Document:

EXHIBIT 4.27

 

 

 

WARRANT AGREEMENT

between

Foster
Wheeler Ltd.

and

Mellon
Investor Services LLC, as Warrant Agent

Dated as of              , 2004

 

WARRANT AGREEMENT

This Warrant Agreement, dated as
of                     ,
2004 (this “Agreement”),
is between Foster Wheeler Ltd., a Bermuda company (the “Company”), and Mellon Investor Services LLC,
a New Jersey limited liability company (the “Warrant Agent”).

The Company, at or about the time that it is entering into this
Agreement, proposes to issue (a) to the holders of its outstanding 9.00%
Preferred Securities, Series I (liquidation amount $25 per trust security)
issued by FW Preferred Capital Trust I that tender in the exchange offer
described in the Company’s registration statements on Form S-4 (File No.
107054) and Form S-4 (File No. _____), each declared effective by the
Securities and Exchange Commission on _______, 2004 (the “Form S-4”), warrants (the “Class A Warrants”) to
purchase ___1of the
Company’s common shares par value $0.01 per share (the “Common Shares”) or in certain circumstances,
the Company’s Series B Convertible Preferred Shares (liquidation preference
$0.01 per preferred share) (the “Preferred Shares”) and (b) to the existing registered
holders of common shares of the Company, on the date preceding the closing date
of the exchange offer described in the Form S-4, warrants to purchase ___1
Common Shares, or, in certain circumstances described herein, Preferred Shares
(the “Class B Warrants”,
and together with the Class A Warrants, the “Warrants”). 
Each Class A Warrant will become exercisable to purchase Common Shares,
and each Class B Warrant will become exercisable to purchase Common Shares in
the circumstances, upon the terms and conditions and subject to adjustment in
certain circumstances, all as set forth in this Agreement; provided that, in certain
circumstances, the Warrants shall be exercisable for Preferred Shares, as
defined herein.

The Company wishes to retain 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, exchange and replacement of the certificates evidencing the
Warrants to be issued under this Agreement (the “Warrant Certificates”) and the exercise of
the Warrants.

The Company and the Warrant Agent wish to enter into this Agreement to
set forth the terms and conditions of the Warrants and the rights of the
holders thereof (“Warrantholders”)
and to set forth the respective rights and obligations of the Company and the
Warrant Agent.  Each Warrantholder is an
intended beneficiary of this Agreement with respect to the rights of
Warrantholders herein.

NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:

1.                                       Appointment of Warrant Agent.  The Company appoints the Warrant Agent to
act as agent for the Company in accordance with the instructions in this
Agreement and the Warrant Agent accepts such appointment.

1 Number of Common Shares to be
determined after the expiration of the exchange offer but prior to closing
pursuant to the formula described in Form S-4.

 

 

2.                                       Date,
Denomination and Execution of Warrant Certificates.

(a)                                  The warrant
certificates (and the Form of Election to Purchase and the Form of Assignment to
be printed on the reverse thereof) shall be in registered form only and shall
be substantially of the tenor and purport recited in Exhibits A and B hereto
(the “Class A Warrant
Certificate” and the “Class B Warrant Certificate”, respectively, and together
the “Warrant Certificates”)
as applicable, and may have such letters, numbers or other marks of
identification or designation and such legends, summaries or endorsements
printed, lithographed or engraved thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this 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
Common Shares or the Warrants may be listed or any automated quotation system,
or to conform to usage.  Each Class A
Warrant shall entitle the registered holder thereof, subject to the conditions
and other provisions of this Agreement and of the Class A Warrant Certificate,
to purchase [_____]2 fully paid and
non-assessable Common Shares on or after ___________, 20053 and on or before the close of business on
___________, 20094, subject to
extension, in certain circumstances, as provided in Section 9(d) hereof (the “Class A Expiration Date”)
for each Class A Warrant evidenced by such Class A Warrant Certificate for
$0.4689 per Common Share to be received (the “Exercise Price”).  Each Class B Warrant shall entitle the registered holder thereof,
subject to the conditions and other provisions of this Agreement and of the
Class B Warrant Certificate, to purchase [       ]2 fully paid and
non-assessable Common Shares on or after ___________, 20053   and on or before the close of business on
___________, 20075, subject to
extension, in certain circumstances, as provided in Section 9(d) hereof (the “Class B Expiration Date”,
together with the Class A Expiration Date, an “Expiration Date”) for each Class B Warrant
evidenced by such Warrant Certificate for the Exercise Price.  Notwithstanding the foregoing, only until
the Increase of Capital and the Par Value Reduction (each as defined in the
Certificate of Designations relating to the Preferred Shares) have been
approved, upon the exercise of a Warrant, the holder thereof shall be entitled
(notwithstanding the fact that the Increase of Capital and Par Value Reduction
have not become effective) to receive a number of Preferred Shares, or fraction
thereof, then convertible into the number of Common Shares (as defined in
Section 6(n)) that would otherwise have been issuable upon exercise of such
Warrant.  The Exercise Price is subject
to adjustment as provided in Section 6 hereof, provided that  the
Exercise Price shall in no case be less than the par value of the underlying
Common Shares.  The Company will not
take any action to increase such par value above the Exercise Price once the
Par Value Reduction has occurred.  Each
Warrant Certificate shall 

2 Number of Common Shares to be
determined after the expiration of the exchange offer but prior to issuance of

Warrant pursuant to
formula described in Form S-4.

3 Date that is one year from the
closing of the exchange offer.

4 Date that is five years from
closing of exchange offer.

5 Date that is three years from
closing of exchange offer.

 

2

 

 

be dated the date on which
the Warrant Agent receives valid written issuance instructions from the Company
or a transferring holder of a Warrant Certificate or, if such instructions
specify another date, such other date.

(b)                                 For purposes of
this Agreement, the term “close of business” on any given date shall mean 5:00
p.m., Eastern time, on such date; provided, however, that if such date is not a
business day, it shall mean 5:00 p.m., Eastern time, on the next succeeding
business day.  For purposes of this
Agreement, the term “business day” shall mean any day other than a Saturday,
Sunday, a federal holiday, any day that shall be in the City of New York a
legal holiday or a day on which banking institutions in New York, New York or
in the State in which the Warrant Agent maintains the principal office in which
it conducts business related to the Warrants are authorized or obligated by law
to be closed.

(c)                                  Each Warrant
Certificate shall be executed on behalf of the Company by the chairman of the
Board of Directors of the Company (the “Board”), the president or chief executive officer, any
vice president, the chief financial officer, the treasurer or any assistant
treasurer, or the secretary or any assistant secretary, either manually or by
facsimile signature printed thereon. 
Each Warrant Certificate shall be countersigned by the Warrant Agent
upon receipt by the Warrant Agent of written instructions from the Company to
such effect (which the Company covenants to give) and shall not be valid for
any purpose unless so countersigned.  In
case any officer of the Company who shall have signed any Warrant Certificate
shall cease to be such officer of the Company before countersignature by the
Warrant Agent and issue and delivery thereof by the Company, such Warrant
Certificate, nevertheless, may be countersigned by the Warrant Agent, issued
and delivered with the same force and effect as though the person who signed
such Warrant Certificate had not ceased to be such officer of the Company.

3.                                       Subsequent Issue of Warrant
Certificates.  Subsequent
to their original issuance, no Warrant Certificates shall be reissued except
(if applicable, upon written notice thereof from the Company to the Warrant
Agent) (i) Warrant Certificates issued upon transfer thereof in accordance with
Section 4 hereof, (ii) Warrant Certificates issued upon any combination,
split-up or exchange of Warrant Certificates pursuant to Section 4 hereof,
(iii) Warrant Certificates issued in replacement of mutilated, destroyed, lost
or stolen Warrant Certificates pursuant to Section 5 hereof, (iv) Warrant
Certificates issued upon the partial exercise of Warrant Certificates pursuant
to Section 7 hereof, and (v) Warrant Certificates issued to reflect any
adjustment or change in the Exercise Price or the number or kind of shares
purchasable thereunder pursuant to Section 22 hereof.  The Warrant Agent is hereby irrevocably authorized to countersign
and deliver, in accordance with the provisions of said Sections 4, 5, 7 and 22,
the new Warrant Certificates required for purposes thereof, and the Company,
whenever required by the Warrant Agent, will supply the Warrant Agent with
(i) Warrant Certificates duly executed on behalf of the Company for such
purposes and (ii) all other information which the Warrant Agent shall
reasonably request.

 

3

 

4.                                       Transfers and Exchanges of Warrant
Certificates.

(a)                                  The Warrant
Agent will keep or cause to be kept books for registration of ownership and
transfer of the Warrant Certificates issued hereunder.  Such registers shall show the names and
addresses of the respective holders of the Warrant Certificates and the kind
and number of Warrants evidenced by each such Warrant Certificate.

(b)                                 The Warrant
Agent shall, from time to time, register the transfer of any outstanding
Warrants upon the books to be maintained by the Warrant Agent for that purpose,
upon surrender of the Warrant Certificate evidencing such Warrants, with the
Form of Assignment duly filled in and executed with such signature guaranteed
by an eligible institution and such supporting documentation as the Warrant
Agent or the Company may reasonably require, to the Warrant Agent at its stock
transfer office in New York, New York at any time on or before the Expiration
Date of such Warrant, and upon payment to the Warrant Agent for the account of
the Company of an amount equal to any applicable transfer tax.  Payment of the amount of such tax may be
made in cash, or by certified or official bank check, payable in lawful money
of the United States of America to the order of the Company.

(c)                                  Upon receipt of
a Warrant Certificate, with the Form of Assignment duly filled in and executed,
accompanied by payment of an amount equal to any applicable transfer tax, the
Warrant Agent shall promptly cancel the surrendered Warrant Certificate and
countersign and deliver to the transferee a new Warrant Certificate for the
number of full Warrants transferred to such transferee; provided, however, that
in case the registered holder of any Warrant Certificate shall elect to
transfer fewer than all of the Warrants evidenced by such Warrant Certificate,
the Warrant Agent in addition shall promptly countersign and deliver to such
registered holder a new Warrant Certificate or Certificates for the number of
full Warrants not so transferred.

(d)                                 Any Warrant
Certificate or Certificates may be exchanged at the option of the holder
thereof for another Warrant Certificate or Certificates of different denominations,
of like tenor and representing in the aggregate the same kind and number of
Warrants, upon surrender of such Warrant Certificate or Certificates, with the
Form of Assignment duly filled in and executed, to the Warrant Agent, at any
time or from time to time after the close of business on the date hereof and
prior to the close of business on the Expiration Date relating to such
Warrant.  The Warrant Agent shall
promptly cancel the surrendered Warrant Certificate and deliver the new Warrant
Certificate pursuant to the provisions of this Section.

