FORM OF WARRANT AGREEMENT
Between
A.L. PHARMA INC.And
THE FIRST NATIONAL BANK OF BOSTON,
Warrant Agent
Warrants to Purchase Class A Common Stock ________, 1994 This WARRANT AGREEMENT (the "Agreement") is dated as of , 1994, between A.L.
PHARMA INC., a Delaware corporation (the "Company"), and THE FIRST NATIONAL
BANK OF BOSTON, a national banking association, as warrant agent (the "Warrant Agent").
WHEREAS, the Company proposes to issue Warrants (the "Warrants") entitling the
holders to purchase an aggregate of up to three million, six hundred thousand (3,600,000) shares
("Shares") of the Company's Class A Common Stock, S.20 par value (the "Class A Common
Stock"); and
WHEREAS, the Warrant Agent, at the request of the Company, has agreed to act as the
agent of the Company in connection with the issuance, registration, transfer, exchange a nd
exercise of Warrants;
NOW, THEREFORE, in consideration of the premises and mutual agreements herein set
forth, the parties hereto agree as follows:
Section 1. Appointment of Warrant Agent. The Company hereby appoints the Warrant
Agent to act as agent for the Company in accordance with the instructions hereina fter set forth;
and the Warrant Agent hereby accepts such appointment, upon the terms and conditions
hereinafter set forth.
Section 2. Amount Issued. Subject to the provisions of this Agreement, Warrants to
purchase no more than three million, six hundred thousand (3,600,000) Shares may be issued and
delivered by the Company hereunder.
Section 3. Form of Warrant Certificates. The certificates evidencing the Warrant s (the
"Warrant Certificates") to be delivered pursuant to this Agreement shall be in regist ered form
only. The Warrant Certificates and the forms of election to purchase Shares and of assignment to
be printed on the reverse thereof shall be in substantially the form set forth in Exhibit A hereto
together with such appropriate insertions, omissions, substitutions and other variations as are
required or
permitted by this Agreement, and may have such letters, numbers or other marks of ide ntification
and such legends or endorsements placed thereon as may be required to comply with any law or
with any rules made pursuant thereto or with any rules of any securities exchange, any agre ement
between the Company and any Warrant holder, or as may, consistently herewith, be determine d
by the officers executing such Warrants, as evidenced by their execution of the Warrants.
Section 4. Execution of Warrant Certificates. Warrant Certificates shall be signe d on
behalf of the Company by its Chairman of the Board of Directors, its President, a Vice President
or its Treasurer and attested by its Secretary or Assistant Secretary, under its corporate seal. Each
such signature upon the Warrant Certificates may be in the form of a facsimile signa ture of the
current or any future Chairman of the Board, President, Vice President, Treasurer, Secretary or
Assistant Secretary and may be imprinted or otherwise reproduced on the Warrant Certific ates
and for that
purpose the Company may adopt and use the facsimile signature of any person who shall have
been Chairman of the Board, President, Vice President, Treasurer, Secretary or Assistant
Secretary, notwithstanding the fact that at the time the Warrant Certificat es shall be
countersigned and delivered or disposed of such person shall have ceased to hold such office.
The seal of the Company may be in the form of a facsimile thereof and may be impressed,
affixed, imprinted or otherwise reproduced on the Warrant Certificates.
If any officer of the Company who shall have signed any of the Warrant Certificates sha ll
cease to be such officer before the Warrant Certificates so signed shall have been countersigned
by the Warrant Agent or disposed of by the Company, such Warrant Certificates nevertheless
may be countersigned and delivered or disposed of as though such person had not ceased to be
such officer of the Company; and any Warrant Certificate may be signed on behalf of t he
Company by any person who, at the actual date of the execution of such Warrant Certifica te,
shall be a proper officer of the Company to sign such Warrant Certificate, although at the date of
the execution of this Agreement any such person was not such officer.
Section 5. Registration and Countersignature. Warrant Certificates shall be manually
countersigned and dated the date of countersignature by the Warrant Agent and shall not be valid
for any purpose unless so countersigned. The Warrants shall be numbered and shall be registered
in a register (the "Warrant Register") to be maintained by the Warrant Agent.
The Warrant Agent's countersignature on all Warrants shall be in substantially the form
set forth in Exhibit A hereto.
The Company and the Warrant Agent may deem and treat the registered holder of a
Warrant Certificate as the absolute owner thereof (notwithstanding any notation of ownership or
other writing thereon made by anyone), for the purpose of any exercise thereof or any
distribution to the holder thereof and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary.Section 6. Registration of Transfers and Exchanges. No Warrant may be transferred prior
to the Restricted Period Termination Date except in a Permitted Transfer. Prior to the Restricted
Period
Termination Date, the Warrant Agent shall not register the transfer of any outstanding W arrant
Certificate except a Permitted Transfer. Following the Restricted Period Termina tion Date until
the Close of Business on the Expiration Date (as hereinafter defined), the Warrant Age nt shall
from time to time register the transfer of any outstanding Warrant Certificates i n the Warrant
Register, upon surrender of such Warrant Certificates, duly endorsed, and, if not surrendered by
or on behalf of an original holder of Warrants or a Permitted Transferee accompanied by a
written instrument or instruments of transfer in form satisfactory to the Warrant Agent, duly
signed by the registered holder or holders thereof or by the duly appointed legal representative
thereof or by a duly authorized attorney, such signature to be guaranteed by (a) a bank or trust
company, (b) a broker or dealer that is a member of the National Association of Securiti es
Dealers, Inc. (the "NASD") or (c) a member of a national securities exchange. Upon any such
registration of transfer, a new Warrant Certificate shall be issued to the transferee . For purposes
of this Agreement the "Restricted Period Termination Date" shall be the earlier of , 1995(1) or
the date on which a registration statement under the Securities Act of 1933, as ame nded (the
"Securities Act"), covering the Warrants and Shares shall have been declared effective by the
Securities and Exchange Commission (the "SEC"), and such
other action as may be required by federal or state law relating to the issuance or distribution of
securities shall have been taken, except that with respect to Warrants issued t o or held by Einar
W. Sissener or A/S Swekk or holders who acquire such warrants from Einar W. Sissener or A/S
Swekk in a Permitted Transfer, the Restricted Period Termination Date shall be [the date of the
third anniversary of the date of this Agreement]. For purposes of this Agreement a "Permitted
Transfer" shall be any of the following: (i) a transfer by operation of law, (ii) a transfer pursua nt
to applicable laws of descent and distribution, and (iii) a transfer to the owners of an entity
holder upon the liquidation of such entity; provided, however, that the restrictions contained in
this Section 6 and elsewhere in this Agreement shall continue in effect with respect to any
Warrant in the hands of the transferee of a Permitted Transfer. For purposes of this Agreement,
the term "Permitted Transferee" shall mean any holder who acquired Warrants in a Permitted
Transfer.
