counsel
need not express any opinion), comply as to form in all material
respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder and (3) has no reason to
believe that (except for financial statements and schedules as to
which such counsel need not express any belief) the Prospectus as of
the date such opinion is delivered contains any untrue statement of a
material fact or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading.
With respect to clause (vi) above, such counsel may state that
their opinion and belief are based upon their participation in the preparation
of the Registration Statement and the Prospectus and any amendments or
supplements thereto (but not including documents incorporated by reference)
and review and discussion of the contents thereof (including documents
incorporated by reference) but are without independent check or verification,
except as specified.
SCHEDULE I
DELAYED DELIVERY CONTRACT
___________, 19__
Dear Sirs:
The undersigned hereby agrees to purchase from Morgan
Stanley, Dean Witter, Discover & Co., a Delaware corporation (the
"Company"), and the Company agrees to sell to the undersigned the Company's
warrants described in Schedule A annexed hereto (the "Warrants"), offered
by the Company's Prospectus dated ____________, 19_ and Prospectus
Supplement dated ____________, 19_, receipt of copies of which are hereby
acknowledged, at a purchase price stated in Schedule A and on the further
terms and conditions set forth in this agreement. The undersigned does not
contemplate selling Warrants prior to making payment therefor.
The undersigned will purchase from the Company _____
Warrants on the delivery dates set forth in Schedule A. Each such date on
which Warrants are to be purchased hereunder is hereinafter referred to as
a "Delivery Date."
Payment for the Warrants which the undersigned has agreed to
purchase on each Delivery Date shall be made in immediately available funds
at the office of ____________________________, New York, N.Y., at 10:00 a.m.
(New York time) on the Delivery Date, upon delivery to the undersigned of
the Warrants to be purchased by the undersigned on the Delivery Date, in
such denominations and registered in such names as the undersigned may
designate by written or telegraphic communication addressed to the Company
not less than five full business days prior to the Delivery Date.
The obligation of the undersigned to take delivery of and make
payment for the Warrants on the Delivery Date shall be subject to the
conditions that (1) the purchase of Warrants to be made by the undersigned
shall not at the time of delivery be prohibited under the laws of the
jurisdiction to which the undersigned is subject and (2) the Company shall
have sold, and delivery shall have taken place to the underwriters (the
"Underwriters") named in the Prospectus Supplement referred to above of, such
part of the Warrants as is to be sold to them. Promptly after completion of
sale and delivery to the Underwriters, the Company will mail or deliver to the
undersigned at its address set forth below notice to such effect, accompanied
by a copy of the opinion of counsel for the Company delivered to the
Underwriters in connection therewith.
Failure to take delivery of and make payment for Warrants by
any purchaser under any other Delayed Delivery Contract shall not relieve
the undersigned of its obligations under this agreement.
This agreement will inure to the benefit of and be binding upon
the parties hereto and their respective successors, but will not be assignable
by either party hereto without the written consent of the other.
If this agreement is acceptable to the Company, it is requested
that the Company sign the form of acceptance below and mail or deliver one of
the counterparts hereof to the undersigned at its address set forth below.
This will become a binding agreement, as of the date first above written,
between the Company and the undersigned when such counterpart is so mailed or
delivered.
This agreement shall be governed by and construed in accordance
with the laws of the State of New York.
Yours very truly,
_________________________________
(Purchaser)
By: _____________________________
Name:
Title:
_________________________________
(Address)
Accepted:
MORGAN STANLEY, DEAN WITTER,
DISCOVER & CO.
By _______________________________
PURCHASER -- PLEASE COMPLETE AT TIME OF SIGNING
The name and telephone and department of the representative of
the Purchaser with whom details of delivery on the Delivery Date may be
discussed is as follows: (Please print.)
Telephone No.
Name (Including Area Code) Department
---- --------------------- ----------
- ---------------- ---------------------- ----------------
- ---------------- ---------------------- ----------------
- ---------------- ---------------------- ----------------
SCHEDULE A
Warrants:
Number of Warrants to be Purchased:
Purchase Price:
Delivery Dates:
==============================================================================
MORGAN STANLEY, DEAN WITTER, DISCOVER & CO.
and
______________________,
Warrant Agent
and
MORGAN STANLEY & CO. INCORPORATED, Determination Agent
_____________________
CURRENCY WARRANT AGREEMENT
dated as of ___________, 199_
____________________
Currency Warrants
==============================================================================
TABLE OF CONTENTS
Page
ARTICLE 1
Issuance of Warrants and Form, Execution, Delivery and Registration of Warrant
Certificates and Global Warrant Certificate
Section 1.1. Issuance of Warranta......................................... 1
Section 1.2. Form, Execution and Delivery of Warrant Certificates......... 2
Section 1.3. Warrant Certificates......................................... 3
Section 1.4. Registration of Transfers and Exchanges...................... 3
Section 1.5. Mutilated or Missing Warrant Certificates.................... 4
Section 1.6. Registered Holders........................................... 5
Section 1.7. Conversion Options........................................... 5
Section 1.8. Global Warrant Certificate................................... 7
ARTICLE 2
Duration and Exercise of Warrants
Section 2.1. Duration of Warrants; Minimum Exercise Amounts; Exercise
Notice..................................................... 9
Section 2.2. Exercise, Valuation and Delivery of Warrants................. 11
Section 2.3. Automatic Exercise of Warrants[; Exercise Upon
an Extraordinary Event or Exercise Limitation Event]....... 17
Section 2.4. Limitation of Number of Exercisable Warrants................. 19
Section 2.5. Covenant of the Company...................................... 20
Section 2.6. Return of Money Held Unclaimed for Two Years................. 20
Section 2.7. Return of Global Warrant Certificate......................... 21
ARTICLE 3
Other Provisions Relating to Rights of Warrantholders
Section 3.1. Warrantholder of Warrant May Enforce Rights.................. 21
ARTICLE 4
Warrants Acquired by the Company; Payment of Taxes
Section 4.1. Warrants Acquired by the Company............................. 21
Section 4.2. Payment of Taxes............................................. 22
ARTICLE 5
Concerning the Warrant Agent
Section 5.1. Warrant Agent................................................ 22
Section 5.2. Conditions of Warrant Agent's Obligations.................... 22
Section 5.3. Resignation and Appointment of Successor..................... 24
ARTICLE 6
Miscellaneous
Section 6.1. Amendment.................................................... 26
Section 6.2. Notices and Demands to the Company, the Warrant Agent
[and the Determination Agent].............................. 27
Section 6.3. Addresses for Notices........................................ 27
Section 6.4. Notices to Holders........................................... 27
Section 6.5. Obtaining of Approvals....................................... 27
Section 6.6. Persons Having Rights Under This Agreement................... 27
Section 6.7. Inspection of Agreement...................................... 28
Section 6.8. Headings..................................................... 28
Section 6.9. Counterparts................................................. 28
Section 6.10. Applicable Law.............................................. 28
TESTIMONIUM.............................................................
SIGNATURES..................................................................29
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 and Notice of Rejection For
Warrants Represented by Warrant Certificates
EXHIBIT B-1 -- Confirmation of Exercise and Notice of Rejection For
Warrants Represented by the Global Warrant Certificate
WARRANT AGREEMENT
THIS AGREEMENT, dated as of ___________, 199_, among MORGAN
STANLEY, DEAN WITTER, DISCOVER & CO., a corporation organized and existing
under the laws of the State of Delaware (the "Company"), [name of Warrant
Agent], a New York banking corporation (the "Warrant Agent")[, and MORGAN
STANLEY & CO. INCORPORATED, a corporation organized and existing under the
laws of the State of Delaware (the "Determination Agent").]
WHEREAS, the Company proposes to sell [put warrants] [call
warrants] (the "Warrants" or, individually, a "Warrant"), representing the
right to receive from the Company an amount in [name of payment currency]
equal to the Cash Settlement Value [or Alternative Settlement Amount (each as]
defined below) determined by reference to [the right to sell (in case of put
warrants)] [the right to purchase (in the case of call warrants)] a specified
amount[s] of the [Base Currency, (the "Base Currency")] [Base Currencies (the
"Base Currencies")](2) for a specified amount[s] of the [Reference Currency],
[(the "Reference Currency")] [Reference Currencies (the "Reference
Currencies")](1) on the terms and conditions set forth in this Agreement; and
- ------------
(1) If multiple Base Currencies or Reference Currencies ar alterations
must be made throughout the Warrant Agreement.
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 1
Issuance of Warrants and Form, Execution, Delivery and
Registration of Warrant Certificates and Global Warrant Certificate
Section 1.1. Issuance of Warranta. (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 shall represent the right, upon exercise
(including automatic exercise) subject to the provisions contained herein, to
receive the Cash Settlement Value [or the Alternative Settlement Amount, as
the case may be (each] as defined herein), of such Warrant. In no event shall
a registered or beneficial holder of a Warrant (each a "Warrantholder") be
entitled to receive any interest on any Cash Settlement Value [or Alternative
Settlement Amount].
Section 1.2. 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 stock exchange 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 any of the Chairman of the Board, the President, the Chief
Financial Officer, the Chief Strategic and Administrative Officer, the
Chief Legal Officer, the Treasurer, any Assistant Treasurer or any other
officer specifically designated by the Board of 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 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 1.3. Warrant Certificates. Each Warrant Certificate,
when executed on behalf of the Company in accordance with Section 1.2, shall be
delivered to the Warrant Agent, which shall manually countersign and deliver
the same to or upon the order of the Company. 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 1.2 shall be conclusive
evidence that the Warrant Certificate so countersigned has been duly issued
hereunder.
Section 1.4. 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, 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(s) 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 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, 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 its offices maintained for such purpose (the location of which
shall be provided to the Company), which shall be in the Borough of Manhattan,
The City of New York (the "Warrant Agent's Office"), and which is, on the date
of this Agreement, [Warrant Agent's address], or at the office of any
successor Warrant Agent (as provided in Section 5.3). Upon surrender of any
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 1.2 and 1.3, 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 1.4(a) or 1.4(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 1.5, 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 1.4 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 holder thereof or his assignee a new Warrant Certificate
evidencing the number of Warrants not exercised.
Section 1.5. 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 the mutilated Warrant
Certificate, or in replacement for 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
1.5 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 1.5, 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 1.5 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.
Section 1.6. 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 1.6 shall
be without prejudice to the rights of Warrantholders as described elsewhere
herein. Warrant Certificates may not be held by a Warrantholder through the
facilities of Cedel S.A. ("CEDEL") or the Euroclear System ("Euroclear").
Section 1.7. Conversion Options. (a) [Number of days after
issuance before conversion option begins] business days following the original
issuance of the Warrants, each Warrantholder will have the option to convert
the form in which such Warrantholder holds his Warrants from definitive to
book-entry form by utilizing the "Conversion Option". The Company shall notify
each Warrantholder, CEDEL and Euroclear as soon as practicable after the
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 order for Warrants to be
converted into book-entry form), (ii) the date on which such conversions will
commence (which shall be such [number of days after issuance before conversion
option begins] business day) (the "Initial Conversion Date"), (iii) the date
on which such conversions will end (which date shall be the [number of days
after conversion option begins until conversion option ends] day after the
Initial Conversion Date (the "Final Conversion Date")), and (iv) the CUSIP
number assigned to the Warrants. The Warrant Agent, at the request and expense
of the Company, 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 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 on the date
that such Warrant Certificates are deposited (if received by the Depository at
its then applicable cut-off time for same-day credit) or on the following
business day (if received by the Depository at 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, by and between 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 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 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 The Chase Manhattan Bank (formerly known
as 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 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 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 1.8
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 1.8, all references in this
Agreement to the Warrant Certificates (other than in Sections 1.2, 1.3, 1.4
and 1.8) shall include the Global Warrant Certificate in the event that the
Global Warrant Certificate is issued.
Section 1.8. Global Warrant Certificate. (a) Any Global
Warrant Certificate issued in accordance with this Section 1.8 shall be
substantially in the form set forth in Exhibit A-1 hereto, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Agreement, and may represent any number of whole
Warrants. The Global Warrant Certificate may have imprinted or otherwise
reproduced thereon such letters, numbers or other marks of identification or
designation and such legends or endorsements as the officers of the Company
executing the same may approve (execution thereof to be conclusive evidence of
such approval) and 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 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.
(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
Company against receipt of an appropriate amount of Certificated Warrants (as
defined herein) (such Certificated 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 1.2. 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
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 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 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 Office, or at the
office of any successor Warrant Agent (as provided in Section 5.3), for
another Global Warrant Certificate of like tenor and representing a like
number of unexercised Warrants.
ARTICLE 2
Duration and Exercise of Warrants
Section 2.1. Duration of Warrants; Minimum Exercise Amounts;
Exercise Notice. (a) Subject to the limitations set forth herein and in
Section 2.3, each Warrant may be irrevocably exercised in whole but not in
part, immediately upon issuance. Except in the case of automatic exercise, each
Warrant shall be irrevocably exercised either (A) in the case of Warrants
represented by Warrant Certificates ("Certificated Warrants"), on any New York
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 New York Business Day immediately
preceding the date (established in or pursuant to a resolution or resolutions
of the Board of Directors of the Company or any committee of such Board duly
authorized to act on its behalf (a "Board Resolution" or "Board Resolutions"))
upon which the right to exercise the Warrants expires (the "Expiration Date"),
and (ii) any Delisting Date (as defined herein) by delivering or causing to be
delivered to the Warrant Agent (at its address as set forth in the Exercise
Notice (as defined below) or at such other address as the Warrant Agent may
specify from time to time) the Warrant Certificate representing such Warrant,
with the Exercise Notice duly completed and executed by the Registered Holder
of such Warrant or (B) in the case of Warrants represented by a Global Warrant
Certificate ("Book-Entry Warrants"), 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 (i) the New York Business Day immediately preceding 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 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.
In the case of Book-Entry Warrants held through the facilities
of CEDEL or Euroclear, a Warrantholder may exercise each Warrant 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 (i) the New York Business Day
immediately preceding the Expiration Date and (ii) any Delisting Date, by
causing (x) such Warrant to be transferred to the Warrant Agent in accordance
with clause (B) of the preceding paragraph, by giving appropriate instructions
to CEDEL or the participant holding his Warrants in Euroclear, as the case may
be, and (y) a duly completed and executed Exercise Notice to be delivered on
behalf of the Warrantholder by CEDEL, in the case of Warrants held through
CEDEL, or such participant, in the case of Warrants held through Euroclear, to
the Warrant Agent.
(b) No fewer than the minimum number of Warrants as set forth in
each Warrant Certificate 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 the Expiration Date or a
Delisting Date[, or in the case of cancellation of the Warrants as a result of
an Extraordinary Event (as defined herein)]. An Exercise Notice shall be
unconditional. Except as provided in Section 2.2(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 its address, which notice (A) for Certificated 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. For purposes of this Agreement, "New York Business
Day" means any day other than a Saturday, Sunday or a day on which commercial
banks in New York City are required or authorized by law or executive order to
remain closed.
Section 2.2. Exercise, Valuation and Delivery of Warrants. (a)
Except for Warrants subject to automatic exercise or Warrants held through the
facilities of CEDEL or Euroclear, the "Exercise Date" for a Warrant means (i)
the New York Business Day on which the Warrant Agent receives the Warrant and
Exercise Notice in proper form with respect to such Warrant, if received at or
prior to 3:00 P.M., New York City time, on such day, or (ii) if the Warrant
Agent receives such Warrant or Exercise Notice after 3:00 P.M., New York City
time, on a New York Business Day, then the next New York Business Day
succeeding the New York Business Day on which such Warrant or Exercise Notice
is received. In the case of Warrants held through the facilities of CEDEL or
Euroclear, except for Warrants subject to automatic exercise, the "Exercise
Date" for a Warrant means (i) the New York Business Day on which the Warrant
Agent receives (by facsimile transmission) 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
being exercised is received by the Warrant Agent by 3:00 P.M., New York City
time, on the New York Business Day next succeeding the date on which the
Exercise Notice is received, or (ii) if the Warrant Agent receives such
Exercise Notice after 3:00 P.M., New York City time, on a New York Business
Day, then the New York Business Day succeeding such New York Business Day,
provided that such day will be the Exercise Date only if the Warrant being
exercised is received by 3:00 P.M., New York City time, on the second
succeeding New York Business Day following the New York Business Day on which
the Exercise Notice is received. In the event that the Warrant being exercised
is received after 3:00 P.M., New York City time, on the New York Business Day
next succeeding the date on which the Exercise Notice is received, then the
Exercise Date for such Warrant will be the day on which such Warrant is
received or, if such day is not a New York Business Day, the next succeeding
New York Business Day. Notwithstanding the foregoing, in the case of the
exercise of a Book-Entry Warrant by CEDEL or a Euroclear participant, CEDEL or
Euroclear, as the case may be, must by facsimile transmission to the Warrant
Agent by 9:00 a.m., New York City time, on the New York Business Day next
succeeding the Exercise Date confirm (an "Account Confirmation") that the
Warrants being exercised will be received by the Warrant Agent by 3:00 p.m.,
New York City time, on such date, provided, further, that if such Account
Confirmation is received after 9:00 a.m., New York City time, on the New York
Business Day next succeeding the Exercise Date, the Company will be entitled
to direct the Warrant Agent to reject the related Exercise Notice or waive the
requirement for timely delivery of such Account Confirmation.
(b) The "Valuation Date" for a Warrant shall be the first New York
Business Day following the applicable Exercise Date (subject to postponement
[upon the occurrence of an Extraordinary Event or Exercise Limitation Event
(as herein defined) or] as a result of the exercise of a number of Warrants
exceeding the limits on exercise set forth herein).
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
New York Business Day immediately preceding the Expiration Date or (ii) the
last New York 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 and the rules and regulations of the
Securities and Exchange Commission thereunder) on, the stock exchange on which
the Warrants are listed and not accepted prior thereto or at the same time for
listing on another United States national securities exchange (such New York
Business Day being a "Delisting Date") 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 by such date [or the Valuation Date
for which has as of such date been postponed as provided in Section 2.3],
shall be deemed to be automatically exercised as of such date; provided,
however, that 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.
(c) The Warrant Agent shall, in the case of Warrants other than
Warrants held through the facilities of CEDEL or Euroclear, following receipt
of proper and timely delivery of a Warrant in accordance with Section 2.2(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 2.2(a):
(i) promptly (1) for Certificated Warrants, 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 Book-Entry Warrants not held through CEDEL or
Euroclear, determine whether such Exercise Notice has been duly
completed and is in proper form and (3) 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 CEDEL or
the Euroclear participant delivering 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
Certificated Warrants, has not been so executed, the Warrant Agent
promptly (A) 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 or Exhibit B-1
hereto, as the case may be, and, in the case of Certificated Warrants,
shall return to the Registered Holder that submitted such Exercise
Notice, by first class mail, the Warrant Certificates evidencing such
Warrants, 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 DTC to the
account from which they were transferred to the Warrant Agent and (B)
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
2.2(c)(vii) 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 New York Business
Day that such Exercise Notice has been received (or shall be deemed to
have been received) of the total number of Warrants covered by such
Exercise Notice;
(iii) with respect to Warrants held through CEDEL or
Euroclear, determine whether the Warrant Agent has received by 9:00
a.m., New York City time, on the New York Business Day next succeeding
the Exercise Date relating to such Warrants, Account Confirmations
with respect to such Warrants, and if the Warrant Agent has not
received any such Account Confirmation 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 the
New York Business Day next succeeding the Exercise Date, of the number
of such Warrants in respect of which the Warrant Agent has not
received such Account 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 Account Confirmations) send to
CEDEL or the Euroclear participant, as the case may be, that delivered
such Exercise Notice for which no related Account Confirmation was
received (at the address specified in such notice) a notice of
rejection substantially in the form set forth in Exhibit B hereto;
(iv) by 11:00 a.m., New York City time, on the Valuation Date
(A) determine the number of Warrants determined pursuant to clause
(ii) 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 (v) and
(vi) of this Section 2.2(c) with respect to such Exercise Notice or
the related Warrants);
(v) determine the applicable Spot Rate and calculate the
Cash Settlement Value of the Exercised Warrants (excluding any
Warrants held through CEDEL or Euroclear as to which timely delivery
of the related Warrant has not been made) as of their Valuation Date
in the manner set forth in Section 2.2(b) by no later than 10:00 a.m.,
New York City time, on the New York Business Day next succeeding the
Valuation Date [(unless the Cash Settlement Value shall be calculated
by the Determination Agent)];
(vi) 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 New York Business Day next succeeding the
Valuation Date of the Cash Settlement Value payable in respect of the
Exercised Warrants, and send notices of confirmation substantially in
the form included in Exhibit B or Exhibit B-1 hereto, as the case may
be, to the Registered Holder, Participant, CEDEL or Euroclear
participant, as the case may be; and
(vii) 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 2.2 or Section 2.3 shall be by telephone (promptly
confirmed in writing) or facsimile transmission.
Except in the case of Warrants subject to automatic exercise
[and for Warrants that upon exercise entitle the holder thereof to receive an
Alternative Settlement Amount in lieu of the Cash Settlement Value], 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 Certificated Warrants, the Warrant Certificate
evidencing such Warrants shall be promptly returned by the Warrant Agent to
the Registered Holder 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 DTC (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 in the case of Warrants subject to automatic exercise
[and for Warrants that upon exercise entitle the holder thereof to receive an
Alternative Settlement Amount in lieu of the Cash Settlement Value], if the
Company has made adequate funds available to the Warrant Agent in a timely
manner, which shall in no event be later than 3:00 p.m., New York City time,
on the second New York Business Day following a Valuation Date (the "Funding
Date"), the Warrant Agent will be responsible for making its payment available
(i) for Certificated 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),
after 3:00 p.m., New York City time, but prior to the close of business on
such Funding Date or (ii) for Book-Entry Warrants, 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 $100,000) by wire transfer to a U.S. Dollar
account maintained by such Participant in the United States (at the
Participant's election as specified in the Exercise Notice), after 3:00 p.m.,
New York City time, but prior to the close of business, on the first New York
Business Day immediately succeeding such Funding Date. For either clause (i)
or (ii) above, such payment shall be in the amount of the aggregate Cash
Settlement Value in respect of the Warrant Certificates or Warrants that were
delivered to the Warrant Agent (together with the related Exercise Notice) as
provided in Sections 2.1 and 2.2(a), 2.2(b) and 2.2(c).
(e) The "Cash Settlement Value" of an exercised Warrant shall be
an amount in [payment currency] equal to [formula or method of calculation for
cash settlement value] provided, however, that if such amount is less than
zero, then the Cash Settlement Value shall be zero.
For purposes of this Agreement, the "Reference Currency" means
the [Reference Currency] and the "Base Currency" means the [Base Currency].
[[The "Spot Rate"] for any date means the offered spot rate of [insert Base
Currency] per [insert Reference Currency] as quoted by [________________] (the
"Spot Rate Reference Bank") at 10:00 A.M., New York City time, on such date,
or if such bank is not quoting such rate at such time, the rate quoted by such
other leading bank in the foreign exchange markets as may be selected by the
Company in good faith and notified to the Warrant Agent.] [Alternative
provision for calculation of Spot Rate.] The offered spot rate of any
applicable currency shall be calculated to four (4) decimal places.
References in this Agreement to "U.S. dollars", "U.S.$" or "$"
are to the lawful currency of the United States of America [other currency or
currency unit].
(f) 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 Account and for which payment has been made as provided in Section
2.2(d) promptly after such delivery and payment. Absent manifest error, the
Warrant Agent's records shall be conclusive evidence of such matters.
[(g) The Company hereby appoints Morgan Stanley & Co. Incorporated,
and Morgan Stanley & Co. Incorporated accepts such appointment, to be the
Company's Determination Agent to make such calculations as may be required
upon the occurrence of any of the circumstances described in Section 2.3,
including, without limitation, calculation of the 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 Warrantholders 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 2.6, whichever
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 5.3, 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.]
[(h) The Determination Agent will have no responsibility for good
faith errors or omissions in calculating or disseminating information
regarding the adjustments or calculations by the Determination Agent (as
provided above) in order to arrive at a calculation of the Cash Settlement
Value or the Alternative Settlement Amount, as applicable].
