EXHIBIT 4.2
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EXECUTION VERSION
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WARRANT AGREEMENT
DATED AS OF JULY 17, 2006
AMONG
NEXTWAVE WIRELESS INC.
AND
THE HOLDERS
LISTED ON SCHEDULE I HERETO
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ARTICLE I DEFINITIONS......................................................1
1.1 Definitions......................................................1
1.2 Rules of Construction............................................5
ARTICLE II ISSUANCE OF WARRANTS AND RESERVATION OF WARRANT SHARES...........5
2.1 Issuance of Warrants to Initial Holders; Warrant Agreement.......5
2.2 Reservation of Warrant Shares....................................6
ARTICLE III CERTAIN ADMINISTRATIVE PROVISIONS................................6
3.1 Form of Warrant; Register........................................6
3.2 Exchange of Warrants for Warrants................................7
3.3 Mechanics of Transfer of Warrants................................7
ARTICLE IV EXERCISE OF WARRANT; EXCHANGE FOR WARRANT SHARES.................8
4.1 Exercise of Warrants; Expiration.................................8
4.2 Exchange for Warrant Shares......................................8
4.3 Issuance of Warrant Shares.......................................9
ARTICLE V ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES.......10
5.1 General.........................................................10
5.2 Distributions, Subdivisions and Combinations....................10
5.3 Issuance of Shares of Common Stock..............................11
5.4 Distributions of Assets or Securities Other than Common
Stock...........................................................14
5.5 Capital Reorganization, Capital Reclassifications, Merger,
Etc.............................................................15
5.6 Above Market Purchases of Securities............................15
5.7 Other Actions Affecting Equity Securities.......................16
5.8 Miscellaneous...................................................16
ARTICLE VI COVENANTS OF THE ISSUER.........................................18
6.1 Notices of Certain Actions......................................18
6.2 Merger and Consolidation of the Issuer..........................18
6.3 Dividends; Distributions........................................19
6.4 No Avoidance....................................................19
6.5 Sale of Warrants................................................19
6.6 Financial Statements and Other Information......................19
6.7 Limitation on Transactions with Affiliates......................20
ARTICLE VII MISCELLANEOUS...................................................20
7.1 Notices.........................................................20
7.2 No Voting Rights; Limitation of Liability.......................20
7.3 Amendments and Waivers..........................................21
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7.4 Remedies........................................................21
7.5 Binding Effect..................................................21
7.6 Counterparts....................................................21
7.7 Governing Law; Jurisdiction and Venue...........................21
7.8 Waiver of Jury Trial............................................22
7.9 Benefits of this Agreement......................................22
7.10 Headings........................................................23
7.11 Aggregation of Warrants and Warrant Shares......................23
7.12 Operative Date..................................................23
Schedule I - Holders
Exhibit A - Form of Warrant
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EXECUTION VERSION
WARRANT AGREEMENT dated as of July
17, 2006, between the Initial Holders listed
on Schedule I hereto (the "Initial Holders")
and NEXTWAVE WIRELESS INC., a Delaware
corporation (the "Company" and, upon the
occurrence of the Conversion Date, the
"Issuer"), to become operative upon the
occurrence of the Operative Date (as defined
herein).
NextWave Wireless LLC ("NW LLC") is entering into a Purchase
Agreement dated as of the date hereof with the Initial Holders (as amended,
restated, supplemented or otherwise modified from time to time, the "Purchase
Agreement") pursuant to which (a) NW LLC is issuing to the Initial Holders
$350,000,000 aggregate principal amount of Senior Secured Notes due 2010 (the
"Notes") and (b) as of the Operative Date, the Company is issuing to the Initial
Holders Warrants (as hereinafter defined), with an initial exercise price of
$0.01 per share (subject to adjustment as provided herein), to purchase a number
of shares (subject to adjustment as provided herein) of Common Stock (as
hereinafter defined) such that, holders of the Warrants would in the aggregate
hold 5% of all issued and outstanding shares of Common Stock as of the
Conversion Date, before giving effect to the exercise of any Warrant and the
issuance of Common Stock in respect thereof. This Agreement sets forth terms and
conditions applicable to the Warrants.