Warrant Certificates may be exchanged at the option of the holder or holders thereof,
when surrendered to the Warrant Agent at its offices or agency maintained in New York, New
York (or at such other offices or agencies as may be designated by the Agent) for the purpose of
exchanging, transferring and exercising the Warrants (a "Warrant Agent Office,") or at the
offices of any successor Warrant Agent as provided in Section 18 hereof, for another Warrant
Certificate or other Warrant Certificates of like tenor and representing in the aggregate a like
number of Warrants.
The Warrant Agent is hereby authorized to countersign, in accordance with the
provisions of Section 5 and of this Section 6, and deliver the new Warrant Certificates required
pursuant to the provisions of this Section, and for the purpose of any distribution of Warrant
Certificates contemplated by Section 13._____________
(1) 1st Anniversary of date of this Agreement.
For purposes of this Agreement, "Affiliate" or "affiliate" means, with respect to any
person, (i) any other person or entity controlling, controlled by or under common control with
such person, and (ii) any officer, director, partner, trustee, beneficiary or employee of any person
referred to in clause (i) above.
Section 7 Duration and Exercise of Warrants. The Warrants shall expire at (a) 5:00 p.m.
New York City Time (the "Close of Business") on [December 31, 1998](2) or (b) the Close of
Business on such later date as shall be determined in the sole discretion of the C ompany in a
written statement to the Warrant Agent and with notice to registered holders of Wa rrants in the
manner provided for in Section 15 (such date of expiration being hereinafter referred to as t he
"Expiration Date"). The Warrants shall not be exercisable prior to the Restrict ed Period
Termination Date. At such time as the Warrants become exercisable, and thereaft er until the
Close of Business on the Expiration Date, the Warrants may be exercised on any business day.
After the Close of Business on the Expiration Date, the Warrants will become void and of no
value.
Subject to the provisions of this Agreement, including Section 13, each Warrant shall
entitle the holder thereof to purchase from the Company (and the Company shall issue and sell to
such holder of a Warrant) one fully paid and non-assessable Share at the price of $ (U.S.)(3)
(such price, as may be adjusted from time to time as provided in Section 13, being the "Exercise
Price"). The holder of a Warrant shall exercise such holder's right to purchase Shares by
depositing with the
Warrant Agent at a Warrant Agent Office the Warrant Certificate evidencing suc h Warrant, with
the form of election to purchase on the reverse thereof duly completed and signed by the
registered holder or holders thereof or by the duly appointed legal representative thereof or by a
duly authorized attorney, such signature (if not signed by or on behalf of an original holder of
Warrants or a Permitted Transferee) to be guaranteed by a bank or trust company, by a broker or
dealer which is a member of the NASD or by a member of a national securities exc hange, and
paying to the Warrant Agent in lawful money of the United States of America an am ount equal
to the Exercise Price multiplied by the number of Shares in respect of which such Wa rrants are
being exercised.
Subject to Section 9, upon such surrender of a Warrant Certificate and payment of the
Exercise Price, the Warrant Agent shall requisition from the Company's Class A Common Stock
transfer agent (the "Transfer Agent") for issuance and delivery to or upon the written order of the
registered holder of such Warrant Certificate and in such name or names as such registered
holder may designate, a certificate or certificates for the Share or Shares issuabl e upon the
exercise of the Warrant or Warrants evidenced by such Warrant Certificate. Such certi ficate or
certificates shall be
deemed to have been issued and any person so designated to be named therein shall be de emed
to have become the holder of record of such Share or Shares as of the date of the surrender of
such Warrant Certificate duly executed and payment of the aggregate Exercise Price . The
Warrants evidenced by a Warrant Certificate shall be exercisable, at the el ection of the registered
holder thereof, either as an entirety or from time to time for a portion of the number of Warrants
specified in the Warrant Certificate. If less than all of the Warrants evidence d by a Warrant
Certificate surrendered upon the exercise of Warrants are exercised at any time pri or to the
Expiration Date, a new Warrant Certificate or Certificates shall be issued for t he number of
Warrants evidenced by the Warrant Certificate so surrendered that have not been exerc ised, and
the Warrant Agent is hereby authorized to countersign such new Warrant Certificate or
Certificates pursuant to the provisions of Section 6 and this Section 7.
The Warrant Agent shall account promptly to the Company with respect to Warrants
exercised and concurrently pay or deliver to the Company all moneys and other considerat ion
received by it upon the purchase of Shares through the exercise of Warrants.
(2) In the event the closing contemplated by the Restructuring Agreement occurs after
September 30, 1994 this date will be the date which is 4 years and three months aft er the
issuance date.
(3) Exercise price to be determined pursuant to the Restructuring Agreement by and betwee n
Apothekernes Laboratorium A.S and A.L. Laboratories, Inc. dated as of May 16, 1994.
