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Exhibit 4.2
FORM OF WARRANT TO
PURCHASE COMMON STOCK
THE
SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE
DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO
IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH
LAWS. THIS INSTRUMENT IS ISSUED SUBJECT TO THE RESTRICTIONS ON
TRANSFER AND OTHER PROVISIONS OF A SECURITIES PURCHASE AGREEMENT
BETWEEN THE ISSUER OF THESE SECURITIES AND THE INVESTOR REFERRED TO
THEREIN, A COPY OF WHICH IS ON FILE WITH THE ISSUER. THE SECURITIES
REPRESENTED BY THIS INSTRUMENT MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID AGREEMENT. ANY SALE OR
OTHER TRANSFER NOT IN COMPLIANCE WITH SAID AGREEMENT WILL BE
VOID.
WARRANT
to purchase
________________
Shares of Common Stock of
CIT Group Inc.
Issue Date:
_______________
1.
Definitions . Unless the context otherwise requires, when
used herein the following terms shall have the meanings
indicated.
"
Affiliate
" has the meaning
ascribed to it in the Purchase Agreement.
"
Appraisal
Procedure " means a procedure whereby two
independent appraisers, one chosen by the Company and one by the
Original Warrantholder, shall mutually agree upon the
determinations then the subject of appraisal. Each party shall
deliver a notice to the other appointing its appraiser within 15
days after the Appraisal Procedure is invoked. If within 30 days
after appointment of the two appraisers they are unable to agree
upon the amount in question, a third independent appraiser shall be
chosen within 10 days thereafter by the mutual consent of such
first two appraisers. The decision of the third appraiser so
appointed and chosen shall be given within 30 days after the
selection of such third appraiser. If three appraisers shall be
appointed and the determination of one appraiser is disparate from
the middle determination by more than twice the amount by which the
other determination is disparate from the middle determination,
then the determination of such appraiser shall be excluded, the
remaining two determinations shall be averaged and such average
shall be binding and conclusive upon the
Company and the Original
Warrantholder; otherwise, the average of all three determinations
shall be binding upon the Company and the Original Warrantholder.
The costs of conducting any Appraisal Procedure shall be borne by
the Company.
"
Board of
Directors " means the board of directors
of the Company, including any duly authorized committee
thereof.
" Business
Combination " means a merger,
consolidation, statutory share exchange or similar transaction that
requires the approval of the Company’s
stockholders.
" business day
" means any day
except Saturday, Sunday and any day on which banking institutions
in the State of New York generally are authorized or required by
law or other governmental actions to close.
" Capital Stock
" means (A) with
respect to any Person that is a corporation or company, any and all
shares, interests, participations or other equivalents (however
designated) of capital or capital stock of such Person and (B) with
respect to any Person that is not a corporation or company, any and
all partnership or other equity interests of such
Person.
" Charter
" means, with
respect to any Person, its certificate or articles of
incorporation, articles of association, or similar organizational
document.
" Common Stock
" has the meaning
ascribed to it in the Purchase Agreement.
"
Company
" means the Person
whose name, corporate or other organizational form and jurisdiction
of organization is set forth in Item 1 of Schedule A
hereto.
" conversion
" has the meaning
set forth in Section 13(B).
"
convertible
securities " has the meaning set forth in
Section 13(B).
"
CPP
" has the meaning
ascribed to it in the Purchase Agreement.
"
Exchange
Act "
means the Securities Exchange Act of 1934, as amended, or any
successor statute, and the rules and regulations promulgated
thereunder.
" Exercise
Price "
means the amount set forth in Item 2(a) of Schedule A
hereto; provided
, that such amount
shall be reduced by the amount set forth in Item 2(b) of Schedule A
hereto on each six month anniversary of the date of this Warrant if
the Shareholder Approvals shall not have been obtained prior to
such anniversary, up to a maximum reduction of the amount set forth
in Item 2(c) of Schedule A hereto.
"
Expiration
Time "
has the meaning set forth in Section 3.