NOW, THEREFORE, the parties to this Agreement hereby agree as set
forth below.
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS.
(a) Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Purchase Agreement.
(b) The following terms shall have the meanings set forth below.
"Agreement" shall mean this Agreement, together with all schedules
and exhibits attached hereto, as amended, restated, supplemented or otherwise
modified from time to time in accordance with the terms hereof.
"Assignment Form" means the assignment form attached as Annex C to a
Warrant.
"Board" means the board of directors of the Issuer.
"Cash" means money, currency or a credit balance in a demand deposit
account.
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"Charter" means the Certificate of Incorporation of the Issuer as
filed with the Secretary of State of the State of Delaware on the Conversion
Date, as the same has been amended, restated, supplemented or otherwise modified
from time to time.
"Common Stock" means the common stock of the Issuer, par value $.001
per share.
"Conversion Date" means the effective date of the filing of a
certificate of merger with the Secretary of State of the State of Delaware, upon
which NW LLC will be merged with and into a wholly owned Delaware limited
liability company subsidiary of the Company or any other action pursuant to
which the holders of limited liability company interests in NW LLC receive
shares of Common Stock in a successor Delaware corporation.
"Convertible Securities" means any Capital Stock, evidence of
Indebtedness or other Securities or rights convertible into or exchangeable for
shares of Common Stock (including the Warrants).
"Delivery Date" has the meaning given to such term in Section
4.3(a).
"Determination Date" has the meaning given to such term in Section
5.6.
"Distribution" means, in respect of any Person, (a) the payment or
making of any dividend or other distribution of Property in respect of Capital
Stock of such Person or (b) the redemption or other acquisition of any Capital
Stock of such Person.
"Exchange Form" means the exchange form attached as Annex B to a
Warrant.
"Exchange Number" has the meaning given to such term in Section 4.2.
"Exercise Form" means the exercise form attached as Annex A to a
Warrant.
"Exercise Price" means $0.01 per Warrant Share, subject to change
from time to time in the manner provided in Article V.
"Expiration Time" means 11:59 p.m., Eastern daylight time, on July
15, 2009, subject to extension pursuant to Section 4.3(g).
"Fair Market Value" means the fair market value of such Property or
Security as determined by the Board in the good faith exercise of its reasonable
business judgment; provided, however, that Holders of at least two-thirds of the
Warrants objects to such determination by the Board by delivery of written
notice to the Issuer within thirty days of the date of determination, the Issuer
and such Holders shall, within the thirty days after the delivery of such
notice, attempt in good faith to resolve the objection. If the Issuer and such
Holders are unable to resolve the objection within the time period provided, the
matter shall be arbitrated by ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇ Financial Advisors,
Inc. to be agreed upon by the Issuer and the Holders (the "Independent
Auditor"). The determination of the fair market value of such Property or
Security by the Independent Auditor shall be final, binding and non-appealable.
The Issuer and the Holders shall instruct the Independent Auditor to render its
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decision within thirty days of its selection. The fees and expenses of the
Independent Auditor shall be shared in the same proportion that the Issuer's
position, on the one hand, and the Holders' position on the other hand,
initially presented to the Independent Auditor (based on the aggregate of all
differences taken as a whole) bear to the final resolution as determined by the
Independent Auditor. Notwithstanding the foregoing, if such Security is Publicly
Traded or quoted at the time of determination, the fair market value of such
Security shall be the (x) in the case of Fair Market Value calculations
identified herein as "single-day Fair Market Value", the closing trading price
of such security as of the trading day immediately prior to the date of
determination and (y) in all other cases, average closing trading price of such
Security for the prior twenty trading days immediately prior to the date of
determination.