Section 8. Cancellation of Warrants. If the Company shall purchase or otherwise acquire
Warrants, the Warrant Certificates representing such Warrants shall thereupon be delive red to
the Warrant Agent and be canceled by it and retired. The Warrant Agent shall c ancel all Warrant
Certificates surrendered for exchange, substitution, transfer or exercise in whole or in part.
Warrant Certificates so canceled shall be delivered by the Warrant Agent to t he Company from
time to time
upon request.
Section 9. Payment of Taxes. The Company will pay all documentary stamp taxes
attributable to the initial issuance of Warrants and of Shares upon the exercise of W arrants;
provided, that the Company shall not be required to pay any tax or taxes which may be payable
in respect of any transfer involved in the issue of any Warrant Certificates or any cert ificates for
Shares in a name other than the registered holder of a Warrant Certificate surrendere d upon the
exercise of a Warrant,
and the Company shall not be required to issue or deliver such certificates unless or unt il the
person or persons requesting the issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the satisfaction of the Company that such tax has been paid
or adequate provision has been made for the payment thereof.
Section 10. Mutilated or Missing Warrant Certificates. If any of the Warrant Certificates
shall be mutilated, lost, stolen or destroyed, the Company may in its discretion issue, and the
Warrant Agent shall countersign and deliver, in exchange and substitution for and upon
cancellation of the mutilated Warrant Certificate, or in lieu of and substi tution for the Warrant
Certificate lost, stolen or destroyed, a new Warrant Certificate of like tenor and representing an
equivalent number of Warrants, but only upon receipt of evidence satisfactory to the Company
and the Warrant Agent of such loss, theft or destruction of such Warrant Certificate and
indemnity or bond, if requested, also
satisfactory to them. Applicants for such substitute Warrant Certificates shall al so comply with
such other reasonable regulations and pay such other reasonable charges as the Company or the
Warrant Agent may prescribe.
Section II. Reservation of Shares. For the purpose of enabling it to satisfy any obligation
to issue Shares upon exercise of Warrants, the Company will at all times through the Close of
Business on the Expiration Date, reserve and keep available, free from preemptive right s and out
of its aggregate authorized but unissued or treasury shares of Class A Common Stock, the
number of Shares deliverable upon the exercise of all outstanding Warrants, and the Transfer
Agent is hereby irrevocably authorized and directed at all times to reserve suc h number of
authorized and unissued or treasury shares of Class A Common Stock as shall be required for
such purpose. The Company will keep a copy of this Agreement on file with such Transfer
Agent and with every transfer agent for any shares of the Company's capital stock issuable upon
the exercise of Warrants pursuant to Section 12. The Warrant Agent is hereby irrevocably
authorized to requisition from time to time from such Transfer Agent stock certifica tes issuable
upon exercise of outstanding Warrants, and
the Company will supply such Transfer Agent with duly executed stock certificates for such
purpose.
Before taking any action that would cause an adjustment pursuant to Section 13 reduc ing
the Exercise Price below the then par value (if any) of the Shares issuable upon exerc ise of the
Warrants, the Company will take any corporate action that may, in the opinion of it s counsel, be
necessary in order that the Company may validly and legally issue fully paid and non-asse ssable
Shares at the Exercise Price as so adjusted.
The Company covenants that all Shares issued upon exercise of the Warrants will, upon
issuance in accordance with the terms of this Agreement, be fully paid and non-assessable and
free from all liens, charges and security interests created by or imposed upon the Compa ny with
respect to the issuance thereof.
Section 12. Registration of Warrants and Shares and Stock Exchange Listings; Prospectus
Delivery. (a) The Company will file with the SEC and use its best efforts to have de clared
effective by the first anniversary of the issuance of the Warrants a registration statem ent, on
Form S-3 or such other form as is then available for such use by the Company, covering all
Warrants and the Shares. The Company will use it best efforts to keep such registrati on statement
continuously effective from the date on which it is first declared effective by the SEC through
the Close of Business ten (10) business days following the Expiration Date; provided however,
that if the Company has received a written request from any person who in the judgment of the
Company may be deemed to be an affiliate of the Company, (as that term is defined in Rule 144
promulgated under the Securities Act) prior to the Expiration Date that any Shares ac quired as
the result of the exercise of a Warrant are owned or deemed to be owned by such affi liate and
that such Shares will be owned or will be deemed to be owned by such affiliate on and a fter the
Expiration Date, then the Company shall use its best efforts to keep the registrat ion statement
provided for by this Section 12 effective for so long as necessary to permit sales of such Shares
to be made by such affiliate but in no event longer than the second anniversary of the Expi ration
Date. So long as any unexpired Warrants remain outstanding and if required in order to comply
with the Securities Act, the Company agrees that it will file such post-effecti ve amendments to
the registration statement provided for in this Section 12. So long as any Warrants rema in
outstanding (and so long as necessary to permit affiliates to sell Shares in the circ umstances and
subject to the limitations described in the second preceding sentence), the Company will take all
necessary action (a) to obtain and keep effective any and all permits, consents a nd approvals of
government agencies and authorities and to make filings under
federal and state securities acts and laws, which may be or become necessary in conne ction with
the issuance, sale, transfer and delivery of the Warrant Certificates, the exerci se of the Warrants
and the issuance, sale, transfer and delivery of the Shares issued upon exercise of Warrants, and
(b) to have the Warrants (no later than the first anniversary of the issuance of the Warra nts) and
the Shares (immediately upon their issuance upon exercise of Warrants) listed for trading or
quotation on the
New York Stock Exchange or, if such listing is in the opinion of the Company impracticable, on
one of the following securities exchanges or securities markets, as the board of directors of the
Company deems appropriate to facilitate the trading of the Warrants:
(i) another national securities exchange; (ii) quotation on the National Association of
Security Dealers Automated Quotations system ("NASDAQ") or the National Association of
Security Dealers Automated Quotation/National Market System ("NASDAQ/NMS"); or (iii)
such other over-the-counter quotation system.