5.                                       Mutilated, Destroyed, Lost or
Stolen Warrant Certificates.  Upon receipt by the Company and the Warrant Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation
of any Warrant Certificate, and in the case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and reimbursement to
them of all reasonable expenses incidental thereto, and, in the case of
mutilation, upon surrender 

 

4

 

and cancellation of the Warrant Certificate,
the Warrant Agent shall countersign and deliver a new Warrant Certificate of
like tenor for the same kind and number of Warrants.  In the case of an institutional Warrantholder, the written
assurance of such Warrantholder of such loss, theft or destruction shall be
considered a satisfactory indemnity for the purposes of this Section 5.

6.                                       Adjustments of Number and Kind of
Shares Purchasable and Exercise Price.  Upon written notice thereof from the Company to the Warrant Agent
(which the Company covenants to promptly give), the number and kind of
securities or other property purchasable upon exercise of a Warrant shall be
subject to adjustment from time to time upon the occurrence, after the date
hereof, of any of the following events:

(a)                                  In case the
Company shall (1) declare and pay a dividend in, or make a distribution of,
shares of its capital on its outstanding Common Shares, (2) subdivide its
outstanding Common Shares into a greater number of such shares or (3)
consolidate its outstanding Common Shares into a smaller number of such shares,
the total number of Common Shares purchasable upon the exercise of each Warrant
outstanding immediately prior thereto shall be adjusted so that the holder of
any Warrant Certificate thereafter surrendered for exercise shall be entitled
to receive at the same aggregate Exercise Price the number of shares of the
applicable classes which such holder would have owned or have been entitled to
receive immediately following the happening of any of the events described
above had such Warrant been exercised in full immediately prior to the record
date with respect to such event; provided  that no adjustment shall be
made in connection with the Bonus Issue or the Par Value Reduction (each as
defined in the Certificate of Designation for the Series B Convertible
Preferred Shares (the “COD”)).  Any
adjustment made pursuant to this Subsection shall, in the case of a share
dividend or distribution, declared and paid in shares of the Company become
effective as of the record date therefore and, in the case of a subdivision or
consolidation, be made as of the effective date thereof.  If, as a result of an adjustment made
pursuant to this Subsection, the holder of any Warrant Certificate thereafter
surrendered for exercise shall become entitled to receive shares of two or more
classes of share capital of the Company, the Board (whose determination shall
be conclusive and shall be evidenced by a Board resolution filed with the
Warrant Agent) shall determine the allocation of the adjusted Exercise Price
between or among shares of such classes.

(b)                                 In the event of
a capital reorganization or a reclassification of the Common Shares (except as
provided in Subsection (a) above or Subsection (d) below), any Warrantholder,
upon exercise of Warrants, shall be entitled to receive, in substitution for
the Common Shares to which he would have become entitled upon exercise
immediately prior to such reorganization or reclassification, the shares (of
any class or classes) or other securities or property of the Company (or cash)
that he would have been entitled to receive at the same aggregate Exercise
Price upon such reorganization or reclassification if such Warrants had been
exercised immediately prior to the record date with respect to such event; and
in any such case, appropriate provision (as reasonably determined by the Board,

 

5

 

 

whose determination shall be
evidenced by a certified Board resolution filed with the Warrant Agent) shall
be made for the application of this Section 6 with respect to the rights and
interests thereafter of the Warrantholders (including but not limited to the
allocation of the Exercise Price between or among shares of classes of
authorized capital), to the end that this Section 6 (including the adjustments
of the number of Common Shares or other securities purchasable and the Exercise
Price thereof) shall thereafter be reflected, as nearly as reasonably
practicable, in all subsequent exercises of the Warrants for any shares or
securities or other property (or cash) thereafter deliverable upon the exercise
of the Warrants.

(c)                                  Whenever the
number of Common Shares or other securities purchasable upon exercise of a
Warrant is adjusted as provided in this Section 6, the Company will promptly
file with the Warrant Agent a certificate signed by the chairman of the Board,
the president or chief executive officer, any vice president, the chief
financial officer, the treasurer or any assistant treasurer, or the secretary
or any assistant secretary, of the Company setting forth the number and kind of
securities or other property purchasable upon exercise of a Warrant, as so
adjusted, stating that such adjustments in the number or kind of shares or
other securities or property conform to the requirements of this Section 6, and
setting forth a brief statement of the facts accounting for such
adjustments.  Promptly after receipt of
such certificate, the Company, or the Warrant Agent at the Company’s
instruction (which the Company covenants to give), will deliver, by
first-class, postage prepaid mail, a brief summary thereof (to be supplied by
the Company) to the registered holders of the outstanding Warrant Certificates;
provided, however, that failure to file or to give any notice required under
this Subsection, or any defect therein, shall not affect the legality or
validity of any such adjustments under this Section 6; and provided, further,
that, where appropriate, such notice may be given in advance and included as
part of the notice required to be given pursuant to Section 12 hereof.

(d)                                 In case of any
consolidation of the Company with, or merger of the Company into, another
company or corporation (other than a consolidation, amalgamation or merger
which does not result in any reclassification or change of the outstanding
Common Shares), or in case of any sale or conveyance to another company or
corporation of the property of the Company as an entirety or substantially as
an entirety, the company or corporation formed by such consolidation,
amalgamation or merger or the company or corporation which shall have acquired
such assets, as the case may be, shall execute and deliver to the Warrant Agent
a supplemental warrant agreement providing that the holder of each Warrant then
outstanding shall have the right thereafter (until the expiration of such
Warrant) to receive, upon exercise of such Warrant, solely the kind and amount
of share capital, shares and other securities and property (or cash) receivable
upon such consolidation, amalgamation, merger, sale or transfer by a holder of
the number of Common Shares of the Company for which such Warrant might have
been exercised immediately prior to such consolidation, amalgamation, merger,
sale or transfer, provided that (i) if the holders of Common Shares were
entitled to exercise a right of election as to the kind or 

 

6

 

amount of securities, cash
or other assets receivable upon such consolidation, amalgamation or merger,
then the kind and amount of securities, cash or other assets for which each
Warrant shall become exercisable shall be deemed to be the kind and amount so
receivable per share by a plurality of the holders of Common Shares in such
consolidation, amalgamation or merger, and (ii) if a tender or exchange offer
shall have been made to and accepted by the holders of Common Shares under
circumstances in which, upon completion of such tender or exchange offer, the
maker thereof, together with members of any group (within the meaning of Rule
13d-5(b)(1) under the Securities Exchange Act of 1934 (the “Exchange Act”) of
which such maker is a part, and together with any affiliate or associate of
such maker (within the meaning of Rule 12b-2 under the Exchange Act) and any
members of any such group of which any such affiliate or associate is a part,
own beneficially (within the meaning of Rule 13d-3 under the Exchange Act) more
than 50% of the outstanding Common Shares, each Warrant shall become
exercisable for the highest amount of cash, securities other property to which
such holder would actually have been entitled as a shareholder if such Warrant
holder had exercised the Warrant prior to the expiration of such tender or
exchange offer, accepted such offer and all of the Common Shares held by such
holder had been purchased pursuant to such tender or exchange offer, subject to
adjustments (from and after the consummation of such tender or exchange offer).  Such supplemental warrant agreement shall
provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided in this Section.  The above provision of this Subsection shall
similarly apply to successive consolidations, amalgamation, mergers, sales or
transfers.  The Warrant Agent shall not
be under any responsibility to determine the correctness of any provision
contained in any such supplemental warrant agreement relating to either the kind
or amount of share capital, shares or securities or property (or cash)
purchasable by holders of Warrant Certificates upon the exercise of their
Warrants after any such consolidation, merger, sale or transfer or of any
adjustment to be made with respect thereto, but subject to the provisions of
Section 20 hereof, may accept as conclusive evidence of the correctness of any
such provisions, and shall be protected in relying upon, a certificate of a
firm of independent certified public accountants (who may be the accountants
regularly employed by the Company) with respect thereto.

(e)                                  If the Company
distributes to all holders of its Common Shares any of its assets (excluding
ordinary cash dividends) or debt securities
or any rights or warrants to purchase debt securities, assets or other securities of the Company, the Exercise Price of
the Warrants shall be adjusted in accordance with the following formula:

E’ = E    x   M    —  F

                        M

where:

E’ =                           the adjusted exercise price.

E =                               the current exercise price.

 

7

 

M =                          the current market price per Common Share on the record date
mentioned below.

F =                               the fair market value on the record date of the assets,
securities, rights, options or warrants applicable to one Common Share. Fair
market value shall be reasonably determined by the Board, provided that the
Company shall obtain an appraisal or other valuation opinion in support of the Board’s determination from an investment
bank or accounting firm of recognized national standing if the aggregate fair market value exceeds
$10 million.

The adjustment contemplated by this paragraph shall be made
successively whenever any such distributions are made and shall become
effective immediately after the record date for the determination of shareholders entitled to receive the
distribution.  This paragraph does not
apply to rights, options or warrants referred to in paragraph (f).

(f)                                    If the Company
issues any Common Shares or securities convertible into or exchangeable for
Common Shares or any rights, options or warrants to acquire Common Shares or
securities convertible into or exchangeable for Common Shares (other than
securities issued in transactions described in subsections (a), (b) or (e) of
this Section 6) for a consideration per Common Share issued or initially deliverable
upon conversion or exchange of such securities less than the current market
price per share on the date of issuance of such securities, the Exercise Price
of the Warrants shall be adjusted in accordance with this formula:

                                    P

E’ = E x            O   +   M

                        O   +   D

where:

E’ =                           the adjusted Exercise Price.

E =                               the then current Exercise Price.

O =                             the number of shares outstanding immediately prior to the
issuance of such securities.

P =                               the aggregate consideration received for the issuance of such
securities.

M =                          the current market price per share on the date of issuance of such securities.

D =                             the number of Common Shares so issued
or the maximum number of shares
deliverable upon exercise or conversion or in exchange for such securities at the initial conversion or
exchange rate.

 

8

 

The adjustment shall be made successively whenever any such issuance is
made, and shall become effective immediate after such issuance.  If all of the Common Shares deliverable upon
conversion or exchange of such securities have not been issued when such
securities are no longer outstanding, or there is a change in the terms of such
securities, then the Exercise Price shall promptly be readjusted to the
Exercise Price which would then be in effect had the adjustment upon the
issuance of such securities been made on the basis of the actual number of
shares of Common Shares issued upon conversion or exchange of such securities (in case the securities are no longer outstanding) or on the basis of such new
terms.  This paragraph does not apply
to: (1) the exercise of Warrants, or the exercise, conversion or exchange of other securities
convertible into or exchangeable for Common Shares, or (2) Common Shares
issued to the Company’s employees, officers, directors and consultants under bona fide employee benefit plans or stock
options plans adopted by the Board of Directors of the Company and approved by
the holders of Common Shares when required by law, if such Common Shares
would otherwise be covered by this paragraph.