Section 2.3. Automatic Exercise of Warrants[; Exercise Upon an
Extraordinary Event or Exercise Limitation Event]. (a) All Warrants for which
the Warrant Agent has not received an Exercise Notice in proper form by 3:00
p.m., New York City time, on (i) the New York Business Day immediately
preceding the Expiration Date or (ii) any Delisting Date, as the case may be,
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 prior to such time, and which have not been cancelled prior to
such time, will be deemed automatically exercised without any requirement of
an Exercise Notice to the Warrant Agent. The Exercise Date for such Warrants
shall be the Expiration Date or Delisting Date, as the case may be, or, if
such date is not a New York Business Day, the next succeeding New York
Business Day and the Valuation Date for such Warrants shall be the first New
York Business Day following the Exercise Date.
The Warrant Agent shall by 5:00 p.m., New York City time, on the
Expiration Date or any Delisting Date, as the case may be, notify the Company
(and such other parties (not to exceed two) as the Company shall designate in
writing) of the number of Warrants to be automatically exercised on such day.
On the Valuation Date for such Warrants, the Warrant Agent shall (i) determine
the Cash Settlement Value (in the manner provided in Section 2.2(e)) of the
Warrants to be automatically exercised; (ii) by 5:00 p.m., New York City time,
on the next New York Business Day 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.
In the case of Certificated Warrants subject to automatic
exercise [(other than Certificated Warrants subject to postponed exercise
following the occurrence of an Extraordinary Event or an Exercise Limitation
Event as described in Section 2.3(b))], the Company shall make available to the
Warrant Agent, not later than 3:00 p.m., New York City time, on the second New
York Business Day following the Valuation Date for automatically exercised
Warrants (the "Automatic Funding Date"), funds in an amount equal to, and for
the payment of, the aggregate Cash Settlement Value of such Warrants. Subject
to such funds having been made available as provided in the preceding
sentence, the Warrant Agent 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), after 3:00 p.m.,
New York City time, but prior to the close of business, on such Automatic
Funding Date, against receipt by the Warrant Agent at the Warrant Agent's
Office 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 or an Exercise Limitation Event as described in
Section 2.3(b))], the Company shall make available to the Warrant Agent, not
later than 3:00 p.m., New York City time, on the Automatic Funding Date, funds
in an amount equal to, and for the payment of, the aggregate Cash Settlement
Value of such Warrants. Subject to such funds having been made available as
provided in the preceding sentence, the Warrant Agent will be responsible for
making funds available to DTC, against receipt of the Global Warrant
Certificate, after 3:00 p.m., New York City time, but 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 has
occurred, 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 New York
Business Day following the date that 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) Extraordinary Event and Exercise Limitation Event provisions,
if applicable.]
Section 2.4. Limitation of Number of Exercisable Warrants. All
exercises of Warrants (other than on automatic exercise [or upon
cancellation]) are subject, at the Company's option, to the limitation that not
more than [limit on aggregate number of Warrants to be exercised on any day]
Warrants in total may be exercised on any Exercise Date and not more than
[individual limit] 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 New York Business Day would otherwise, under the
terms hereof, be the Exercise Date in respect of more than [limit on aggregate
number of Warrants to be exercised on any day] 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 New York Business Day immediately following
such Exercise Date), [limit on aggregate number of Warrants to be exercised on
any day] 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 [minimum exercise amount] 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 [minimum exercise amount]
Warrants), and the remainder of such Warrants (the "Remaining Warrants") shall
be deemed exercised on the following New York Business Day (notwithstanding
the provisions of Section 2.1(b)); provided that in the event that the
aggregate number of such Remaining Warrants, together with any additional
Warrants with respect to which the Exercise Date would be such following New
York Business Day, exceeds the [limit on aggregate number of Warrants to be
exercised on any day] the provisions of this Section 2.4 shall apply to the
exercise of such Remaining Warrants and such additional Warrants on such
following New York Business Day and successively until the limitations set
forth in this Section 2.4 are no longer exceeded; provided further that, any
such Remaining Warrants shall be deemed exercised before any such additional
Warrants.
If any beneficial owner of Warrants attempts to exercise more
than [individual limit] Warrants on any New York Business Day, 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
next New York Business Day following such Day) [individual limit] of such
Warrants shall be deemed exercised on such New York Business Day and the
remainder of such Warrants shall be deemed exercised on the following New York
Business Day (notwithstanding the provisions of Section 2.1(b)); provided,
that in the event that the aggregate number of such remaining Warrants,
together with any additional Warrants of such beneficial owner with respect to
which the Exercise Date would be such following New York Business Day, exceeds
[individual limit]; at the Company's election (as notified in the manner
described above) the provisions of this Section 2.4 shall apply to the
exercise of such remaining Warrants and such additional Warrants on such
following New York Business Day and successively until the limitations set
forth in this Section 2.4 are no longer exceeded; provided further, that, any
such remaining Warrants shall be deemed exercised before any such additional
Warrants of such beneficial owner. The date on which any Warrant is deemed
exercised under the preceding sentences shall for all purposes of this
Agreement be the "Exercise Date" in respect of such Warrants.
Section 2.5. 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 [exchange on which
the Warrants are listed] unless the Company has, at the same time, arranged for
listing on another United States national securities exchange.
Section 2.6. 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 Certificated 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 2.7. 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.
ARTICLE 3
Other Provisions Relating to Rights of Warrantholders
Section 3.1. Warrantholder of Warrant 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 4
Warrants Acquired by the Company; Payment of Taxes
Section 4.1. 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 Certificated 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 deliver a certificate of disposition to the Company
evidencing the same.
Section 4.2. 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 which tax or other
governmental charge shall be paid by the appropriate Warrantholder or
Registered Holder.
ARTICLE 5
Concerning the Warrant Agent
Section 5.1. Warrant Agent. The Company hereby appoints [name
of Warrant Agent] as Warrant Agent of the Company in respect of the Warrants
upon the terms and subject to the conditions set forth herein; and [name of
Warrant Agent] 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.
Section 5.2. 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 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.
The obligations of the Company under this Section 5.2(a) shall survive the
termination of this Agreement.
(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.
(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 6.2
hereof, to make any demand upon the Company.
Section 5.3. Resignation and Appointment of Successor. (a) The
Company agrees, for the benefit of the holders from time to time of the
Warrants, that there shall at all times be a Warrant Agent hereunder until all
the Warrants are no longer 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 2.6, 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 5.2(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 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 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 6
Miscellaneous
Section 6.1. 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 6.1 to the contrary,
this Agreement may not be amended to provide for the countersigning by the
Warrant Agent of Warrant Certificates evidencing in the aggregate in excess of
[maximum number of issuable Warrants] Warrants unless and until the Warrant
Agent has received notice from the [exchange on which Warrants are to be
listed] or any successor United States national securities exchange that the
additional Warrants in excess of [maximum number of issuable Warrants] have
been approved for listing on such exchange.
(b) The Company, the Warrant Agent [and the Determination 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 or decreases the price (in the Base
Currency) provided in the Warrants at which the Warrantholder may purchase or
sell the amount of Reference Currency provided in such Warrants], 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 6.2. 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 6.3. Addresses for Notices. Any communications to the
Warrant Agent with respect to this Agreement shall be addressed to
__________________________, Attention: ______________, and any communications
to the Company with respect to this Agreement shall be addressed to Morgan
Stanley, Dean Witter, Discover & Co., 1585 Broadway, New York, New York 10036,
Attention: [Corporate Treasurer][, and any communications to the Determination
Agent with respect to this Agreement shall be addressed to Morgan Stanley &
Co. Incorporated, 1585 Broadway, New York, New York 10036] (or such other
address as shall be specified in writing by the Warrant Agent, the Company [or
the Determination Agent], respectively).
Section 6.4. 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 Certificated 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 6.5. 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 [exchange on which the Warrants are listed]
or any successor national securities exchange 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 6.6. 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 of the Warrantholders.
Section 6.7. 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 any Participant to be a Warrantholder, in each case, on behalf of
whom such Participant holds Warrants.
Section 6.8. 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 6.9. 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.
IN WITNESS WHEREOF, this Agreement has been duly executed by
the parties hereto as of the day and year first above written.
MORGAN STANLEY, DEAN WITTER,
DISCOVER & CO.
By:______________________________
Name:
Title:
[NAME OF WARRANT AGENT]
By:______________________________
Name:
Title:
[MORGAN STANLEY & CO.
INCORPORATED
By:______________________________
Name:
Title:
EXHIBIT A
FORM OF WARRANT CERTIFICATE
FACE
NO. C- CUSIP _________
MORGAN STANLEY, DEAN WITTER, DISCOVER & CO.
[Title of Warrants]
This Warrant Certificate certifies that _____, or registered
assigns, is the registered holder of ______________ [title of Warrants] (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 offices of the Warrant Agent 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 Morgan Stanley, Dean Witter,
Discover & Co. (the "Company") the Cash Settlement Value in [payment currency]
(the "Cash Settlement Value") equal to [formula or method of calculation for
cash settlement value]; provided, however, that if such amount is less than or
equal to zero, then the Cash Settlement Value shall be zero. In no event shall
a Warrantholder be entitled to any interest on any Cash Settlement Value.
Subject to the terms and conditions set forth herein and in the
Warrant Agreement, each Warrant may be exercised, on any New York 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 New York Business Day immediately preceding
the date established in or pursuant to a Board Resolution or Resolutions upon
which the right to exercise the Warrants expires (the "Expiration Date") and
(ii) any Delisting Date (as defined herein). 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 New York Business Day immediately preceding
the Expiration Date and (ii) 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.
IN WITNESS WHEREOF, Morgan Stanley, Dean Witter, Discover & Co.
has caused this instrument to be duly executed.
Dated: MORGAN STANLEY, DEAN WITTER,
DISCOVER & CO.
[SEAL] By:______________________________
Name:
Title:
Attest:
By:______________________________
Secretary
Countersigned as of the date above
written:
[NAME OF WARRANT AGENT]
as Warrant Agent
By:______________________________
Authorized Officer
[REVERSE]
MORGAN STANLEY, DEAN WITTER, DISCOVER & CO.
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 ________________ (the "Warrant Agreement"), among the
Company, [name of Warrant Agent] (the "Warrant Agent") and Morgan Stanley &
Co. Incorporated (the "Determination Agent") and is 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 (as defined herein).
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 New York Business Day
immediately preceding the Expiration Date and (ii) any Delisting Date (as
defined herein) 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 offices in the Borough of Manhattan, The City of New York (the
"Warrant Agent's Office"), which are, on the date hereof, located at [Warrant
Agent's address] 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 and in the
Warrant Agreement, such Warrantholder may instead receive the Alternative
Settlement Amount for such Warrant]. The "Cash Settlement Value" of a Warrant
shall be an amount in [payment currency] equal to [formula or method of
calculation for cash settlement value]; provided, however, that if such amount
is less than or equal to zero, then the Cash Settlement Value shall be zero.
[The Company has appointed Morgan Stanley & Co. Incorporated
to be its Determination Agent 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 adjustments or calculations by the Determination Agent in order
to arrive at a calculation the Cash Settlement Value [or the Alternative
Settlement Amount, as applicable].]
Subject to the Warrant Agreement and this Warrant Certificate,
the "Valuation Date" for a Warrant will be the first New York 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, the "Exercise Date" for a Warrant will be (i) the New York Business
Day on which the Warrant Agent receives the Warrant and Exercise Notice in
proper form with respect to such Warrant, if received at or prior to 3:00
P.M., New York City time, on such day, or (ii) if the Warrant Agent receives
such Warrant or Exercise Notice after 3:00 P.M., New York City time, on a New
York Business Day, then the next New York Business Day succeeding the New York
Business Day on which such Warrant or Exercise Notice is received. 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 New York Business Day
immediately preceding the Expiration Date or (ii) any Delisting 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 at
such time been postponed as described below, will be automatically exercised.
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 New York
Business Day, the next succeeding New York Business Day. The Warrant Agent
will obtain the Spot Rate (determined as of the first New York 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.
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 [and for Warrants that upon
exercise entitle the holder thereof to receive an Alternative Settlement
Amount in lieu of the Cash Settlement Value], 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
[and for Warrants that upon exercise entitle the holder thereof to receive an
Alternative Settlement Amount in lieu of the Cash Settlement Value], if the
Company has made adequate funds available to the Warrant Agent in a timely
manner which shall in no event be later than 3:00 p.m., New York City time,
on the second New York Business Day following the Valuation Date, (the
"Funding Date"), the Warrant Agent will be responsible for making 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 the registered holder's
election as specified in the Exercise Notice) after 3:00 p.m., New York City
time, but prior to the close of business on such Funding Date against receipt
by the Warrant Agent at the Warrant Agent's office of such Registered Holder's
Warrant Certificates. Such payment shall be in the amount equal to the
aggregate Cash Settlement Value of the Warrants evidenced by such Warrant
Certificates.
With respect to automatically exercised Warrants, if the
Company has made adequate funds available to the Warrant Agent not later than
3:00 p.m., New York City time, on the second New York Business Day following
the Valuation Date for automatically exercised Warrants (the "Automatic Funding
Date"), funds in an amount equal to, and for the payment of, the aggregate
Cash Settlement Value of such Warrants, the Warrant Agent will thereafter be
responsible for making payment available to each Registered Holder of the
Warrants 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 holder in the United States (at such holder's
election and upon proper notice being given to the Company and the Warrant
Agent), after 3:00 p.m., New York City time, but prior to the close of
business on such Automatic Funding Date, against receipt by the Warrant Agent
at the Warrant Agent's Office of such Registered Holder's Warrant
Certificates. Such payment shall be in the amount equal to the aggregate Cash
Settlement Value of the Warrants evidenced by such Warrant Certificates.
[Extraordinary Event and Exercise Limitation Event provisions,
if applicable.]
All exercises of Warrants (other than on automatic exercise [or
upon cancellation]) are subject, at the Company's option, to the limitation
that not more than [limit on aggregate number of Warrants to be exercised on
any day] Warrants in total may be exercised on any Exercise Date and not more
than [individual limit] 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 New York Business Day would otherwise,
under the terms hereof, be the Exercise Date in respect of more than [limit on
aggregate number of Warrants to be exercised on any day] 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 New York Business Day immediately
following such Exercise Date), [limit on aggregate number of Warrants to be
exercised on any day] 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 [the minimum exercise amount] 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 [the
minimum exercise amount] Warrants), and the remainder of such Warrants (the
"Remaining Warrants") shall be deemed exercised on the following New York
Business Day (notwithstanding to the provisions of the Warrant Agreement);
provided that in the event that the aggregate number of such Remaining
Warrants, together with any additional Warrants with respect to which the
Exercise Date would be such following New York Business Day, exceeds [limit on
aggregate number of Warrants to be exercised on any day] the provisions of
this paragraph shall apply to the exercise of such Remaining Warrants and such
additional Warrants on such following New York Business Day and successively
until the limitations set forth in this paragraph and in the Warrant Agreement
are no longer exceeded; provided further, that any such Remaining Warrants
shall be deemed exercised before any such additional Warrants.
If any beneficial owner of Warrants attempts to exercise more
than [individual limit] Warrants on any New York Business Day, 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 New
York Business Day following such New York Business Day), [individual limit] of
such Warrants shall be deemed exercised on such New York Business Day and the
remainder of such Warrants shall be deemed exercised on the following New York
Business Day (notwithstanding the provisions in the Warrant Agreement)
provided that in the event that the aggregate number of such remaining
Warrants, together with any additional Warrants of such beneficial owner with
respect to which the Exercise Date would be such following New York Business
Day, exceeds [individual limit], at the Company's election (as notified in the
manner described above), the provisions of this paragraph shall apply to the
exercise of such remaining Warrants and such additional Warrants on such
following New York Business Day and successively until the limitations set
forth in this paragraph and in the Warrant Agreement are no longer exceeded;
provided further, that any such remaining Warrants shall be deemed exercised
before any such additional Warrants of such beneficial owner. The date on
which any Warrant is deemed exercised under the preceding sentences shall for
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 office accompanied by a written
instrument or instruments of transfer in form satisfactory to the Warrant Agent
duly executed by, the registered holder(s) hereof, a duly appointed legal
representative or duly authorized attorney. Such signature must be guaranteed
by a bank or trust company having a correspondent office in New York City 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.
[Number of days after issuance before conversion option begins]
business days after the closing of the offering of the Warrants, each
Warrantholder will have the option to convert the form in which such
Warrantholder holds his Warrants from definitive to book-entry form by
utilizing the Conversion Option. The Conversion Option will be available for
[number of days after conversion option begins until conversion option ends]
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 DTC, in proper form for deposit, by a
Participant. Accordingly, unless Warrants are purchased in book-entry form, a
Warrantholder who is not a Participant 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 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 Trust Company
("DTC") for exchange during the Conversion Option Period will be exchanged for
Warrants in book-entry form by the close of business on the New York Business
Day that such Certificates are received by DTC (if received by DTC at its then
applicable cut-off time for same day credit) or on the following New York
Business Day (if received by DTC at 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. The Company has been informed by CEDEL and
Euroclear that such clearing agencies will clear Warrants in book-entry form
beginning on the commencement of the Conversion Option Period and that
Warrants may not be held in certificated form through their facilities. 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 as provided in the Warrant Agreement.
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 Office 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.
For purposes of this Certificate the "Reference Currency" means
the [Reference Currency] and the "Base Currency" means the [Base Currency].
[[The "Spot Rate"] for any date means the offered spot rate of [insert Base
Currency] per [insert Reference Currency] as quoted by [________________] (the
"Spot Rate Reference Bank") at 10:00 A.M., New York City time, on such date,
or if such bank is not quoting such rate at such time, the rate quoted by such
other leading bank in the foreign exchange markets as may be selected by the
Company in good faith and notified to the Warrant Agent.] [Alternative
provision for calculation of Spot Rate.] The offered spot rate of any
applicable currency shall be calculated to four (4) decimal places. References
in this Agreement to "U.S. dollars", "U.S.$" or "$" are to the lawful currency
of the United States of America [other currency or currency unit]. As used
herein, "New York Business Day" means any day other than a Saturday or a
Sunday or a day on which commercial banks in New York City are required or
authorized by law or executive order to remain closed.
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.
Exercise Notice
[Name and Address of Warrant Agent]
Attention: ___________________
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 beneficial owner of Warrants that is exercising Warrants
pursuant to this Exercise Notice is exercising no fewer than [individual limit]
Warrants and no beneficial owner is acting in concert with any other beneficial
owner in relation to the exercise of the Exercised Warrants.
2. The Owner hereby directs the Warrant Agent (a) to pay the Cash
Settlement Value, if any, with respect to the Exercised Warrants:
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:
------------------------------------
(Owner)
By:_________________________________
Authorized Signature
Address:
Telephone:
EXHIBIT A-1
FORM OF GLOBAL WARRANT CERTIFICATE
No.
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.
MORGAN STANLEY, DEAN WITTER, DISCOVER & CO.
Global Warrant Certificate Representing
[Title of the Warrants]
This certifies that CEDE & CO., or registered assigns, is the
Registered Holder of the number of [title of the Warrants] (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 Morgan Stanley, Dean Witter, Discover & Co. (the "Company") the Cash
Settlement Value in [name of payment currency] equal to [formula or method of
calculation for cash settlement value]; provided, however, that if such amount
is less than or equal to zero, then the Cash Settlement Value shall be zero.
In no event shall a Warrantholder be entitled to any interest on any Cash
Settlement Value.
Subject to the terms and conditions set forth herein and in the
Warrant Agreement, each Warrant may be exercised, on any New York 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 New York Business Day immediately preceding
the date (established in or pursuant to a Board Resolution or Resolutions) upon
which the right to exercise the Warrants expires (the "Expiration Date") and
(ii) any Delisting Date (as defined herein). 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 (i) the New York Business Day immediately preceding the Expiration Date and
(ii) any Delisting Date, will be automatically exercised.
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 ________________ (the "Warrant Agreement"),
among the Company, [name of Warrant Agent] (the "Warrant Agent"), and Morgan
Stanley & Co. Incorporated (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 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 (i) the New York Business Day immediately preceding 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 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.
In the case of Book-Entry Warrants held through the facilities
of CEDEL or Euroclear, a Warrantholder may exercise each Warrant 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 (i) the New York Business Day
immediately preceding the Expiration Date and (ii) any Delisting Date by
causing (x) such Warrant to be transferred to the Warrant Agent (in accordance
with the preceding paragraph), by giving appropriate instructions either to
CEDEL or to the participant holding his Warrants in Euroclear, as the case may
be, and (y) a duly completed and executed Exercise Notice to be delivered on
behalf of the Warrantholder by CEDEL, in the case of Warrants held through
CEDEL, or such participant, in the case of Warrants held through Euroclear, to
the Warrant Agent.
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 and in the
Warrant Agreement, such Warrantholder may instead receive the Alternative
Settlement Amount for such Warrant]. The "Cash Settlement Value" of a Warrant
shall be an amount in [payment currency] equal to [formula or method of
calculation for cash settlement value]; provided however, that if such amount
is less than or equal to zero, then the Cash Settlement Value shall be zero.
[The Company has appointed Morgan Stanley & Co. Incorporated,
as Determination Agent, 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 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 adjustments or calculations by the Determination Agent in order
to arrive at a calculation of the Cash Settlement Value or the Alternative
Settlement Amount, as applicable.]
Except for Warrants subject to automatic exercise or Warrants
held through the facilities of CEDEL or Euroclear, the "Exercise Date" for a
Warrant will be (i) the New York Business Day on which the Warrant Agent
receives the Warrant and Exercise Notice in proper form with respect to such
Warrant, if received at or prior to 3:00 P.M., New York City time, on such
day, or (ii) if the Warrant Agent receives such Warrant or Exercise Notice
after 3:00 P.M., New York City time, on a New York Business Day, then the next
New York Business Day succeeding the New York Business Day on which such
Warrant or Exercise Notice is received. In the case of Warrants held through
the facilities of CEDEL or Euroclear, except for Warrants subject to automatic
exercise, the "Exercise Date" for a Warrant means (i) the New York Business
Day on which the Warrant Agent receives (by facsimile transmission) 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 being exercised is received by the Warrant Agent by
3:00 P.M., New York City time, on the New York Business Day next succeeding
the date on which the exercise notice is received, or (ii) if the Warrant
Agent receives such Exercise Notice after 3:00 P.M., New York City time, on a
New York Business Day, then the New York Business Day succeeding such New York
Business Day, provided that such day will be the Exercise Date only if the
Warrant being exercised is received by 3:00 P.M., New York City time, on the
second succeeding New York Business Day following the New York Business Day on
which the Exercise Notice is received. In the event that the Warrant being
exercised is received after 3:00 P.M., New York City time, on the New York
Business Day next succeeding the date on which the Exercise Notice is
received, then the Exercise Date for such Warrant will be the day on which
such Warrant is received or, if such day is not a New York Business Day, the
next succeeding New York Business Day. Notwithstanding the foregoing, in the
case of the exercise of a Warrant by a CEDEL or Euroclear participant, CEDEL or
Euroclear, as the case may be, must by facsimile transmission to the Warrant
Agent by 9:00 a.m., New York City time, on the New York Business Day next
succeeding the Exercise Date confirm (an "Account Confirmation") that the
Warrants being exercised will be received by the Warrant Agent by 3:00 p.m.,
New York City time, on such date, provided, further, that if such Account
Confirmation is received after 9:00 a.m., New York City time, on the New York
Business Day next succeeding the Exercise Date, the Company will be entitled
to direct the Warrant Agent to reject the related Exercise Notice or waive the
requirement for timely delivery of such Account Confirmation.
Subject to the Warrant Agreement and this Global Warrant
Certificate, the "Valuation Date" for a Warrant will be the first New York
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.
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
New York Business Day immediately preceding the Expiration Date or (ii) any
Delisting 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 at such time been postponed as described
below, will be automatically exercised. 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 New York Business Day, the next succeeding New York
Business Day. The Warrant Agent will obtain the Spot Rate (determined as of
the Valuation Date for such Warrants [except in the case of a postponed
exercise following the occurrence of an Extraordinary Event or Exercise
Limitation Events]) and will determine the Cash Settlement Value, if any, of
such Warrants.
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 [and except for Warrants that
upon exercise entitle the holder thereof to receive an Alternative Settlement
Amount in lieu of the Cash Settlement Value], 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
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 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
[and except for Warrants that upon exercise entitle the holder thereof to
receive an Alternative Settlement amount in lieu of the Cash Settlement
Value], if the Company has made adequate funds available to the Warrant Agent
in a timely manner, which shall in no event be later than 3:00 p.m., New York
City time, on the second New York Business Day following a Valuation Date (the
"Funding Date"), the Warrant Agent will be responsible for making 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), after 3:00 p.m., New York City time, but prior to the close of
business, on such Funding 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 the
Warrant Agreement.