"
Fair
Market Value " means, with respect to any
security or other property, the fair market value of such security
or other property as determined by the Board of Directors, acting
in good faith or, with respect to Section 14, as determined by the
Original Warrantholder acting in good faith. For so long as the
Original Warrantholder holds this Warrant or any portion
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thereof, it may object in
writing to the Board of Director’s calculation of fair market
value within 10 days of receipt of written notice thereof. If the
Original Warrantholder and the Company are unable to agree on fair
market value during the 10-day period following the delivery of the
Original Warrantholder’s objection, the Appraisal Procedure
may be invoked by either party to determine Fair Market Value by
delivering written notification thereof not later than the 30
th day after delivery of the Original
Warrantholder’s objection.
"
Governmental
Entities " has the meaning ascribed to
it in the Purchase Agreement.
"
Initial
Number "
has the meaning set forth in Section 13(B).
"Issue
Date" means
the date set forth in Item 3 of Schedule A hereto.
"
Market
Price "
means, with respect to a particular security, on any given day, the
last reported sale price regular way or, in case no such reported
sale takes place on such day, the average of the last closing bid
and ask prices regular way, in either case on the principal
national securities exchange on which the applicable securities are
listed or admitted to trading, or if not listed or admitted to
trading on any national securities exchange, the average of the
closing bid and ask prices as furnished by two members of the
Financial Industry Regulatory Authority, Inc. selected from time to
time by the Company for that purpose. "Market Price" shall be
determined without reference to after hours or extended hours
trading. If such security is not listed and traded in a manner that
the quotations referred to above are available for the period
required hereunder, the Market Price per share of Common Stock
shall be deemed to be (i) in the event that any portion of the
Warrant is held by the Original Warrantholder, the fair market
value per share of such security as determined in good faith by the
Original Warrantholder or (ii) in all other circumstances, the fair
market value per share of such security as determined in good faith
by the Board of Directors in reliance on an opinion of a nationally
recognized independent investment banking corporation retained by
the Company for this purpose and certified in a resolution to the
Warrantholder. For the purposes of determining the Market Price of
the Common Stock on the "trading day" preceding, on or following
the occurrence of an event, (i) that trading day shall be deemed to
commence immediately after the regular scheduled closing time of
trading on the New York Stock Exchange or, if trading is closed at
an earlier time, such earlier time and (ii) that trading day shall
end at the next regular scheduled closing time, or if trading is
closed at an earlier time, such earlier time (for the avoidance of
doubt, and as an example, if the Market Price is to be determined
as of the last trading day preceding a specified event and the
closing time of trading on a particular day is 4:00 p.m. and the
specified event occurs at 5:00 p.m. on that day, the Market Price
would be determined by reference to such 4:00 p.m. closing
price).
" Ordinary Cash
Dividends " means a regular quarterly
cash dividend on shares of Common Stock out of surplus or net
profits legally available therefor (determined in accordance with
generally accepted accounting principles in effect from time to
time), provided
that Ordinary Cash
Dividends shall not include any cash dividends paid subsequent to
the Issue Date to the extent the aggregate per share dividends paid
on the outstanding Common Stock in any quarter exceed the amount
set forth in Item 4 of Schedule A hereto, as adjusted for any stock
split, stock dividend, reverse stock split, reclassification or
similar transaction.
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" Original
Warrantholder " means the United States
Department of the Treasury. Any actions specified to be taken by
the Original Warrantholder hereunder may only be taken by such
Person and not by any other Warrantholder.
" Permitted
Transactions " has the meaning set forth in
Section 13(B).
"
Person
" has the meaning
given to it in Section 3(a)(9) of the Exchange Act and as used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act.
" Per Share Fair Market
Value "
has the meaning set forth in Section 13(C).
"Preferred
Shares "
means the perpetual preferred stock issued to the Original
Warrantholder on the Issue Date pursuant to the Purchase
Agreement.