(g)                                 For purposes of this Section 6, the current market price per share of
Common Shares on any date is the average of the Quoted Prices of the
Common Shares for 30 consecutive trading days commencing 45 trading days before
the date in question.  The “Quoted Price” of the Common Shares is the last reported sales
price of the Common Shares as reported by Nasdaq, National Market System, or if
the Common Shares are listed on a securities exchange, the last reported sales
price of the Common Shares on such exchange which shall be for
consolidated trading if applicable to such exchange, or if neither so reported
or listed, the last reported bid
price of the Common Shares; provided that with respect to the sale of Common
Shares in an underwritten public offering, the current market price per share
shall be equal to the offering price. 
In the absence of one or more such quotations, the current market price shall be the fair market value, as reasonably determined by the Board of Directors.

(h)                                 For purposes of any computation respecting consideration received pursuant
to paragraph (f) of this Section 6, the following shall apply:  (1) in the case of the issuance of shares
of Common Shares for cash, the consideration shall be the amount of such cash,
provided that in no case shall any deduction be made for reasonable
commissions, discounts or other expenses incurred by the Company for any
underwriting of the issue or otherwise in connection therewith; (2) in the case of the issuance of shares of Common
Shares for a consideration in whole or in part other than  cash,
the  consideration other than cash shall be deemed to be the fair
market value thereof; and (3) in the case of the issuance of securities
convertible into or exchangeable for shares, the aggregate consideration
received therefor shall be deemed to be the consideration received by the
Company for the issuance of such securities
plus the additional minimum consideration, if any, to be received by the Company
upon the conversion or exchange thereof (the consideration in each case to be
determined in the same manner as provided in clauses (1) and (2) of this
paragraph).

 

9

 

(i)                                     Whenever the Exercise Price is adjusted, the Company shall promptly provide
to the Warrantholders notice of adjustment stating the facts requiring the
adjustment and the manner of computing it.

(j)                                     Upon each event that provides for an adjustment of the Exercise Price
pursuant to paragraph (e) or (f) of this Section 6, each Warrant outstanding
prior to the making of the adjustment shall thereafter evidence the right to
receive upon payment of the adjusted Exercise Price that number of Common
Shares obtained from the following formula:

	
   

  	
   

  	
  N’ 

  	
  =

  	
  N

  	
  x

  	
  E

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  E’

  	
   

  	
   

  

 

where

 

	
   

  	
  N'=

  	
   

  	
  the
  adjusted number of Warrant Shares issuable upon exercise of a

  
	
   

  	
   

  	
   

  	
  Warrant
  by payment of the adjusted Exercise Price.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  N =

  	
   

  	
  the
  number of Warrant Shares previously issuable upon exercise of a Warrant by
  payment of the Exercise Price prior to adjustment.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  E'=

  	
   

  	
  the
  adjusted Exercise Price.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  E =

  	
   

  	
  the
  Exercise Price prior to adjustment.

  

 

(k)                                  In case any
event shall occur affecting the Company, or any entity in which the Company has a direct or indirect investment, as to which
the provisions of this Section 6 are not strictly applicable, but the failure to make any adjustment would not
fairly protect the purchase rights
represented by the Warrants in accordance with the essential intent and principles of this Section, then in each such
case the Company shall make the adjustment on a basis reasonably determined by the Board to
be consistent with the essential intent and principles established in this
Section 6, necessary to preserve, without dilution, the purchase rights
represented by the Warrants. In no case may such adjustment increase the
Exercise Price or reduce the number of
shares issuable on exercise of a Warrant.

(l)                                     Irrespective of
any adjustments in the number or kind of shares issuable upon exercise of
Warrants, Warrant Certificates theretofore or thereafter issued may continue to
express the same price and number and kind of shares as are stated in the
similar Warrant Certificates initially issuable pursuant to this Warrant
Agreement.

(m)                               The Company may
retain a firm of independent public accountants of recognized standing, which
may be the firm regularly retained by the Company, selected by the Board or the
Executive Committee of the Board, to make any computation required under this
Section, and a certificate signed by such firm shall, if reasonable, be
conclusive evidence of the correctness of any computation made under this
Section.

 

10

 

(n)                                 For the purpose
of this Section, the term “Common Shares” shall mean (i) the Common Shares or
(ii) any other class of share capital or shares resulting from successive
changes or reclassifications of such Common Shares consisting solely of changes
in par value.  In the event that at any
time as a result of an adjustment made pursuant to this Section, the holder of
any Warrant thereafter surrendered for exercise shall become entitled to
receive any share capital or shares of the Company other than Common Shares,
thereafter the number of such other shares so receivable upon exercise of any
Warrant shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to the
Common Shares contained in this Section, and all other provisions of this
Agreement, with respect to the Common Shares, shall apply on like terms to any
such other shares.

7.                                       Exercise of Warrants.  The registered holder of any Warrant
Certificate may exercise the Warrants evidenced thereby, in whole at any time
or in part from time to time on or after _____, 2005 and on or before the close
of business on the applicable Expiration Date relating to such Warrant, subject
to the provisions of Section 8, at which time the Warrant Certificates shall be
and become wholly void and of no value. 
Warrants may be exercised by their holders or redeemed by the Company as
follows:

(a)                                  Exercise of
Warrants shall be accomplished upon surrender of the Warrant Certificate
evidencing such Warrants, with the Form of Election to Purchase on the reverse
side thereof duly filled in and executed, to the Warrant Agent at its stock
transfer office in New York, New York, together with payment to the Warrant
Agent on behalf of the Company of the Exercise Price (as of the date of such
surrender) of the Warrants then being exercised and an amount equal to any
applicable transfer tax and, if requested by the Company, any other taxes or
governmental charges which the Company may be required by law to collect in
respect of such exercise.  Payment of
the Exercise Price and other amounts may be made by wire transfer of good
funds, or by certified or bank cashier’s check, payable in lawful money of the
United States of America to the order of the Company.  No adjustment shall be made for any cash dividends, whether paid
or declared, on any securities issuable upon exercise of a Warrant.

(b)                                 Upon receipt of
a Warrant Certificate, with the Form of Election to Purchase duly and properly
filled in and executed, accompanied by payment of the Exercise Price of the
Warrants being exercised (and of an amount equal to any applicable taxes or
government charges as aforesaid), the Warrant Agent shall promptly request from
the Transfer Agent with respect to the securities to be issued and delivered to
or upon the order of the registered holder of such Warrant Certificate, in such
name or names as such registered holder may designate, a certificate or
certificates for the number of full shares of the securities to be purchased,
together with cash, if any, made available by the Company pursuant to Section 8
hereof in respect of any fraction of a share of such securities otherwise
issuable upon such exercise, and the Company shall cause the Transfer Agent to
prepare and deliver such certificate or certificates within two business days; provided
that if a Warrant 

 

11

 

is being exercised for
Preferred Shares then such period shall be 30 days6.  If
the Warrant is then exercisable to purchase property other than securities, the
Company shall take appropriate steps to cause such property to be delivered to
or upon the order of the registered holder of such Warrant Certificate.  In addition, if it is required by law and
upon written instruction by the Company, the Warrant Agent will deliver to each
Warrantholder a prospectus which complies with the provisions of Section 9 of
the Securities Act of 1933 and/or the Bermuda Companies Act 1981 and the
Company agrees to supply the Warrant Agent with sufficient number of
prospectuses to effectuate that purpose.

(c)                                  In case the
registered holder of any Warrant Certificate shall exercise fewer than all of
the Warrants evidenced by such Warrant Certificate, the Warrant Agent shall
promptly countersign and deliver to the registered holder of such Warrant
Certificate, or to his duly authorized assigns, a new Warrant Certificate or
Certificates evidencing the number of Warrants that were not so exercised.

(d)                                 Each person in
whose name any certificate for securities is issued upon the exercise of
Warrants shall first be registered as the holder of such securities in the
branch register of members of the Company on, and thereupon shall, for all
purposes, be deemed to have become the holder of the securities represented
thereby as of, and such registration shall be made and such certificate shall be
dated, the date upon which the Warrant Certificate was duly surrendered in
proper form and payment of the Exercise Price (and of any applicable taxes or
other governmental charges) was made; provided, however, that if the date of
such surrender and payment is a date on which said branch register of the
Company is closed, such person shall be deemed to have become the record holder
of such shares as of, and the registration in the said branch register and the
certificate for such shares shall be dated, the next succeeding business day on
which the said branch register is open (whether before, on or after the
Expiration Date relating to such Warrant) and the Warrant Agent shall be under
no duty to deliver the certificates for such shares until such date.  The Company covenants and agrees that it
shall not cause its branch register of members to be closed for a period of
more than 20 consecutive business days except upon consolidation, amalgation,
merger, sale of all or substantially all of its assets, dissolution or
liquidation or as otherwise provided by law.

8.                                       Fractional Interests.  The Company may but shall not be required to
issue any Warrant Certificate evidencing a Warrant that is exercisable for a
fraction of a Common Share or to issue fractions of Common Shares on the
exercise of the Warrants (if a Warrant is exercisable at the time of exercise
for Preferred Shares, the Company shall be obligated to issue fractional
shares).  If any fraction (calculated to
the nearest one-hundredth) of a Common Share would, except for the provisions
of this Section, be issuable on the exercise of any Warrant, the Company shall,
at its option (subject to applicable law), either purchase such fraction for an
amount in cash equal to the current value of such 

6 Note that in such cases the
company will have to obtain a separate Board resolution authorizing the
issuance of     the relevant
bonus shares.

12

 

fraction computed on the basis of the closing
market price (as quoted on the OTC Bulletin Board or other principal quotation
system or exchange on which the Common Shares are quoted or traded) on the
trading day immediately preceding the day upon which such Warrant Certificate
was surrendered for exercise in accordance with Section 7 hereof or issue the
required fractional  share. If more than
one Warrant held by a single Warrantholder evidences a fraction of a share upon
its exercise, then for the purposes of this Section 8, the shares issuable upon
the exercise of all such Warrants held by such Warrantholder at a given time
shall be aggregated for the purposes of this Section 8.  By accepting a Warrant Certificate, the
holder thereof expressly waives any right to receive a Warrant Certificate
evidencing any Warrant that is exercisable for a fraction of a Common Share or
to receive any fractional Common Share upon exercise of a Warrant, except as
expressly provided in this Section 8.

9.                                       Reservation and Registration of
Equity Securities.

(a)                                  The Company
covenants that it will at all times reserve and keep available, free from any
preemptive rights, out of its authorized and unissued equity securities, solely
for the purpose of issuance upon exercise of the Warrants, such number of
Preferred Shares or Common Shares, as the case may be, of the Company as shall
then be issuable upon the exercise of all outstanding Warrants (“Equity Securities”).  The Company covenants that all Equity
Securities which shall be so issuable shall, upon such issue, be duly
authorized, validly issued, fully paid and non-assessable.