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)], the Company shall make
available to the Warrant Agent, not later than 3:00 p.m., New York City time,
on the second New York Business Day following the Valuation Date for
automatically exercised Warrants (the "Automatic Funding Date"), funds in an
amount equal to, and for the payment of, the aggregate Cash Settlement Value
of such Warrants. Subject to such funds having been made available as provided
in the preceding sentence, the Warrant Agent will be responsible for making
funds available to the Depository, against receipt of the Global Warrant
Certificate, after 3:00 p.m., New York City time, but 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.
[Extraordinary Event and Exercise Limitation Event provisions,
if applicable.]
All exercises of Warrants (other than on automatic exercise [or
upon cancellation]) are subject, at the Company's option, to the limitation
that not more than [limit on aggregate number of Warrants to be exercised on
any day] Warrants in total may be exercised on any Exercise Date and not more
than [individual limit] 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 New York Business Day would otherwise,
under the terms hereof, be the Exercise Date in respect of more than [limit on
aggregate number of Warrants to be exercised on any day] 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 New York Business Day immediately
following such Exercise Date), [limit on aggregate number of Warrants to be
exercised on any day] 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 [minimum exercise amount] 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 [minimum exercise
amount] Warrants), and the remainder of such Warrants (the "Remaining
Warrants") shall be deemed exercised on the following New York Business Day
(subject to the provisions of the Warrant Agreement); provided that in the
event that the aggregate number of such Remaining Warrants, together with any
additional Warrants with respect to which the Exercise Date would be such
following New York Business Day, exceeds [limit on aggregate number of Warrants
to be exercised on any day] the provisions of this paragraph shall apply to
the exercise of such Remaining Warrants and such additional Warrants on such
following New York Business Day and successively until the limitations set
forth in this paragraph and in the Warrant Agreement are no longer exceeded;
provided further, that any such Remaining Warrants shall be deemed exercised
before any such additional Warrants.
If any beneficial owner of Warrants attempts to exercise more
than [individual limit] Warrants on any New York Business Day, 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
next New York Business Day following such Day) [individual limit] of such
Warrants shall be deemed exercised on such New York Business Day and the
remainder of such warrants shall be deemed exercised on the following New York
Business Day (subject to the provisions of the Warrant Agreement); provided
that in the event that the aggregate number of such remaining Warrants,
together with any additional Warrants of such beneficial owner with respect to
which the Exercise Date would be such following New York Business Day, exceeds
[individual limit], at the Company's election (as notified in the manner
described above), the provisions of the paragraph shall apply to the exercise
of such remaining Warrants and such additional Warrants on such following New
York Business Day and successively until the limitations set forth in this
paragraph and in the Warrant Agreement are no longer exceeded; provided
further, that any such remaining Warrants shall be deemed exercised before any
such additional Warrants of such beneficial owner. 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.
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 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
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 Office, or at the office of any
successor Warrant Agent for another Global Warrant Certificate of like tenor
and representing a like number of unexercised Warrants.
Capitalized terms included herein but not defined herein have
the meanings assigned thereto in the Warrant Agreement.
For purposes of this Certificate, the "Reference Currency"
means the [Reference Currency] and the "Base Currency" means the [Base
Currency]. [[The "Spot Rate"] for any date means the offered spot rate of
[insert Base Currency] per [insert Reference Currency] as quoted by
[________________] (the "Spot Rate Reference Bank") at 10:00 A.M., New York
City time, on such date, or if such bank is not quoting such rate at such
time, the rate quoted by such other leading bank in the foreign exchange
markets as may be selected by the Company in good faith and notified to the
Warrant Agent.] [Alternative provision for calculation of Spot Rate.] The
offered spot rate of any applicable currency shall be calculated to four (4)
decimal places.
References in this Agreement to "U.S. dollars", "U.S.$" or "$"
are to the lawful currency of the United States of America [other currency or
currency unit]. As used herein, "New York Business Day" means any day other
than a Saturday or a Sunday or a day on which commercial banks in New York
City are required or authorized by law or executive order to remain closed.
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, Morgan Stanley, Dean Witter, Discover & Co.
has caused this instrument to be duly executed.
Dated: MORGAN STANLEY, DEAN WITTER,
DISCOVER & CO.
[SEAL]
By:______________________________
Name:
Title:
_______________________________
Attest:
By:____________________________
Secretary
Countersigned as of the date above
written:
[NAME OF WARRANT AGENT]
as Warrant Agent
By:____________________________
Authorized Officer
Schedule A
Number of Warrants Represented by this Global
Date Warrant Certificate
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EXHIBIT A-2
EXERCISE NOTICE
For Warrants Represented by the Global Warrant Certificate
[Name and Address of Warrant Agent]
Attention: ________________________
1. We refer to the Warrant Agreement dated as of ________________
(the "Warrant Agreement"), among Morgan Stanley, Dean Witter, Discover & Co.
(the "Company"), [Name of Warrant Agent], as warrant agent (the "Warrant
Agent"), [and Morgan Stanley & Co. Incorporated, as determination agent (the
"Determination Agent")]. On behalf of certain beneficial owners, each of whom
we certify is exercising no fewer than [minimum exercise amount] 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 New York Business Day in order for the
Valuation Date for the Tendered Warrants to be the New York Business Day
following such New York 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 New York 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 New York Business Day next succeeding the New York
Business Day on which such Exercise Notice is received), the Valuation Date of
the Tendered Warrants shall be the New York Business Day next succeeding the
succeeding New York 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:
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:_________________________________
Account No.:__________________________
ABA Routing No.: ______________________
Reference: ___________________________
4. 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 [individual limit] Warrants on behalf of any beneficial owner or in
concert with any other beneficial owner.
5. 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.
6. If this Exercise Notice is submitted in relation to Warrants
held through the facilities of Euroclear, the undersigned represents that it
is a participant in Euroclear.
Capitalized terms used but not defined herein have the meanings
assigned thereto in the Warrant Agreement.
Dated: [NAME OF DEPOSITORY PARTICIPANT]
Participant Number
[NAME OF EUROCLEAR PARTICIPANT]
[CEDEL S.A.]
By:________________________________
Authorized Signature:
Address:
Telephone:
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 $_______ ($____ 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 second New York Business Day following 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
________________, among Morgan Stanley, Dean Witter, Discover & Co., [name of
Warrant Agent], and Morgan Stanley & Co. Incorporated.
Dated: [NAME OF WARRANT AGENT], as
Warrant Agent
By:________________________________
Authorized Signature
NOTICE OF REJECTION
You are hereby notified that the Exercise Notice delivered by
you was determined by us not to have been duly completed in proper form.
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: [NAME OF WARRANT AGENT], as
Warrant Agent
By:______________________________
Authorized Signature
EXHIBIT B-1
CONFIRMATION OF EXERCISE
For Warrants Represented by the Global Warrant Certificate
[Name of Depository Participant]
[Name of Euroclear Participant]
[CEDEL S.A.]
[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__.
For purposes hereof, all such Warrants shall constitute
Exercised Warrants, which number we hereby confirm to be ____________________.
We hereby confirm that the aggregate Cash Settlement Value of
the Exercised Warrants is $__________ ($_____ 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 second New York Business Day following 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
________________, among Morgan Stanley, Dean Witter, Discover & Co., [name of
Warrant Agent], as Warrant Agent, [and Morgan Stanley & Co. Incorporated, as
Determination Agent].
Dated: [NAME OF WARRANT AGENT], as
Warrant Agent
By:________________________________
Authorized Signature
NOTICE OF REJECTION
[Name of Depository Participant]
[Name of Euroclear Participant]
[CEDEL S.A.]
[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
________________, among Morgan Stanley, Dean Witter, Discover & Co., [name of
Warrant Agent], and Morgan Stanley & Co. Incorporated.] 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: [NAME OF WARRANT AGENT], as
Warrant Agent
By:________________________________
Authorized Signature
==============================================================================
MORGAN STANLEY, DEAN WITTER, DISCOVER & CO.
and
_____________,
Warrant Agent
and
MORGAN STANLEY & CO. INCORPORATED, Determination Agent
_____________________
INDEX WARRANT AGREEMENT
dated as of ___________, 199_
____________________
Index Warrants
==============================================================================
TABLE OF CONTENTS(1)
Page
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ARTICLE 1
Issuance of Warrants and Form, Execution, Delivery and Registration of Warrant
Certificates and Global Warrant Certificate
Section 1.1. Issuance of Warrants......................................... 1
Section 1.2. Form, Execution and Delivery of Warrant Certificates......... 2
Section 1.3. Warrant Certificates......................................... 3
Section 1.4. Registration of Transfers and Exchange....................... 3
Section 1.5. Mutilated or Missing Warrant Certificates.................... 4
Section 1.6. Registered Holders........................................... 5
Section 1.7. Conversion Option............................................ 5
Section 1.8. Global Warrant Certificate................................... 7
ARTICLE 2
Duration and Exercise of Warrants
Section 2.1. Duration of Warrants; Minimum Exercise Amounts; Exercise
Notice..................................................... 9
Section 2.2. Exercise, Valuation and Delivery of Warrants................. 11
Section 2.3. Automatic Exercise of Warrants; Exercise Upon an
Extraordinary Event or Exercise Limitation Event........... 20
Section 2.4. Limitation of Number of Exercisable Warrants................. 27
Section 2.5. Covenant of the Company...................................... 28
Section 2.6. Return of Money Held Unclaimed for Two Years................. 28
Section 2.7. Return of Global Warrant Certificate......................... 28
ARTICLE 3
Other Provisions Relating to Rights of Warrantholders
Section 3.1. Warrantholder of Warrant May Enforce Rights.................. 29
ARTICLE 4
Warrants Acquired by the Company; Payment of Taxes
Section 4.1. Warrants Acquired by the Company............................. 29
Section 4.2. Payment of Taxes............................................. 30
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(1) The Table of Contents is not a part of the Warrant Agreement.
ARTICLE 5
Concerning the Warrant Agent
Section 5.1. Warrant Agent................................................ 30
Section 5.2. Condition of Warrant Agent's Obligations..................... 30
Section 5.3. Resignation and Appointment of Successor..................... 32
ARTICLE 6
Miscellaneous
Section 6.1. Amendment.................................................... 34
Section 6.2. Notices and Demands to the Company, the Warrant Agent and
the Determination Agent.................................... 34
Section 6.3. Addresses for Notices........................................ 35
Section 6.4. Notices to Holders........................................... 35
Section 6.5. Obtaining of Approvals....................................... 35
Section 6.6. Persons Having Rights under this Agreement................... 35
Section 6.7. Inspection of Agreement...................................... 36
Section 6.8. Headings..................................................... 36
Section 6.9. Counterparts................................................. 36
Section 6.10. Applicable Law.............................................. 36
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 and Notice of Rejection For
Warrants Represented by Warrant Certificates
EXHIBIT B-1 -- Confirmation of Exercise and Notice of Rejection For
Warrants Represented by the Global Warrant 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
WARRANT AGREEMENT
THIS AGREEMENT, dated as of ___________, 199_, among MORGAN
STANLEY, DEAN WITTER, DISCOVER & CO., a corporation organized and existing
under the laws of the State of Delaware (the "Company"), [name of Warrant
Agent], a New York banking corporation (the "Warrant Agent"), and MORGAN
STANLEY & CO. INCORPORATED, a corporation organized and existing under the
laws of the State of Delaware (the "Determination Agent").
WHEREAS, the Company proposes to sell [put warrants] [call
warrants] (the "Warrants" or, individually, a "Warrant"), representing the
right to receive from the Company an amount in [name of payment currency] to
be determined by reference to [decreases (in the case of Put Warrants)]
[increases (in the case of Call Warrants)] [in the level of the [name of
Reference Index] (the "Index")] [or in the levels (or relative levels) of two
or more Indices or combinations of Indices] 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
canceled;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
Issuance of Warrants and Form, Execution, Delivery and
Registration of Warrant Certificates and Global Warrant
Certificate
Section 1.1. 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 shall represent the right, upon exercise
(including automatic exercise) subject to the provisions contained herein, to
receive the Cash Settlement Value or the Alternative Settlement Amount, as the
case may be (each as defined herein), of such Warrant. In no event shall a
registered or beneficial holder of a Warrant (each a "Warrantholder") be
entitled to receive any interest on any Cash Settlement Value or Alternative
Settlement Amount. The Warrants will not entitle the Warrantholders to any of
the rights of the holder of any security underlying the Index (an "Underlying
Security") [alternative provision for indices not based on securities]. A
Warrant will not require or entitle the Warrantholder thereof to sell,
deliver, purchase or take delivery of any Underlying Security [alternative
provision for indices not based on securities], nor will the Company be under
any obligation to, nor will it, purchase or take delivery of, or sell or
deliver, any such securities to or from Warrantholders.
Section 1.2. 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 stock exchange 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 any of the
Chairman of the Board, the President, the Chief Financial Officer, the
Chief Strategic and Administrative Officer, the Chief Legal Officer, the
Treasurer, any Assistant Treasurer or any other officer specifically
designated by the Board of 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 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 1.3. Warrant Certificates. Each Warrant Certificate,
when executed on behalf of the Company in accordance with Section 1.2, shall be
delivered to the Warrant Agent, which shall manually countersign and deliver
the same to or upon the order of the Company. 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 1.2 shall be conclusive
evidence that the Warrant Certificate so countersigned has been duly issued
hereunder.
Section 1.4. Registration of Transfers and Exchange. (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, 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(s) 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 transfer, a new Warrant Certificate shall be issued to the transferee(s)
and the surrendered Warrant Certificate shall be canceled by the Warrant Agent.
(b) At the option of a Warrantholder, 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 its offices maintained for such purpose (the location of which
shall be provided to the Company), which shall be in the Borough of Manhattan,
The City of New York (the "Warrant Agent's Office"), and which is, on the date
of this Agreement, [Warrant Agent's address], or at the office of any
successor Warrant Agent (as provided in Section 5.3). Upon surrender of any
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 1.2 and 1.3, 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 1.4(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 1.5, 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 1.4 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 holder thereof or his assignee a new Warrant Certificate
evidencing the number of Warrants Not Exercised.
Section 1.5. 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 the mutilated Warrant
Certificate, or in replacement for 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
1.5 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 1.5, 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 1.5 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.
Section 1.6. 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 1.6 shall
be without prejudice to the rights of Warrantholders as described elsewhere
herein. Warrant Certificates may not be held by a Warrantholder through the
facilities of Cedel S.A. ("CEDEL") or the Euroclear System ("Euroclear").
Section 1.7. Conversion Option. (a) [Number of days after
issuance before conversion option begins] business days following the original
issuance of the Warrants, each Warrantholder will have the option to convert
the form in which such Warrantholder holds his Warrants from definitive to
book-entry form by utilizing the "Conversion Option". The Company shall notify
each Warrantholder, CEDEL and Euroclear as soon as practicable after the
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 order for Warrants to be
converted into book-entry form), (ii) the date on which such conversions will
commence (which shall be such [number of days after issuance before conversion
option begins] business day) (the "Initial Conversion Date"), (iii) the date
on which such conversions will end (which date shall be the [number of days
after conversion option begins until conversion option ends] day after the
Initial Conversion Date (the "Final Conversion Date")), and (iv) the CUSIP
number assigned to the Warrants. The Warrant Agent, at the request and expense
of the Company, 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 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 on the date
that such Warrant Certificates are deposited (if received by the Depository at
its then applicable cut-off time for same-day credit) or on the following
business day (if received by the Depository at 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 and by and between 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 canceled Warrant Certificates. On the
first day during the Conversion 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 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 The Chase Manhattan Bank (formerly known
as 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 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 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 1.8
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 1.8, all references in this
Agreement to the Warrant Certificates (other than in Sections 1.2, 1.3, 1.4
and 1.8) shall include the Global Warrant Certificate in the event that the
Global Warrant Certificate is issued.
Section 1.8. Global Warrant Certificate. (a) Any Global
Warrant Certificate issued in accordance with this Section 1.8 shall be
substantially in the form set forth in Exhibit A-1 hereto, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Agreement, and may represent any number of whole
Warrants. The Global Warrant Certificate may have imprinted or otherwise
reproduced thereon such letters, numbers or other marks of identification or
designation and such legends or endorsements as the officers of the Company
executing the same may approve (execution thereof to be conclusive evidence of
such approval) and 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 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
(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
Company against receipt of an appropriate amount of Certificated Warrants (as
defined herein) (such Certificated 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 1.2. The Warrant Agent shall countersign
the new Global Warrant Certificate as provided in this Section d 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
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 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 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 canceled by the Warrant Agent.
The Global Warrant Certificate may be transferred as provided in
paragraph ) above, when surrendered to the Warrant Agent's Office, or at the
office of any successor Warrant Agent (as provided in Section 5.3), for
another Global Warrant Certificate of like tenor and representing a like
number of unexercised Warrants.
ARTICLE 2
Duration and Exercise of Warrants
Section 2.1. Duration of Warrants; Minimum Exercise Amounts;
Exercise Notice. (a) Subject to the limitations set forth herein and in
Section 2.3, each Warrant may be irrevocably exercised in whole but not in
part, immediately upon issuance. Except in the case of automatic exercise, each
Warrant shall be irrevocably exercised either (A) in the case of Warrants
represented by Warrant Certificates ("Certificated Warrants"), on any New York
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 New York Business Day immediately
preceding the date (established in or pursuant to a resolution or resolutions
of the Board of Directors of the Company or any committee of such Board duly
authorized to act on its behalf (a "Board Resolution" or "Board Resolutions"))
upon which the right to exercise the Warrants expires (the "Expiration Date"),
and (ii) any Delisting Date (as defined herein) by delivering or causing to be
delivered to the Warrant Agent (at its address as set forth in the Exercise
Notice (as defined below) or at such other address as the Warrant Agent may
specify from time to time) the Warrant Certificate representing such Warrant,
with the Exercise Notice duly completed and executed by the Registered Holder
of such Warrant or (B) in the case of Warrants represented by a Global Warrant
Certificate ("Book-Entry Warrants"), 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 (i) the New York Business Day immediately preceding 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 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.
In the case of Book-Entry Warrants held through the facilities
of CEDEL or Euroclear, a Warrantholder may exercise each Warrant 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 (i) the New York Business Day
immediately preceding the Expiration Date and (ii) any Delisting Date, by
causing (x) such Warrant to be transferred to the Warrant Agent in accordance
with clause ) of the preceding paragraph, giving appropriate instructions to
CEDEL or the participant holding his Warrants in Euroclear, as the case may
be, and (y) a duly completed and executed Exercise Notice to be delivered on
behalf of the Warrantholder by CEDEL, in the case of Warrants held through
CEDEL, or such participant, in the case of Warrants held through Euroclear, to
the Warrant Agent
(b) No fewer than the minimum number of Warrants as set forth in
each Warrant Certificate 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 the Expiration Date or a
Delisting Date, or in the case of cancellation of the Warrants as a result of
an Extraordinary Event (as defined herein). With the exception of the Limit
Option, an Exercise Notice shall be unconditional. Except as provided in
Section 2.2(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 its address, which notice (A) for Certificated 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. For purposes of this Agreement, "New York Business
Day" means any day other than a Saturday, Sunday or a day on which either the
American Stock Exchange or the New York Stock Exchange 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.
Section 2.2. Exercise, Valuation and Delivery of Warrants. (a)
Except for Warrants subject to automatic exercise, Warrants held through the
facilities of CEDEL or Euroclear, or Warrants subject to the Limit Option, the
"Exercise Date" for a Warrant means (i) the New York Business Day on which the
Warrant Agent receives the Warrant and Exercise Notice in proper form with
respect to such Warrant, if received at or prior to 3:00 P.M., New York City
time, on such day, or (ii) if the Warrant Agent receives such Warrant or
Exercise Notice after 3:00 P.M., New York City time, on a New York Business
Day, then the next New York Business Day succeeding the New York Business Day
on which such Warrant or Exercise Notice is received. In the case of Warrants
held through the facilities of CEDEL or Euroclear, except for Warrants subject
to automatic exercise and except for Warrants subject to the Limit Option, the
"Exercise Date" for a Warrant means (i) the New York Business Day on which the
Warrant Agent receives (by facsimile transmission) 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 being exercised is received by the Warrant Agent by 3:00 P.M., New
York City time, on the New York Business Day next succeeding the date on which
the Exercise Notice is received, or (ii) if the Warrant Agent receives such
Exercise Notice after 3:00 P.M., New York City time, on a New York Business
Day, then the New York Business Day succeeding such New York Business Day,
provided that such day will be the Exercise Date only if the Warrant being
exercised is received by 3:00 P.M., New York City time, on the second
succeeding New York Business Day following the New York Business Day on which
the Exercise Notice is received. In the event that the Warrant being exercised
is received after 3:00 P.M., New York City time, on the New York Business Day
next succeeding the date on which the Exercise Notice is received, then the
Exercise Date for such Warrant will be the day on which such Warrant is
received or, if such day is not a New York Business Day, the next succeeding
New York Business Day. Notwithstanding the foregoing, in the case of the
exercise of a Book-Entry Warrant by CEDEL or a Euroclear participant, CEDEL or
Euroclear, as the case may be, must by facsimile transmission to the Warrant
Agent by 9:00 a.m., New York City time, on the New York Business Day next
succeeding the Exercise Date confirm (an "Account Confirmation") that the
Warrants being exercised will be received by the Warrant Agent by 3:00 p.m.,
New York City time, on such date, provided, further, that if such Account
Confirmation is received after 9:00 a.m., New York City time, on the New York
Business Day next succeeding the Exercise Date, the Company will be entitled
to direct the Warrant Agent to reject the related Exercise Notice or waive the
requirement for timely delivery of such Account Confirmation.
(b) The "Valuation Date" for a Warrant shall be the first Index
Calculation Date (as defined herein) following the applicable Exercise Date
(subject to postponement upon the occurrence of an Extraordinary Event or
Exercise Limitation Event (as herein defined) or as a result of the exercise
of a number of Warrants exceeding the limits on exercise set forth herein). For
purposes of this Agreement, "Index Calculation Date" means any day the Index
(as herein defined) or any Successor Index (as herein defined) is calculated
and published.
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
New York Business Day immediately preceding the Expiration Date or (ii) the
last New York 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 and the rules and regulations of the
Securities and Exchange Commission thereunder) on, the stock exchange on which
the Warrants are listed and not accepted prior thereto or at the same time for
listing on another United States national securities exchange (such New York
Business Day being a "Delisting Date") 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 by such date or the Valuation Date for
which has as of such date been postponed as provided in Section 2.3, shall be
deemed to be automatically exercised as of such date; provided, however, that
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.