"Fully Diluted Basis" means, with respect to the Common Stock at any
time of determination, the number of shares of Common Stock that would be issued
and outstanding at such time, assuming full conversion, exercise and exchange of
all issued and outstanding Convertible Securities and Options that shall be (or
may become) exchangeable for, or exercisable or convertible into, Common Stock,
including the exercise of the Warrant and the conversion of the Warrant Shares,
except that the number of shares of Common Stock outstanding on a Fully Diluted
Basis shall not include the number of shares of Common Stock issuable upon
exercise, conversion or exchange of Options or Convertible Securities that, at
the time of determination, are Out of the Money.
"Governing Documents" means as to any Person, its articles or
certificate of incorporation and by-laws, its partnership agreement, its
certificate of formation and operating agreement and/or the other organizational
or governing documents of such Person.
"Holder" means with respect to any Warrant, the holder of such
Warrant as set forth in the Warrant Register. Unless the context otherwise
requires, "Holder" includes a holder of Warrant Shares.
"Initial Holders" has the meaning set forth in the caption.
"Issuer" has the meaning set forth in the caption.
"Notes" has the meaning given to such term in the preamble.
"Operative Date" means the date on which Warrants are to be issued
to the Initial Holders or their assignees pursuant to Section 1.2(c) of the
Purchase Agreement.
"Options" means any warrants, options or other rights to subscribe
for or to purchase (a) shares of Common Stock or (b) Convertible Securities.
"Other Equity Documents" means the (a) the Warrant, (b) the Purchase
Agreement and (c) the Registration Rights Agreement dated as of the date hereof
by and among the Issuer and the Holders, as the same may be amended, restated,
supplemented or otherwise modified from time to time.
"Other Equity Securities" means any Capital Stock, other than the
Common Stock, Convertible Securities or Options.
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"Out of the Money" means, at any date of determination (a) in the
case of an Option, that the aggregate single-day Fair Market Value of the shares
of Common Stock issuable upon the exercise of such Option as of such date is
less than the aggregate exercise price payable upon such exercise and (b) in the
case of a Convertible Security, that the quotient resulting from dividing the
consideration payable to convert any such Convertible Security (including
without limitation, the value, if any, of such Convertible Security relinquished
as a result of such conversion) as of such date by the number of shares issuable
as of such date upon conversion or exchange of such Convertible Security is
greater than the Fair Market Value of one share of Common Stock.
"Previous Adjustment" has the meaning given to such term in Section
5.3(b)(iii).
"Property" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Public Market Issuance" shall mean a firm commitment, fully
underwritten public offering primarily in the United States of the Company's
Common Stock by a nationally recognized investment banking firm with gross
proceeds to the Company of not less than $200 million, with the Common Stock so
offered listed on either the New York Stock Exchange or the Nasdaq National
Market.
"Public Offering" means the public offering of Capital Stock of a
Person (other than an offering of Securities issuable pursuant to an employee
benefit plan) pursuant to a registration statement declared effective under the
Securities Act.
"Publicly Traded" means, with respect to any Security, that such
Security is (a) listed on a domestic securities exchange, (b) quoted on the
Nasdaq National Market or the Nasdaq Small-Cap Market or (c) traded in the
domestic over-the-counter market, which trades are reported by the National
Quotation Bureau, Incorporated or a similar successor organization.
"Purchase Agreement" has the meaning given to such term in the
preamble.
"Repurchase" has the meaning given to such term in Section 5.6.
"Repurchase Premium" has the meaning given to such term in Section
5.6.
"Requisite Holders" means, as of any date of determination, Holders
holding Warrants or Warrant Shares representing at least a majority of the
Warrant Shares that are either (a) previously issued and are then outstanding or
(b) issuable upon exercise of Warrants then outstanding; provided that any
Warrants or Warrant Shares held by the Issuer or its Affiliates shall not be
counted in either the numerator or the denominator of the calculation of
Requisite Holders. For the purpose of any matter applicable only to Warrants and
not Warrant Shares, "Requisite Holders" will be determined based on Holders of
Warrants and not Warrant Shares.