(b) On the date of its effectiveness and on the date of any Warrant sale or exercise,
the Registration Statement will comply in all material respects with the applicable requirements
of the Securities Act and the rules and regulations thereunder; on the date of its effec tiveness, the
Registration Statement will not contain any untrue statement of a materia l fact or omit to state
any
material fact required to be stated therein or necessary in order to make the statements therein not
misleading; and, the final prospectus contained in the Registration Statement, if not bled
pursuant to rule 424(b), will not, and on the date of any filing pursuant to rule 424(b) and upon
the date of any Warrant sale or exercise or any resale by an affiliate, such final prospectus
(together with any supplement thereto) will not, include any untrue statement of a ma terial fact
or omit to state a material fact necessary in order to make the stateme nts therein, in the light of
the circumstances under which they were made, not misleading.
(c) The Company will indemnify and hold harmless, to the fullest extent permitted by
law, the holders of Warrants and Shares and each person, if any, who controls each such holder
within the meaning of the Securities Act, from and against any and all losses, dama ges, claims,
liabilities, joint or several, costs and expenses (including any amounts paid in any set tlement
effected
with the Company's consent) to which the holders or any such controlling person may become
subject under the Securities Act, state securities or blue sky laws, common law or otherwise,
insofar as such losses, damages, claims, liabilities (or actions or proceedings in respect thereof),
costs or expenses arise out of or are based upon (x) any untrue statement or alleged untrue
statement of any material fact contained in the registration statement or included prospectus, as
amended or supplemented, or (y) the omission or alleged omission to state therein a ma terial fact
required to be stated therein or necessary to make the statements therein, in light of the
circumstances in which they are made, not misleading, and the Company will reimburse the
holders and each such controlling person of the holders promptly upon demand for any
reasonable legal or any other expenses incurred by them in connection with investigating,
preparing to defend or defending against or appearing as a third-party witness in connection with
such loss, claim, damage, liability, action or proceeding; provided, however, that the Company
will not be liable to any holder in any such case to the extent, but only to the extent, that any
such loss, damage, liability, cost or expenses arises out of or is based upon an untrue statem ent or
alleged untrue statement or omission or alleged omission so made in conformity wit h
information about such holder furnished by such holder or such controlling persons for use in the
preparation thereof, provided further, that the Company shall not be liable to any person who
participates as an underwriter, in the offering or sale of Registrable Securities or t o any other
person, if any, who controls such underwriter, within the meaning of the Securities Act, in any
such case to the extent that any such loss, claim, damage, liability (or acti on or proceeding in
respect thereof) or expense arises out of such person's failure to send or give a copy of the final
prospectus prepared by the Company and made available to such persons, as the same may be
then supplemented or amended, to the person asserting an untrue statement or alleged unt rue
statement or omission or alleged omission at or prior to the written confirmation of the sale of
Registrable Securities to such person if such statement or omission was corrected in such final
prospectus. Such indemnity shall remain in full force and effect regardless of any investigati on
made by or on behalf of any holder or any controlling person of the holder, and shall survive the
transfer of such securities by the holder. In the event that indemnity is not availabl e, the
Company agrees to contribute to any and all losses based on the relative faults of the parties
involved as well as other equitable factors which may be appropriate.
(d) Each holder of Warrants or Shares covered by any registration statement
contemplated by this Section 12 will severally indemnify and hold harmless to t he fullest extent
permitted by law, the Company and each person, if any, who controls the Company within the
meaning of the Securities Act, from and against any and all losses, damages, claim s, liabilities,
joint or several, costs and expenses (including any amounts paid in any settlement effe cted with
such holder's consent) to
which the Company or any such controlling person may become subject under the Securities
Act, state securities or blue sky laws, common law or otherwise, insofar as such losses, dam ages,
claims, liabilities (or actions or proceedings in respect thereof), costs or expenses arise out of or
are based upon (x) any untrue statement or alleged untrue statement of any material fact
contained in the registration statement or included prospectus, as amended or supplemented, or
(y) the omission or alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances in which they are
made, not misleading, or (z)
the failure of such holder to send or give a copy of the final prospectus prepared by the Company
and made available to such holder to any person, and such holder will reimburse the Company
and each such controlling person of the Company promptly upon demand for any reasonable
legal or any other expenses incurred by them in connection with investigating, preparing to
defend or defending against or appearing as a third-party witness in connection with such loss,
claim, damage, liability, action or proceeding to the extent, but only to the extent, that any such
loss, damage, liability,
cost or expense arises out of or is based upon an untrue statement or alleged untrue statem ent or
omission or alleged omission so made in conformity with information about such holder
furnished by such holder or such controlling persons for use in the preparation of such
registration statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto. Each holder, by accepting delivery of any Warrant, agrees to be bound by
the provisions of this Section 12(d). Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Company or any controlling person
of the Company. In the event that indemnity is not
available, each such holder severally agrees to contribute to any and all losses ba sed on the
relative faults of the parties involved as well as any other equitable factors whi ch may be
appropriate.
(e) If requested by the original holders of not less than 25% of the outstanding
Warrants, the Company and such holders shall enter into an underwriting agreement with a n
investment banking firm containing customary representations, warranties and provisions
relating to indemnification and contribution. In addition, the Company shall use its re asonable
efforts to cooperate with such investment banking firm to facilitate any such offering.
(f) The Company shall make available to the holders of Warrants copies of the
prospectus so that such holders may comply with their prospectus delivery requirements.
(g) The Company shall pay all out-of-pocket expenses incurred in connection with
the Registration Statement including, without limitation, all SEC and blue sky registration and
filing fees, printing expenses, transfer agents' and registrars' fees, fees and disbursements of the
Company's and the Warrant holders' counsel (provided however that the Warrant holders are
only
entitled to one counsel as a group selected by the holders of a majority of the Share s) and
accountants and fees and disbursements of experts used by the Company in connection with such
registration, provided, that the Company shall not be required to pay any underwriting discounts
or commissions.