(b)                                 The Company
covenants that if any Equity Securities, required to be reserved for the
purpose of issue upon exercise of the Warrants hereunder, require registration
with or approval of any governmental authority under any federal, state or
other law before such shares may be issued upon exercise of Warrants, the
Company will use its best efforts to cause such securities to be duly
registered, or approved, as the case may be, and, to the extent practicable,
take all such action in anticipation of and prior to the exercise of the
Warrants, including, without limitation, filing or maintaining an appropriate
registration statement (the “Shelf Registration Statement”) or prospectus, necessary
to permit a public offering of the securities underlying the Warrants at any
and all times during which the Warrants are exercisable.

(c)                                  Upon
(i) the issuance by the Securities and Exchange Commission of a stop order
suspending the effectiveness of the Shelf Registration Statement or the initiation
of proceedings with respect to the Shelf Registration Statement under
Section 10(d) or 8(e) of the Securities Act of 1933, as amended (the “Securities Act”),
(ii) the occurrence of any event or the existence of any fact (a “Material Event”) as a
result of which the Shelf Registration Statement shall contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, or
any prospectus contained therein shall contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they 

 

13

 

were made, not misleading,
or (iii) the occurrence or existence of any pending corporate development
with respect to the Company that, in the discretion of the Company, makes it
appropriate to suspend the availability of the Shelf Registration Statement and
the related prospectus, then (A) in the case of clause (ii) above,
subject to the next sentence, the Company shall, as promptly as practicable,
use its best efforts to prepare and file a post effective amendment to such Shelf
Registration Statement or a supplement to the related prospectus or any
document incorporated therein by reference or file any other required document
that would be incorporated by reference into such Shelf Registration Statement
and prospectus so that such Shelf Registration Statement does not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading, and such prospectus does not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, as thereafter delivered to the
holders of the Warrants being exercised thereunder, and, in the case of a post
effective amendment to the Shelf Registration Statement, subject to the next
sentence, use its best efforts to cause it to be declared effective as promptly
as is reasonably practicable, and (B) the Company shall give notice to the
holders of the Warrants that the availability of the Shelf Registration
Statement is suspended (a “Deferral Notice”) and, upon receipt of any Deferral
Notice, each holder agrees not to exercise any Warrants pursuant to the Shelf
Registration Statement until such holder’s receipt of copies of the
supplemented or amended prospectus provided for in clause (A) above, or
until it is advised in writing by the Company that the prospectus may be used,
and has received copies of any additional or supplemental filings that are
incorporated or deemed incorporated by reference in such prospectus.  The Company shall use its best efforts to
ensure that the use of the prospectus may be resumed (x) in the case of
clause (i) above, as promptly as is practicable, (y) in the case of
clause (ii) above, as soon as, in the good faith judgment of the Company,
public disclosure of such Material Event would not be materially prejudicial to
or contrary to the interests of the Company or, if necessary to avoid
unreasonable burden or expense, as soon as reasonably practicable thereafter
and (z) in the case of clause (iii) above, as soon as, in the
discretion of the Company, such suspension is no longer appropriate.  The period during which the availability of
the Shelf Registration Statement and any prospectus is suspended or for any
other reason the Warrants are not exercisable (the “Deferral Period”) shall not exceed
30 days, and there shall not occur more than one such Deferral Period in
any consecutive 90-day period.

(d)                                 The parties
hereto agree that the Expiration Dates shall be extended as provided herein if
(i) the Shelf Registration Statement has not been declared effective under the
Securities Act on or prior to _________, 20057 (the “Effective Date Deadline”), or (ii) a Deferral Period
occurs.  The Expiration Dates shall be
extended in the case of clause (i), for a period having a duration equal to the

7 Date that is one year from the closing of
the exchange offer.

 

14

 

 

period beginning on the
Effective Date Deadline and ending on the date the Shelf Registration Statement
is declared effective under the Securities Act and, in the case of clause (ii),
for a period having a duration equal to each Deferral Period (each, an “Extension Period”).  The Expiration Dates shall be extended from
time to time for every Extension Period. 
In addition, if a Deferral Period occurs at any time during the 30
business days preceding what would otherwise have been the Expiration Dates,
then the Expiration Dates shall be extended so that no Deferral Period exists
during the 30 consecutive business days preceding the Expiration Dates, as so
extended.  The Company shall promptly
give notice to each holder of Warrants of each extension of the Expiration
Dates.

10.                                 Reduction of Conversion Price
Below Par Value.  Following
the Par Value Reduction, before taking any action that would cause an
adjustment pursuant to Section 6 hereof reducing the portion of the Exercise
Price required to purchase one share of its share capital below the then par
value (if any) of a share of such capital stock, the Company will take any
corporate action which, in the opinion of its counsel, may be necessary in
order that the Company may validly and legally issue fully paid and
non-assessable shares of such share capital.

11.                                 Payment of Taxes.  The Company covenants and agrees that it
will pay when due and payable any and all federal, state or local documentary
stamp and other original issue taxes which may be payable in respect of the
original issuance of the Warrant Certificates, or any Common Shares or other
securities upon the exercise of Warrants. 
The Company shall not, however, be required (a) to pay any tax which may
be payable in respect of any transfer involved in the transfer and delivery of
Warrant Certificates or the issuance or delivery of certificates for Common
Shares or other securities in a name other than that of the registered holder
of the Warrant Certificate surrendered for purchase or (b) to issue or deliver
any certificate for Common Shares or other securities upon the exercise of any
Warrant Certificate until any such tax shall have been paid, all such tax being
payable by the holder of such Warrant Certificate at the time of surrender.

12.                                 Notice of Certain Corporate Action.  In case the Company after the date hereof
shall propose (a) to offer or distribute to the holders of Common Shares,
generally, rights to subscribe to or purchase any additional shares of any class
of its share capital, any evidences of its indebtedness or assets, or any other
rights or options, (b) to effect any reclassification of Common Shares (other
than a reclassification involving merely the subdivision or combination of
outstanding Common Shares) or any capital reorganization, tender or exchange
offer, or any consolidation, amalgamation or merger to which the Company is a
party and for which approval of any members of the Company is required, or any
sale, transfer or other disposition of its property and assets substantially as
an entirety, or the liquidation, voluntary or involuntary dissolution or
winding-up of the Company, or (c) take any action that, under Section 9(c) of
the Certificate of Designation for the Preferred Shares, requires delivery of a
notice to the holders of the Preferred Shares of such event, then, in each such
case, the Company shall file with the Warrant Agent and the Company (which the
Company covenants to so instruct), or the Warrant Agent on its behalf, if so
instructed in writing by the Company, shall mail (by first-class, postage
prepaid mail) to all registered holders of the Warrant 

 

15

 

Certificates notice of such proposed action,
which notice shall specify the date on which the books of the Company shall
close or a record be taken for such offer of rights or options, or the date on
which such reclassification, reorganization, consolidation, amalgamation,
merger, sale, transfer, other disposition, liquidation, voluntary or
involuntary dissolution or winding-up shall take place or commence, as the case
may be, and which shall also specify any record date for determination of
holders of Common Shares entitled to vote thereon or participate therein and
shall set forth such facts with respect thereto as shall be reasonably
necessary to indicate any adjustments in the Exercise Price and the number or
kind of shares or other securities purchasable upon exercise of Warrants which
will be required as a result of such action (which notice, in the case of any
action under Section 9(c) of the Certificate of Designations for the Preferred
Shares, shall include a copy of the notice being concurrently delivered under
said Section 9(c) to the holders of the Preferred Shares).  Such notice shall be filed and mailed in the
case of any action covered by clause (a) above, at least 15 days prior to the
record date for determining holders of the Common Shares for purposes of such
action or, if a record is not to be taken, the date as of which the holders of
Common Shares of record are to be entitled to such offering; and, in the case
of any action covered by clause (b) above, at least 20 days prior to the
earlier of the date on which such reclassification, reorganization,
consolidation, amalgamation, merger, sale, transfer, other disposition,
liquidation, voluntary or involuntary dissolution or winding-up is expected to
become effective and the date on which it is expected that holders of Common
Shares of record on such date shall be entitled to exchange their shares for
securities or other property deliverable upon such reclassification,
reorganization, consolidation, amalgamation, merger, sale, transfer, other
disposition, liquidation, voluntary or involuntary dissolution or winding-up.  Failure to give any such notice or any
defect therein shall not affect the legality or validity of any transaction
listed in this Section 12.

13.                                 Disposition of Proceeds on
Exercise of Warrant Certificate, etc. The Warrant Agent shall
account promptly to the Company with respect to Warrants exercised and
concurrently pay to the Company all moneys received by the Warrant Agent for
the purchase of securities or other property through the exercise of such
Warrants.

14.                                 Warrantholder Not Deemed a Member.  No Warrantholder, as such, shall be entitled
to vote, receive dividends or be deemed the holder of Common Shares or any
other securities of the Company which may at any time be issuable on the
exercise of the Warrants represented thereby for any purpose whatever, nor
shall anything contained herein or in any Warrant Certificate be construed to
confer upon any Warrantholder, as such, any of the rights of a member of the
Company or any right to vote for the election of directors or upon any matter
submitted to members at any meeting thereto, or to give or withhold consent to
any corporate action (whether upon any recapitalization, issuance of shares,
reclassification of shares, change of par value, consolidation, merger,
amalgamation, conveyance or otherwise), or to receive notice of meetings or
other actions affecting members (except as provided in Section 12 hereof), or
to receive dividend or subscription rights, or otherwise, until such Warrant
Certificate shall have been exercised in accordance with the provisions hereof
and the receipt of the Exercise Price and any other amounts payable upon such
exercise by the Warrant Agent.

 

16

 

15.                                 Right of Action.  All rights of action in respect to this
Agreement are vested in the respective registered holders of the Warrant
Certificates; and any registered holder of any Warrant Certificate, without the
written consent of the Warrant Agent or of any other holder of a Warrant
Certificate, may, in his own behalf for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company
suitable to enforce, or otherwise in respect of, his right to exercise the
Warrants evidenced by such Warrant Certificate, for the purchase of the Common
Shares in the manner provided in the Warrant Certificate and in this Agreement.

16.                                 Agreement with Holders of Warrant
Certificates.  Every
holder of a Warrant Certificate by accepting the same consents and agrees with
the Company, the Warrant Agent and with every other holder of a Warrant
Certificate that:

(a)                                  the Warrant
Certificates are transferable on the registry books of the Warrant Agent only
upon the terms and conditions set forth in this Agreement; and

(b)                                 the Company and
the Warrant Agent may deem and treat the person in whose name the Warrant
Certificate is registered as the absolute owner of the Warrant (notwithstanding
any notation of ownership or other writing thereon made by anyone other than
the Company or the Warrant Agent) for all purposes whatever and neither the
Company nor the Warrant Agent shall be affected by any notice to the contrary.