"Transfer" means any sale, transfer, assignment, or other
disposition of any interest in, with or without consideration, any security,
including any disposition of any security or of any interest therein which would
constitute a sale thereof within the meaning of the Securities Act.
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"Warrant" has the meaning given to such term in Section 3.1(a).
"Warrant Register" has the meaning given to such term in Section
3.1(b).
"Warrant Shares" has the meaning set forth in a Warrant.
1.2 RULES OF CONSTRUCTION.
The definitions in Section 1.1 shall apply equally to the singular and
plural forms of the terms defined. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The words "herein," "hereof," "hereunder" and other words of similar import
refer to this Agreement as a whole, including the schedules and exhibits, as the
same may from time to time be amended, restated, supplemented or otherwise
modified, and not to any particular section, subsection, paragraph, subparagraph
or clause contained in this Agreement. All references to sections, schedules and
exhibits mean the sections of this Agreement and the schedules and exhibits
attached to this Agreement, except where otherwise stated. The title of and the
section and paragraph headings in this Agreement are for convenience of
reference only and shall not govern or affect the interpretation of any of the
terms or provisions of this Agreement. The use herein of the masculine, feminine
or neuter forms shall also denote the other forms, as in each case the context
may require. Where specific language is used to clarify by example a general
statement contained herein, such specific language shall not be deemed to
modify, limit or restrict in any manner the construction of the general
statement to which it relates. Any reference to any term contained in any other
agreement or other document shall be deemed to be a reference to such term in
the applicable agreement or document as in effect as of the date hereof, unless
the Requisite Holders have consented to any amendment of such applicable
agreement since the date hereof, in which case such reference shall be deemed to
be a reference to such term in the applicable agreement or document, as amended
through the date of the most recent consent by the Requisite Holders. The
language used in this Agreement has been chosen by the parties to express their
mutual intent, and no rule of strict construction shall be applied against any
party.
ARTICLE II
ISSUANCE OF WARRANTS AND RESERVATION OF WARRANT SHARES
2.1 ISSUANCE OF WARRANTS TO INITIAL HOLDERS; WARRANT AGREEMENT.
Pursuant to the Purchase Agreement, upon the occurrence of the Operative
Date, the Issuer shall issue and deliver Warrants, dated as of the Operative
Date, to the Initial Holders in accordance with the Purchase Agreement. The
provisions of this Agreement shall apply to all Warrants (and, to the extent
applicable, Warrant Shares), and each Holder that is not a party to this
Agreement, by its acceptance of a Warrant or a Warrant Share, agrees to be bound
by the applicable provisions hereof.
2.2 RESERVATION OF WARRANT SHARES.
From and after the Operative Date, the Issuer shall at all times have
authorized, and reserve and keep available, free from preemptive or similar
rights, for the purpose of enabling it to satisfy any obligation to issue
Warrant Shares upon the exercise or exchange of each Warrant, the number of
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authorized but unissued Warrant Shares issuable upon exercise or exchange of all
outstanding Warrants. The Issuer shall promptly take all actions necessary to
ensure that Warrant Shares shall be duly authorized and, when issued upon
exercise or exchange of any Warrant in accordance with the terms hereof, shall
be validly issued, fully paid and non-assessable, free and clear of all Taxes,
Liens (except to the extent of any applicable provisions of this Agreement or
any Other Equity Document) and all preemptive or similar rights.
ARTICLE III
CERTAIN ADMINISTRATIVE PROVISIONS
3.1 FORM OF WARRANT; REGISTER.
(a) Each Warrant issued under the Purchase Agreement or hereunder
shall be in the form of Exhibit A attached hereto (each, a "Warrant") and shall
be executed on behalf of the Issuer by a Responsible Officer of the Issuer. Each
Warrant shall bear the legend(s) appearing on the first page of such form,
except that a Warrant need not bear any such legend from and after such time as
all the restrictions to which such legend relates no longer apply. Upon initial
issuance, each Warrant shall be dated as of the date of signature thereof by the
Issuer. Irrespective of any adjustments in the Exercise Price or the number or
kind of Capital Stock or other Property issuable upon the exercise of the
Warrants, any Warrants theretofore or thereafter issued may, as a matter of
form, continue to express the same Exercise Price and the same number of Warrant
Shares issuable upon the exercise of such Warrants as were stated in the
Warrants initially issued pursuant the Purchase Agreement.