(h) The provisions of this Section 13 are for the benefit of the holders of Warrants and
persons who may be deemed to be affiliates of the Company acquiring Shares upon the exercise
of Warrants and shall survive the expiration and/or exercise of the Warrants.
Section 13. Adjustment of Exercise Price and Number of Shares Purchasable or Number
of Warrants. The Exercise Price, the number of Shares purchasable upon the exercise of each
Warrant and the number of Warrants outstanding are subject to adjustment from time to time
upon the occurrence of the events enumerated in this Section 13.
(a) If the Company shall (i) pay a dividend on its shares of Class A Common Stock in
shares of either Class A Common Stock or shares of the Company's Class B Common Stock,
$.20 par value, (ii) subdivide its outstanding shares of Class A Common Stock, (iii) combine it s
outstanding shares of Class A Common Stock into a smaller number of shares of Class A
Common Stock or (iv)
reclassify the Class A Common Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing corporation), the number of
Shares purchasable upon exercise of each Warrant immediately prior thereto shall be a djusted so
that the holder of each Warrant shall be entitled upon exercise to receive the kind and number of
Shares or other securities of the Company which such holder would have owned or have been
entitled to receive after the happening of any of the events described above, had such W arrant
been exercised immediately prior to the happening of such event or any record date wit h respect
thereto. An adjustment made pursuant to this paragraph (a) shall become effective imme diately
after the effective date of such event retroactive to the record date, if any, for such event. In
addition, in the event of any reclassification of the Class A Common Stock, reference s in this
Agreement to Class A Common Stock shall thereafter be deemed to refer to the securities into
which the Class A Common Stock shall have been reclassified.
(b) If the Company shall issue rights, options or warrants to all holders of its outstanding
Class A Common Stock entitling them for a period of 45 days or less to subscribe for or purchase
shares of Class A Common Stock at a price per share that is lower than the market price per
share of Class A Common Stock (as defined in paragraph (f) below) as of the record date
mentioned below, the number of Shares thereafter purchasable upon the exercise of each W arrant
shall be determined by multiplying the number of Shares theretofore purchasable upon exercise
of each Warrant by a fraction, (i) the numerator of which shall be the number of shares of C lass
A Common Stock outstanding on the date of issuance of such rights, options or warrants plus the
number of additional shares of Class A Common Stock offered for subscription or purchase, and
(ii) the denominator of which shall be the number of shares of Class A Common Stock
outstanding on the date of issuance of such rights, options or warrants plus the number of shares
which the aggregate offering price of the total number of shares of Class A Common Stock so
offered would purchase at the market price per share of Class A Common Stock at such record
date (the date of computation referenced in paragraph (f) below). Such adjustment shall be m ade
whenever such rights, options or warrants are issued, and shall become effective immediatel y on
the date of issuance retroactive to the record date for the determination of stockhol ders entitled to
receive such rights, options or warrants.
For the purposes of adjustments required by paragraph (b) of this Section 13, the shares
of Class A Common Stock that the holder of any outstanding rights, options or warrants shall be
entitled to subscribe for or purchase shall be deemed to be issued and outstanding as of the date
of sale, issuance or distribution of such securities to the extent that an adjustment has been made
for such issuance pursuant to such paragraph (b), and the consideration, if any, received by the
Company
therefor shall be deemed to be the consideration received by the Company for such securities,
plus the consideration or premiums stated in such securities to be paid for the shares of C lass A
Common Stock covered thereby.
(c) If the Company shall distribute to all holders of its shares of Class A Common St ock
evidences of its indebtedness or assets (excluding cash dividends or distributions payable out of
consolidated earnings or earned surplus and dividends or distributions referred to in paragraph
(a) above) or rights, options or warrants or convertible or exchangeable securities containing the
right to subscribe for or purchase shares of Class A Common Stock (excluding those referred to
in paragraph (b) above), then in each case the number of Shares thereafter purchasable upon the
exercise of each Warrant shall be determined by multiplying the number of Shares theret ofore
purchasable upon the exercise of each Warrant, by a fraction, (i) the numerator of which shall be
the then current market price per share of Class A Common Stock (as defined in para graph (f)
below) on the date of such distribution (the date of computation referenced in paragraph (f)
below), and
(ii) the denominator of which shall be the then current market price per share of Class A
Common Stock (as defined in paragraph (f) below) on the date of such distribution (the date of
computation referenced in paragraph (f) below), less the then fair value (as determined in good
faith by the Board of Directors of the Company, whose determination shall be conclusive and
shall be evidenced by a resolution filed with the Warrant Agent) of the portion of the a ssets or
evidences of indebtedness so distributed or of subscription rights, options or warrants or
convertible or exchangeable securities, in each instance applicable to one share of Class A
Common Stock. Such adjustment shall be made whenever any such distribution is made, and
shall become effective on the date of distribution retroactive to the record date for the
determination of stockholders entitled to receive such distribution.
(d) For the purpose of any computation under paragraph (b) of this Section 13, the current
or closing market price per share of Class A Common Stock at any date shall be de emed to be
the average of the daily closing prices (determined as provided in Section 14(c)) for the 15
consecutive trading days commencing 20 trading days before the date of such computation.
(e) Except for adjustments required by paragraph (k) hereof, no adjustment in the number
of Shares purchasable hereunder shall be required unless such adjustment would require an
increase or decrease of at least one percent (1 %) in the number of Shares purchasable upon t he
exercise of each Warrant; provided, however, that any adjustments which by reason of this
paragraph (e) are not required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations shall be made to the nearest cent and to the nearest
one-hundredth of a share, as the
case may be.
(f) Whenever the number of Shares purchasable upon the exercise of each Warrant is
adjusted as herein provided (whether or not the Company then or thereafter elects t o issue
additional Warrants in substitution for an adjustment in the number of Shares as provided in
paragraph (k) hereof), the Exercise Price payable upon exercise of each Warrant shall be
adjusted by multiplying
such Exercise Price immediately prior to such adjustment by a fraction, the numerator of which
shall be the number of Shares purchasable upon the exercise of each Warrant immediate ly prior
to such adjustment and the denominator of which shall be the number of Shares so purchasabl e
immediately thereafter.