17.                                 Cancellation of Warrant
Certificates.  In the
event that the Company shall purchase or otherwise acquire any Warrant
Certificate or Certificates after the issuance thereof, such Warrant
Certificate or Certificates shall thereupon be delivered to the Warrant Agent
and be canceled by it and retired.  The
Warrant Agent shall also cancel any Warrant Certificate delivered to it for
exercise, in whole or in part, or delivered to it for transfer, split-up,
combination or exchange.  Warrant
Certificates so canceled shall be maintained in accordance with the regulations
of the Securities and Exchange Commission.

18.                                 Concerning the Warrant Agent.  The Company agrees to pay to the Warrant
Agent compensation for all services rendered by it hereunder as set forth in
Annex A to this Agreement, including its reasonable expenses, including counsel
fees, and other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder.  The Company also agrees to indemnify the
Warrant Agent for, and to hold it harmless against, any loss, judgment, fine,
cost, damage, penalty, demand, claim, liability or expense (including the
reasonable fees and expenses of a single counsel to the Warrant Agent),
incurred without gross negligence, bad faith or willful misconduct (which gross
negligence, bad faith or willful misconduct must be determined by a final,
nonappealable order, judgment, decree or ruling of a court of competent
jurisdiction) on the part of the Warrant Agent, arising out of or in connection
with the acceptance and administration of this Agreement.

19.                                 Merger or Consolidation or Change
of Name of Warrant Agent.  Any
corporation, company or other entity into which the Warrant Agent may be merged
or amalgamated or with which it may be consolidated, or any corporation
resulting from any merger, 

 

17

 

amalgamation, or consolidation to which the
Warrant Agent shall be a party, or any corporation, company or other entity
succeeding to the corporate trust 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 hereto, provided
that such corporation, company or other entity would be eligible for
appointment as a successor warrant agent under the provisions of Section 21
hereof.  In case at the time such
successor to the Warrant Agent shall succeed to the agency created by this
Agreement, any of the Warrant Certificates shall have been countersigned but
not delivered, any such successor to the Warrant Agent may adopt the
countersignature of the original Warrant Agent and deliver such Warrant
Certificates so countersigned; and in case 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; and in
all such cases such Warrant Certificates shall have the full force provided in
the Warrant Certificates and in this Agreement.  In case at any time the name of the Warrant Agent shall be
changed and at such time any of the Warrant Certificates shall have been
countersigned but not delivered, the Warrant Agent may adopt the
countersignature under its prior name and deliver Warrant Certificates so
countersigned; and in case at that 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 Certificates and in this Agreement.

20.                                 Duties of Warrant Agent.  The Warrant Agent undertakes the duties and
obligations expressly imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Warrant
Certificates, by their acceptance thereof, shall be bound:

(a)                                  The Warrant
Agent may consult with counsel satisfactory to it (who may be counsel for the
Company), and the advice or opinion of such counsel shall be full and complete
authorization and protection to the Warrant Agent as to any action taken,
suffered or omitted by it in good faith and in accordance with such opinion.

(b)                                 Whenever in the
performance of its duties under this Agreement, the Warrant Agent shall deem it
necessary or desirable that any fact or matter be proved or established by the
Company prior to taking, suffering or omitting to take any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and
established prior to taking, suffering or omitting to take any action
hereunder, by a certificate signed by a Chairman or co-Chairman of the Board or
the President or a Vice President or the Chief Financial Officer, Treasurer or
Secretary of the Company and delivered to the Warrant Agent; and such
certificate shall be full authorization and protection to the Warrant Agent for
any action taken, suffered or omitted to be taken in good faith by it under the
provisions of this Agreement in reliance upon such certificate.

 

18

 

(c)                                  The Warrant
Agent shall be liable hereunder only for its own gross negligence, bad faith or
willful misconduct (which gross negligence, bad faith or willful misconduct
must be determined by a final, nonappealable order, judgment, decree or ruling
of a court of competent jurisdiction). 
Anything to the contrary notwithstanding, in no event shall the Warrant
Agent be liable for special, punitive, indirect, consequential or incidental
loss or damage of any kind whatsoever (including, but not limited to, lost
profits), even if the Warrant Agent has been advised of the likelihood of such
loss or damage.  The liability of the
Warrant Agent hereunder is limited to the amount of annual fees paid to the
Warrant Agent by the Company pursuant to this Agreement.

(d)                                 The Warrant
Agent shall not be liable for or by reason of any of the statements of fact or
recitals contained in this Agreement or in the Warrant Certificates (except its
countersignature on the Warrant Certificates and such statements or recitals as
describe the Warrant Agent or action taken or to be taken by it) or be required
to verify the same, but all such statements and recitals are and shall be
deemed to have been made by the Company only.

(e)                                  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 it be responsible
for any breach by the Company of any covenant or condition contained in this
Agreement or in any Warrant Certificate; nor shall it be responsible for the
making of any change in the number of Common Shares for which a Warrant is
exercisable required under the provisions of Section 6 or responsible for the
manner, method or amount of any such change or the ascertaining of the existence
of facts that would require any such adjustment or change (except with respect
to the exercise of Warrant Certificates after actual notice of any adjustment
of the Exercise Price); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any Common
Shares to be issued pursuant to this Agreement or any Warrant Certificate or as
to whether any Common Shares will, when issued, be validly issued, fully paid
and non-assessable.

(f)                                    The Warrant
Agent shall be under no obligation to institute any action, suit or legal
proceeding or take any other action likely to involve expense unless the
Company or one or more registered holders of Warrant Certificates shall furnish
the Warrant Agent with reasonable security and indemnity for any costs and
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 Warrants or
the production thereof at any trial or other proceeding relative 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 of judgment shall be for
the ratable benefit of the registered holders of the Warrant Certificates, as
their respective rights or interests may appear.

 

19

 

(g)                                 The Warrant
Agent and any stockholder, director, officer or employee of the Warrant Agent
may buy, sell or deal in any of the Warrants or other securities of the Company
or become pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to or otherwise act as fully and
freely as though it were not Warrant Agent under this Agreement.  Nothing herein shall preclude the Warrant
Agent from acting in any other capacity for the Company or for any other legal
entity.

(h)                                 The Warrant
Agent is hereby authorized and directed to accept instructions with respect to
the performance of its duties hereunder from a Chairman or co-Chairman of the
Board or President or a Vice President or the Chief Financial Officer,
Treasurer or the Secretary of the Company, and to apply to such officers for
advice or instructions in connection with the Warrant Agent’s duties, and it
shall not be liable for any action taken or suffered or omitted by it in good
faith in accordance with instructions of any such officer.

(i)                                     The Warrant
Agent will not be responsible for any failure of the Company to comply with any
of the covenants contained in this Agreement or in the Warrant Certificates to
be complied with by the Company.

(j)                                     The Warrant
Agent may execute and exercise any of the rights or powers hereby vested in it
or perform any duty hereunder either itself or by or through its attorneys,
agents or employees and the Warrant Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys,
agents or employees or for any loss to the Company resulting from such neglect
or misconduct; provided, however, that reasonable care shall have been
exercised in the selection and continued employment of such attorneys, agents
and employees.

(k)                                  Subject to
Sections 18, 20(c) and 20(m) of this Agreement, the Warrant Agent, in carrying
out its duties and exercising its powers pursuant to this Agreement, shall at
all times act in accordance with such standards of conduct as are customary in
the industry for agencies of this kind.

(l)                                     The Warrant
Agent will not incur any liability or responsibility to the Company or to any
holder of any Warrant Certificate for any action taken, or any failure to take
action, in reliance on any notice, resolution, waiver, consent, order,
certificate or other paper, document or instrument reasonably believed by the
Warrant Agent to be genuine and to have been signed, sent or presented by the
proper party or parties.

(m)                               The Warrant
Agent will act hereunder solely as agent of the Company in a ministerial
capacity, and its duties will be determined solely by the provisions
hereof.  The Warrant Agent will not be
liable for anything which it may do or refrain from doing in connection with
this Agreement except for its own gross negligence, bad faith or willful
misconduct (which gross negligence, bad faith or 

 

20

 

willful misconduct must be
determined by a final, nonappealable order, judgment, decree or ruling of a
court of competent jurisdiction).

21.                                 Change of Warrant Agent.  The Warrant Agent may resign and be
discharged from its duties under this Agreement upon 30 days’ prior notice in
writing mailed, by registered or certified mail, to the Company.  The Company may remove the Warrant Agent or
any successor warrant agent upon 30 days’ prior notice in writing, mailed to
the Warrant Agent or successor warrant agent, as the case may be, by registered
or certified mail.  If the Warrant Agent
shall resign or be removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Warrant Agent and shall, within 15
days following such appointment, give notice thereof in writing to each
registered holder of the Warrant Certificates. 
After such removal or resignation or incapacity by the resigning or
incapacitated Warrant Agent, the Company agrees to perform the duties of the
Warrant Agent hereunder until a successor Warrant Agent is appointed.  After appointment and execution of a copy of
this Agreement in effect at that time, the successor Warrant Agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Warrant Agent without further act or deed; but the
former Warrant Agent shall deliver and transfer to the successor Warrant Agent,
within a reasonable time, any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary
for the purpose.  Failure to give any
notice provided for in this Section, however, or any defect therein shall not
affect the legality or validity of the resignation or removal of the Warrant
Agent or the appointment of the successor warrant agent, as the case may be.

22.                                 Issuance of New Warrant
Certificates. 
Notwithstanding any of the provisions of this Agreement or the several
Warrant Certificates to the contrary, the Company may, at its option, issue new
Warrant Certificates in such form as may be approved by the Board to reflect
any adjustment or change in the Exercise Price or the number or kind of shares
purchasable under the several Warrant Certificates made in accordance with the
provisions of this Agreement.

23.                                 Notices.  Notice or demand pursuant to this Agreement
to be given or made on the Company by the Warrant Agent or by the registered
holder of any Warrant Certificate shall be sufficiently given or made if sent
by first-class or registered mail, postage prepaid, addressed (until another
address is filed in writing by the Company with the Warrant Agent) as follows:

Foster
Wheeler Ltd.

c/o Foster Wheeler Inc.

Perryville Corporate Park

Clinton, NJ  08809-4000

Telecopier No.: 908-730-5315

Attention: Steven I. Weinstein

Subject to the provisions of
Section 21, any notice pursuant to this Agreement to be given or made by the
company or by the holder of any Warrant Certificate to or on the Warrant Agent
shall be sufficiently given or made if sent by first-class or registered mail,
postage 

 

21

 

 

prepaid, addressed (until
another address is filed in writing by the Warrant Agent with the Company) as
follows:

Mellon Investor Services LLC

44 Wall Street

6th Floor

New York, New York 10005

Facsimile No.: (917) 320-6318

Attention: Relationship Manager

Mellon
Investor Services LLC

85 Challenger Road

Ridgefield Park, New Jersey  07660-2108

Facsimile No.:  (201) 296-4004

Attention:  General Counsel

Any notice or demand
authorized to be given or made to the registered holder of any Warrant
Certificate under this Agreement shall be sufficiently given or made if sent by
first-class or registered mail, postage prepaid, to the last address of such
holder as it shall appear on the registers maintained by the Warrant Agent.