(b) Each Warrant issued, exchanged or Transferred hereunder shall
be registered in a warrant register (the "Warrant Register"). The Warrant
Register shall set forth (i) the number of each Warrant, (ii) the name and
address of the Holder thereof, (iii) the original number of Warrant Shares
purchasable upon the exercise thereof, (iv) the number of Warrant Shares
purchasable upon the exercise thereof, as adjusted from time to time in
accordance with this Agreement and (v) the Exercise Price for each Warrant
Share, as adjusted from time to time in accordance with this Agreement. The
Warrant Register will be maintained by the Issuer and will be available for
inspection by any Holder at the principal office of the Issuer or such other
location as the Issuer may designate to the Holders in the manner set forth in
Section 8.1. The Issuer shall be entitled to treat the Holder of any Warrant as
the owner in fact thereof for all purposes and shall not be bound to recognize
any equitable or other claim to or interest in such Warrant on the part of any
other Person.
3.2 EXCHANGE OF WARRANTS FOR WARRANTS.
(a) The Holder may exchange any Warrant issued hereunder for
another Warrant of like kind and tenor representing in the aggregate the right
to purchase the same number and class or series of Warrant Shares that could be
purchased pursuant to the Warrant being so exchanged. In order to effect an
exchange permitted by this Section 3.2, the Holder shall deliver to the Issuer
such Warrant accompanied by a written request signed by the Holder thereof
specifying the number and denominations of Warrants to be issued in such
exchange and, subject to the transfer restrictions contained in the Other Equity
Documents, the names in which such Warrants are to be issued. As promptly as
practicable but in any event within three Business Days of receipt of such a
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request, the Issuer shall, without charge, issue, register and deliver to the
Holder thereof each Warrant to be issued in such exchange and make any necessary
changes to the Warrant Register.
(b) Upon receipt of evidence reasonably satisfactory to the Issuer
(an affidavit of the Holder being satisfactory) of the ownership and the loss,
theft, destruction or mutilation of any Warrant, and in the case of any such
loss, theft or destruction, upon receipt of an indemnity reasonably satisfactory
to the Issuer (if the Holder is a financial institution or other institutional
investor, its own indemnity agreement being satisfactory) or, in the case of any
such mutilation, upon surrender of such Warrant, the Issuer shall, without
charge, issue, register and deliver in lieu of such Warrant a new Warrant of
like kind representing the same rights represented by, and dated the date of,
such lost, stolen, destroyed or mutilated Warrant. Any such new Warrant shall
constitute an original contractual obligation of the Issuer, whether or not the
allegedly lost, stolen, mutilated or destroyed Warrant shall be at any time
enforceable by any Person.
(c) The Issuer shall pay all expenses and Taxes (other than any
applicable income or income-based, capital gains or similar Taxes payable by a
Holder of a Warrant) attributable to an exchange of a Warrant pursuant to this
Section 3.2; provided, however, that the Issuer shall not be required to pay any
Tax that may be payable in respect of any Transfer involved in the issuance of
any Warrant in a name other than that of the Holder of the Warrant being
exchanged.
3.3 MECHANICS OF TRANSFER OF WARRANTS.
(a) Subject to the further provisions of this Agreement and the
Other Equity Documents, each Warrant may be Transferred, in whole or in part, by
the Holder thereof by delivering to the Issuer such Warrant accompanied by a
properly completed, duly executed, Assignment Form. As promptly as practicable
but in any event within three Business Days of receipt of such Assignment Form,
the Issuer shall, without charge, issue, register and deliver to the Holder
thereof a new Warrant of like kind and tenor representing in the aggregate the
right to purchase the same number of Warrant Shares that could be purchased
pursuant to the Warrant being Transferred.