(g) For the purpose of this Section 13, the term "shares of Class A Common Stock"
shall mean (i) the class of stock designated as the Class A Common Stock of the C ompany at the
date of this Agreement, or (ii) any other class of stock resulting from successive changes or
reclassification of such shares consisting solely of changes in par value, or from par value to no
par value, or from no par value to par value. If at any time, as a result of an adjustm ent made
pursuant to paragraph (a) or (c) above, the holders of Warrants shall become entitled t o purchase
any shares of the Company other than shares of Class A Common Stock, thereafter the
provisions of this Agreement with respect to Shares, including, without limitation, the provisions
regarding adjustments to be made from time to time to the number of such other share s so
purchasable upon exercise of each Warrant and the Exercise Price of such shares, shall apply as
nearly as practicable in an equivalent manner to such other shares.
(h) Upon the expiration of any rights, options, warrants or conversion or exchange
privileges, if any thereof shall not have been exercised, the Exercise Price and t he number of
shares of Class A Common Stock purchasable upon the exercise of each Warrant shall, upon
such expiration, be readjusted and shall thereafter be such as it would have been had it been
originally adjusted (or had the original adjustment not been required, as the case may be) as if (i)
the only shares of Class A Common Stock so issued were the shares of Class A Common Stock,
if any, actually issued or sold upon the exercise of such rights, options, warrants or conversion or
exchange rights and (ii) such shares of Class A Common Stock, if any, were issued or sold for
the consideration actually received by the Company upon such exercise plus the aggregat e
consideration, if any, actually received by the Company for the issuance, sale or grant of all of
such rights, options, warrants or conversion or exchange rights whether or not exercised;
provided, that no such readjustment shall have the effect of increasing the Exercise Pri ce or
decreasing the number of shares by an amount in excess of the amount of the adjustment ini tially
made in respect to the issuance, sale or grant of such rights, options, warrants or conversion or
exchange rights.
(i) The Company in its discretion may elect, on or after the date of any adjustme nt
required by paragraphs (a) and (b) of this Section 13, to adjust the number of Warrants in
substitution for an adjustment in the number of Shares purchasable upon the exercise of a
Warrant. Each of the Warrants outstanding after such adjustment of the number of Warrant s shall
be exercisable for the same number of Shares as immediately prior to such adjustment. Each
Warrant held of record prior to such adjustment of the number of Warrants shall become that
number of Warrants (calculated to the nearest hundredth) obtained by dividing the Exercise Price
in effect prior to adjustment of the Exercise Price by the Exercise Price in effe ct after adjustment
of the Exercise Price. The Company shall notify the holders of Warrants in the same manner as
provided in the first paragraph of Section 14, of its election to adjust the number of Warra nts,
indicating the record date for the adjustment, and, if known at the time, the am ount of the
adjustment to be made. This record date may be the date on which the Exercise Price is adjusted
or any day thereafter. Upon each adjustment of the number of Warrants pursuant to this
paragraph (i) the Company shall, as promptly as practicable, cause to
be distributed to holders of record of Warrants on such record date Warrant Certificates
evidencing, subject to Section 14, the additional Warrants to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall cause to be distri buted to
such holders of record in substitution and replacement for the Warrant Certificates hel d by such
holders prior to the date of adjustment, and upon surrender thereof, if required by the Company,
new Warrant Certificates evidencing all the Warrants to be issued, executed and registered in the
manner specified in Sections 4, 5 and 6 (and which may bear, at the option of the Company, t he
adjusted Exercise Price) and shall be, registered in the names of the holders of re cord of Warrant
Certificates on the record date specified in the notice.
(j) Except as provided in paragraphs (a) and (b) of this Section 13, no adjustment to the
number of Shares which may be purchased upon exercise of any Warrant in respect of any
dividend shall be made during the term of a Warrant or upon the exercise of a Warrant.
(k) In case of any consolidation of the Company with or merger of the Company into
another corporation or in case of any sale or conveyance to another corporation of the property of
the Company as an entirety or substantially as an entirety or the Company is a pa rty to a merger
or binding share exchange which reclassifies or changes its outstanding Class A Common Stoc k,
the Company or such successor or purchasing corporation, as the case may be, shall execute with
the Warrant Agent an agreement, in form and substance substantially equivalent to this
Agreement, that each holder of a Warrant shall have the right thereafter, subject to terms and
conditions substantially
equivalent to those contained in this Agreement, upon payment of the Exercise Price i n effect
immediately prior to such action to purchase upon exercise of each Warrant the ki nd and amount
of shares and other securities and property which such holder would have owned or have been
entitled to receive after the happening of such consolidation, merger, sale or conveyanc e had
such Warrant been exercised immediately prior to such action. The Company shall ma il by
first-class mail, postage prepaid, to each registered holder of a Warrant, notice of the execution
of any such agreement. Such agreement shall provide for adjustments, which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Section 13. The
provisions of this paragraph (k) shall similarly apply to successive consolidations, mergers, sales
or conveyances. The Warrant Agent shall be under no duty or responsibility to determine the
correctness of any provisions contained in any such agreement relating either to the kind or
amount of shares of stock or other securities or property receivable upon exercise of Warrants or
with respect to the method employed and provided therein for any adjustments and shall be
entitled to rely upon the provisions contained in any such agreement
(1) Irrespective of any adjustments in the Exercise Price or the number or kind of shares
purchasable upon the exercise of the Warrants, Warrants theretofore or thereafter issued may
continue to express the same price and number and kind of shares as are stated in the Wa rrants
initially issuable pursuant to this Agreement.
Section 14. Fractional Warrants and Fractional Shares.