"
Pro Rata
Repurchases " means any purchase of shares
of Common Stock by the Company or any Affiliate thereof pursuant to
(A) any tender offer or exchange offer subject to Section 13(e) or
14(e) of the Exchange Act or Regulation 14E promulgated thereunder
or (B) any other offer available to substantially all holders of
Common Stock, in the case of both (A) or (B), whether for cash,
shares of Capital Stock of the Company, other securities of the
Company, evidences of indebtedness of the Company or any other
Person or any other property (including, without limitation, shares
of Capital Stock, other securities or evidences of indebtedness of
a subsidiary), or any combination thereof, effected while this
Warrant is outstanding. The " Effective
Date " of
a Pro Rata Repurchase shall mean the date of acceptance of shares
for purchase or exchange by the Company under any tender or
exchange offer which is a Pro Rata Repurchase or the date of
purchase with respect to any Pro Rata Repurchase that is not a
tender or exchange offer.
"
Purchase
Agreement " means the Securities Purchase
Agreement – Standard Terms incorporated into the Letter
Agreement, dated as of the date set forth in Item 5 of Schedule A
hereto, as amended from time to time, between the Company and the
United States Department of the Treasury (the "
Letter
Agreement "), including all annexes and
schedules thereto.
"
Qualified
Equity Offering " has the meaning ascribed to
it in the Purchase Agreement.
"
Regulatory
Approvals " with respect to the
Warrantholder, means, to the extent applicable and required to
permit the Warrantholder to exercise this Warrant for shares of
Common Stock and to own such Common Stock without the Warrantholder
being in violation of applicable law, rule or regulation, the
receipt of any necessary approvals and authorizations of, filings
and registrations with, notifications to, or expiration or
termination of any applicable waiting period under, the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and the rules and regulations thereunder.
" SEC
" means the U.S.
Securities and Exchange Commission.
"
Securities
Act "
means the Securities Act of 1933, as amended, or any successor
statute, and the rules and regulations promulgated
thereunder.
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" Shareholder
Approvals " means all shareholder
approvals necessary to (A) approve the exercise of this Warrant for
Shares for purposes of the section or rule set forth in Item 6 of
Schedule A hereto, and/or (B) amend the Charter to increase the
number of authorized shares of Common Stock to the extent necessary
to permit the exercise of this Warrant.
" Shares
" has the meaning
set forth in Section 2.
"trading
day" means (A) if the shares of
Common Stock are not traded on any national or regional securities
exchange or association or over-the-counter market, a business day
or (B) if the shares of Common Stock are traded on any national or
regional securities exchange or association or over-the-counter
market, a business day on which such relevant exchange or quotation
system is scheduled to be open for business and on which the shares
of Common Stock (i) are not suspended from trading on any national
or regional securities exchange or association or over-the-counter
market for any period or periods aggregating one half hour or
longer; and (ii) have traded at least once on the national or
regional securities exchange or association or over-the-counter
market that is the primary market for the trading of the shares of
Common Stock.
"
U.S.
GAAP "
means United States generally accepted accounting principles.
" Warrantholder
" has the meaning
set forth in Section 2.
"
Warrant
" means this
Warrant, issued pursuant to the Purchase Agreement.
2. Number
of Shares; Exercise Price . This certifies that, for
value received, the United States Department of the Treasury or its
permitted assigns (the " Warrantholder
") is entitled, upon
the terms and subject to the conditions hereinafter set forth, to
acquire from the Company, in whole or in part, after the receipt of
all applicable Regulatory Approvals and Shareholder Approvals, if
any, up to an aggregate of the number of fully paid and
nonassessable shares of Common Stock set forth in Item 7 of
Schedule A hereto, at a purchase price per share of Common Stock
equal to the Exercise Price. The number of shares of Common Stock
(the " Shares
") and the Exercise
Price are subject to adjustment as provided herein, and all
references to "Common Stock," "Shares" and "Exercise Price" herein
shall be deemed to include any such adjustment or series of
adjustments.
3.