(b) At the request of the Issuer, any Person to whom a Warrant is
Transferred in accordance with this Article III shall execute and deliver to the
Issuer a joinder in the form of Annex C to the Warrant pursuant to which such
Person agrees to become a party to, and to be bound by the terms of and entitled
to the benefits under this Agreement.
ARTICLE IV
EXERCISE OF WARRANT; EXCHANGE FOR WARRANT SHARES
4.1 EXERCISE OF WARRANTS; EXPIRATION.
(a) On any Business Day during normal business hours on or prior
to the Expiration Time, a Holder may exercise a Warrant, in whole or in part, by
delivering to the Issuer such Warrant accompanied by a properly completed
Exercise Form and consideration in the form set forth in Section 4.1(b) in an
aggregate amount equal to the product of (x) the Exercise Price and (y) the
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number of Warrant Shares being purchased. Any partial exercise of a Warrant
shall be for a whole number of Warrant Shares only.
(b) Upon exercise of a Warrant, in whole or in part, the Holder
thereof shall deliver to the Issuer the aggregate Exercise Price:
(i) by wire transfer of immediately available funds to a
bank account designated by the Issuer or a certified check payable to the
Issuer;
(ii) by surrender of a number Warrant Shares having a Fair
Market Value equal to the aggregate Exercise Price; or
(iii) a combination of the methods set forth in clauses (i)
and (ii).
(c) A Warrant shall terminate and become void as of the earlier of
(x) the Expiration Time and (y) the date such Warrant is exercised in full.
4.2 EXCHANGE FOR WARRANT SHARES.
(a) On any Business Day during normal business hours on or prior
to the Expiration Time, a Holder may exchange a Warrant, in whole or in part,
for Warrant Shares by delivering to the Issuer such Warrant accompanied by a
properly completed Exchange Form. The number of Warrant Shares to be received by
a Holder upon such exchange shall be equal to the number of Warrant Shares
allocable to the portion of the Warrant being exchanged (the "Exchange Number"),
as specified by such Holder in the Exchange Form, minus a number of Warrant
Shares equal to the quotient obtained by dividing (i) the product of (x) the
Exercise Price and (y) the Exchange Number by (ii) the Fair Market Value of one
Warrant Share as of the Delivery Date. The Issuer acknowledges that the
provisions of this Section 4.2 are intended, in part, to ensure that a full or
partial exchange of a Warrant pursuant to this Section 4.2 will qualify as a
conversion, within the meaning of paragraph (d)(3)(ii) of Rule 144 of the
Securities Act. At the request of any Holder, the Issuer will accept reasonable
modifications to the exchange procedures provided for in this Section 4.2 in
order to accomplish such intent.
(b) The Issuer and each Holder intend that if any Holder exercises
this Warrant by surrendering Warrant Shares as contemplated by Section
4.1(b)(ii) or Section 4.2 hereof, such method of exercise shall be treated for
Tax purposes as a "reorganization" pursuant to Section 368(a)(1)(E) of the Code.
The Issuer and each Holder intend that such Holder (and its direct and indirect
beneficial owners) will neither realize nor recognize any taxable income or gain
as a result of its exercise of the Warrant by such method. None of the parties
hereto will take any position in their respective Tax or other financial or
accounting filings that are contrary to or inconsistent with the foregoing.
4.3 ISSUANCE OF WARRANT SHARES.
(a) Issuance of Warrant Shares. As promptly as practicable but in
any event within three Business Days following the delivery date (the "Delivery
Date") of (i) an Exercise Form or Exchange Form in accordance with Section 4.1
or 4.2, (ii) the related Warrant and (iii) any required payment of the Exercise
Price, the Issuer shall, without charge, upon compliance with the applicable
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provisions of this Agreement, issue to such Holder one or more stock
certificates or other appropriate evidence of ownership of the aggregate number
of Warrant Shares to which the Holder of such Warrant is entitled and the other
Securities or Property (including any Cash) to which such Holder is entitled, in
such denominations, and registered or otherwise placed in, or payable to the
order of, such name as may be directed in writing by such Holder. The Issuer
shall deliver such stock certificates or evidence of ownership and any other
Securities or Property (including any Cash) to the Person entitled to receive
the same, together with an amount in Cash in lieu of any fraction of a Warrant
Share (or fractional interest in any other Security), as hereinafter provided.