(a) The Company shall not be required to issue fractions of Warrants on any
distribution of Warrants to holders of Warrant Certificates pursuant to Section 13(k) or to
distribute Warrant Certificates that evidence fractional Warrants. In lieu of such fractional
Warrants there shall be paid to the registered holders of the Warrant Certificates with regard to
which such fractional Warrants would otherwise be issuable, an amount in cash equal to the
same fraction of the current market value of a full Warrant. For purposes of this Section 14(a),
the current market value of a Warrant shall be the closing price of one Warrant (a s determined
pursuant to paragraph (c) below) for the trading day immediately prior to the date on which such
fractional Warrant would have been otherwise issuable.
(b) Notwithstanding any adjustment pursuant to Section 13 in the number of Shares
purchasable upon the exercise of a Warrant, the Company shall not be required to issue fra ctions
of Shares upon exercise of the Warrants or to distribute certificates which evidence frac tional
Shares. In lieu of fractional Shares, there shall be paid to the registered holders of Warrant
Certificates at the
time such Warrant Certificates are exercised as herein provided an amount in c ash equal to the
same fraction of the current market value of a share of Class A Common Stock minus the
equivalent fraction of the exercise price. For purposes of this Section 14(b), the current marke t
value of a share of Class A Common Stock shall be the closing price of a share of Cla ss A
Common Stock (as determined pursuant to paragraph (c) below) for the trading day immediate ly
prior to the date of such exercise.
(c) The closing' price for each day shall be the last sale price, regular way, or, if no
such sale takes place on such day, the average of the closing bid and asked prices, regul ar way,
for such day, in either case as reported in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the
Warrants or Class A Common Stock, as the case may be, are not listed or admitted to trading on
such exchange, as reported on the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange on whic h the Warrants or
Class A Common Stock, respectively, is listed or admitted to trading, or if the W arrants or Class
A Common Stock, as the case may be, is not listed or admitted to trading on any na tional
securities exchange, as reported on NASDAQ/NMS or, if the Warrants or Class A Common
Stock, as the case may be, is not listed or admitted to trading on NASDAQ/NMS, as report ed on
NASDAQ.
Section 15. Notices to Warrant holders. Upon any adjustment of the number of Shares
purchasable upon exercise of each Warrant, the Exercise Price or the number of Warrants
outstanding pursuant to Section 13, the Company within 20 calendar days thereafter shall (i)
cause to be filed with the Warrant Agent a certificate of a firm of independent public accountants
of recognized standing selected by the Company (who may be the regular auditors of the
Company) setting forth the Exercise Price and either the number of Shares purchasable upon
exercise of each Warrant or the additional number of Warrants to be issued for each pre viously
outstanding Warrant, as the case may be, after such adjustment and setting forth in reasonable
detail the method of calculation and the facts upon which such adjustment was m ade, which
certificate shall be conclusive evidence of the correctness of the matters set forth therein, and (ii)
cause the Warrant Agent to give to each of the registered holders of the Warrant Ce rtificates at
such holder's address appearing on the Warrant Register written notice of such adjustments by
first-class mail, postage prepaid. Where appropriate, such notice may be given in advance and
included as a part of the
notice required to be mailed under the other provisions of this Section 15.
If:
(a) the Company shall declare any dividend payable in any securities upon its shares
of Class A Common Stock or make any distribution (other than a cash dividend declared in the
ordinary course) to the holders of its shares of Class A Common Stock, or
(b) the Company shall offer to the holders of its shares of Class A Common Stock
any additional shares of Class A Common Stock or securities convertible or exchangeable i nto
shares of Class A Common Stock or any right to subscribe for or purchase Class A Common
Stock, or
(c) there shall be a dissolution, liquidation or winding up of the Company (other than
in connection with a consolidation, merger or sale of all or substantially all of it s property, assets
and business as an entirety),
then the Company shall (i) cause written notice of such event to be filed with t he Warrant
Agent and shall cause written notice of such event to be given to each of the registe red holders of
the Warrant Certificates at such holder's address appearing on the Warrant Register, by fi rst-class
mail, postage prepaid, and (ii) make a public announcement in a daily morning English language
newspaper of general circulation in New York City, New York, and in a daily morning
Norwegian language newspaper of general circulation in Oslo, Norway, of such event, such
giving of notice and publication to be completed at least 10 calendar days (or 20 c alendar days in
any case specified in clause (c) above) prior to the date fixed as a record dat e or the date of
closing the transfer books for the determination of the stockholders entitled to such divide nd,
distribution or subscription rights, or for the determination of stockholders entitled to vote on
such proposed dissolution, liquidation or winding up. Such notice shall specify such record date
or the date of closing the transfer books,
as the case may be. The failure to give the notice required by this Section 15 or any defect
therein shall not affect the legality or validity of any dividend, distribution, right, opti on, warrant,
dissolution, liquidation or winding up or the vote upon or any other action taken in connection
therewith.
Section 16. Merger, Consolidation or Change of Name of Warrant Agent. Any
corporation into which the Warrant Agent may be merged or converted or with which it 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 succeeding to the shareholder services
business of the Warrant Agent, shall be the successor to the Warrant Agent hereunder without
the execution or filing of any paper or any further act on the part of any of the parties he reto,
provided that such corporation would be eligible for appointment as a successor Warrant Agent
under the provisions of Section 18. If at the time such successor to the Warrant Agent shall
succeed under this Agreement, any of the Warrant Certificates shall have been counte rsigned but
not delivered, any such successor to the Warrant Agent may adopt the countersignature of the
original Warrant Agent; and if at that time any of the Warrant Certificates shall not have been
countersigned, any successor to the Warrant Agent may countersign such Warrant Certificates
either in the name of the predecessor Warrant Agent or in the name of the successor Warrant
Agent; in all such cases such Warrant Certificates shall have
the full force provided in the Warrant Certificates and in this Agreement.