(c) The Warrant Agent shall, in the case of Warrants other than
Warrants held through the facilities of CEDEL or Euroclear, following receipt
of proper and timely delivery of a Warrant in accordance with Section 2.2(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 2.2(a):
(i) promptly (1) for Certificated Warrants, 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 Book-Entry
Warrants not held through CEDEL or Euroclear, determine whether such Exercise
Notice has been duly completed and is in proper form and (3) 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 CEDEL or
the Euroclear participant delivering 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 Certificated Warrants, has not
been so executed, the Warrant Agent promptly (A) 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 or
Exhibit B-1 hereto, as the case may be, and, in the case of Certificated
Warrants, shall return to the Registered Holder that submitted such Exercise
Notice, by first class mail, the Warrant Certificates evidencing such
Warrants, 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 DTC to the account from which they
were transferred to the Warrant Agent and (B) shall not take the actions
required by clauses i)-(viii) 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 2.2(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 New York 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 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 CEDEL or
Euroclear, determine whether the Warrant Agent has received by 9:00 a.m., New
York City time, on the New York Business Day next succeeding the Exercise Date
relating to such Warrants, Account Confirmations with respect to such
Warrants, and if the Warrant Agent has not received any such Account
Confirmation 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 the New York Business Day next succeeding the Exercise Date, of
the number of such Warrants in respect of which the Warrant Agent has not
received such Account 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 Account Confirmations) send to CEDEL or the Euroclear
participant, as the case may be, that delivered such Exercise Notice for which
no related Account Confirmation was received (at the address specified in such
notice) a notice of rejection substantially in the form set forth in Exhibit
B hereto;
(iv) if any of the Warrants covered by such Exercise Notice
constitute Contingently Tendered Warrants, by 11:00 a.m., New York City time,
on the Valuation Date or if such date is not a New York Business Day, then the
next succeeding New York Business Day, (A) except as provided in Section
2.2(h), determine the Limit Option Reference Index Value (as defined herein)
for such Warrants and the Spot Value (as defined herein) for the Index
Calculation Date that, but for the provisions of Section 2.2(i), would be the
Valuation Date for such Warrants; (B) determine in accordance with Section
2.2(i) 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 Certificated Warrants, to the
Registered Holder or, in the case of Book-Entry Warrants to the Participant or
to CEDEL or to the Euroclear participant in the case of Warrants held through
the facilities of CEDEL or Euroclear, respectively, 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 that submitted such Exercise
Notice, by first class mail, the Warrant Certificates evidencing such
Warrants, 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, CEDEL or Euroclear participant, as the case may be; and (C)
notify the Company and the Determination Agent as to whether such Contingently
Tendered Warrants will be subject to exercise;
(v) by 11:00 a.m., New York City time, on the Valuation Date
or if such Date is not a New York Business Day then the next succeeding New
York Business Day, (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 i)(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 v)(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 i) and (vii) of
this Section 2.2(c) with respect to such Exercise Notice or the related
Warrants);
(vi) determine the applicable Spot Value and calculate the
Cash Settlement Value of the Exercised Warrants (excluding any Warrants held
through CEDEL or Euroclear as to which timely delivery of the related Warrant
has not been made) as of their Valuation Date in the manner set forth in
Section 2.2(e) by no later than 10:00 a.m., New York City time, on the New
York Business Day next succeeding the Valuation Date (unless the Cash
Settlement Value shall be calculated by the Determination Agent);
(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 New York Business Day next succeeding the Valuation Date of the
Cash Settlement Value payable in respect of the Exercised Warrants, and send
notices of confirmation substantially in the form included in Exhibit B or
Exhibit B-1 hereto, as the case may be, to the Registered Holder, Participant,
CEDEL or Euroclear participant, as the case may be; and
(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 2.2 or Section 2.3
shall be by telephone (promptly confirmed in writing) or facsimile
transmission.
Except in the case of Warrants subject to automatic exercise
and for Warrants that upon exercise entitle the holder thereof to receive an
Alternative Settlement Amount in lieu of the Cash Settlement Value, 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 Certificated Warrants, the Warrant Certificate evidencing
such Warrants shall be promptly returned by the Warrant Agent to the
Registered Holder 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 DTC (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 in the case of Warrants subject to automatic exercise
and for Warrants that upon exercise entitle the holder thereof to receive an
Alternative Settlement Amount in lieu of the Cash Settlement Value, if the
Company has made adequate funds available to the Warrant Agent in a timely
manner, which shall in no event be later than 3:00 p.m., New York City time,
on the fourth New York Business Day following a Valuation Date (or, if the
Valuation Date is not a New York Business Day, on the fourth New York Business
Day following the New York Business Day next succeeding the Valuation Date)
(the "Funding Date"), the Warrant Agent will be responsible for making its
payment available (i) for Certificated 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), after 3:00 p.m., New York City time, but prior to the close of
business on the first New York Business Day immediately succeeding such
Funding Date or (ii) for Book-Entry Warrants, 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 $100,000) by wire transfer to a U.S. Dollar account
maintained by such Participant in the United States (at the Participant's
election as specified in the Exercise Notice), after 3:00 p.m., New York City
time, but prior to the close of business, on the first New York Business Day
immediately succeeding such Funding Date. For either clause (i) or (ii) above,
such payment shall be in the amount of the aggregate Cash Settlement Value in
respect of the Warrant Certificates or Warrants that were delivered to the
Warrant Agent (together with the related Exercise Notice) as provided in
Sections 2.1 and 2.2(a), (b) and (c).
(e) The "Cash Settlement Value" of an exercised Warrant shall be
an amount in [name of payment currency] equal to [formula or method of
calculation for cash settlement value] provided, however, that if such amount
is less than zero, then the Cash Settlement Value shall be zero.
For purposes of this Agreement, the "Index" means the [Reference
Index] and the "Spot Value" for any date means the closing level on such date
of the [Reference Index]. References in this Agreement to "U.S. dollars",
"U.S.$" or "$" are to the lawful currency of the United States of America,
[and references to [other currency] are to the lawful currency of [country of
the principal trading market for the Underlying Securities]] [other provisions
if the principal trading markets for the Underlying Securities are in more
than one country] [alternative provision for indices not based on securities].
(f) 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 Account and for which payment has been made as provided in Section
2.2(d) promptly after such delivery and payment. Absent manifest error, the
Warrant Agent's records shall be conclusive evidence of such matters.
(g) The Company hereby appoints Morgan Stanley & Co. Incorporated,
and Morgan Stanley & Co. Incorporated accepts such appointment, to be the
Company's Determination Agent to make such calculations as may be required
upon the occurrence of any of the circumstances described in Section 2.2(h) or
2.3, including, without limitation, calculation of the 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 Warrantholders 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 2.6, whichever
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 5.3,
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.
(h) In the event that the Index is not published by [name of Index
publisher] (the "Index Publisher") but is published by another person not
affiliated with the Company and acceptable to the Company (the "Third Party"),
then the Spot Value for any date thereafter will be determined based on the
closing level of the Index as published by such Third Party. If the Index
Publisher or any Third Party discontinues publication of the Index and
publishes a successor or substitute index that the Company determines, in its
sole discretion, to be comparable to the Index (any such index being a
"Successor Index"), then the Spot Value for any date thereafter will be
determined by the Determination Agent on behalf of the Company based on the
closing level of the Successor Index on such date. If the Index Publisher or
any Third Party makes a material change in the formula for, or the method of
calculating, the Index or any Successor Index, the Determination Agent shall
make such calculations as may be required to determine the applicable Cash
Settlement Value using the formula and method of calculating the Index or any
Successor Index as in effect prior to such change or modification. If the Index
Publisher and/or any Third Party discontinues publication of the Index and/or
Successor Index, the Determination Agent will determine the applicable Cash
Settlement Value based on the formula and method used in calculating the Index
or any Successor Index as in effect on the date the Index or such Successor
Index was last published.
If calculation or publication of the Index or a Successor Index
is modified, discontinued or suspended, as provided in this Section 2.2(h),
then the Determination Agent shall promptly notify the Warrant Agent, and the
Warrant Agent shall in turn promptly notify the Warrantholders in accordance
with Section 6.4 hereof, of such modification, discontinuance or suspension
and of any modification or adjustment to be made with respect to calculation
of the Cash Settlement Value or Alternative Settlement Amount, as applicable.
The Determination Agent will have no responsibility for good
faith errors or omissions in calculating or disseminating information
regarding the Index, any Successor Index, adjustments or calculations by the
Determination Agent (as provided above) in order to arrive at a calculation of
a stock index comparable to the Index or any Successor Index, or the Cash
Settlement Value or the Alternative Settlement Amount, as applicable.
(i) Except for Warrants subject to automatic exercise (as
described in Section 2.3 below) and except as described in Section 2.3 with
respect to payments of any Alternative Settlement Amount, 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), will have the option (the "Limit Option") to specify in the
related Exercise Notice that such exercise be subject to the condition that the
Spot Value that would otherwise be used to determine the Cash Settlement Value
of such Warrants not be [minimum number of points] or more points [lower in
the case of call warrants] [higher in the case of put warrants] [formula] than
the Limit Option Reference Index Value for such Warrants. "Limit Option
Reference Index Value", with respect to any Contingently Tendered Warrants,
means the closing level of the Index on the relevant Exercise Date (or, if
such Exercise Date is not an Index Calculation Date, on the immediately
preceding Index Calculation 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
[double the minimum exercise amount] 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 [minimum exercise amount]. 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 [minimum exercise amount].
(ii) Except as provided in Section 2.2(g), the Limit
Option Reference Index Value 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 Value for the first Index
Calculation Date following the relevant Exercise Date is [minimum
number of points] or more points [lower in the case of call warrants]
[higher in the case of put warrants] [formula] than the Limit Option
Reference Index Value 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 2.2(c). If such Spot Value is not [minimum number
of points] or more points [lower in the case of call warrants] [higher
in the case of put warrants] [formula] than such Limit Option
Reference Index Value, such Warrants shall be subject to exercise as
provided in this Section 2.2 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 2.3(b), the Limit
Option (based on the Limit Option Reference Index Value as determined
for the relevant Exercise Date or, if applicable, the first Index
Calculation Date preceding such 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 canceled as
provided in Section 2.3(b) or until the Expiration Date or any
Delisting Date.
Section 2.3. Automatic Exercise of Warrants; Exercise Upon an
Extraordinary Event or Exercise Limitation Event. (a) All Warrants for which
the Warrant Agent has not received an Exercise Notice in proper form by 3:00
p.m., New York City time, on (i) the New York Business Day immediately
preceding the Expiration Date or (ii) any Delisting Date, as the case may be,
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 prior to such time, and which have not been canceled prior to
such time, will be deemed automatically exercised without any requirement of
an Exercise Notice to the Warrant Agent. The Exercise Date for such Warrants
shall be the Expiration Date or Delisting Date, as the case may be, or, if
such date is not a New York Business Day, the next succeeding New York
Business Day and the Valuation Date for such Warrants shall be the first Index
Calculation Date following such date.
The Warrant Agent shall by 5:00 p.m., New York City time, on the
Expiration Date or any Delisting Date, as the case may be, notify the Company
(and such other parties (not to exceed two) as the Company shall designate in
writing) of the number of Warrants to be automatically exercised on such day.
On the Valuation Date for such Warrants (or, if such Valuation Date is not a
New York Business Day, on the next succeeding New York Business Day), the
Warrant Agent shall (i) except as provided in Section 2.2(h), determine the
Cash Settlement Value (in the manner provided in Section 2.2(e)) of the
Warrants to be automatically exercised; (ii) by 5:00 p.m., New York City time,
on the next New York Business Day 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.
In the case of Certificated Warrants subject to automatic
exercise (other than Certificated Warrants subject to postponed exercise
following the occurrence of an Extraordinary Event or an Exercise Limitation
Event as described in Section 2.3(b)), the Company shall make available to the
Warrant Agent, not later than 3:00 p.m., New York City time, on the fourth New
York Business Day following the Valuation Date for automatically exercised
Warrants (or if such Valuation Date is not a New York Business Day, on the
fourth New York Business Day following the New York Business Day next
succeeding such Valuation Date) (in any such case, the "Automatic Funding
Date"), funds in an amount equal to, and for the payment of, the aggregate
Cash Settlement Value of such Warrants. Subject to such funds having been made
available as provided in the preceding sentence, the Warrant Agent 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), after 3:00 p.m., New York City time, but prior to the close
of business, on the Automatic Funding Date, against receipt by the Warrant
Agent at the Warrant Agent's Office 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 canceled 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 or an Exercise Limitation Event as
described in Section 2.3(b)), the Company shall make available to the Warrant
Agent, not later than 3:00 p.m., New York City time, on the Automatic Funding
Date, funds in an amount equal to, and for the payment of, the aggregate Cash
Settlement Value of such Warrants. Subject to such funds having been made
available as provided in the preceding sentence, the Warrant Agent will be
responsible for making funds available to DTC, against receipt of the Global
Warrant Certificate, after 3:00 p.m., New York City time, but 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 has
occurred, 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 New York
Business Day following the date that 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) Anything in this Agreement to the contrary notwithstanding, if
the Company determines that an Extraordinary Event or Exercise Limitation Event
has occurred and is continuing on the Home Country Business Day with respect
to which the Spot Value on a Valuation Date is to be determined (the
"Applicable Home Country Business Day"), then the Cash Settlement Value with
respect to an exercise of Warrants shall be calculated on the basis that the
Valuation Date shall be the next Index Calculation Day following an Applicable
Home Country 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
shall receive the Alternative Settlement Amount (as defined herein) in lieu of
the Cash Settlement Value which shall be calculated as if the Warrants had
been canceled on the Expiration Date or any Delisting Date, as the case may
be. The term "Home Country Business Day" means any day on which the principal
trading market for the Underlying Securities is not open for securities
trading [other provisions if the principal trading markets for the Underlying
Securities are in more than one country] [alternative provision for indices
not based on securities].
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 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 Sections 2.3(b) and (d)
herein (treating the Expiration Date or any Delisting Date, as the case may
be, as the date on which the Warrants were canceled for the purposes of this
Section 2.3(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 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 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.
(c) For purposes of this Agreement, "Extraordinary Event" means
any of the following events:
(i) a suspension or absence of trading on the [principal
market in which the Underlying Securities are traded] [other
provisions if there is more than one principal trading market for the
Underlying Securities] [alternative provision for indices not based on
securities] of all the Underlying Securities which then comprise the
Index or a Successor Index;
(ii) the enactment, publication, decree or other promulgation
of any statute, regulation, rule or order of any court or any other
U.S. or non-U.S. governmental authority that would make it unlawful
for the Company to perform any of its obligations under this Agreement
or the Warrants or that has or will have a material adverse effect on
the ability of the Company to perform its obligations under the
Warrants or to modify the hedge of its position with respect to the
Index; or
(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 [country of principal
market in which the Underlying Securities are traded] or the trading
of securities generally on the [principal market in which the
Underlying Securities are traded]) that has or will have a material
adverse effect on the ability of the Company to perform its
obligations under the Warrants or to modify the hedge of its position
with respect to the Index.
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 [principal market in which the Underlying
Securities are traded] and (2) an "absence of trading" on the [principal
market in which the Underlying Securities are traded] will not include any
time when the [principal market in which Underlying Securities are traded] 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 [principal market in which the Underlying Securities are
traded] of (a) [___]% or more of the Underlying Securities and/or (b)
the securities of [percentage or number] of the most highly
capitalized companies included in the Underlying Securities which then
comprise the Index or a Successor Index; or
(ii) the suspension or material limitation on [relevant
futures exchange(s) with respect to the Underlying Securities] or any
other major futures or securities market of trading in futures or
options contracts related to the [other relevant index], the Index or
a Successor Index.]
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 market or
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 in trading in an Underlying Security [or in a futures or
options contract] referred to in clause[s] ) [and (ii)] above, by reason of
(x) a price change violating limits set by the [principal market in which the
Underlying Securities are traded] [or the relevant futures exchange(s) with
respect to the Underlying Securities] or such [futures or] securities market,
(y) an imbalance of orders relating to an Underlying Security [or such
contracts] or (z) a disparity in bid and ask quotes relating to an Underlying
Security [or such contracts], will constitute a suspension or material
limitation of trading, (4) an "absence of trading" in the [principal market in
which the Underlying Securities are traded] will not include any time when the
[principal market in which the Underlying Securities are traded] is closed for
trading under ordinary circumstances and (5) the occurrence of an
Extraordinary Event described in clause ) of the definition of Extraordinary
Event will not constitute, and will supersede the occurrence of, an Exercise
Limitation Event.
The "Alternative Settlement Amount" is equal to the amount "X"
calculated using the formula set forth below:
X = I + (T/2 x A/B)
where
I = the Cash Settlement Value of the Warrants determined as
described under Section 2.2(e), but calculated with a Spot
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 component securities of the Index (the "Underlying
Securities") [alternative provision for indices not
based on securities] on the Cancellation Date,
Expiration Date or Delisting Date, whichever has given
rise to the payment of the Alternative Settlement
Amount;
T = the initial offering price per Warrant;
A = the total number of days from but excluding the Cancellation
Date, Expiration 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.
For purposes of determining "I" 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 Value which fairly
reflects the value of the Underlying Securities [alternative provision for
indices not based on securities] on the Cancellation Date, Expiration Date or
Delisting 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 or which have been canceled as described above, the Company
shall make available to the Warrant Agent not later than 3:00 p.m., New York
City time, on the third New York 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"), 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 be responsible for making a payment in the manner set forth in
Section 2.3(a), (i) in the case of Certificated 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, after 3:00 p.m., New York City
time, but 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 2.4. Limitation of Number of Exercisable Warrants. All
exercises of Warrants (other than on automatic exercise or upon cancellation)
are subject, at the Company's option, to the limitation that not more than
[limit on aggregate number of Warrants to be exercised on any day] Warrants in
total may be exercised on any Exercise Date and not more than [individual
limit] 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 New York Business Day would otherwise, under the terms
hereof, be the Exercise Date in respect of more than [limit on aggregate
number of Warrants to be exercised on any day] 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 New York Business Day immediately following
such Exercise Date), [limit on aggregate number of Warrants to be exercised on
any day] 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 [minimum exercise amount] 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 [minimum exercise amount]
Warrants), and the remainder of such Warrants (the "Remaining Warrants") shall
be deemed exercised on the following New York Business Day (notwithstanding
the provisions of Section 2.1(b)); provided that in the event that the
aggregate number of such Remaining Warrants, together with any additional
Warrants with respect to which the Exercise Date would be such following New
York Business Day, exceeds the [limit on aggregate number of Warrants to be
exercised on any day] the provisions of this Section 2.4 shall apply to the
exercise of such Remaining Warrants and such additional Warrants on such
following New York Business Day and successively until the limitations set
forth in this Section 2.4 are no longer exceeded; provided further that, any
such Remaining Warrants shall be deemed exercised before any such additional
Warrants.
If any beneficial owner of Warrants attempts to exercise more
than [individual limit] Warrants on any New York Business Day, 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
next New York Business Day following such Day) [individual limit] of such
Warrants shall be deemed exercised on such New York Business Day and the
remainder of such Warrants shall be deemed exercised on the following New York
Business Day (notwithstanding the provisions of Section 2.1(b)); provided,
that in the event that the aggregate number of such remaining Warrants,
together with any additional Warrants of such beneficial owner with respect to
which the Exercise Date would be such following New York Business Day, exceeds
[individual limit], at the Company's election (as notified in the manner
described above), the provisions of this Section 2.4 shall apply to the
exercise of such remaining Warrants and such additional Warrants on such
following New York Business Day and successively until the limitations set
forth in this Section 2.4 are no longer exceeded; provided further, that, any
such remaining Warrants shall be deemed exercised before any such additional
Warrants of such beneficial owner. The date on which any Warrant is deemed
exercised under the preceding sentences shall for all purposes of this
Agreement be the "Exercise Date" in respect of such Warrants.
Section 2.5. 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 [exchange on which
the Warrants are listed] unless the Company has, at the same time, arranged for
listing on another United States national securities exchange.
Section 2.6. 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 Certificated 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 2.7. 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 canceled and all payments to the
Participants made as provided herein, the Warrant Agent shall dispose of the
canceled 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.
ARTICLE 3
Other Provisions Relating to Rights of Warrantholders
Section 3.1. Warrantholder of Warrant 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 4
Warrants Acquired by the Company; Payment of Taxes
Section 4.1. 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 Certificated 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 canceled 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 canceled as provided herein, except as otherwise expressly
permitted by this Agreement.
Any canceled 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 deliver a certificate of disposition to the Company
evidencing the same.
Section 4.2. 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 which tax or other
governmental charge shall be paid by the appropriate Warrantholder or
Registered Holder.
ARTICLE 5
Concerning the Warrant Agent
Section 5.1. Warrant Agent. The Company hereby appoints [name
of Warrant Agent] as Warrant Agent of the Company in respect of the Warrants
upon the terms and subject to the conditions set forth herein; and [name of
Warrant Agent] 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.
Section 5.2. Condition 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 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.
The obligations of the Company under this Section 5.2(a) shall survive the
termination of this Agreement.
(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.
(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 6.2
hereof, to make any demand upon the Company.
Section 5.3. Resignation and Appointment of Successor. (a) The
Company agrees, for the benefit of the holders from time to time of the
Warrants, that there shall at all times be a Warrant Agent hereunder until all
the Warrants are no longer 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 2.6, 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 5.2(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 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 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 6
Miscellaneous
Section 6.1. 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 6.1 to the contrary,
this Agreement may not be amended to provide for the countersigning by the
Warrant Agent of Warrant Certificates evidencing in the aggregate in excess of
[maximum number of issuable Warrants] Warrants unless and until the Warrant
Agent has received notice from the [exchange on which Warrants are to be
listed] or any successor United States national securities exchange that the
additional Warrants in excess of [maximum number of issuable Warrants] have
been approved for listing on such exchange.
(b) The Company, the Warrant Agent and the Determination 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 strike level or base value, in
the case of call warrants] [decreases the strike level or base value, in the
case of put warrants], 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 6.2. 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 6.3. Addresses for Notices. Any communications to the
Warrant Agent with respect to this Agreement shall be addressed to
__________________________, Attention: ______________, and any communications
to the Company with respect to this Agreement shall be addressed to Morgan
Stanley, Dean Witter, Discover & Co., 1585 Broadway, New York, New York 10036,
Attention: [Corporate Treasurer], and any communications to the Determination
Agent with respect to this Agreement shall be addressed to Morgan Stanley &
Co. Incorporated, 1585 Broadway, New York, New York 10036 (or such other
address as shall be specified in writing by the Warrant Agent, the Company or
the Determination Agent, respectively).
Section 6.4. 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 Certificated 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 6.5. 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 [exchange on which the Warrants are listed]
or any successor national securities exchange an (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 6.6. 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 of the Warrantholders.
Section 6.7. 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 any Participant to be a Warrantholder, in each case, on behalf of
whom such Participant holds Warrants.
Section 6.8. Headings. The descriptive headings of the several
Articles d Sections this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
Section 6.9. 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.
IN WITNESS WHEREOF, this Agreement has been duly executed by
the parties hereto as of the day and year first above written.
MORGAN STANLEY, DEAN WITTER,
DISCOVER & CO.
By:_________________________________
Name:
Title:
[NAME OF WARRANT AGENT]
By:_________________________________
Name:
Title:
MORGAN STANLEY & CO.
INCORPORATED
By:_________________________________
Name:
Title:
EXHIBIT A
FORM OF WARRANT CERTIFICATE
FACE
NO. C- CUSIP _________
MORGAN STANLEY, DEAN WITTER, DISCOVER & CO.
[Title of Warrants]
This Warrant Certificate certifies that _____, or registered
assigns, is the registered holder of ______________ [title of Warrants] (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 offices of the Warrant Agent 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 Morgan Stanley, Dean Witter,
Discover & Co., the Cash Settlement Value in [payment currency] (the "Cash
Settlement Value") equal to [formula or method of calculation for cash
settlement value]; provided, however, that if such amount is less than or
equal to zero, then the Cash Settlement Value shall be zero. In no event shall
a Warrantholder be entitled to any interest on any Cash Settlement Value.
The Warrants will not entitle the Warrantholders to any of the
rights of the holder of any security underlying the Index (an "Underlying
Security") [alternative provision for indices not based on securities]. A
Warrant will not require or entitle the Warrantholder thereof to sell,
deliver, purchase or take delivery of any Underlying Security to or from the
Company [alternative provision for indices not based on securities], nor will
the Company be under any obligation to, nor will it, purchase or take delivery
of, or sell or deliver, any such security to or from Warrantholders.
Subject to the terms and conditions set forth herein and in the
Warrant Agreement, each Warrant may be exercised, on any New York 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 New York Business Day immediately preceding
the date, established in or pursuant to a Board Resolution or Resolutions, upon
which the right to exercise the Warrants expires (the "Expiration Date") and
(ii) any Delisting Date (as defined herein). 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 New York Business Day immediately preceding
the Expiration Date and (ii) 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.
IN WITNESS WHEREOF, Morgan Stanley, Dean Witter, Discover & Co.
has caused this instrument to be duly executed.
Dated:____________________________ MORGAN STANLEY, DEAN WITTER,
DISCOVER & CO.
[SEAL] By:_____________________________
Name:
Title:
Attest:
By:_________________________________
(Secretary)
Countersigned as of the date above
written:
[NAME OF WARRANT AGENT], as
Warrant Agent
By:_________________________________
Authorized Officer
[REVERSE]
MORGAN STANLEY, DEAN WITTER, DISCOVER & CO.
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 ________________ (the "Warrant Agreement"), among the
Company, [name of Warrant Agent] (the "Warrant Agent") and Morgan Stanley &
Co. Incorporated (the "Determination Agent") and is 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 (as defined herein).
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 New York Business Day
immediately preceding the Expiration Date and (ii) any Delisting Date (as
defined herein) 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 offices in the Borough of Manhattan, The City of New York (the
"Warrant Agent's Office"), which are, on the date hereof, located at [Warrant
Agent's address] 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 and in the
Warrant Agreement, such Warrantholder may instead receive the Alternative
Settlement Amount for such Warrant. The "Cash Settlement Value" of a Warrant
shall be an amount in [payment currency] equal to [formula or method of
calculation for cash settlement value]; provided, however, that if such amount
is less than or equal to zero, then the Cash Settlement Value shall be zero.