24.                                 Modification of Agreement.  Any term, covenant, agreement or condition
in this Agreement may be amended, or compliance therewith may be waived (either
generally or in a particular instance and either retroactively or
prospectively), by a written instrument or written instruments executed by the
Company and the Warrant Agent with the consent of a holders of a majority of
the Warrants then outstanding (excluding the Company and its affiliates); provided,
that, without the consent of each Warrantholder affected, no such
amendment or waiver shall (i) reduce the number of Common Shares , Preferred
Shares or other property or securities that can be issued pursuant to a
Warrant, (ii) increase the Exercise Price, (iii) bring forward the Expiration
Date, (iv) change any provision of Section 6 hereof in a manner adverse to any
Warrantholder or (v) modify any provision of this Section 24.  Each amendment, modification, termination or
waiver shall be effective only in the specific instance and for the specific
purpose for which it was given.  No
notice to or demand on the Company, the Warrant Agent or any Warrantholder in
any case shall entitle the Company, the Warrant Agent or the Warrantholder to
any other or further notice or demand in similar or other circumstances.  Any amendment, modification, termination,
waiver or consent effected in accordance with this Section 24 shall be binding
upon Warrantholders, Warrant Agent and the Company.

25.                                 Successors.  All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Warrant Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.

26.                                 New York Contract.  This Agreement and each Warrant Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of New York and for all purposes shall be construed in accordance with
the laws of said State.  To the fullest
extent permitted by applicable law, the parties hereby irrevocably and
unconditionally 

 

22

 

submit to the jurisdiction of any New York
State or United States Federal court sitting in New York City over any suit,
action or proceeding arising out of or relating to this Warrant Agreement or
any Warrant.  Each party irrevocably and
unconditionally waives, to the fullest extent permitted by applicable law, any
objection which it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding brought in such a court and any claim that any
such suit, action or proceeding brought in such a court has been brought in an
inconvenient forum. To the extent that a party has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process with respect
to itself or its property, such party irrevocably waives, to the fullest extent
permitted by applicable law, such immunity in respect of its obligations hereunder
or under any Warrant Certificate.  Each
party agrees that final judgment in any such suit, action or proceeding brought
in such a court shall be conclusive and binding upon such party and, to the
extent permitted by applicable law, may be enforced in any court to the
jurisdiction of which such party is subject by a suit upon such judgment or in
any manner provided by applicable law; provided that service of process is
effected upon such party in the manner specified in the following subsection or
as otherwise permitted by applicable law.

27.                                 Termination.  This Agreement shall terminate as of the
close of business on the Expiration Date, or such earlier date upon which all
Warrants shall have been exercised or redeemed, except that the Warrant Agent
shall account to the Company as to all Warrants outstanding and all cash held
by it as of the close of business on the Expiration Date.  The provisions of Sections 18 and 20 of this
Agreement shall survive the termination of this Agreement.

28.                                 Benefits of this Agreement.  Nothing in this Agreement or in the Warrant
Certificates shall be construed to give to any person or corporation other than
the Company, the Warrant Agent, and their respective successors and assigns
hereunder and the registered holders of the Warrant Certificates any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Warrant Agent, their
respective successors and assigns hereunder and the registered holders of the
Warrant Certificates.

29.                                 Descriptive Headings.  The descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.

30.                                 Counterparts.  This Agreement may be executed in any number
of counterparts, each of which shall be an original, but such counterparts
shall together constitute one and the same instrument.

(Remainder
of page intentionally left blank; signature page follows)

 

23

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.

 

 

	
   

  	
  FOSTER
  WHEELER LTD.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

 

	
   

  	
  MELLON
  INVESTOR SERVICES LLC

  	
   

  
	
   

  	
  as
  Warrant Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

24

 

Exhibit A

Form of Class A Warrant

[DTC LEGEND

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), 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 IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.][to be included in global Warrant
Certificates held through DTC]

VOID AFTER 5 P.M. EASTERN TIME ON________,
2009

(EXCEPT AS PROVIDED IN THE WARRANT AGREEMENT)

WARRANTS TO PURCHASE COMMON SHARES

Warrants

Foster Wheeler Ltd.

CUSIP:

THIS CERTIFIES THAT ____________________ or registered assigns, is the
registered holder of the number of Warrants (“Warrants”) set forth above.  Each Warrant is issued by Foster Wheeler
Ltd. a Bermuda company, (the “Company”) as provided in the Warrant Agreement,
hereinafter more fully described (the “Warrant Agreement”), and will entitle the holder thereof
to purchase from the Company, subject to the terms and conditions set forth
hereinafter and in the Warrant Agreement, at any time on or after _______, 2005
and before the close of business on __________, 2009, subject to extension, in
certain circumstances, as described in the Warrant Agreement (the “Expiration Date”), to
purchase [_____] fully paid and non-assessable Common Shares of the Company (“Common Shares”),
subject to adjustments as provided in the Warrant Agreement, upon presentation
and surrender of this Warrant Certificate, with the instructions for the
registration and delivery of Common Shares filled in, at the stock transfer
office in New York, New York, of
[                 ],
Warrant Agent of the Company (“Warrant Agent”) or of its successor warrant agent or, if
there be no successor warrant agent, at the corporate offices of the Company, and
upon payment of the Exercise Price (as defined in the Warrant Agreement) and
any applicable taxes paid either in cash, or by certified or official bank
check, payable in lawful money of the United States of America to the order of
the Company.  Each Warrant will entitle
the holder to purchase Common Shares for $0.4689 per Common 

 

 

Share or, in certain circumstances, Preferred Shares
as provided in the Warrant Agreement (subject to adjustments as provided in the
Warrant Agreement).  The number and kind
of securities or other property for which the Warrants are exercisable are
subject to adjustment to prevent dilution. 
All Warrants not theretofore exercised will expire on the Expiration
Date.

This Warrant Certificate is subject to all of the terms, provisions and
conditions of the Warrant Agreement, dated as of
                 ,
2004, between the Company and the Warrant Agent, to all of which terms,
provisions and conditions the registered holder of this Warrant Certificate
consents by acceptance hereof.  The
Warrant Agreement is incorporated herein by reference and made a part hereof
and reference is made to the Warrant Agreement for a full description of the
rights, limitations of rights, obligations, duties and immunities of the
Warrant Agent, the Company and the holders of the Warrant Certificates.  Copies of the Warrant Agreement are
available for inspection at the stock transfer office of the Warrant Agent or
may be obtained upon written request addressed to the Company at Foster Wheeler
Ltd. c/o Foster Wheeler Inc.
Perryville Corporate Park Clinton, NJ 
08809-4000 Telecopier No.: 908-730-5315 Attention: Steven I.
Weinstein.

The Company may but shall not be required upon the exercise of the
Warrants evidenced by this Warrant Certificate to issue fractions of, Common
Shares, but may make adjustment therefore in cash on the basis of the current
market value of any fractional interest as provided in the Warrant Agreement.

In certain cases, the sale of securities by the Company upon exercise
of Warrants would violate the securities laws of the United States, certain
states thereof or other jurisdictions. 
The Company has agreed to use its best efforts to cause a registration
statement to continue to be effective during the term of the Warrants with
respect to such sales under the Securities Act of 1933, and to take such action
under the laws of various states as may be required to cause the sale of
securities upon exercise to be lawful.

This Warrant Certificate, with or without other Certificates, upon surrender
to the Warrant Agent, any successor warrant agent or, in the absence of any
successor warrant agent, at the corporate offices of the Company, may be
exchanged for another Warrant Certificate or Certificates evidencing in the
aggregate the same number of Warrants as the Warrant Certificate or
Certificates so surrendered.  If the
Warrants evidenced by this Warrant Certificate shall be exercised in part, the
holder hereof shall be entitled to receive upon surrender hereof another
Warrant Certificate or Certificates evidencing the number of Warrants not so
exercised.

No holder of this Warrant Certificate, as such, shall be entitled to
vote, receive dividends or be deemed the holder of Common Shares or any other
securities of the Company which may at any time be issuable on the exercise
hereof for any purpose whatever, nor shall anything contained in the Warrant
Agreement or herein be construed to confer upon the holder of this Warrant
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof or give or withhold consent to any
corporate action (whether upon any matter submitted to shareholders at any
meeting thereof, or give or withhold consent to any merger, recapitalization,
issuance of shares, reclassification of shares, change of par value or change
of shares to no par value, consolidation, conveyance or otherwise) or to
receive notice of meetings 

 

A-2

 

or other actions affecting shareholders (except as
provided in the Warrant Agreement) or to receive dividends or subscription
rights or otherwise until the Warrants evidenced by this Warrant Certificate
shall have been exercised and the Common Shares purchasable upon the exercise
thereof shall have become deliverable as provided in the Warrant Agreement.

If this Warrant Certificate shall be surrendered for exercise within
any period during which the transfer books for the Company’s Common Shares or
other class of shares purchasable upon the exercise of the Warrants evidenced
by this Warrant Certificate are closed for any purpose, the Company shall not
be required to make delivery of certificates for shares purchasable upon such
transfer until the date of the reopening of said transfer books.

Every holder of this Warrant Certificate by accepting the same consents
and agrees with the Company, the Warrant Agent, and with every other holder of
a Warrant Certificate that:

(a)           this Warrant
Certificate is transferable on the registry books of the Warrant Agent only
upon the terms and conditions set forth in the Warrant Agreement, and

(b)           the Company and the
Warrant Agent may deem and treat the person in whose name this Warrant Certificate
is registered as the absolute owner hereof (notwithstanding any notation of
ownership or other writing thereon made by anyone other than the Company or the
Warrant Agent) for all purposes whatever and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary.  The Company shall not be required to issue
or deliver any certificate for Common Shares or other securities upon the
exercise of Warrants evidenced by this Warrant Certificate until any tax which
may be payable in respect thereof by the holder of this Warrant Certificate
pursuant to the Warrant Agreement shall have been paid, such tax being payable
the holder of this Warrant Certificate at the time of surrender.

This Warrant Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Warrant Agent.

(Remainder
of page intentionally left blank; signature page follows)

 

 

A-3

 

 

WITNESS the facsimile signatures of the proper officer of the Company.

Dated:

 

 

 

	
   

  	
  FOSTER
  WHEELER LTD.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

 

	
   

  	
  Countersigned:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MELLON
  INVESTOR SERVICES LLC

  	
   

  
	
   

  	
  as
  Warrant Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

 

A-4

 

[TO
BE PRINTED ON BACK OF CERTIFICATE]

FORM OF ELECTION TO PURCHASE

The undersigned holder hereby exercises the right to purchase common
shares (the “Warrant Shares”) of FOSTER WHEELER LTD., a Bermuda company (the
“Company”), evidenced by the attached Warrant (the “Warrant”).  Capitalized terms used herein and not
otherwise defined have the respective meanings set forth in the Warrant.