Exercise of Warrant; Term . Subject to Section 2, to the
extent permitted by applicable laws and regulations, the right to
purchase the Shares represented by this Warrant is exercisable, in
whole or in part by the Warrantholder, at any time or from time to
time after the execution and delivery of this Warrant by the
Company on the date hereof, but in no event later than 5:00 p.m.,
New York City time on the tenth anniversary of the Issue Date (the
" Expiration
Time "),
by (A) the surrender of this Warrant and Notice of Exercise annexed
hereto, duly completed and executed on behalf of the Warrantholder,
at the principal executive office of the Company located at the
address set forth in Item 8 of Schedule A hereto (or such other
office or agency of the Company in the United States as it may
designate by notice in writing to the Warrantholder at the address
of the Warrantholder appearing on the books of the Company), and
(B) payment of the Exercise Price for the Shares thereby
purchased:
(i) by having the Company withhold, from the shares of Common Stock
that would otherwise be delivered to the Warrantholder upon such
exercise, shares of Common stock issuable upon exercise of the
Warrant equal in value to the aggregate Exercise Price as to which
this Warrant is so exercised based on the Market Price of the
Common Stock on the trading day on which this Warrant is exercised
and the Notice of Exercise is delivered to the Company pursuant to
this Section 3, or
(ii) with the consent of both the Company and the Warrantholder, by
tendering in cash, by certified or cashier’s check payable to
the order of the Company, or by wire transfer of immediately
available funds to an account designated by the Company.
If the Warrantholder does not exercise this Warrant in its
entirety, the Warrantholder will be entitled to receive from the
Company within a reasonable time, and in any event not exceeding
three business days, a new warrant in substantially identical form
for the purchase of that number of Shares equal to the difference
between the number of Shares subject to this Warrant and the number
of Shares as to which this Warrant is so exercised. Notwithstanding
anything in this Warrant to the contrary, the Warrantholder hereby
acknowledges and agrees that its exercise of this Warrant for
Shares is subject to the condition that the Company will have first
received Shareholder Approvals and the Warrantholder will have
first received any applicable Regulatory Approvals.
4.
Issuance of Shares; Authorization; Listing . Certificates for Shares
issued upon exercise of this Warrant will be issued in such name or
names as the Warrantholder may designate and will be delivered to
such named Person or Persons within a reasonable time, not to
exceed three business days after the date on which this Warrant has
been duly exercised in accordance with the terms of this Warrant.
The Company hereby represents and warrants that any Shares issued
upon the exercise of this Warrant in accordance with the provisions
of Section 3 will be duly and validly authorized and issued, fully
paid and nonassessable and free from all taxes, liens and charges
(other than liens or charges created by the Warrantholder, income
and franchise taxes incurred in connection with the exercise of the
Warrant or taxes in respect of any transfer occurring
contemporaneously therewith). The Company agrees that the Shares so
issued will be deemed to have been issued to the Warrantholder as
of the close of business on the date on which this Warrant and
payment of the Exercise Price are delivered to the Company in
accordance with the terms of this Warrant, notwithstanding that the
stock transfer books of the Company may then be closed or
certificates representing such Shares may not be actually delivered
on such date. Subject to receipt of Shareholder Approvals, the
Company will at all times reserve and keep available, out of its
authorized but unissued Common Stock, solely for the purpose of
providing for the exercise of this Warrant, the aggregate number of
shares of Common Stock then issuable upon exercise of this Warrant
at any time. The Company will (A) procure, at its sole expense, the
listing of the Shares issuable upon exercise of this Warrant at any
time, subject to issuance or notice of issuance, on all principal
stock exchanges on which the Common Stock is then listed or traded
and (B) maintain such listings of such Shares at all times after
issuance. The Company will use reasonable best efforts to ensure
that the Shares may be issued without violation of any applicable
law or regulation or of any requirement of any securities exchange
on which the Shares are listed or traded.
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5. No
Fractional Shares or Scrip . No fractional Shares or scrip
representing fractional Shares shall be issued upon any exercise of
this Warrant. In lieu of any fractional Share to which the
Warrantholder would otherwise be entitled, the Warrantholder shall
be entitled to receive a cash payment equal to the Market Price of
the Common Stock on the last trading day preceding the date of
exercise less the pro-rated Exercise Price for such fractional
share.
6. No
Rights as Stockholders; Transfer Books . This Warrant does not entitle
the Warrantholder to any vot
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