[The "Strike Level" is _____ which was determined by the
Determination Agent and is [formula for strike level] [if applicable, the
"Base Value" is ____ which was determined by the Determination Agent and is
[formula for base value]].
The Company has appointed Morgan Stanley & Co. Incorporated to
be its Determination Agent 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 Index, any Successor Index, adjustments or calculations by the
Determination Agent in order to arrive at a calculation of a stock index
comparable to the Index or any Successor Index, or the Cash Settlement Value
or the Alternative Settlement Amount, as applicable.
In the event that the [Reference Index] is not published by the
Index Publisher but is published by another person not affiliated with the
Company and acceptable to the Company (the "Third Party"), then the Spot Value
for any date thereafter will be determined based on the closing level of the
[Reference Index] as published by such Third Party. If the Index Publisher or
any Third Party discontinues publication of the [Reference Index] and
publishes a successor or substitute index that the Company determines, in its
sole discretion, to be comparable to the [Reference Index] (any such index
being a "Successor Index"), then the Spot Value for any date thereafter will
be determined by the Determination Agent on behalf of the Company based on the
closing level of the Successor Index on such date. If the Index Publisher or
any Third Party makes a material change in the formula for, or the method of
calculating, the [Reference Index] or any Successor Index, the Determination
Agent shall make such calculations as may be required to determine the
applicable Cash Settlement Value using the formula and method of calculating
the Index or any Successor Index as in effect prior to such change or
modification. If the Index Publisher and/or any Third Party discontinues
publication of the [Reference Index] and/or any Successor Index, the
Determination Agent will determine the applicable Cash Settlement Value based
on the formula and method used in calculating the [Reference Index] or any
Successor Index as in effect on the date the [Reference Index] or such
Successor Index was last published.
Except for Warrants subject to automatic exercise, or Warrants
subject to the Limit Option, the "Exercise Date" for a Warrant will be (i) the
New York Business Day on which the Warrant Agent receives the Warrant and
Exercise Notice in proper form with respect to such Warrant, if received at or
prior to 3:00 P.M., New York City time, on such day, or (ii) if the Warrant
Agent receives such Warrant or Exercise Notice after 3:00 P.M., New York City
time, on a New York Business Day, then the next New York Business Day
succeeding the New York Business Day on which such Warrant or Exercise Notice
is received. 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 New
York Business Day immediately preceding the Expiration Date or (ii) any
Delisting 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 at such time been postponed as described below,
will be automatically exercised. 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 New York Business Day, the next succeeding New York Business
Day. The Warrant Agent will obtain the Spot Value (determined as of the first
Index Calculation 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.
Subject to the Warrant Agreement and this Warrant Certificate,
the "Valuation Date" for a Warrant will be the first Index Calculation 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. For purposes of this Certificate, "Index
Calculation Date" means any day the Index or any Successor Index is calculated
and published.
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
New York Business Day immediately preceding the Expiration Date or (ii) any
Delisting Date, as the case may be, together with any Warrants the Valuation
Date for which has at such time been postponed as described below, will be
automatically exercised. 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 New York Business Day, the next succeeding New York Business Day. The
Warrant Agent will obtain the Spot Value (determined as of the first Index
Calculation Date 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 Exercise Limitation Event) and will
determine the Cash Settlement Value, if any, of such Warrants.
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 and for Warrants that upon
exercise entitle the holder thereof to receive an Alternative Settlement
Amount in lieu of the Cash Settlement Value, 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
and for Warrants that upon exercise entitle the holder thereof to receive an
Alternative Settlement Amount in lieu of the Cash Settlement Value, if the
Company has made adequate funds available to the Warrant Agent in a timely
manner, which shall in no event be later than 3:00 p.m., New York City time,
on the fourth New York Business Day following the Valuation Date (or, if the
Valuation Date is not a New York Business Day, on the fourth New York Business
Day following the New York Business Day next succeeding the Valuation Date)
(the "Funding Date"), the Warrant Agent will be responsible for making 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 the registered holder's
election as specified in the Exercise Notice) after 3:00 p.m. New York City
time but prior to the close of business on the first New York Business Day
immediately succeeding such Funding Date against receipt by the Warrant Agent
at the Warrant Agent's office of such Registered Holder's Warrant
Certificates.
With respect to automatically exercised Warrants, if the
Company has made adequate funds available to the Warrant Agent not later than
3:00 p.m., New York City time, on the fourth New York Business Day following
the Valuation Date for automatically exercised Warrants (or, if such Valuation
Date is not a New York Business Day, on the fourth New York Business Day
following the New York Business Day next succeeding such Valuation Date) (in
any such case, the "Automatic Funding Date"), funds in an amount equal to, and
for the payment of, the aggregate Cash Settlement Value of such Warrants, the
Warrant Agent will thereafter be responsible for making payment available to
each Registered Holder of the Warrants 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 holder in the United
States (at such holder's election and upon proper notice being given to the
Company and the Warrant Agent), after 3:00 p.m., New York City time, but prior
to the close of business on the Automatic Funding Date, against receipt by the
Warrant Agent at the Warrant Agent's Office of such Registered Holder's
Warrant Certificates. Such payment shall be in the amount equal to the
aggregate Cash Settlement Value of the Warrants evidenced by such Warrant
Certificates.
Anything in the Warrant Agreement or in this Warrant
Certificate to the contrary notwithstanding, if the Company determines that an
Extraordinary Event or an Exercise Limitation Event has occurred and is
continuing on the Home Country Business Day (as defined herein) with respect
to which the Spot Value on a Valuation Date is to be determined (the
"Applicable Home Country Business Day"), then the Cash Settlement Value in
respect of an exercise shall be calculated on the basis that the Valuation
Date shall be the next Index Calculation Day following an Applicable Home
Country 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, Warrantholders will
receive the Alternative Settlement Amount in lieu of the Cash Settlement Value
which shall be calculated as if the Warrants had been canceled on the
Expiration Date or any Delisting Date, as the case may be. The term "Home
Country Business Day" means any day other than a day on which the principal
trading market for the Underlying Securities is not open for securities
trading [other provisions if the principal trading markets for the Underlying
Securities are in more than one country] [alternative provision for indices
not based on securities].
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 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 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 any Delisting Date, as the case may be, as
the date on which the Warrants were canceled.
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 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
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 shall have the right to receive, in lieu of the Cash
Settlement Value of such Warrant an amount (the "Alternative Settlement
Amount"), determined by the Determination Agent.
With respect to all Warrant Certificates as to which the
Valuation Date has been postponed or which have been canceled as described
above, if the Company has made adequate funds available to the Warrant Agent
not later than 3:00 p.m., New York City time, on the third New York 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"), the Warrant Agent will thereafter be responsible for making
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 such holder in the United States (at such holder's election and
upon proper notice being given to the Company and the Warrant Agent), after
3:00 p.m., New York City time, but prior to the close of business on the
Alternative Funding Date, against receipt by the Warrant Agent at the Warrant
Agent's Office 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.
The "Alternative Settlement Amount" shall be an amount,
determined by the Determination Agent, which is equal to the amount "X"
calculated using the formula set forth below:
X = I + (T/2 x A/B)
where
I = the Cash Settlement Value of the Warrants determined as
described above, but calculated with a Spot 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
Underlying Securities [alternative provision for indices
not based on securities] on the Cancellation Date,
Expiration Date or Delisting Date, whichever has given
rise to the payment of the Alternative Settlement
Amount;
T = the initial offering price per Warrant;
A = the total number of days from but excluding the Cancellation
Date, Expiration 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.
For purposes of determining "I" 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 calculated
in accordance with the above formula, agreed upon a Spot Value which fairly
reflects the value of the Underlying Securities [alternative provision for
indices not based on securities] on the Cancellation Date, Expiration Date or
Delisting 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.
"Extraordinary Event" means any of the following events:
(i) a suspension or absence of trading on [principal market
in which the Underlying Securities are traded] [other provisions if
there is more than one principal trading market for the Underlying
Securities] [alternative provision for indices not based on
securities] of all of the Underlying Securities which then comprise
the [Reference Index] or a Successor Index;
(ii) the enactment, publication, decree or other promulgation
of any statute, regulation, rule or order of any court or any other
U.S. or non-U.S. governmental authority that would make it unlawful
for the Company to perform any of its obligations under the Warrant
Agreement or the Warrants or that has or will have a material adverse
effect on the ability of the Company to perform its obligations under
the Warrants or to modify the hedge of its position with respect to
the [Reference Index]; 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 [country of principal
market in which the Underlying Securities are traded] or the trading
of securities generally on the [principal market in which the
Underlying Securities are traded]) that has or will have a material
adverse effect on the ability of the Company to perform its
obligations under the Warrants or to modify the hedge of its position
with respect to the [Reference Index].
For the purposes 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 [principal market in which the Underlying
Securities are traded] and (2) an "absence of trading" on the [principal
market in which the Underlying Securities are traded] will not include any
time when the [principal market in which the Underlying Securities are traded]
is closed for trading under ordinary circumstances.
"Exercise Limitation Event" means either of the following
events:
(i) a suspension, material limitation or absence of trading
on the [principal market in which the Underlying Securities are
traded] of (a) [___]% or more of the Underlying Securities and/or (b)
the securities of [percentage or number] of the most highly
capitalized companies included in the Underlying Securities which then
comprise the [Reference Index] or a Successor Index; or
[(ii) the suspension or material limitation on the [relevant
futures exchange(s) with respect to the Underlying Securities)] or any
other major futures or securities market of trading in futures or
options contracts related to the [other relevant index], the
[Reference Index] or a Successor Index.]
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 market or
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 in trading in an Underlying Security [or in a futures or
options contract] referred to in clause[s] ) [and (ii)] above, by reason of
(x) a price change violating limits set by the [principal market in which the
Underlying Securities are traded] [or the relevant futures exchange(s) with
respect to the Underlying Securities] or such [futures or] securities market,
(y) an imbalance of orders relating to an Underlying Security [or such
contracts] or (z) a disparity in bid and ask quotes relating to an Underlying
Security [or such contracts], will constitute a suspension or material
limitation of trading, (4) an "absence of trading" in the [principal market in
which the Underlying Securities are traded] will not include any time when the
[principal market in which the Underlying Securities are traded] is closed for
trading under ordinary circumstances and (5) the occurrence of an
Extraordinary Event described in clause ) 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
upon cancellation) are subject, at the Company's option, to the limitation
that not more than [limit on aggregate number of Warrants to be exercised on
any day] Warrants in total may be exercised on any Exercise Date and not more
than [individual limit] 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 New York Business Day would otherwise,
under the terms hereof, be the Exercise Date in respect of more than [limit on
aggregate number of Warrants to be exercised on any day] 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 New York Business Day immediately
following such Exercise Date), [limit on aggregate number of Warrants to be
exercised on any day] 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 [minimum exercise amount] 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
[minimum exercise amount] Warrants), and the remainder of such Warrants (the
"Remaining Warrants") shall be deemed exercised on the following New York
Business Day (notwithstanding the provisions of the Warrant Agreement);
provided that in the event that the aggregate number of such Remaining
Warrants, together with any additional Warrants with respect to which the
Exercise Date would be such following New York Business Day, exceeds [limit on
aggregate number of Warrants to be exercised on any day] the provisions of
this paragraph all apply to the exercise of such Remaining Warrants and such
additional Warrants on such following New York Business Day and successively
until the limitations set forth in this paragraph d in the Warrant Agreement
are no longer exceeded; provided further, that any such Remaining Warrants
shall be deemed exercised before any such additional Warrants.
If any beneficial owner of Warrants attempts to exercise more
than [individual limit] Warrants on any New York Business Day, 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 New
York Business Day following such New York Business Day), [individual limit] of
such Warrants shall be deemed exercised on such New York Business Day and the
remainder of such Warrants shall be deemed exercised on the following New York
Business Day (notwithstanding any inconsistent provisions in the Warrant
Agreement); provided that in the event that the aggregate number of such
remaining Warrants, together with any additional Warrants of such beneficial
owner with respect to which the Exercise Date would be such following New York
Business Day, exceeds [individual limit], at the Company's election (as
notified in the manner described above), the provisions of this paragraph all
apply to the exercise of such remaining Warrants and such additional Warrants
on such following New York Business Day and successively until the limitations
set forth in this paragraph d in the Warrant Agreement are no longer exceeded;
provided further, that any such remaining Warrants shall be deemed exercised
before any such additional Warrants of such beneficial owner. The date on
which any Warrant is deemed exercised under the preceding sentences shall for
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 Office accompanied by a written
instrument or instruments of transfer in form satisfactory to the Warrant Agent
duly executed by, the registered holder(s) hereof, a duly appointed legal
representative or duly authorized attorney. Such signature must be guaranteed
by a bank or trust company having a correspondent office in New York City 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
canceled by the Warrant Agent.
[Number of days after issuance before conversion option begins]
business days after the closing of the offering of the Warrants, each
Warrantholder will have the option to convert the form in which such
Warrantholder holds his Warrants from definitive to book-entry form by
utilizing the Conversion Option. The Conversion Option will be available for
[number of days after conversion option begins until conversion option ends]
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 DTC, in proper form for deposit, by a
Participant. Accordingly, unless Warrants are purchased in book-entry form, a
Warrantholder who is not a Participant 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 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 Trust Company
("DTC") for exchange during the Conversion Option Period will be exchanged for
Warrants in book-entry form by the close of business on the New York Business
Day that such Certificates are received by DTC (if received by DTC at its then
applicable cut-off time for same day credit) or on the following New York
Business Day (if received by DTC at 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. The Company has been informed by CEDEL and
Euroclear that such clearing agencies will clear Warrants in book-entry form
beginning on the commencement of the Conversion Option Period and that
Warrants may not be held in certificated form through their facilities. 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 as provided in the Warrant Agreement.
Except for Warrants subject to automatic exercise and with
respect to payments of any Alternative Settlement Amount, each Warrantholder,
in connection with any exercise of Warrants (including a postponed exercise
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 Value that would otherwise be used to determine the Cash
Settlement Value of such Warrants is [minimum number of points] or more points
[lower in the case of call warrants] [higher in the case of put warrants]
[formula] than the closing level of the [Reference Index] for the day
specified below (such closing level, the "Limit Option Reference Index
Value"). 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 Value will be the closing level of the [Reference
Index] on the relevant Exercise Date (or if such day is not an Index
Calculation Day, on the immediately preceding Index Calculation Day). 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
Value will be determined as of the next day that is also a New York Business
Day (or, if such day is not an Index Calculation Day, as of the immediately
preceding Index Calculation Day).
Following receipt of an Exercise Notice and the related Warrants
subject to the Limit Option, the Warrant Agent will obtain the applicable
Limit Option Reference Index Value 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 will be returned to the
registered holder by first class mail at the Company's expense. 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
Value as initially determined for such Warrants, except when such Valuation
Date is postponed until the Expiration Date, any Delisting Date or the
Cancellation Date. Such Warrants will either (i) be exercised on a delayed
basis if the applicable Spot Value on the postponed Valuation Date is not
[minimum number of points] or more points [less in the case of call
warrants] [more in the case of put warrants] [formula] than the Limit
Option Reference Index Value or (ii) be excluded from being exercised if,
on any applicable postponed Valuation Date, the applicable Spot Value is
[minimum number of points] or more points [less in the case of call
warrants] [more in the case of put warrants] [formula] than the Limit
Option Reference Index Value. In connection with any exercise of [double
the minimum exercise amount] 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 [the minimum exercise amount].
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 Office 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.
For purposes of this Certificate, the "Index" means the
[Reference Index] and the "Spot Value" for any date means the closing level on
such date of the [Reference Index]. References herein to "U.S. dollar,"
"U.S.$" or "$" are to the lawful currency of the United States of America
[and, references to [other currency] are to the lawful currency of [country of
the principal trading market of the Underlying Securities]] [alternative
provision for indices not based on securities] [other provision if the
principal trading markets of the Underlying Securities are in more than one
country] [alternative provision for indices not based on securities]. As used
herein, "New York Business Day" means any day other than a Saturday or a Sunday
or a day on which either the American Stock Exchange or the New York Stock
Exchange 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. As
used herein, "Index Calculation Day" means any day on which the [Reference
Index] or any Successor Index is calculated and published.
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.
Exercise Notice
[Name and Address of Warrant Agent]
Attention: ___________________
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 Value used to determine the Cash Settlement Value of Contingently
Tendered Warrants is [lower in the case of call warrants] [higher in the case
of put warrants] [formula] than the Reference Index by [minimum number of
points] 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 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 beneficial owner of Warrants that is exercising
Warrants pursuant to this Exercise Notice is exercising no fewer than
[individual limit] Warrants and no beneficial owner is acting in concert with
any other beneficial owner in relation to the exercise of the Exercised
Warrants.
3. The Owner hereby directs the Warrant Agent (a) to pay the Cash
Settlement Value, if any, with respect to the Exercised Warrants:
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:_________________________________ ___________________________________
(Owner)
By:________________________________
Authorized Signature
Address:
Telephone:
EXHIBIT A-1
FORM OF GLOBAL WARRANT CERTIFICATE
No.
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.
MORGAN STANLEY, DEAN WITTER, DISCOVER & CO.
Global Warrant Certificate Representing
[Title of the Warrants]
This Warrant Certificate certifies that CEDE & CO., or
registered assigns, is the registered holder of the number of [title of the
Warrants] (the "Warrants") set forth from time to time on Schedule 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, from Morgan Stanley, Dean Witter, Discover & Co. (the "Company")
the Cash Settlement Value in [payment currency] (the "Cash Settlement Value")
equal to [formula or method of calculation for cash settlement value];
provided, however, that if such amount is less than or equal to zero, then the
Cash Settlement Value shall be zero. In no event shall a Warrantholder be
entitled to any interest on any Cash Settlement Value.
The Warrants will not entitle the Warrantholders to any of the
rights of the holder of any security underlying the Index (an "Underlying
Security") [alternative provision for indices not based on securities]. A
Warrant will not require or entitle the Warrantholder thereof to sell,
deliver, purchase or take delivery of any Underlying Security to or from the
Company [alternative provision for indices not based on securities], nor will
the Company be under any obligation to, nor will it, purchase or take delivery
of, or sell or deliver, any such security to or from Warrantholders.
Subject to the terms and conditions set forth herein and in the
Warrant Agreement, each Warrant may be exercised, on any New York 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 New York Business Day immediately preceding
the date, established in or pursuant to a Board Resolution or Resolutions, upon
which the right to exercise the Warrants expires (the "Expiration Date") and
(ii) any Delisting Date (as defined herein). 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 (i) the New York Business Day immediately preceding the Expiration Date and
(ii) any Delisting Date, will be automatically exercised.
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 ________________ (the "Warrant Agreement"),
among the Company, [name of Warrant Agent] (the "Warrant Agent") and Morgan
Stanley & Co. Incorporated (the "Determination Agent") and is subject to the
terms and provisions contained in the Warrant Agreement, to all of which terms
and provisions each Warrantholder, the entities through which such
Warrantholders hold their beneficial interests in the 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 (as defined herein).
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 during the period from the Initial Conversion Date
until 3:00 P.M., New York City time, on the earlier of (i) the New York
Business Day immediately preceding the Expiration Date and (ii) any Delisting
Date (as defined herein), 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 relating to the Warrants, and (y) a duly completed and
executed Exercise Notice to be received by the Warrant Agent from a
Participant 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.
In the case of Book-Entry Warrants held through the facilities
of CEDEL or Euroclear, a Warrantholder may exercise each Warrant 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 (i) the New York Business Day
immediately preceding the Expiration Date and (ii) any Delisting Date by
causing (x) such Warrant to be transferred to the Warrant Agent (in accordance
with the preceding paragraph), giving appropriate instructions either to
CEDEL or to the participant holding his Warrants in Euroclear, as the case may
be, and (y) a duly completed and executed Exercise Notice to be delivered on
behalf of the Warrantholder by CEDEL, in the case of Warrants held through
CEDEL, or such participant, in the case of Warrants held through Euroclear, to
the Warrant Agent.
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 and in the
Warrant Agreement, such Warrantholder may instead receive the Alternative
Settlement Amount for such Warrant. The "Cash Settlement Value" of a Warrant
shall be an amount in [payment currency] equal to [formula or method of
calculation for Cash Settlement Value]; provided, however, that if such amount
is less than or equal to zero, then the Cash Settlement Value shall be zero.
[The Strike Level is which was determined by the Determination
Agent and is [formula for Strike Level] [if applicable, the Base Value is
which was determined by the Determination Agent and is [formula for base
value]].
The Company has appointed Morgan Stanley & Co. Incorporated to
be its Determination Agent, 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 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 Index, any Successor Index, adjustments or calculations by the
Determination Agent in order to arrive at a calculation of a stock index
comparable to the Index or any Successor Index, or the Cash Settlement Value
or the Alternative Settlement Amount, as applicable.
In the event that the [Reference Index] is not published by the
Index Publisher but is published by another person not affiliated with the
Company and acceptable to the Company (a "Third Party"), then the Spot Value
for any date thereafter will be determined based on the closing level of the
[Reference Index] as published by such Third Party. If the Index Publisher or
any Third Party discontinues publication of the [Reference Index] and
publishes a successor or substitute index that the Company determines, in its
sole discretion, to be comparable to the [Reference Index] (any such index
being a "Successor Index"), then the Spot Value for any date thereafter will be
determined by the Determination Agent on behalf of the Company based on the
closing level of the Successor Index on such date. If the Index Publisher or
any Third Party makes a material change in the formula for, or the method of
calculating, the [Reference Index] or any Successor Index, the Determination
Agent shall make such calculations as may be required to determine the
applicable Cash Settlement Value using the formula and method of calculating
the Index or any Successor Index as in effect prior to such change or
modification. If the Index Publisher and/or any Third Party discontinues
publication of the [Reference Index] and/or any Successor Index, the
Determination Agent will determine the applicable Cash Settlement Value based
on the formula and method used in calculating the [Reference Index] or any
Successor Index as in effect on the date the [Reference Index] or such
Successor Index was last published.
Except for Warrants subject to automatic exercise or Warrants
held through the facilities of CEDEL or Euroclear, or Warrants subject to the
Limit Option, the "Exercise Date" for a Warrant means (i) the New York Business
Day on which the Warrant Agent receives the Warrant and Exercise Notice in
proper form with respect to such Warrant, if received at or prior to 3:00
P.M., New York City time, on such day, or (ii) if the Warrant Agent receives
such Warrant or Exercise Notice after 3:00 P.M., New York City time, on a New
York Business Day, then the next New York Business Day succeeding the New York
Business Day on which such Warrant or Exercise Notice is received. In the case
of Warrants held through the facilities of CEDEL or Euroclear, except for
Warrants subject to automatic exercise and except for Warrants subject to the
Limit Option, the "Exercise Date" for a Warrant means (i) the New York
Business Day on which the Warrant Agent receives (by facsimile transmission)
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 being exercised is received by the
Warrant Agent by 3:00 P.M., New York City time, on the New York Business Day
next succeeding the date on which the exercise notice is received, or (ii) if
the Warrant Agent receives such Exercise Notice after 3:00 P.M., New York City
time, on a New York Business Day, then the New York Business Day succeeding
such New York Business Day, provided that such day will be the Exercise Date
only if the Warrant being exercised is received by 3:00 P.M., New York City
time, on the second succeeding New York Business Day following the New York
Business Day on which the Exercise Notice is received. In the event that the
Warrant being exercised is received after 3:00 P.M., New York City time, on
the New York Business Day next succeeding the date on which the Exercise
Notice is received, then the Exercise Date for such Warrant will be the day on
which such Warrant is received or, if such day is not a New York Business Day,
the next succeeding New York Business Day. Notwithstanding the foregoing, in
the case of the exercise of a Warrant by a CEDEL or Euroclear participant,
CEDEL or Euroclear, as the case may be, must by facsimile transmission to the
Warrant Agent by 9:00 a.m., New York City time, on the New York Business Day
next succeeding the Exercise Date confirm (an "Account Confirmation") that the
Warrants being exercised will be received by the Warrant Agent by 3:00 p.m.,
New York City time, on such date, provided, further, that if such Account
Confirmation is received after 9:00 a.m., New York City time, on the New York
Business Day next succeeding the Exercise Date, the Company will be entitled
to direct the Warrant Agent to reject the related Exercise Notice or waive the
requirement for timely delivery of such Account Confirmation.