If at any time the name of the Warrant Agent shall be changed and at such ti me any of the
Warrant Certificates shall have been countersigned but not delivered, the Warrant Agent whose
name has changed may adopt the countersignature under its prior name; and if at tha t time any of
the Warrant Certificates shall not have been countersigned, the Warrant Agent may countersign
such Warrant Certificates either in its prior name or in its changed name; and in all such cases
such Warrant Certificates shall have the full force provided in the Warrant Certifi cates and in
this Agreement. Section 17. Warrant Agent. The Warrant Agent undertakes the duties and obligations
imposed by this Agreement upon the following terms and conditions, by all of which the
Company and the holders of Warrants, by their acceptance thereof, shall be bound:
(a) The statements contained herein and in the Warrant Certificates shall be taken as
statements of the Company, and the Warrant Agent assumes no responsibility for the correctness
of any of the same except such as describe the Warrant Agent or action taken or to be taken by it.
Except as herein otherwise provided, the Warrant Agent assumes no responsibility with respect
to the execution, delivery or distribution of the Warrant Certificates.
(b) The Warrant Agent shall not be responsible for any failure of the Company to
comply with any of the covenants contained in this Agreement or in the Warrant Certifi cates to
be complied with by the Company nor shall it at any time be under any duty or responsi bility to
any holder of a Warrant to make or cause to be made any adjustment in the Exerci se Price or in
the number of Shares issuable upon exercise of any Warrant (except as instructed by the
Company), or to determine whether any facts exist which may require any such adjustments, or
with respect to the nature or extent of or method employed in making any such adjustm ents when
made.
(c) The Warrant Agent may consult at any time with counsel satisfactory to it (who
may be counsel for the Company) and the Warrant Agent shall incur no liability or re sponsibility
to the Company or any holder of any Warrant Certificate in respect of any action ta ken, suffered
or omitted by it hereunder in good faith and in accordance with the opinion or the advice of such
counsel.
(d) The Warrant Agent shall incur no liability or responsibility to the Company or to
any holder of any Warrant Certificate for any action taken in reliance on any noti ce, resolution,
waiver, consent, order, certificate or other paper, document or instrument believed in good fa ith
by it to be genuine and to have been signed, sent or presented by the proper party or parties.
(e) The Company agrees to pay to the Warrant Agent reasonable compensation for all
services
rendered by the Warrant Agent under this Agreement, to reimburse the Warrant Agent upon
demand
for all expenses, taxes and governmental charges and other charges of any kind and nature
incurred by the Warrant Agent in the performance of its duties, under this Agreement and to
indemnify the Warrant Agent and save it harmless against any and all losses, liabi lities and
expenses, including judgments, costs and reasonable counsel fees and expenses, for anything
done or omitted by the Warrant Agent arising out of or in connection with this Agreement exc ept
as a result of its negligence or bad faith.
(f) The Warrant Agent shall be under no obligation to institute any action, suit or
legal proceeding or to take any other action likely to involve expense unless the C ompany or one
or more registered holders of Warrant Certificates shall furnish the Warrant Agent with
reasonable security and indemnity for any costs or expenses which may be incurred. All rights of
action under this Agreement or under any of the Warrants may be enforced by the Warrant Agent
without
the possession of any of the Warrant Certificates or the production thereof at any trial or other
proceeding related thereto, and any such action, suit or proceeding instituted by the Warrant
Agent shall be brought in its name as Warrant Agent, and any recovery or judgment shall be for
the ratable
benefit of the registered holders of the Warrants, as their respective rights or interests may
appear.
(g) The Warrant Agent, and any stockholder, director, officer or employee thereof,
may buy, sell or deal in any of the Warrants or other securities of the Company or become
pecuniarily interested in any transaction in which the Company may be interested, or contract
with or lend money to the Company or otherwise act as fully and freely as though they were not
the Warrant Agent under this Agreement, or a stockholder, director, officer or employee of the
Warrant Agent, as the case may be. Nothing herein shall preclude the Warrant Agent from
acting in any other capacity for the Company or for any other legal entity.
(h) The Warrant Agent shall act hereunder solely as agent for the Company, and its
duties shall be determined solely by the provisions hereof. The Warrant Agent shall not be liable
for anything which it may do or refrain from doing in connection with this Agreement except for
its own negligence or bad faith.
(i) The Company agrees that it will perform, execute, acknowledge and deliver or
cause to be performed, executed, acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the Warrant Agent for the carrying
out or performing the provisions of this Agreement. (j) The Warrant Agent shall not be under any responsibility in respect of the validity
of this Agreement or the execution and delivery hereof (except the due execution hereof by the
Warrant Agent) or in respect of the validity or execution of any Warrant Certificate (except its
countersignature thereof), nor shall the Warrant Agent by any act hereunder be deemed to
make any representation or warranty as to the authorization or reservation of the Shares to be
issued
pursuant to this Agreement or any Warrant Certificate or as to whether the Shares will when
issued
be validly issued, fully paid and non-assessable or as to the Exercise Price or the number of
Shares
issuable upon exercise of any Warrant.
(k) The Warrant Agent is hereby authorized and directed to accept instructions with
respect to the performance of its duties hereunder from the Chairman of the Board, the President,
any Vice President, the Treasurer, the Secretary or an Assistant Secretary of the Compa ny, and to
apply to such officers for advice or instructions in connection with its duties, and shall not be
liable for any action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer or in good faith reliance upon any statement signed by any one of
such officers of the Company with respect to any fact or matter (unless other evidence in respect
thereof is herein specifically prescribed) which may be deemed to be conclusively proved and
established by such signed statement. Section 18. Change of Warrant Agent. If the Warrant Agent shall resign (such resignation
to become effective not earlier than 60 days after the giving of written notice thereof to the
Company and the registered holders of Warrant Certificates) or shall become incapabl e of acting
as Warrant Agent or if the Board of Directors of the Company shall by resolution remove t he
Warrant Agent (such removal to become effective not earlier than 30 days after the filing of a
certified copy of such resolution with the Warrant Agent and the giving of written