1.             Payment of Warrant
Exercise Price.  The holder has paid in
connection with this exercise the sum of $              
to the Company in accordance with the terms of the Warrant.

2.             Delivery of Warrant
Shares.  The Company shall deliver to
the holder
                       
Warrant Shares in accordance with the terms of the Warrant.

 

 

	
   

  	
  Dated:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (Name
  of Registered Holder)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

 

A-5

 

FORM OF ASSIGNMENT

FOR VALUE RECEIVED, the undersigned does hereby assign and transfer
to                      ,
Federal Identification
No.             , a
warrant to
             the
common shares of FOSTER WHEELER LTD., a Bermuda company, represented by warrant
certificate
no.                     
, standing in the name of the undersigned on the books of said company.  The undersigned does hereby irrevocably
constitute and appoint
                 ,
attorney to transfer the warrants of said company, with full power of
substitution in the premises.

 

 

	
   

  	
  Dated:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (Name
  of Registered Holder)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

 

A-6

 

 

Exhibit B

 

[DTC LEGEND

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), 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 IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.][to be included in global Warrant
Certificates held through DTC]

Form of Class B Warrant

VOID AFTER 5 P.M. EASTERN TIME ON________,
2007

(EXCEPT AS PROVIDED IN THE WARRANT AGREEMENT)

WARRANTS TO PURCHASE COMMON SHARES

Warrants

Foster Wheeler Ltd.

CUSIP:

THIS CERTIFIES THAT ____________________ or registered assigns, is the
registered holder of the number of Warrants (“Warrants”) set forth above.  Each Warrant is issued by Foster Wheeler
Ltd. a Bermuda company, (the “Company”) as provided in the Warrant Agreement,
hereinafter more fully described (the “Warrant Agreement”), and will entitle the holder thereof
to purchase from the Company, subject to the terms and conditions set forth
hereinafter and in the Warrant Agreement, at any time on or after _______, 2005
and before the close of business on __________, 2007, subject to extension, in
certain circumstances, as described in the Warrant Agreement (the “Expiration Date”), to
purchase [_____] fully paid and non-assessable Common Shares of the Company (“Common Shares”),
subject to adjustments as provided in the Warrant Agreement, upon presentation
and surrender of this Warrant Certificate, with the instructions for the
registration and delivery of Common Shares filled in, at the stock transfer
office in New York, New York, of [                 ],
Warrant Agent of the Company (“Warrant Agent”) or of its successor warrant agent or, if
there be no successor warrant agent, at the corporate offices of the Company,
and upon payment of the Exercise Price (as defined in the Warrant Agreement)
and any applicable taxes paid either in cash, or by certified or official bank
check, payable in lawful money of the United States of America to the order of
the Company.  Each Warrant will entitle
the holder to purchase Common Shares for $0.4689 per Common Share or, in
certain circumstances, Preferred Shares as provided in the Warrant Agreement
(subject to adjustments as provided in the Warrant Agreement).  The number and kind of 

 

 

securities or other property for which the Warrants
are exercisable are subject to adjustment to prevent dilution.  All Warrants not theretofore exercised will
expire on the Expiration Date.

This Warrant Certificate is subject to all of the terms, provisions and
conditions of the Warrant Agreement, dated as of
                 ,
2004, between the Company and the Warrant Agent, to all of which terms,
provisions and conditions the registered holder of this Warrant Certificate
consents by acceptance hereof.  The
Warrant Agreement is incorporated herein by reference and made a part hereof
and reference is made to the Warrant Agreement for a full description of the
rights, limitations of rights, obligations, duties and immunities of the
Warrant Agent, the Company and the holders of the Warrant Certificates.  Copies of the Warrant Agreement are
available for inspection at the stock transfer office of the Warrant Agent or
may be obtained upon written request addressed to the Company at Foster Wheeler
Ltd. c/o Foster Wheeler Inc.
Perryville Corporate Park Clinton, NJ 
08809-4000 Telecopier No.: 908-730-5315 Attention: Steven I.
Weinstein.

The Company may but shall not be required upon the exercise of the
Warrants evidenced by this Warrant Certificate to issue fractions of Common
Shares, but may make adjustment therefore in cash on the basis of the current
market value of any fractional interest as provided in the Warrant Agreement.

In certain cases, the sale of securities by the Company upon exercise
of Warrants would violate the securities laws of the United States, certain
states thereof or other jurisdictions. 
The Company has agreed to use its best efforts to cause a registration
statement to continue to be effective during the term of the Warrants with
respect to such sales under the Securities Act of 1933, and to take such action
under the laws of various states as may be required to cause the sale of
securities upon exercise to be lawful.

This Warrant Certificate, with or without other Certificates, upon
surrender to the Warrant Agent, any successor warrant agent or, in the absence
of any successor warrant agent, at the corporate offices of the Company, may be
exchanged for another Warrant Certificate or Certificates evidencing in the
aggregate the same number of Warrants as the Warrant Certificate or
Certificates so surrendered.  If the
Warrants evidenced by this Warrant Certificate shall be exercised in part, the
holder hereof shall be entitled to receive upon surrender hereof another
Warrant Certificate or Certificates evidencing the number of Warrants not so
exercised.

No holder of this Warrant Certificate, as such, shall be entitled to
vote, receive dividends or be deemed the holder of Common Shares or any other
securities of the Company which may at any time be issuable on the exercise
hereof for any purpose whatever, nor shall anything contained in the Warrant
Agreement or herein be construed to confer upon the holder of this Warrant
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof or give or withhold consent to any
corporate action (whether upon any matter submitted to shareholders at any
meeting thereof, or give or withhold consent to any merger, recapitalization,
issuance of shares, reclassification of shares, change of par value or change
of shares to no par value, consolidation, conveyance or otherwise) or to
receive notice of meetings or other actions affecting shareholders (except as
provided in the Warrant Agreement) or to receive dividends or subscription
rights or otherwise until the Warrants evidenced by this 

 

B-2

 

Warrant Certificate shall have been exercised and
the Common Shares purchasable upon the exercise thereof shall have become
deliverable as provided in the Warrant Agreement.

If this Warrant Certificate shall be surrendered for exercise within
any period during which the transfer books for the Company’s Common Shares or
other class of shares purchasable upon the exercise of the Warrants evidenced
by this Warrant Certificate are closed for any purpose, the Company shall not
be required to make delivery of certificates for shares purchasable upon such
transfer until the date of the reopening of said transfer books.

Every holder of this Warrant Certificate by accepting the same consents
and agrees with the Company, the Warrant Agent, and with every other holder of
a Warrant Certificate that:

(a)           this Warrant
Certificate is transferable on the registry books of the Warrant Agent only
upon the terms and conditions set forth in the Warrant Agreement, and

(b)           the Company and the
Warrant Agent may deem and treat the person in whose name this Warrant
Certificate is registered as the absolute owner hereof (notwithstanding any
notation of ownership or other writing thereon made by anyone other than the
Company or the Warrant Agent) for all purposes whatever and neither the Company
nor the Warrant Agent shall be affected by any notice to the contrary.  The Company shall not be required to issue
or deliver any certificate for Common Shares or other securities upon the
exercise of Warrants evidenced by this Warrant Certificate until any tax which
may be payable in respect thereof by the holder of this Warrant Certificate
pursuant to the Warrant Agreement shall have been paid, such tax being payable
the holder of this Warrant Certificate at the time of surrender.

This Warrant Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Warrant Agent.

(Remainder
of page intentionally left blank; signature page follows)

 

 

B-3

 

 

WITNESS the facsimile signatures of the proper officer of the Company.

Dated:

 

 

	
   

  	
  FOSTER
  WHEELER LTD.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

 

	
   

  	
  Countersigned:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MELLON
  INVESTOR SERVICES LLC

  	
   

  
	
   

  	
  as
  Warrant Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

 

B-4

 

 

[TO BE PRINTED ON BACK OF
CERTIFICATE]

FORM OF ELECTION TO PURCHASE

The undersigned holder hereby exercises the right to purchase common
shares (the “Warrant Shares”) of FOSTER WHEELER LTD., a Bermuda company (the
“Company”), evidenced by the attached Warrant (the “Warrant”).  Capitalized terms used herein and not otherwise
defined have the respective meanings set forth in the Warrant.

1.             Payment of Warrant
Exercise Price.  The holder has paid in
connection with this exercise the sum of
$              
to the Company in accordance with the terms of the Warrant.

2.             Delivery of Warrant
Shares.  The Company shall deliver to
the holder
                       
Warrant Shares in accordance with the terms of the Warrant.

 

 

	
   

  	
  Dated:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (Name
  of Registered Holder)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

B-5

 

FORM OF ASSIGNMENT

FOR VALUE RECEIVED, the undersigned does hereby assign and transfer
to                      ,
Federal Identification No.              
, a warrant to
                 the
common shares of FOSTER WHEELER LTD., a Bermuda company, represented by warrant
certificate
no.                     
, standing in the name of the undersigned on the books of said company.  The undersigned does hereby irrevocably
constitute and appoint
                 ,
attorney to transfer the warrants of said company, with full power of
substitution in the premises.

 

 

	
   

  	
  Dated:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (Name
  of Registered Holder)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

B-6

 

 

Annex AExhibit
4.14

 

 

THIRD SUPPLEMENTAL INDENTURE

 

 

THIRD SUPPLEMENTAL INDENTURE
(the “Supplemental Indenture”),
dated as of as of __________, 2004, to the Indenture (defined below) made by
and among Foster Wheeler LLC, a limited liability company organized under
the laws of Delaware (the “Company”), the guarantors set forth on Exhibit A
hereto and BNY Midwest Trust Company, an Illinois trust company (the “Trustee”), as
successor to the obligations of Harris Trust and Savings Bank, an Illinois
banking corporation.

 

W I T N E S S E T H

 

WHEREAS, the Company has
issued 6 3/4% Senior Secured Notes due 2005 guaranteed by Foster Wheeler Ltd.
(“Parent”) and the
subsidiary guarantors set forth in the Indenture (together with Parent, the “Guarantors”) (the “2005 Notes”), pursuant
to the Indenture dated November 15, 1995 by Foster Wheeler Corporation to
Harris Trust and Savings Bank (the “Original Indenture”), as amended and supplemented by the
Amended and Restated First Supplemental Indenture dated as of August 10, 2001
by the Company and the guarantors set forth therein to Harris Trust and Savings
Bank (the “First Supplemental
Indenture”) and the Second Supplemental Indenture dated as of
August 16, 2002 by the Company and the guarantors set forth therein (the “Second Supplemental Indenture”),
and together with the Original Indenture and the First Supplemental Indenture,
the “Indenture”);

WHEREAS, the Company desires
to amend the Indenture for the purpose of changing and eliminating certain
provisions;

WHEREAS, Section 902 of
the Indenture provides that the Indenture may be amended, subject to certain
exceptions, with the consent of the Holders of a majority in aggregate
principal amount of the outstanding 2005 Notes;

WHEREAS, the Company has
received consents to the following amendments from the holders of at least a
majority in aggregate principal amount of the outstanding 2005 Notes; and

WHEREAS, all conditions
precedent to amend the Indenture and to make this Third Supplemental Indenture
a valid and binding instrument in accordance with its terms have been
satisfied.