Subject to the Warrant Agreement and this Global Warrant
Certificate, the "Valuation Date" for a Warrant will be the first Index
Calculation Date 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. For purposes of this
Global Warrant Certificate, "Index Calculation Date" means any day the Index
or any Successor Index is calculated and published.
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
New York Business Day immediately preceding the Expiration Date or (ii) any
Delisting 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 at such time been postponed as described below,
will be automatically exercised. 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 New York Business Day, the next succeeding New York Business Day. The
Warrant Agent will obtain the Spot Value (determined as of the first Index
Calculation Date 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 Exercise Limitation Event) and will
determine the Cash Settlement Value, if any, of such Warrants.
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 and except for Warrants that
upon exercise entitle the holder thereof to receive an Alternative Settlement
Amount in lieu of the Cash Settlement Value, if on any Valuation Date the Cash
Settlement Value for any Warrants then exercised would 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 (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.
Except in the case of Warrants subject to automatic exercise
and except for Warrants that upon exercise entitle the holder thereof to
receive an Alternative Settlement Amount in lieu of the Cash Settlement Value,
if the Company has made adequate funds available to the Warrant Agent in a
timely manner, which shall in no event be later than 3:00 p.m., New York City
time, on the fourth New York Business Day following a Valuation Date (or, if
the Valuation Date is not a New York Business Day, on the fourth New York
Business Day following the New York Business Day next succeeding the Valuation
Date) (the "Funding Date"), the Warrant Agent will be responsible for making
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), after 3:00 p.m., New York City time, but prior to the
close of business, on the first New York Business Day immediately succeeding
such Funding Date. For either clause ) 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 the Warrant Agreement.
With respect to automatically exercised Warrants, if the
Company has made adequate funds available to the Warrant Agent, not later than
3:00 p.m., New York City time, on the fourth New York Business Day following
the Valuation Date for automatically exercised Warrants (or if such Valuation
Day is not a New York Business Day, on the fourth New York Business Day
following the New York Business Day next succeeding such Valuation Date) (in
any such case the "Automatic Funding Date"), funds in an amount equal to, and
for the payment of, the aggregate Cash Settlement Value of such Warrants, the
Warrant Agent will thereafter be responsible for making funds available to the
Depository, against receipt of the Global Warrant Certificate, after 3:00
p.m., New York City time, but 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.
Anything in this Global Warrant Certificate or in the Warrant
Agreement to the contrary notwithstanding, if the Company determines that an
Extraordinary Event or Exercise Limitation Event has occurred and is
continuing on the Home Country Business Day (as defined herein) with respect
to which the Spot Value on a Valuation Date is to be determined (the
"Applicable Home Country Business Day"), then the Cash Settlement Value in
respect of an exercise shall be calculated on the basis that the Valuation Date
shall be the next Index Calculation Day following an Applicable Home Country
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, Warrantholders shall receive the
Alternative Settlement Amount in lieu of the Cash Settlement Value, which
shall be calculated as if the Warrants had been canceled on the Expiration
Date or any Delisting Date, as the case may be. The term "Home Country
Business Day" means any day other than a day on which the principal trading
market for the Underlying Securities is not open for securities trading [other
provisions if the principal trading markets for the Underlying Securities are
in more than one country] [alternative provision for indices not based on
securities].
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 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 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 any Delisting Date, as the case may be, as
the date on which the Warrants were canceled).
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 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 the Warrant Agreement shall thereupon cease;
provided, that 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 each Warrantholder shall have the right to receive, in lieu of the Cash
Settlement Value of such Warrant an amount (the "Alternative Settlement
Amount"), determined by the Determination Agent.
With respect to all Warrants as to which the Valuation Date has
been postponed or which have been canceled as described above, if the Company
has made adequate funds available to the Warrant Agent not later than 3:00
p.m., New York City time, on the third New York 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"), the
Warrant Agent will thereafter be responsible for making a payment in the
manner set forth in the Warrant Agreement to the Depository, after 3:00 p.m.,
New York City time, but 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). 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.
The "Alternative Settlement Amount" shall be an amount
determined by the Determination Agent, which is equal to the amount "X"
calculated using the formula set forth below:
X = I + (T/2 x A/B)
where
I = the Cash Settlement Value of the Warrants determined as
described above, but calculated with a Spot 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
Underlying Securities [alternative provision for indices
not based on securities] on the Cancellation Date,
Expiration Date or Delisting Date, whichever has given
rise to the payment of the Alternative Settlement
Amount;
T = the initial offering price per Warrant;
A = the total number of days from but excluding the Cancellation
Date, Expiration 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.
For purposes of determining "I" 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 Value which fairly
reflects the value of the Underlying Securities [alternative provision for
indices not based on securities] on the Cancellation Date, Expiration Date or
Delisting 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.
"Extraordinary Event" means any of the following events:
(i) a suspension or absence of trading on the [principal
market in which the Underlying Securities are traded] [other
provisions if there is more than one principal trading market for the
Underlying Securities] [alternative provision for indices not based on
securities] of all the Underlying Securities which then comprise the
[Reference Index] or a Successor Index;
(ii) the enactment, publication, decree or other promulgation
of any statute, regulation, rule or order of any court or any other
U.S. or non-U.S. governmental authority that would make it unlawful
for the Company to perform any of its obligations under the Warrant
Agreement or the Warrants or that has or will have a material adverse
effect on the ability of the Company to perform its obligations under
the Warrants or to modify the hedge of its position with respect to
the [Reference Index]; 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 [country of principal
market in which the Underlying Securities are traded] or the trading
of securities generally on the [principal market in which the
Underlying Securities are traded]) that has or will have a material
adverse effect on the ability of the Company to perform its
obligations under the Warrants or to modify the hedge of its position
with respect to the [Reference Index].
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 [principal market in which the Underlying
Securities are traded] and (2) an "absence of trading" on the [principal
market in which the Underlying Securities are traded] will not include any
time when the [principal market in which the Underlying Securities are traded]
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 [principal market in which the Underlying Securities are
traded] of (a) [___]% or more of the Underlying Securities and/or (b)
the securities of [percentage or number] of the most highly
capitalized companies included in the Underlying Securities which then
comprise the [Reference Index] or a Successor Index; or
[(ii) the suspension or material limitation on the [relevant
futures exchange(s) with respect to the Underlying Securities] or any
other major futures or securities market of trading in futures or
options contracts related to the [other relevant index], the
[Reference Index] or a Successor Index.]
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 market or
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 in trading in an Underlying Security [or in a futures or
options contract] referred to in clause[s] ) [and (ii)] above, by reason of
(x) a price change violating limits set by the [principal market in which the
Underlying Securities are traded] [or the relevant futures exchange(s) with
respect to the Underlying Securities] or such [futures or] securities market,
(y) an imbalance of orders relating to an Underlying Security [or such
contracts] or (z) a disparity in bid and ask quotes relating to an Underlying
Security [or such contracts], will constitute a suspension or material
limitation of trading, (4) an "absence of trading" in the [principal market in
which the Underlying Securities are traded] will not include any time when the
[principal market in which the Underlying Securities are traded] is closed for
trading under ordinary circumstances and (5) the occurrence of an
Extraordinary Event described in clause ) 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
upon cancellation) are subject, at the Company's option, to the limitation
that not more than [limit on aggregate number of Warrants to be exercised on
any day] Warrants in total may be exercised on any Exercise Date and not more
than [individual limit] 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 New York Business Day would otherwise,
under the terms hereof, be the Exercise Date in respect of more than [limit on
aggregate number of Warrants to be exercised on any day] 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 New York Business Day immediately
following such Exercise Date), [limit on aggregate number of Warrants to be
exercised on any day] 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 [minimum exercise amount] 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
[minimum exercise amount] Warrants), and the remainder of such Warrants (the
"Remaining Warrants") shall be deemed exercised on the following New York
Business Day (notwithstanding the provisions of the Warrant Agreement);
provided that in the event that the aggregate number of such Remaining
Warrants, together with any additional Warrants with respect to which the
Exercise Date would be such following New York Business Day, exceeds [limit on
aggregate number of Warrants to be exercised on any day] the provisions of
this paragraph all apply to the exercise of such Remaining Warrants and such
additional Warrants on such following New York Business Day and successively
until the limitations set forth in this paragraph d in the Warrant Agreement
are no longer exceeded; provided further, that any such Remaining Warrants
shall be deemed exercised before any such additional Warrants.
If any beneficial owner of Warrants attempts to exercise more
than [individual limit] Warrants on any New York Business Day, 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
next New York Business Day following such New York Business Day) [individual
limit] of such Warrants shall be deemed exercised on such New York Business
Day and the remainder of such Warrants shall be deemed exercised on the
following New York Business Day (notwithstanding any inconsistent provisions
in the Warrant Agreement); provided that in the event that the aggregate
number of such remaining Warrants, together with any additional Warrants of
such beneficial owner with respect to which the Exercise Date would be such
following New York Business Day, exceeds [individual limit], at the Company's
election (as notified in the manner described above), the provisions of the
paragraph all apply to the exercise of such remaining Warrants and such
additional Warrants on such following New York Business Day and successively
until the limitations set forth in this paragraph d in the Warrant Agreement
are no longer exceeded; provided further, that any such remaining Warrants
shall be deemed exercised before any such additional Warrants of such
beneficial owner. 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.
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 must be guaranteed by a bank or trust company having a
correspondent office in New York City 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 transfer, a new Global Warrant Certificate shall be issued to the transferee
and the surrendered Global Warrant Certificate shall be canceled by the
Warrant Agent.
Except for Warrants subject to automatic exercise and with
respect to payments of any Alternative Settlement Amount, each Warrantholder,
in connection with any exercise of Warrants (including a postponed exercise
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 Value that would otherwise be used to determine the Cash
Settlement Value of such Warrants is [minimum number of points] or more points
[lower in the case of call warrants] [higher in the case of put warrants]
[formula] than the closing level of the [Reference Index] for the day
specified below (such closing level, the "Limit Option Reference Index
Value"). 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 Value will be the closing level of the [Reference
Index] on the relevant Exercise Date (or if such day is not an Index
Calculation Day, on the immediately preceding Index Calculation Day). If an
Exercise Notice is received after 3:00 P.M., New York City time, on a given
day, the applicable Limit Option Reference Index Value will be determined as
of the next day that is also a New York Business Day (or, if such day is not
an Index Calculation Day, as of the immediately preceding Index Calculation
Day).
Following receipt of an Exercise Notice subject to the Limit
Option, the Warrant Agent will obtain the applicable Limit Option Reference
Index Value and will determine whether such Warrants exercised pursuant to such
Exercise Notice will not be exercised because of the Limit Option. Warrants
that are not exercised will be treated as not having been tendered for
exercise. To exercise such Warrants, a Warrantholder will be required to cause
an Exercise Notice 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 Value as initially determined for such
Warrants, except when such Valuation Date is postponed until the Expiration
Date, any Delisting Date or the Cancellation Date. Such Warrants will either
(i) be exercised on a delayed basis if the applicable Spot Value on the
postponed Valuation Date is not [minimum number of points] or more points
[less in the case of call warrants] [more in the case of put warrants]
[formula] than the Limit Option Reference Index Value of (ii) be excluded from
being exercised if, on any applicable postponed Valuation Date, the applicable
Spot Value is [minimum number of points] or more points [less in the case of
call warrants] [more in the case of put warrants] [formula] than the Limit
Option Reference Index Value. In connection with any exercise of [double the
minimum exercise amount] 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 [the minimum exercise amount].
Capitalized terms included herein but not defined herein have
the meanings assigned thereto in the Warrant Agreement.
For purposes of this Certificate, the "Index" means the
[Reference Index] and the "Spot Value" for any date means the closing level on
such date of the [Reference Index]. References herein to "U.S. dollar,"
"U.S.$" or "$" are to the lawful currency of the United States of America
[and, references to [other currency] are to the lawful currency of [country of
the principal trading market of the Underlying Securities]] [other provision
if the principal trading markets of the Underlying Securities are in more than
one country] [alternative provision for indices not based on securities]. As
used herein, "New York Business Day" means any day other than a Saturday or a
Sunday or a day on which either the American Stock Exchange or the New York
Stock Exchange 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. As used herein, "Index Calculation Day" means any day on which the
[Reference Index] or any Successor Index is calculated and published.
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, Morgan Stanley, Dean Witter, Discover & Co.
has caused this instrument to be duly executed.
Dated:________________________ MORGAN STANLEY, DEAN WITTER,
DISCOVER & CO.
By:_____________________________
Name:
Title:
Attest:
By:_________________________________
Name:
Title:
Countersigned as of the date above
written:
[NAME OF WARRANT AGENT], as
Warrant Agent
By:_________________________________
Authorized Officer
Schedule
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Number of Warrants Represented by this Global
Date Warrant Certificate
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EXHIBIT A-2
EXERCISE NOTICE
For Warrants Represented by the Global Warrant Certificate
[Name and Address of Warrant Agent]
Attention: ________________________
1. We refer to the Warrant Agreement dated as of ________________
(the "Warrant Agreement"), among Morgan Stanley, Dean Witter, Discover & Co.
(the "Company"), [Name of Warrant Agent], as warrant agent (the "Warrant
Agent"), and Morgan Stanley & Co. Incorporated, as determination agent (the
"Determination Agent"). On behalf of certain beneficial owners, each of whom
we certify is exercising no fewer than [minimum exercise amount] 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, 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 New York Business Day in order for the Valuation Date for the
Tendered Warrants to be the Index Calculation Date following such New York
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 New York
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
New York Business Day next succeeding the New York Business Day on which such
Exercise Notice is received, the Valuation Date of the Tendered Warrants shall
be the Index Calculation Date next succeeding the succeeding New York 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:
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:_______________________________________________________
Account No.: _______________________________________________
ABA Routing No.:____________________________________________
Reference:__________________________________________________
4. The Tendered Warrants covered hereby ARE NOT subject to the
Limit Option(2)
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 [individual limit] Warrants on behalf of any beneficial owner or in
concert with any other beneficial owner.
6. 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.
7. If this Exercise Notice is submitted in relation to Warrants
held through the facilities of Euroclear, the undersigned represents that it
is a participant in Euroclear.
- ----------
(2) A separate Exercise Notice shall be submitted with respect to Warrants
subject to the Limit Option and Warrants not subject to the Limit Option.
Capitalized terms used but not defined herein have the meanings
assigned thereto in the Warrant Agreement.
Dated:________________________ [NAME OF DEPOSITORY PARTICIPANT]
Participant Number
By:______________________________
Name:
Title:
[NAME OF EUROCLEAR PARTICIPANT]
[CEDEL S.A.]
By:______________________________
Authorized Signature
Address:
Telephone:
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 $_______ ($____ 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 fifth New York Business Day following the Valuation Date for such
Warrants (or, if such Valuation Date is not a New York Business Day, on the
fifth New York Business Day following the New York 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
________________, among Morgan Stanley, Dean Witter, Discover & Co., [name of
Warrant Agent], and Morgan Stanley & Co. Incorporated.
Dated:_______________________ [NAME OF WARRANT AGENT], as
Warrant Agent,
By:______________________________
Authorized Signature
NOTICE OF REJECTION
You are hereby notified that the Exercise Notice delivered by
you was determined by us not to have been duly completed in proper form.
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:_________________________ [NAME OF WARRANT AGENT], as
Warrant Agent,
By:_____________________________
Authorized Signature
EXHIBIT B-1
CONFIRMATION OF EXERCISE
For Warrants Represented by the Global Warrant Certificate
[Name of Depository Participant]
[Name of Euroclear Participant]
[CEDEL S.A.]
[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 Value for such Warrants is _______ and the Spot Value
for the date that would otherwise be the Valuation Date for such Warrants is
________. Such Spot Value is not [lower, in the case of Call Warrants]
[higher, in the case of Put Warrants] than such Limit Option Reference Index
Value by [minimum number of points] 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 $__________ ($_____ 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 fifth New York Business Day following the Valuation
Date for such Warrants (or, if such Valuation Date is not a New York Business
Day, on the fifth New York Business Day following the New York 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
________________, among Morgan Stanley, Dean Witter, Discover & Co., [name of
Warrant Agent], as Warrant Agent, and Morgan Stanley & Co. Incorporated, as
Determination Agent.
Dated:_________________________ [NAME OF WARRANT AGENT], as
Warrant Agent,
By:_____________________________
Authorized Signature
NOTICE OF REJECTION
[Name of Depository Participant]
[Name of Euroclear Participant]
[CEDEL S.A.]
[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
________________, among Morgan Stanley, Dean Witter, Discover & Co., [name of
Warrant Agent], and Morgan Stanley & Co. Incorporated. 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:_________________________ [NAME OF WARRANT AGENT], as
Warrant Agent,
By:_____________________________
Authorized Signature
EXHIBIT C-1
NOTICE OF REJECTION
RELATING TO LIMIT OPTION
For Warrants Represented
by Warrant Certificates
We refer to your Exercise Notice dated __________, 19__, with
respect to Warrants that were subject to the Limit Option. The applicable
Limit Option Reference Index Value for such Warrants is _________ and the Spot
Value for the date that would otherwise be the Valuation Date for such
Warrants is ______________. Such Spot Value is [lower, in the case of Call
Warrants] [higher, in the case of Put Warrants] than the Limit Option
Reference Index Value on the Exercise Date (or if such date was not an Index
Calculation Date, on the Index Calculation Date prior to the Exercise Date for
such Warrants) by [minimum number of points] 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
________________, among Morgan Stanley, Dean Witter, Discover & Co., [name of
Warrant Agent] and Morgan Stanley & Co. Incorporated.
Dated:________________________ [NAME OF WARRANT AGENT], as
Warrant Agent,
By:_____________________________
Authorized Signature
EXHIBIT C-2
NOTICE OF REJECTION
RELATING TO LIMIT OPTION
For Warrants Represented
by the Global Warrant Certificate
[Name of Depository Participant]
[Name of Euroclear Participant]
[CEDEL S.A.]
[Address]
We refer to your Exercise Notice dated ________, 19__, with
respect to Warrants that were subject to the Limit Option. The applicable
Limit Option Reference Index Value for such Warrants is __________ and the
Spot Value for the date that would otherwise be the Valuation Date for such
Warrants is __________. Such Spot Value is [lower, in the case of Call
Warrants] [higher, in the case of Put Warrants] than the Reference Index on the
Exercise Date (or if such date was not an Index Calculation Date, on the Index
Calculation Date prior to the Exercise Date for such Warrants) by [minimum
number of points] 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
________________, among Morgan Stanley, Dean Witter, Discover & Co., [name of
Warrant Agent], and Morgan Stanley & Co. Incorporated.
Dated:_________________________ [NAME OF WARRANT AGENT], as
Warrant Agent,
By:______________________________
Authorized Signature
=============================================================================
MORGAN STANLEY, DEAN WITTER, DISCOVER & CO.
and
Warrant Agent
and
MORGAN STANLEY & CO. INCORPORATED, Determination Agent
INTEREST RATE WARRANT AGREEMENT
dated as of ___________, 199_
Interest Rate Warrants
=============================================================================
TABLE OF CONTENTS
Page
----
ARTICLE 1
ISSUANCE OF WARRANTS AND FORM, EXECUTION, DELIVERY AND REGISTRATION OF WARRANT
CERTIFICATES AND GLOBAL WARRANT CERTIFICATES
Section 1.1. Issuance of Warrants......................................... 1
Section 1.2. Form, Execution and Delivery of Warrant Certificates......... 2
Section 1.3. Warrant Certificates......................................... 2
Section 1.4. Registration of Transfers and Exchanges...................... 3
Section 1.5. Mutilated or Missing Warrant Certificates.................... 4
Section 1.6. Registered Holders........................................... 5
Section 1.7. Conversion Option............................................ 5
Section 1.8. Global Warrant Certificate................................... 7
ARTICLE 2
DURATION AND EXERCISE OF WARRANTS
Section 2.1. Duration of Warrants; Minimum Exercise Amounts; Exercise
Notice....................................................... 9
Section 2.2. Exercise, Valuation and Delivery of Warrants................. 11
Section 2.3. Automatic Exercise of Warrants; [Exercise Upon
an Extraordinary Event or Exercise Limitation Event]......... 17
Section 2.4. Limitation of Number of Exercisable Warrants................. 19
Section 2.5. Covenant of the Company...................................... 20
Section 2.6. Return of Money Held Unclaimed for Two Years................. 20
Section 2.7. Return of Global Warrant Certificate......................... 20
ARTICLE 3
OTHER PROVISIONS RELATING TO RIGHTS OF WARRANTHOLDERS
Section 3.1. Warrantholder of Warrant May Enforce Rights.................. 21
ARTICLE 4
WARRANTS ACQUIRED BY THE COMPANY; PAYMENT OF TAXES
Section 4.1. Warrants Acquired by the Company............................. 21
Section 4.2. Payment of Taxes............................................. 22
ARTICLE 5
CONCERNING THE WARRANT AGENT
Section 5.1. Warrant Agent................................................ 22
Section 5.2. Conditions of Warrant Agent's Obligations.................... 22
Section 5.3. Resignation and Appointment of Successor..................... 24
ARTICLE 6
MISCELLANEOUS
Section 6.1. Amendment.................................................... 25
Section 6.2. Notices and Demands to the Company, the
Warrant Agent [and the Determination Agent].................. 26
Section 6.3. Addresses for Notices........................................ 26
Section 6.4. Notices to Holders........................................... 27
Section 6.5. Obtaining of Approvals....................................... 27
Section 6.6. Persons Having Rights under this Agreement................... 27
Section 6.7. Inspection of Agreement...................................... 27
Section 6.8. Headings..................................................... 28
Section 6.9. Counterparts................................................. 28
Section 6.10. Applicable Law.............................................. 28
WARRANT AGREEMENT
THIS AGREEMENT, dated as of ___________, 199_, among MORGAN
STANLEY, DEAN WITTER, DISCOVER & CO., a corporation organized and existing
under the laws of the State of Delaware (the "Company"), [name of Warrant
Agent], a New York banking corporation (the "Warrant Agent")[, and MORGAN
STANLEY & CO. INCORPORATED, a corporation organized and existing under the
laws of the State of Delaware (the "Determination Agent").]
WHEREAS, the Company proposes to sell [put warrants] [call
warrants] (the "Warrants" or, individually, a "Warrant"), representing the
right to receive from the Company an amount in [name of payment currency]
equal to the Cash Settlement Value [or Alternative Settlement Amount (each as]
defined below) to be determined by reference to [decreases (in the case of put
warrants)] [increases (in the case of call warrants)] in the [yield or closing
price of one or more debt instruments (the "Reference Debt Instrument[s]") in
an interest rate, interest swap rate or other rate (the "Reference Rate[s]")
or any combination of foregoing] 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 1
ISSUANCE OF WARRANTS AND FORM, EXECUTION, DELIVERY AND
REGISTRATION OF WARRANT CERTIFICATES AND GLOBAL WARRANT
CERTIFICATES
Section 1.1. 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 shall represent the right, upon exercise
(including automatic exercise) subject to the provisions contained herein, to
receive the Cash Settlement Value [or the Alternative Settlement Amount, as
the case may be (each] as defined herein), of such Warrant. In no event shall
a registered or beneficial holder of a Warrant (each a "Warrantholder") be
entitled to receive any interest on any Cash Settlement Value [or Alternative
Settlement Amount].
Section 1.2. 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 stock exchange 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 any one of the
Chairman of the Board, the President, the Chief Financial Officer, the
Chief Strategic and Administrative Officer, the Chief Legal Officer, the
Treasurer, any Assistant Treasurer or any other officer specifically
designated by the Board of 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 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 1.3. Warrant Certificates. Each Warrant Certificate,
when executed on behalf of the Company in accordance with Section 1.2, shall be
delivered to the Warrant Agent, which shall manually countersign and deliver
the same to or upon the order of the Company. 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 1.2 shall be conclusive
evidence that the Warrant Certificate so countersigned has been duly issued
hereunder.
Section 1.4. 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, 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(s) 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 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, 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 its offices maintained for such purpose (the location of which
shall be provided to the Company), which shall be in the Borough of Manhattan,
The City of New York (the "Warrant Agent's Office"), and which is, on the date
of this Agreement, [Warrant Agent's address], or at the office of any
successor Warrant Agent (as provided in Section 5.3). Upon surrender of any
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 1.2 and 1.3, 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 1.4(a) or 1.4(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 1.5, 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 1.4 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 holder thereof or his assignee a new Warrant Certificate
evidencing the number of Warrants not exercised.
Section 1.5. 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 the mutilated Warrant
Certificate, or in replacement for 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
1.5 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 1.5, 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 1.5 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.
Section 1.6. 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 1.6 shall
be without prejudice to the rights of Warrantholders as described elsewhere
herein. Warrant Certificates may not be held by a Warrantholder through the
facilities of Cedel S.A. ("CEDEL") or the Euroclear System ("Euroclear").
Section 1.7. Conversion Option. (a) [Number of days after
issuance before conversion option begins] business days following the original
issuance of the Warrants, each Warrantholder will have the option to convert
the form in which such Warrantholder holds his Warrants from definitive to
book-entry form by utilizing the "Conversion Option". The Company shall notify
each Warrantholder, CEDEL and Euroclear as soon as practicable after the
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 order for Warrants to be
converted into book-entry form), (ii) the date on which such conversions will
commence (which shall be such [number of days after issuance before conversion
option begins] business day) (the "Initial Conversion Date"), (iii) the date
on which such conversions will end (which date shall be the [number of days
after conversion option begins until conversion option ends] day after the
Initial Conversion Date (the "Final Conversion Date")), and (iv) the CUSIP
number assigned to the Warrants. The Warrant Agent, at the request and expense
of the Company, 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 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 on the date
that such Warrant Certificates are deposited (if received by the Depository at
its then applicable cut-off time for same-day credit) or on the following
business day (if received by the Depository at 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, by and between 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 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 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 The Chase Manhattan Bank (formerly known
as 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 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 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 1.8
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 1.8, all references in this
Agreement to the Warrant Certificates (other than in Sections 1.2, 1.3, 1.4
and 1.8) shall include the Global Warrant Certificate in the event that the
Global Warrant Certificate is issued.
Section 1.8. Global Warrant Certificate. (a) Any Global
Warrant Certificate issued in accordance with this Section 1.8 shall be
substantially in the form set forth in Exhibit A-1 hereto, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Agreement, and may represent any number of whole
Warrants. The Global Warrant Certificate may have imprinted or otherwise
reproduced thereon such letters, numbers or other marks of identification or
designation and such legends or endorsements as the officers of the Company
executing the same may approve (execution thereof to be conclusive evidence of
such approval) and 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 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.
(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
Company against receipt of an appropriate amount of Certificated Warrants (as
defined herein) (such Certificated 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 1.2. 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 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 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 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 1.8(d) above, when surrendered to the Warrant Agent's
Office, or at the office of any successor Warrant Agent (as provided in
Section 5.3), for another Global Warrant Certificate of like tenor and
representing a like number of unexercised Warrants.
ARTICLE 2
DURATION AND EXERCISE OF WARRANTS
Section 2.1. Duration of Warrants; Minimum Exercise
Amounts; Exercise Notice. (a) Subject to the limitations set forth
herein and in Section 2.3, each Warrant may be irrevocably exercised in
whole but not in part, immediately upon issuance. Except in the case of
automatic exercise, each Warrant shall be irrevocably exercised either (A)
in the case of Warrants represented by Warrant Certificates ("Certificated
Warrants"), on any New York 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 New
York Business Day immediately preceding the date (established in or
pursuant to a resolution or resolutions of the Board of Directors of the
Company or any committee of such Board duly authorized to act on its behalf
(a "Board Resolution" or "Board Resolutions")) upon which the right to
exercise the Warrants expires (the "Expiration Date"), and (ii) any
Delisting Date (as defined herein) by delivering or causing to be delivered
to the Warrant Agent (at its address as set forth in the Exercise Notice
(as defined below) or at such other address as the Warrant Agent may
specify from time to time) the Warrant Certificate representing such
Warrant, with the Exercise Notice duly completed and executed by the
Registered Holder of such Warrant or (A) in the case of Warrants
represented by a Global Warrant Certificate ("Book-Entry Warrants"), 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 (i) the New York
Business Day immediately preceding 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 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.
In the case of Book-Entry Warrants held through the facilities
of CEDEL or Euroclear, a Warrantholder may exercise each Warrant 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 (i) the New York Business Day
immediately preceding the Expiration Date and (ii) any Delisting Date, by
causing (x) such Warrant to be transferred to the Warrant Agent in accordance
with clause (B) of the preceding paragraph, by giving appropriate instructions
to CEDEL or the participant holding his Warrants in Euroclear, as the case may
be, and (y) a duly completed and executed Exercise Notice to be delivered on
behalf of the Warrantholder by CEDEL, in the case of Warrants held through
CEDEL, or such participant, in the case of Warrants held through Euroclear, to
the Warrant Agent.
(b) No fewer than the minimum number of Warrants as set forth in
each Warrant Certificate 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 the Expiration Date or a
Delisting Date[, or in the case of cancellation of the Warrants as a result of
an Extraordinary Event (as defined herein)]. An Exercise Notice shall be
unconditional. Except as provided in Section 2.2(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 its address, which notice (A) for Certificated 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. For purposes of this Agreement, "New York Business
Day" means any day other than a Saturday, Sunday or a day on which commercial
banks in New York City are required or authorized by law or executive order to
remain closed.
Section 2.2. Exercise, Valuation and Delivery of Warrants.
(a) Except for Warrants subject to automatic exercise or Warrants held
through the facilities of CEDEL or Euroclear, the "Exercise Date" for a
Warrant means (i) the New York Business Day on which the Warrant Agent
receives the Warrant and Exercise Notice in proper form with respect to
such Warrant, if received at or prior to 3:00 P.M., New York City time, on
such day, or (ii) if the Warrant Agent receives such Warrant or Exercise
Notice after 3:00 P.M., New York City time, on a New York Business Day,
then the next New York Business Day succeeding the New York Business Day on
which such Warrant or Exercise Notice is received. In the case of Warrants
held through the facilities of CEDEL or Euroclear, except for Warrants
subject to automatic exercise, the "Exercise Date" for a Warrant means (i)
the New York Business Day on which the Warrant Agent receives (by facsimile
transmission) 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 being exercised is
received by the Warrant Agent by 3:00 P.M., New York City time, on the New
York Business Day next succeeding the date on which the Exercise Notice is
received, or (ii) if the Warrant Agent receives such Exercise Notice after
3:00 P.M., New York City time, on a New York Business Day, then the New
York Business Day succeeding such New York Business Day, provided that such
day will be the Exercise Date only if the Warrant being exercised is
received by 3:00 P.M., New York City time, on the second succeeding New
York Business Day following the New York Business Day on which the Exercise
Notice is received. In the event that the Warrant being exercised is
received after 3:00 P.M., New York City time, on the New York Business Day
next succeeding the date on which the Exercise Notice is received, then the
Exercise Date for such Warrant will be the day on which such Warrant is
received or, if such day is not a New York Business Day, the next
succeeding New York Business Day. Notwithstanding the foregoing, in the
case of the exercise of a Book-Entry Warrant by CEDEL or a Euroclear
participant, CEDEL or Euroclear, as the case may be, must by facsimile
transmission to the Warrant Agent by 9:00 a.m., New York City time, on the
New York Business Day next succeeding the Exercise Date confirm (an
"Account Confirmation") that the Warrants being exercised will be received
by the Warrant Agent by 3:00 p.m., New York City time, on such date,
provided, further, that if such Account Confirmation is received after 9:00
a.m., New York City time, on the New York Business Day next succeeding the
Exercise Date, the Company will be entitled to direct the Warrant Agent to
reject the related Exercise Notice or waive the requirement for timely
delivery of such Account Confirmation.
(b) The "Valuation Date" for a Warrant shall be the applicable
Exercise Date (subject to postponement [upon the occurrence of an
Extraordinary Event or Exercise Limitation Event (as herein defined) or] as a
result of the exercise of a number of Warrants exceeding the limits on exercise
set forth herein).
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
New York Business Day immediately preceding the Expiration Date or (ii) the
last New York 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 and the rules and regulations of the
Securities and Exchange Commission thereunder) on, the stock exchange on which
the Warrants are listed and not accepted prior thereto or at the same time for
listing on another United States national securities exchange (such New York
Business Day being a "Delisting Date") 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 by such date [or the Valuation Date
for which has as of such date been postponed as provided in Section 2.3],
shall be deemed to be automatically exercised as of such date; provided,
however, that 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.
(c) The Warrant Agent shall, in the case of Warrants other than
Warrants held through the facilities of CEDEL or Euroclear, following receipt
of proper and timely delivery of a Warrant in accordance with Section 2.2(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 2.2(a):
(i) promptly (1) for Certificated Warrants, 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 Book-Entry
Warrants not held through CEDEL or Euroclear, determine whether such Exercise
Notice has been duly completed and is in proper form and (3) 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 CEDEL or
the Euroclear participant delivering 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 Certificated Warrants, has not
been so executed, the Warrant Agent promptly (A) 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 or
Exhibit B-1 hereto, as the case may be, and, in the case of Certificated
Warrants, shall return to the Registered Holder that submitted such Exercise
Notice, by first class mail, the Warrant Certificates evidencing such
Warrants, 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 DTC to the account from which they
were transferred to the Warrant Agent and (B) 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 2.2(c)(vii) 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 New York Business Day that
such Exercise Notice has been received (or shall be deemed to have been
received) of the total number of Warrants covered by such Exercise Notice;
(iii) with respect to Warrants held through CEDEL or
Euroclear, determine whether the Warrant Agent has received by 9:00 a.m., New
York City time, on the New York Business Day next succeeding the Exercise Date
relating to such Warrants, Account Confirmations with respect to such
Warrants, and if the Warrant Agent has not received any such Account
Confirmation 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 the New York Business Day next succeeding the Exercise Date, of
the number of such Warrants in respect of which the Warrant Agent has not
received such Account 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 Account Confirmations) send to CEDEL or the Euroclear
participant, as the case may be, that delivered such Exercise Notice for which
no related Account Confirmation was received (at the address specified in such
notice) a notice of rejection substantially in the form set forth in Exhibit
B hereto;
(iv) by 11:00 a.m., New York City time, on the New York
Business Day next succeeding the Valuation Date (A) determine the number of
Warrants determined pursuant to clause (ii) 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 (v)
and (vi) of this Section 2.2(c) with respect to such Exercise Notice or the
related Warrants);
(v) determine the applicable Spot Rate and calculate the
Cash Settlement Value of the Exercised Warrants (excluding any Warrants
held through CEDEL or Euroclear as to which timely delivery of the related
Warrant has not been made) as of their Valuation Date in the manner set
forth in Section 2.2(b) by no later than 10:00 a.m., New York City time, on
the New York Business Day next succeeding the Valuation Date [(unless the
Cash Settlement Value shall be calculated by the Determination Agent)];
(vi) 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 New York Business Day next succeeding the Valuation
Date of the Cash Settlement Value payable in respect of the Exercised
Warrants, and send notices of confirmation substantially in the form
included in Exhibit B or Exhibit B-1 hereto, as the case may be, to the
Registered Holder, Participant, CEDEL or Euroclear participant, as the case
may be; and
(vii) 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 2.2 or Section 2.3
shall be by telephone (promptly confirmed in writing) or facsimile
transmission.
Except in the case of Warrants subject to automatic exercise
[and for Warrants that upon exercise entitle the holder thereof to receive
an Alternative Settlement Amount in lieu of the Cash Settlement Value], 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 Certificated Warrants, the
Warrant Certificate evidencing such Warrants shall be promptly returned by
the Warrant Agent to the Registered Holder 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 DTC (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 in the case of Warrants subject to automatic exercise
[and for Warrants that upon exercise entitle the holder thereof to receive an
Alternative Settlement Amount in lieu of the Cash Settlement Value], if the
Company has made adequate funds available to the Warrant Agent in a timely
manner, which shall in no event be later than 3:00 p.m., New York City time,
on the fourth New York Business Day following a Valuation Date (the "Funding
Date"), the Warrant Agent will be responsible for making its payment available
(i) for Certificated 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),
after 3:00 p.m., New York City time, but prior to the close of business on the
first New York Business Day immediately succeeding such Funding Date or (ii)
for Book-Entry Warrants, 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 $100,000) by wire transfer to a U.S. Dollar account maintained by such
Participant in the United States (at the Participant's election as specified
in the Exercise Notice), after 3:00 p.m., New York City time, but prior to the
close of business, on the first New York Business Day immediately succeeding
such Funding Date. For either clause (i) or (ii) above, such payment shall be
in the amount of the aggregate Cash Settlement Value in respect of the Warrant
Certificates or Warrants that were delivered to the Warrant Agent (together
with the related Exercise Notice) as provided in Sections 2.1 and 2.2(a),
2.2(b) and 2.2(c).
(e) The "Cash Settlement Value" of an exercised Warrant shall be
an amount in [payment currency] equal to [formula or method of calculation for
cash settlement value] provided, however, that if such amount is less than
zero, then the Cash Settlement Value shall be zero.
For purposes of this Agreement, ["Reference Rate" means the
[Reference Rate]] and ["Reference Debt Instrument" means the [Reference Debt
Instrument]]. [[The "Spot Amount"] for any date means [insert definition from
Prospectus Supplement]. References in this Agreement to "U.S. dollars",
"U.S.$" or "$" are to the lawful currency of the United States of America
[other currency or currency unit]. [Provision for other relevant
definitions.]
(f) 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 Account and for which payment has been made as provided in Section
2.2(d) promptly after such delivery and payment. Absent manifest error, the
Warrant Agent's records shall be conclusive evidence of such matters.
[(g) The Company hereby appoints Morgan Stanley & Co. Incorporated,
and Morgan Stanley & Co. Incorporated accepts such appointment, to be the
Company's Determination Agent to make such calculations as may be required
upon the occurrence of any of the circumstances described in Section 2.3,
including, without limitation, calculation of the 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 Warrantholders
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 2.6,
whichever 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 5.3, 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.]
[(h) The Determination Agent will have no responsibility for
good faith errors or omissions in calculating or disseminating information
regarding the adjustments or calculations by the Determination Agent (as
provided above) in order to arrive at a calculation of the Cash Settlement
Value or the Alternative Settlement Amount, as applicable].
Section 2.3. Automatic Exercise of Warrants; [Exercise Upon an
Extraordinary Event or Exercise Limitation Event]. (a) All Warrants for which
the Warrant Agent has not received an Exercise Notice in proper form by 3:00
p.m., New York City time, on (i) the New York Business Day immediately
preceding the Expiration Date or (ii) any Delisting Date, as the case may be,
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 prior to such time, and which have not been cancelled prior to
such time, will be deemed automatically exercised without any requirement of
an Exercise Notice to the Warrant Agent. The Exercise Date for such Warrants
shall be the Expiration Date or Delisting Date, as the case may be, or, if
such date is not a New York Business Day, the next succeeding New York
Business Day and the Valuation Date shall be the Exercise Date.
The Warrant Agent shall by 5:00 p.m., New York City time, on
the Expiration Date or any Delisting Date, as the case may be, notify the
Company (and such other parties (not to exceed two) as the Company shall
designate in writing) of the number of Warrants to be automatically
exercised on such day. On the Valuation Date for such Warrants, the
Warrant Agent shall (i) determine the Cash Settlement Value (in the manner
provided in Section 2.2(e)) of the Warrants to be automatically exercised;
(ii) by 5:00 p.m., New York City time, on the next New York Business Day
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.
In the case of Certificated Warrants subject to automatic
exercise [(other than Certificated Warrants subject to postponed exercise
following the occurrence of an Extraordinary Event or an Exercise
Limitation Event as described in Section 2.3(b))], the Company shall make
available to the Warrant Agent, not later than 3:00 p.m., New York City
time, on the fourth New York Business Day following the Valuation Date for
automatically exercised Warrants (the "Automatic Funding Date"), funds in
an amount equal to, and for the payment of, the aggregate Cash Settlement
Value of such Warrants. Subject to such funds having been made available
as provided in the preceding sentence, the Warrant Agent 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), after 3:00 p.m., New York City time, but prior to
the close of business, on the Automatic Funding Date, against receipt by
the Warrant Agent at the Warrant Agent's Office 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 or an Exercise Limitation Event as
described in Section 2.3(b))], the Company shall make available to the
Warrant Agent, not later than 3:00 p.m., New York City time, on the
Automatic Funding Date, funds in an amount equal to, and for the payment
of, the aggregate Cash Settlement Value of such Warrants. Subject to such
funds having been made available as provided in the preceding sentence, the
Warrant Agent will be responsible for making funds available to DTC,
against receipt of the Global Warrant Certificate, after 3:00 p.m., New
York City time, but 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 has
occurred, 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 New York
Business Day following the date that 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) Extraordinary Event and Exercise Limitation Event provisions,
if applicable.]
Section 2.4. Limitation of Number of Exercisable Warrants.
All exercises of Warrants (other than on automatic exercise [or upon
cancellation]) are subject, at the Company's option, to the limitation that
not more than [limit on aggregate number of Warrants to be exercised on any
day] Warrants in total may be exercised on any Exercise Date and not more
than [individual limit] 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 New York Business Day would
otherwise, under the terms hereof, be the Exercise Date in respect of more
than [limit on aggregate number of Warrants to be exercised on any day]
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 New
York Business Day immediately following such Exercise Date), [limit on
aggregate number of Warrants to be exercised on any day] 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 [minimum
exercise amount] 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 [minimum exercise amount] Warrants), and
the remainder of such Warrants (the "Remaining Warrants") shall be deemed
exercised on the following New York Business Day (notwithstanding the
provisions of Section 2.1(b)); provided that in the event that the
aggregate number of such Remaining Warrants, together with any additional
Warrants with respect to which the Exercise Date would be such following
New York Business Day, exceeds the [limit on aggregate number of Warrants
to be exercised on any day] the provisions of this Section 2.4 shall apply
to the exercise of such Remaining Warrants and such additional Warrants on
such following New York Business Day and successively until the limitations
set forth in this Section 2.4 are no longer exceeded; provided further
that, any such Remaining Warrants shall be deemed exercised before any such
additional Warrants.
If any beneficial owner of Warrants attempts to exercise more
than [individual limit] Warrants on any New York Business Day, 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
next New York Business Day following such Day) [individual limit] of such
Warrants shall be deemed exercised on such New York Business Day and the
remainder of such Warrants shall be deemed exercised on the following New York
Business Day (notwithstanding the provisions of Section 2.1(b)); provided,
that in the event that the aggregate number of such remaining Warrants,
together with any additional Warrants of such beneficial owner with respect to
which the Exercise Date would be such following New York Business Day, exceeds
[individual limit], at the Company's election (as notified in the manner
described above) the provisions of this Section 2.4 shall apply to the
exercise of such remaining Warrants and such additional Warrants on such
following New York Business Day and successively until the limitations set
forth in this Section 2.4 are no longer exceeded; provided further, that, any
such remaining Warrants shall be deemed exercised before any such additional
Warrants of such beneficial owner. The date on which any Warrant is deemed
exercised under the preceding sentences shall for all purposes of this
Agreement be the "Exercise Date" in respect of such Warrants.
Section 2.5. 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 [exchange on
which the Warrants are listed] unless the Company has, at the same time,
arranged for listing on another United States national securities exchange.
Section 2.6. 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 Certificated 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 2.7. 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.
ARTICLE 3
OTHER PROVISIONS RELATING TO RIGHTS OF WARRANTHOLDERS
Section 3.1. Warrantholder of Warrant 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 4
WARRANTS ACQUIRED BY THE COMPANY; PAYMENT OF TAXES
Section 4.1. 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
Certificated 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 deliver a certificate of disposition
to the Company evidencing the same.
Section 4.2. 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 which tax or other governmental charge shall be paid by the
appropriate Warrantholder or Registered Holder.
ARTICLE 5
CONCERNING THE WARRANT AGENT
Section 5.1. Warrant Agent. The Company hereby appoints [name
of Warrant Agent] as Warrant Agent of the Company in respect of the Warrants
upon the terms and subject to the conditions set forth herein; and [name of
Warrant Agent] 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.
Section 5.2. 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 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. The obligations of the Company under this
Section 5.2(a) shall survive the termination of this Agreement.
(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.
(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 6.2
hereof, to make any demand upon the Company.
Section 5.3. Resignation and Appointment of Successor. (a)
The Company agrees, for the benefit of the holders from time to time of the
Warrants, that there shall at all times be a Warrant Agent hereunder until
all the Warrants are no longer 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
2.6, 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 5.2(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 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 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 6
MISCELLANEOUS
Section 6.1. 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 6.1 to the contrary,
this Agreement may not be amended to provide for the countersigning by the
Warrant Agent of Warrant Certificates evidencing in the aggregate in excess of
[maximum number of issuable Warrants] Warrants unless and until the Warrant
Agent has received notice from the [exchange on which Warrants are to be
listed] or any successor United States national securities exchange that the
additional Warrants in excess of [maximum number of issuable Warrants] have
been approved for listing on such exchange.
(b) The Company, the Warrant Agent [and the Determination 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 [strike amount], [base amount]
in the case of call warrants] [decreases the [strike amount], [base amount] in
the case of put warrants], 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 6.2. 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 6.3. Addresses for Notices. Any communications to the
Warrant Agent with respect to this Agreement shall be addressed to
__________________________, Attention: ______________, and any communications
to the Company with respect to this Agreement shall be addressed to Morgan
Stanley, Dean Witter, Discover & Co., 1585 Broadway, New York, New York 10036,
Attention: [Corporate Treasurer], and any communications to the Determination
Agent with respect to this Agreement shall be addressed to Morgan Stanley &
Co. Incorporated, 1585 Broadway, New York, New York 10036] (or such other
address as shall be specified in writing by the Warrant Agent, the Company [or
the Determination Agent], respectively).
Section 6.4. 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 Certificated
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 6.5. 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 [exchange on which the Warrants are listed]
or any successor national securities exchange 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 6.6. 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 of the Warrantholders.
Section 6.7. 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 any Participant to be a
Warrantholder, in each case, on behalf of whom such Participant holds
Warrants.
Section 6.8. 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 6.9. 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.
IN WITNESS WHEREOF, this Agreement has been duly executed by
the parties hereto as of the day and year first above written.
MORGAN STANLEY, DEAN WITTER,
DISCOVER & CO.
By:
------------------------------
Name:
Title:
[NAME OF WARRANT AGENT]
By:
------------------------------
Name:
Title:
MORGAN STANLEY & CO.
INCORPORATED
By:
------------------------------
Name:
Title:
EXHIBIT A
FORM OF WARRANT CERTIFICATE
FACE
No. CUSIP
-----
MORGAN STANLEY, DEAN WITTER, DISCOVER & CO.
[Title of Warrants]
This Warrant Certificate certifies that _____, or registered
assigns, is the registered holder of ______________ [title of Warrants] (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 offices of the Warrant Agent 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 Morgan Stanley, Dean Witter,
Discover & Co. (the "Company") the Cash Settlement Value in [payment currency]
(the "Cash Settlement Value") equal to [formula or method of calculation for
cash settlement value]; provided, however, that if such amount is less than or
equal to zero, then the Cash Settlement Value shall be zero. In no event shall
a Warrantholder be entitled to any interest on any Cash Settlement Value.
Subject to the terms and conditions set forth herein and in the
Warrant Agreement, each Warrant may be exercised, on any New York 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 New York Business Day immediately preceding
the date established in or pursuant to a Board Resolution or Resolutions upon
which the right to exercise the Warrants expires (the "Expiration Date") and
(ii) any Delisting Date (as defined herein). 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 New York Business Day immediately preceding
the Expiration Date and (ii) 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.
IN WITNESS WHEREOF, Morgan Stanley, Dean Witter, Discover & Co.
has caused this instrument to be duly executed.
Dated: MORGAN STANLEY, DEAN WITTER,
DISCOVER & CO.
[SEAL] By:______________________________
Name:
Title:
Attest:
By:_________________________________
(Secretary)
Countersigned as of the date above
written:
[NAME OF WARRANT AGENT]
as Warrant Agent
By: _________________________________
Authorized Officer
[REVERSE]
MORGAN STANLEY, DEAN WITTER, DISCOVER & CO.
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 ________________ (the "Warrant Agreement"),
among the Company, [name of Warrant Agent] (the "Warrant Agent") and Morgan
Stanley & Co. Incorporated (the "Determination Agent") and is 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 (as defined
herein).