NOW, THEREFORE, in
consideration of the foregoing and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company, the
Guarantors and the Trustee agree as follows:

 

 

ARTICLE
I

EFFECTIVENESS AND EFFECT

 

SECTION 1.01.  Effectiveness and Effect.

This Third Supplemental
Indenture shall take effect on the date hereof.  The provisions set forth in this Third Supplemental Indenture
shall be deemed to be, and shall be construed as part of, the Indenture.  All references to the Indenture in the
Indenture or in any other agreement, document or instrument delivered in
connection therewith or pursuant thereto shall be deemed to refer to the
Indenture as amended by this Third Supplemental Indenture.

 

ARTICLE
II

AMENDMENT OF CERTAIN PROVISIONS OF THE INDENTURE

 

SECTION 2.01.  Deletion of Certain Provisions.

 

(a)   The section headings and the text of Sections
501(5), 1004 and 1005 of the Indenture are hereby deleted and eliminated
in their entirety and replaced with “[Intentionally Deleted by Amendment]”.

(b)   The section heading and the text of Section
2.1 of the Second Supplemental Indenture is hereby deleted and eliminated in
its entirety and replaced with “[Intentionally Deleted by Amendment]”.

(c)   All references in the Indenture, as amended
by this Section 2.1, to any of the provisions deleted and eliminated as
provided above, or to terms defined in such provisions, shall also be deemed
deleted and eliminated.

ARTICLE
III

MISCELANEOUS

 

SECTION 3.01.  Indenture Effective.

Except as amended and
supplemented hereby, the Indenture is hereby ratified and confirmed in all
respects and shall remain in full force and effect.

SECTION 3.02.  Amendment; Discharge.

No provisions of this Third
Supplemental Indenture may be changed, waived, discharged or terminated orally,
but only by an instrument in writing signed by the parties hereto.

SECTION 3.03.  Notices.

All notices provided
hereunder shall be deemed made when delivered to the principal executive
offices of the party to be notified.

SECTION 3.04.  Governing Law.

This Third Supplemental
Indenture shall be governed by and construed in accordance with the internal
laws of the State of New York applicable to agreements made and to be performed
entirely within such State, without regard to the conflicts of law principles
of such State.

SECTION 3.05.  Counterparts.

 

2

 

This Third Supplemental
Indenture may be executed in counterparts, each of which when so executed shall
be an original, but all such counterparts shall together constitute one and the
same instruments.

SECTION 3.06.  Trustee.

The Trustee makes no
representations as to the validity or sufficiency of this Third Supplemental Indenture.  The statements and recitals herein are
deemed to be those of the Company not of the Trustee.

SECTION 3.07.  Trust Indenture Act to Control.

If and to the extent that
any provision of this Third Supplemental Indenture limits, qualifies or conflicts
with the duties imposed by Sections 310 to 318, inclusive, of the TIA,
such imposed duties shall control.  If
any provision of this Third Supplemental Indenture modifies or excludes any
provision of the TIA that may be so modified or excluded, the latter provision
shall be deemed to apply to this Third Supplemental Indenture as so modified or
excluded, as the case may be.

SECTION 3.08.  Headings.

The titles and headings of
the articles and sections of this Third Supplemental Indenture have been
inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.

SECTION 3.09.  Separability.

In case any one or more of
the provisions contained in this Third Supplemental Indenture shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other
provisions of this Third Supplemental Indenture, but this Third Supplemental Indenture
shall be construed as if such invalid or illegal or unenforceable provision had
never been contained herein or therein.

SECTION 3.10.  Benefits of Supplemental Indenture.

Nothing in this Third
Supplemental Indenture or Indenture, express or implied shall give to any
Person, other than the parties hereto and thereto and their successors
hereunder and thereunder, any benefit of any legal or equitable right, remedy
or claim under the Indenture or this Third Supplemental Indenture.

SECTION 3.11.  Assignment.

The Company will have the
right at all times to assign any of its respective rights or obligations under
this Third Supplemental Indenture to a direct or indirect wholly owned
Subsidiary of the Company; provided that, in the event of any such
assignment, the Company will remain liable for all such obligations.  Subject to the foregoing, this Third
Supplemental Indenture is binding upon and inures to the benefit of the parties
thereto and their respective successors and assigns.  This Third Supplemental Indenture may not otherwise be assigned
by the parties thereto.

SECTION 3.12.  Definitions.

Capitalized terms used but
not defined herein shall have the respective meaning ascribed to them in the
Indenture.

 

3

 

IN WITNESS WHEREOF, the
Company and the Trustee have caused this Third Supplemental Indenture to be
executed and delivered of the date first written above.

 

	
  FOSTER WHEELER LLC

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
   Name:

  
	
   Title:

  
	
   

  
	
   

  
	
  FOSTER WHEELER LTD.

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
   Name:

  
	
   Title:

  
	
   

  
	
   

  
	
  EQUIPMENT CONSULTANTS, INC.

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
   Name:

  
	
   Title:

  
	
   

  
	
   

  
	
  FOSTER WHEELER HOLDINGS LTD.

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
   Name:

  
	
   Title:

  
	
   

  
	
   

  
	
  FOSTER WHEELER ASIA LIMITED

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
   Name:

  
	
   Title:

  

 

4

 

	
  FOSTER WHEELER CAPITAL & FINANCE CORPORATION

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
   Name:

  
	
   Title:

  
	
   

  
	
   

  
	
  FOSTER WHEELER CONSTRUCTORS, INC.

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
   Name:

  
	
   Title:

  
	
   

  
	
   

  
	
  FOSTER WHEELER DEVELOPMENT CORPORATION

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
   Name:

  
	
   Title:

  
	
   

  
	
   

  
	
  FOSTER WHEELER ENERGY CORPORATION

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
   Name:

  
	
   Title:

  
	
   

  
	
   

  
	
  FOSTER WHEELER ENERGY MANUFACTURING, INC.

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
   Name:

  
	
   Title:

  

 

5

 

	
  FOSTER WHEELER ENERGY SERVICES, INC.

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
   Name:

  
	
   Title:

  
	
   

  
	
   

  
	
  FOSTER WHEELER ENVIRESPONSE, INC.

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
   Name:

  
	
   Title:

  
	
   

  
	
   

  
	
  FOSTER WHEELER ENVIRONMENTAL CORPORATION

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
   Name:

  
	
   Title:

  
	
   

  
	
   

  
	
  FOSTER WHEELER FACILITIES MANAGEMENT, INC.

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
   Name:

  
	
   Title:

  
	
   

  
	
   

  
	
  FOSTER WHEELER INC.

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
   Name:

  
	
   Title:

  

 

6

 

	
  FOSTER WHEELER INTERNATIONAL CORPORATION

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
   Name:

  
	
   Title:

  
	
   

  
	
   

  
	
  FOSTER WHEELER INTERNATIONAL HOLDINGS, INC.

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
   Name:

  
	
   Title:

  
	
   

  
	
   

  
	
  FOSTER WHEELER POWER GROUP, INC.

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
   Name:

  
	
   Title:

  
	
   

  
	
   

  
	
  FOSTER WHEELER POWER SYSTEMS, INC.

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
   Name:

  
	
   Title:

  
	
   

  
	
   

  
	
  FOSTER WHEELER PYROPOWER, INC.

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
   Name:

  
	
   Title:

  

 

7

 

	
  FOSTER WHEELER REAL ESTATE DEVELOPMENT CORP.

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
   Name:

  
	
   Title:

  
	
   

  
	
   

  
	
  FOSTER WHEELER REALTY SERVICES, INC.

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
   Name:

  
	
   Title:

  
	
   

  
	
   

  
	
  FOSTER WHEELER USA CORPORATION

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
   Name:

  
	
   Title:

  
	
   

  
	
   

  
	
  FOSTER WHEELER VIRGIN ISLANDS, INC.

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
   Name:

  
	
   Title:

  
	
   

  
	
   

  
	
  FOSTER WHEELER ZACK, INC.

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
   Name:

  
	
   Title:

  

 

8

 

	
  FW MORTSHAL, INC.

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
   Name:

  
	
   Title:

  
	
   

  
	
   

  
	
  FW TECHNOLOGIES HOLDINGS, LLC

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
   Name:

  
	
   Title:

  
	
   

  
	
   

  
	
  HFM INTERNATIONAL, INC.

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
   Name:

  
	
   Title:

  
	
   

  
	
   

  
	
  PROCESS CONSULTANTS, INC.

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
   Name:

  
	
   Title:

  
	
   

  
	
   

  
	
  PYROPOWER OPERATING SERVICES COMPANY, INC.

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
   Name:

  
	
   Title:

  

 

9

 

	
  PERRYVILLE III TRUST

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
   Name:

  
	
   Title:

  
	
   

  
	
   

  
	
  BNY MIDWEST TRUST COMPANY,

  
	
    As Trustee

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
   Name:

  
	
   Title:

  

 

10

 

Exhibit A

 

Guarantors

 

	
  Foster Wheeler Ltd.

  
	
  Equipment Consultants, Inc.

  
	
  Foster Wheeler Holdings Ltd.

  
	
  Foster Wheeler Asia Limited

  
	
  Foster Wheeler Capital & Finance Corporation

  
	
  Foster Wheeler Constructors, Inc.

  
	
  Foster Wheeler Development Corporation

  
	
  Foster Wheeler Energy Corporation

  
	
  Foster Wheeler Energy Manufacturing, Inc.

  
	
  Foster Wheeler Energy Services, Inc.

  
	
  Foster Wheeler Enviresponse, Inc.

  
	
  Foster Wheeler Environmental Corporation

  
	
  Foster Wheeler Facilities Management, Inc.

  
	
  Foster Wheeler Inc.

  
	
  Foster Wheeler International Corporation

  
	
  Foster Wheeler International Holdings, Inc.

  
	
  Foster Wheeler Power Group, Inc.

  
	
  Foster Wheeler Power Systems, Inc.

  
	
  Foster Wheeler Pyropower, Inc.

  
	
  Foster Wheeler Real Estate Development Corp.

  
	
  Foster Wheeler Realty Services, Inc.

  
	
  Foster Wheeler USA Corporation

  
	
  Foster Wheeler Virgin Islands, Inc.

  
	
  Foster Wheeler Zack, Inc.

  
	
  FW Mortshal, Inc.

  
	
  FW Technologies Holdings, LLC

  
	
  HFM International, Inc.

  
	
  Process Consultants, Inc.

  
	
  Pyropower Operating Services Company, Inc.

  
	
  Perryville III Trust

  

 

11

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