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 New York
Business Day immediately preceding the Expiration Date and (ii) any
Delisting Date (as defined herein) 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 offices in the Borough of Manhattan, The City of New
York (the "Warrant Agent's Office"), which are, on the date hereof, located
at [Warrant Agent's address] 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 and in the
Warrant Agreement, such Warrantholder may instead receive the Alternative
Settlement Amount for such Warrant]. The "Cash Settlement Value" of a Warrant
shall be an amount in [payment currency] equal to [formula or method of
calculation for cash settlement value]; provided, however, that if such amount
is less than or equal to zero, then the Cash Settlement Value shall be zero.
[The "Strike Amount" is _____ which was determined by the
Determination Agent and is the [formula for strike amount]].
[The Company has appointed Morgan Stanley & Co. Incorporated to
be its Determination Agent 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 adjustments or calculations by the Determination Agent in order
to arrive at a calculation the Cash Settlement Value [or the Alternative
Settlement Amount, as applicable].]
Subject to the Warrant Agreement and this Warrant Certificate,
the "Valuation Date" for a Warrant will be 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, the "Exercise Date" for a Warrant will
be (i) the New York Business Day on which the Warrant Agent receives the
Warrant and Exercise Notice in proper form with respect to such Warrant, if
received at or prior to 3:00 P.M., New York City time, on such day, or (ii) if
the Warrant Agent receives such Warrant or Exercise Notice after 3:00 P.M.,
New York City time, on a New York Business Day, then the next New York
Business Day succeeding the New York Business Day on which such Warrant or
Exercise Notice is received. 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 New York Business Day immediately preceding the Expiration Date or
(ii) any Delisting 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 at such time been postponed as described below,
will be automatically exercised. 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 New York Business Day, the next succeeding New York Business
Day. The Warrant Agent will obtain the Spot Rate (determined as of 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.
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 [and for Warrants that upon
exercise entitle the holder thereof to receive an Alternative Settlement
Amount in lieu of the Cash Settlement Value], 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
[and for Warrants that upon exercise entitle the holder thereof to receive an
Alternative Settlement Amount in lieu of the Cash Settlement Value], if the
Company has made adequate funds available to the Warrant Agent in a timely
manner which shall in no event be later than 3:00 p.m., New York City time, on
the fourth New York Business Day following the Valuation Date, (the "Funding
Date"), the Warrant Agent will be responsible for making 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 the registered holder's election as
specified in the Exercise Notice) after 3:00 p.m., New York City, time but
prior to the close of business on the first New York Business Day such Funding
Date against receipt by the Warrant Agent at the Warrant Agent's office of
such Registered Holder's Warrant Certificates. Such payment shall be in
the amount equal to the aggregate Cash Settlement Value of such holder's
exercised Warrants.
With respect to automatically exercised Warrants, if the
Company has made adequate funds available to the Warrant Agent not later
than 3:00 p.m., New York City time, on the fourth New York Business Day
following the Valuation Date for automatically exercised Warrants (the
"Automatic Funding Date"), funds in an amount equal to, and for the payment
of, the aggregate Cash Settlement Value of such Warrants, the Warrant Agent
will thereafter be responsible for making payment available to each
Registered Holder of the Warrants 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 holder in
the United States (at such holder's election and upon proper notice being
given to the Company and the Warrant Agent), after 3:00 p.m., New York City
time, but prior to the close of business on the Automatic Funding Date,
against receipt by the Warrant Agent at the Warrant Agent's Office of such
Registered Holder's Warrant Certificates. Such payment shall be in the
amount equal to the aggregate Cash Settlement Value of the Warrants
evidenced by such Warrant Certificates.
[Extraordinary Event and Exercise Limitation Event provisions,
if applicable.]
All exercises of Warrants (other than on automatic exercise [or
upon cancellation]) are subject, at the Company's option, to the limitation
that not more than [limit on aggregate number of Warrants to be exercised on
any day] Warrants in total may be exercised on any Exercise Date and not more
than [individual limit] 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 New York Business Day would otherwise,
under the terms hereof, be the Exercise Date in respect of more than [limit on
aggregate number of Warrants to be exercised on any day] 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 New York Business Day immediately
following such Exercise Date), [limit on aggregate number of Warrants to be
exercised on any day] 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 [the minimum exercise amount] 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 [the minimum exercise amount] Warrants), and the remainder of such
Warrants (the "Remaining Warrants") shall be deemed exercised on the following
New York Business Day (notwithstanding to the provisions of the Warrant
Agreement); provided that in the event that the aggregate number of such
Remaining Warrants, together with any additional Warrants with respect to
which the Exercise Date would be such following New York Business Day, exceeds
[limit on aggregate number of Warrants to be exercised on any day] the
provisions of this paragraph shall apply to the exercise of such Remaining
Warrants and such additional Warrants on such following New York Business Day
and successively until the limitations set forth in this paragraph and in the
Warrant Agreement are no longer exceeded; provided further, that any such
Remaining Warrants shall be deemed exercised before any such additional
Warrants.
If any beneficial owner of Warrants attempts to exercise more
than [individual limit] Warrants on any New York Business Day, 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 New
York Business Day following such New York Business Day), [individual limit] of
such Warrants shall be deemed exercised on such New York Business Day and the
remainder of such Warrants shall be deemed exercised on the following New York
Business Day (notwithstanding the provisions in the Warrant Agreement)
provided that in the event that the aggregate number of such remaining
Warrants, together with any additional Warrants of such beneficial owner with
respect to which the Exercise Date would be such following New York Business
Day, exceeds [individual limit], at the Company's election (as notified in the
manner described above), the provisions of this paragraph shall apply to the
exercise of such remaining Warrants and such additional Warrants on such
following New York Business Day and successively until the limitations set
forth in this paragraph and in the Warrant Agreement are no longer exceeded;
provided further, that any such remaining Warrants shall be deemed exercised
before any such additional Warrants of such beneficial owner. The date on
which any Warrant is deemed exercised under the preceding sentences shall for
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 office accompanied
by a written instrument or instruments of transfer in form satisfactory to
the Warrant Agent duly executed by, the registered holder(s) hereof, a duly
appointed legal representative or duly authorized attorney. Such signature
must be guaranteed by a bank or trust company having a correspondent office
in New York City 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.
[Number of days after issuance before conversion option begins]
business days after the closing of the offering of the Warrants, each
Warrantholder will have the option to convert the form in which such
Warrantholder holds his Warrants from definitive to book-entry form by
utilizing the Conversion Option. The Conversion Option will be available for
[number of days after conversion option begins until conversion option ends]
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 DTC, in proper form for deposit,
by a Participant. Accordingly, unless Warrants are purchased in book-entry
form, a Warrantholder who is not a Participant 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 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 Trust Company
("DTC") for exchange during the Conversion Option Period will be exchanged for
Warrants in book-entry form by the close of business on the New York Business
Day that such Certificates are received by DTC (if received by DTC at its then
applicable cut-off time for same day credit) or on the following New York
Business Day (if received by DTC at 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. The Company has been informed by CEDEL and
Euroclear that such clearing agencies will clear Warrants in book-entry form
beginning on the commencement of the Conversion Option Period and that
Warrants may not be held in certificated form through their facilities. 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 as provided in the Warrant Agreement.
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 Office 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.
For purposes of this Certificate ["Reference Rate" means the
[Reference Rate] and ["Reference Debt Instrument" means the [Reference Debt
Instrument]]. [[The "Spot Amount"] for any date means [insert definition from
Prospectus Supplement] [Alternative provision for calculation of Spot Rate.]
References in this Agreement to "U.S. dollars", "U.S.$" or "$" are to the
lawful currency of the United States of America [other currency or currency
unit]. As used herein, "New York Business Day" means any day other than a
Saturday or a Sunday or a day on which commercial banks in New York City are
required or authorized by law or executive order to remain closed. [Provisions
for other relevant definitions]
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.
Exercise Notice
[Name and Address of Warrant Agent]
Attention:_________________________
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 beneficial owner of Warrants that is exercising Warrants
pursuant to this Exercise Notice is exercising no fewer than [individual
limit] Warrants and no beneficial owner is acting in concert with any other
beneficial owner in relation to the exercise of the Exercised Warrants.
2. The Owner hereby directs the Warrant Agent 3 to pay the Cash
Settlement Value, if any, with respect to the Exercised Warrants:
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 4 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:
EXHIBIT A-1
FORM OF GLOBAL WARRANT CERTIFICATE
No. CUSIP
------
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.
MORGAN STANLEY, DEAN WITTER, DISCOVER & CO.
Global Warrant Certificate Representing
[Title of the Warrants]
This certifies that CEDE & CO., or registered assigns, is the
Registered Holder of the number of [title of the Warrants] (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 Morgan Stanley, Dean Witter, Discover & Co. (the "Company") the Cash
Settlement Value in [name of payment currency] equal to [formula or method of
calculation for cash settlement value]; provided, however, that if such amount
is less than or equal to zero, then the Cash Settlement Value shall be zero.
In no event shall a Warrantholder be entitled to any interest on any Cash
Settlement Value.
Subject to the terms and conditions set forth herein and in the
Warrant Agreement, each Warrant may be exercised, on any New York 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 New York Business Day immediately preceding
the date (established pursuant to a Board Resolution or Resolutions) upon
which the right to exercise the Warrants expires (the "Expiration Date") and
(ii) any Delisting Date (as defined herein). 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 (i) the New York Business Day immediately preceding the Expiration Date and
(ii) any Delisting Date, will be automatically exercised.
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 ________________ (the "Warrant
Agreement"), among the Company, [name of Warrant Agent] (the "Warrant
Agent"), [and Morgan Stanley & Co. Incorporated (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 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 (i) the New York Business Day immediately preceding
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 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.
In the case of Book-Entry Warrants held through the facilities
of CEDEL or Euroclear, a Warrantholder may exercise each Warrant 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 (i) the New York Business Day
immediately preceding the Expiration Date and (ii) any Delisting Date by
causing (x) such Warrant to be transferred to the Warrant Agent (in accordance
with the preceding paragraph), by giving appropriate instructions either to
CEDEL or to the participant holding his Warrants in Euroclear, as the case may
be, and (y) a duly completed and executed Exercise Notice to be delivered on
behalf of the Warrantholder by CEDEL, in the case of Warrants held through
CEDEL, or such participant, in the case of Warrants held through Euroclear, to
the Warrant Agent.
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 and in the
Warrant Agreement, such Warrantholder may instead receive the Alternative
Settlement Amount for such Warrant]. The "Cash Settlement Value" of a Warrant
shall be an amount in [payment currency] equal to [formula or method of
calculation for cash settlement value]; provided, however, that if such amount
is less than or equal to zero, then the Cash Settlement Value shall be zero.
[The Company has appointed Morgan Stanley & Co.
Incorporated, as Determination Agent, 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 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 adjustments or calculations by the Determination Agent in
order to arrive at a calculation of the Cash Settlement Value or the
Alternative Settlement Amount, as applicable.]
Except for Warrants subject to automatic exercise or Warrants
held through the facilities of CEDEL or Euroclear, the "Exercise Date" for a
Warrant will be (i) the New York Business Day on which the Warrant Agent
receives the Warrant and Exercise Notice in proper form with respect to such
Warrant, if received at or prior to 3:00 P.M., New York City time, on such
day, or (ii) if the Warrant Agent receives such Warrant or Exercise Notice
after 3:00 P.M., New York City time, on a New York Business Day, then the next
New York Business Day succeeding the New York Business Day on which such
Warrant or Exercise Notice is received. In the case of Warrants held through
the facilities of CEDEL or Euroclear, except for Warrants subject to automatic
exercise, the "Exercise Date" for a Warrant means (i) the New York Business
Day on which the Warrant Agent receives (by facsimile transmission) 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 being exercised is received by the Warrant Agent by
3:00 P.M., New York City time, on the New York Business Day next succeeding
the date on which the exercise notice is received, or (ii) if the Warrant
Agent receives such Exercise Notice after 3:00 P.M., New York City time, on a
New York Business Day, then the New York Business Day succeeding such New York
Business Day, provided that such day will be the Exercise Date only if the
Warrant being exercised is received by 3:00 P.M., New York City time, on the
second succeeding New York Business Day following the New York Business Day on
which the Exercise Notice is received. In the event that the Warrant being
exercised is received after 3:00 P.M., New York City time, on the New York
Business Day next succeeding the date on which the Exercise Notice is
received, then the Exercise Date for such Warrant will be the day on which
such Warrant is received or, if such day is not a New York Business Day, the
next succeeding New York Business Day. Notwithstanding the foregoing, in
the case of the exercise of a Warrant by a CEDEL or Euroclear participant,
CEDEL or Euroclear, as the case may be, must by facsimile transmission to
the Warrant Agent by 9:00 a.m., New York City time, on the New York
Business Day next succeeding the Exercise Date confirm (an "Account
Confirmation") that the Warrants being exercised will be received by the
Warrant Agent by 3:00 p.m., New York City time, on such date, provided,
further, that if such Account Confirmation is received after 9:00 a.m., New
York City time, on the New York Business Day next succeeding the Exercise
Date, the Company will be entitled to direct the Warrant Agent to reject
the related Exercise Notice or waive the requirement for timely delivery of
such Account Confirmation.
Subject to the Warrant Agreement and this Global Warrant
Certificate, the "Valuation Date" for a Warrant will be 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.
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
New York Business Day immediately preceding the Expiration Date or (ii) any
Delisting 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 by such
date the Valuation Date for which has at such time been postponed as described
below, will be automatically exercised. 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 New York Business Day, the next succeeding New York
Business Day. The Warrant Agent will obtain the Spot Rate (determined as of
the Valuation Date for such Warrants [except in the case of a postponed
exercise following the occurrence of an Extraordinary Event or Exercise
Limitation Event]) and will determine the Cash Settlement Value, if any, of
such Warrants.
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 [and except for Warrants
that upon exercise entitle the holder thereof to receive an Alternative
Settlement Amount in lieu of the Cash Settlement Value], 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 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.
Except in the case of Warrants subject to automatic exercise
[and except for Warrants that upon exercise entitle the holder thereof to
receive an Alternative Settlement amount in lieu of the Cash Settlement
Value], if the Company has made adequate funds available to the Warrant Agent
in a timely manner, which shall in no event be later than 3:00 p.m., New York
City time, on the fourth New York Business Day following a Valuation Date (the
"Funding Date"), the Warrant Agent will be responsible for making 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), after 3:00 p.m., New York City time, but prior to the close of
business, on the first New York Business Day immediately succeeding such
Funding 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 the Warrant Agreement.
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)], the Company shall make
available to the Warrant Agent, not later than 3:00 p.m., New York City time,
on the fourth New York Business Day following the Valuation Date for
automatically exercised Warrants (the "Automatic Funding Date"), funds in an
amount equal to, and for the payment of, the aggregate Cash Settlement Value
of such Warrants. Subject to such funds having been made available as provided
in the preceding sentence, the Warrant Agent will be responsible for making
funds available to the Depository, against receipt of the Global Warrant
Certificate, after 3:00 p.m., New York City time, but 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.
[Extraordinary Event and Exercise Limitation Event provisions,
if applicable.]
All exercises of Warrants (other than on automatic exercise [or
upon cancellation]) are subject, at the Company's option, to the limitation
that not more than [limit on aggregate number of Warrants to be exercised on
any day] Warrants in total may be exercised on any Exercise Date and not more
than [individual limit] 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 New York Business Day would otherwise,
under the terms hereof, be the Exercise Date in respect of more than [limit on
aggregate number of Warrants to be exercised on any day] 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 New York Business Day immediately
following such Exercise Date), [limit on aggregate number of Warrants to be
exercised on any day] 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 [minimum exercise amount] 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 [minimum exercise
amount] Warrants), and the remainder of such Warrants (the "Remaining
Warrants") shall be deemed exercised on the following New York Business Day
(subject to the provisions of the Warrant Agreement); provided that in the
event that the aggregate number of such Remaining Warrants, together with any
additional Warrants with respect to which the Exercise Date would be such
following New York Business Day, exceeds [limit on aggregate number of
Warrants to be exercised on any day] the provisions of this paragraph shall
apply to the exercise of such Remaining Warrants and such additional Warrants
on such following New York Business Day and successively until the limitations
set forth in this paragraph and in the Warrant Agreement are no longer
exceeded; provided further, that any such Remaining Warrants shall be deemed
exercised before any such additional Warrants.
If any beneficial owner of Warrants attempts to exercise more
than [individual limit] Warrants on any New York Business Day, 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
next New York Business Day following such Day) [individual limit] of such
Warrants shall be deemed exercised on such New York Business Day and the
remainder of such warrants shall be deemed exercised on the following New York
Business Day (subject to the provisions of the Warrant Agreement); provided
that in the event that the aggregate number of such remaining Warrants,
together with any additional Warrants of such beneficial owner with respect to
which the Exercise Date would be such following New York Business Day, exceeds
[individual limit], at the Company's election (as notified in the manner
described above), the provisions of the paragraph shall apply to the exercise
of such remaining Warrants and such additional Warrants on such following New
York Business Day and successively until the limitations set forth in this
paragraph and in the Warrant Agreement are no longer exceeded; provided
further, that any such remaining Warrants shall be deemed exercised before any
such additional Warrants of such beneficial owner. 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.
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 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 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 Office, or at the office of any
successor Warrant Agent for another Global Warrant Certificate of like tenor
and representing a like number of unexercised Warrants.
Capitalized terms included herein but not defined herein have
the meanings assigned thereto in the Warrant Agreement.
For purposes of this Certificate, ["Reference Rate" means the
[Reference Rate] and ["Reference Debt Instrument" means [Reference Debt
Instrument]]. [[The "Spot Amount"] for any date means [insert definition from
Prospectus Supplement]. References in this Agreement to "U.S. dollars",
"U.S.$" or "$" are to the lawful currency of the United States of America
[other currency or currency unit]. As used herein, "New York Business Day"
means any day other than a Saturday or a Sunday or a day on which commercial
banks in New York City are required or authorized by law or executive order to
remain closed. [Provisions for other relevant definitions]
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, Morgan Stanley, Dean Witter, Discover & Co.
has caused this instrument to be duly executed.
Dated: _________ __, 19__ MORGAN STANLEY, DEAN WITTER,
DISCOVER & CO.
By:
------------------------------
Name:
Title:
Attest:
By:
-----------------------------
Name:
Title:
Countersigned as of the date above
written:
[NAME OF WARRANT AGENT], as
Warrant Agent
By:
-----------------------------
Authorized Officer
Schedule A
Number of Warrants Represented
Date by this Global Warrant Certificate
----------------------------------
EXHIBIT A-2
EXERCISE NOTICE
For Warrants Represented by the Global Warrant Certificate
[Name and Address of Warrant Agent]
Attention: ________________________
1. We refer to the Warrant Agreement dated as of ________________
(the "Warrant Agreement"), among Morgan Stanley, Dean Witter, Discover & Co.,
(the "Company"), [Name of Warrant Agent], as warrant agent (the "Warrant
Agent"), [and Morgan Stanley & Co. Incorporated, as determination agent (the
"Determination Agent")]. On behalf of certain beneficial owners, each of whom
we certify is exercising no fewer than [minimum exercise amount] 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 New York Business Day in order for the
Valuation Date for the Tendered Warrants to be such New York 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 New York 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 New York Business Day
next succeeding the New York Business Day on which such Exercise Notice is
received, the Valuation Date of the Tendered Warrants shall be the next
succeeding New York 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:
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:_________________________________
Account No.:__________________________
ABA Routing No.:______________________
Reference:____________________________
4. 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 [individual limit] Warrants on behalf of any beneficial owner or in
concert with any other beneficial owner.
5. 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.
6. If this Exercise Notice is submitted in relation to Warrants
held through the facilities of Euroclear, the undersigned represents that it
is a participant in Euroclear.
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]
[CEDEL S.A.]
By:
----------------------------------
Authorized Signature
Name:
Title:
Telephone:
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 $_______ ($____ 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 fifth New York Business Day following 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
________________, among Morgan Stanley, Dean Witter, Discover & Co., [name of
Warrant Agent], and Morgan Stanley & Co. Incorporated.
Dated:____________________, 19___ [NAME OF WARRANT AGENT]
as Warrant Agent,
By:
-------------------------
Authorized Signature
Name:
Title:
NOTICE OF REJECTION
You are hereby notified that the Exercise Notice delivered by
you was determined by us not to have been duly completed in proper form.
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___ [NAME OF WARRANT AGENT]
as Warrant Agent
By:
-------------------------
Authorized Signature
EXHIBIT B-1
CONFIRMATION OF EXERCISE
For Warrants Represented by the Global Warrant Certificate
[Name of Depository Participant]
[Name of Euroclear Participant]
[CEDEL S.A.]
[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__.
For purposes hereof, all such Warrants shall constitute
Exercised Warrants, which number we hereby confirm to be ____________________.
We hereby confirm that the aggregate Cash Settlement Value of
the Exercised Warrants is $__________ ($_____ 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 fifth New York Business Day following 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
________________, among Morgan Stanley, Dean Witter, Discover & Co., [name of
Warrant Agent], as Warrant Agent, [and Morgan Stanley & Co. Incorporated, as
Determination Agent].
Dated: ___________________, 19___ [NAME OF WARRANT AGENT]
as Warrant Agent
By:
-------------------------
Authorized Signature
NOTICE OF REJECTION
[Name of Depository Participant]
[Name of Euroclear Participant]
[CEDEL S.A.]
[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
________________, among Morgan Stanley, Dean Witter, Discover & Co., [name of
Warrant Agent], and Morgan Stanley & Co. Incorporated.] 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___ [NAME OF WARRANT AGENT]
as Warrant Agent
By:
-------------------------
Authorized Signature
Exhibit 15
To the Directors and Shareholders of Dean Witter, Discover & Co. (to
be renamed Morgan Stanley, Dean Witter, Discover & Co.):
We have made a review, in accordance with standards established by the
American Institute of Certified Public Accountants, of the unaudited
interim consolidated financial information of Dean Witter, Discover & Co.
and subsidiaries as of March 31, 1997 and for the three month periods ended
March 31, 1997 and 1996, as indicated in our report dated April 30, 1997;
because we did not perform an audit, we expressed no opinion on that
information.
We are aware that our report referred to above, which is included in
your Quarterly Report on Form 10-Q for the quarter ended March 31, 1997, is
incorporated by reference in the following Registration Statements of Dean
Witter, Discover & Co.:
Filed on Form S-3:
Registration Statement No. 33-57202
Registration Statement No. 33-60734
Registration Statement No. 33-89748
Registration Statement No. 33-92172
Registration Statement No. 333-7947
Registration Statement No. 333-22409
Filed on Form S-4:
Registration Statement No. 333-25003
Filed on Form S-8:
Registration Statement No. 33-62374
Registration Statement No. 33-63024
Registration Statement No. 33-63026
Registration Statement No. 33-78038
Registration Statement No. 33-79516
Registration Statement No. 33-82240
Registration Statement No. 33-82242
Registration Statement No. 33-82244
Registration Statement No. 333-4212
We are also aware that the aforementioned report, pursuant to Rule
436(c) under the Securities Act of 1933, is not considered a part of the
Registration Statement prepared or certified by an accountant or a report
prepared or certified by an accountant within the meaning of Sections 7 and
11 of that Act.
DELOITTE & TOUCHE LLP
New York, New York
May 28, 1997
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on Form S-3 for the registration of currency warrants,
index warrants, and interest rate warrants and in the related Prospectus of
Dean Witter, Discover & Co. (to be renamed Morgan Stanley, Dean Witter,
Discover & Co.) for the same securities and to the incorporation by reference
therein of our report, dated January 7, 1997, with respect to the consolidated
financial statements and financial statement schedule of Morgan Stanley Group
Inc. incorporated by reference and included in its Annual Report on Form 10-K
for the fiscal year ended November 30, 1996, filed with the Securities and
Exchange Commission.
Ernst & Young LLP
New York, New York
May 28, 1997
Exhibit 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Dean Witter, Discover & Co. (to be renamed Morgan Stanley, Dean Witter,
Discover & Co.) on Form S-3 (relating to the registration of $1,000,000 of
Currency Warrants, Index Warrants and Interest Rate Warrants) of our
reports dated February 21, 1997, appearing in and incorporated by reference
in the Annual Report on Form 10-K of Dean Witter, Discover & Co. for the
year ended December 31, 1996, and to the reference to us under the heading
"Experts" in the Prospectus, which is part of this Registration Statement.
DELOITTE & TOUCHE LLP
New York, New York
May 28, 1997