If any Securities included in the Warrant Shares are Publicly Traded, then at
the request of such Holder, the Issuer shall use commercially reasonable efforts
to cause its transfer agent to electronically transmit such Securities to such
Holder through the Deposit Withdrawal Agent Commission System of The Depository
Trust Company.
(b) Partial Exercise or Exchange. If a Holder shall exercise or
exchange a Warrant for less than all of the Warrant Shares that could be
purchased or received thereunder, the Issuer shall issue, register and deliver
to the Holder, as promptly as practicable but in any event within three Business
Days following the Delivery Date, a new Warrant evidencing the right to purchase
the remaining Warrant Shares. In the case of an exchange pursuant to Section
4.2, the number of remaining Warrant Shares shall be the original number of
Warrant Shares subject to the Warrant so exchanged reduced by the Exchange
Number. Each Warrant surrendered pursuant to Section 4.1 or 4.2 shall be
cancelled.
(c) Fractional Shares. The Issuer shall not be required to issue
fractional Warrant Shares or fractional units of any other Security upon the
exercise or exchange of a Warrant. If any fraction of a Warrant Share or
fractional unit of any other Security would be issuable on the exercise or
exchange of any Warrant, the Issuer may, in lieu of issuing such fraction of a
Warrant Share or fractional unit, pay to such Holder for any such fraction an
amount in Cash equal to the product of (x) such fraction and (y) the Fair Market
Value for one Warrant Share or for a unit of such other Security, as the case
may be, as of the Delivery Date.
(d) Expenses. The Issuer shall pay all expenses and Taxes (other
than any applicable income, capital gains or similar Taxes payable by a Holder
of a Warrant) attributable to the initial issuance of Warrant Shares upon the
exercise or exchange of a Warrant; provided, however, that the Issuer shall not
be required to pay any Tax that may be payable in respect of any Transfer
involved in the issuance of any Warrant or any certificate for, or any other
evidence of ownership of, Warrant Shares in a name other than that of the Holder
of the Warrant being exercised or exchanged.
(e) Record Ownership. To the extent permitted by Applicable Laws,
the Person in whose name any certificate for Warrant Shares or other evidence of
ownership of any other Security is issued upon exercise or exchange of a Warrant
shall for all purposes be deemed to have become the holder of record of such
Warrant Shares or other Security on the Delivery Date, irrespective of the date
of delivery of such certificate or other evidence of ownership (subject, in the
case of any exercise to which Section 4.3(g) applies, to the consummation of a
transaction upon which such exercise is conditioned), notwithstanding that the
transfer books of the Issuer shall then be closed or that such certificates or
other evidence of ownership shall not then actually have been delivered to such
Person.
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(f) Listings. The Issuer shall from time to time promptly take all
action that may be necessary so that any such Securities, immediately upon their
issuance upon exercise or exchange of Warrants, will be listed on all the
principal securities exchanges, quotation systems and markets within the United
States of America, if any on which other Securities of the Issuer of the same
class or type are then listed or quoted.
(g) Conditional Exercise or Exchange. Any Exercise Form or
Exchange Form delivered under Section 4.1 or 4.2 may condition the exercise or
exchange of any Warrant on the consummation of a transaction being undertaken by
the Issuer or the Holder of such Warrant, and such exercise or exchange shall
not be deemed to have occurred except concurrently with the consummation of such
transaction, except that, for purposes of determining whether such exercise or
exchange is timely it shall be deemed to have occurred on the Delivery Date. If
any exercise of a Warrant is so conditioned, then, subject to delivery of the
items required by Section 4.3(a) and compliance with the other terms hereof, the
Issuer shall deliver the certificates and other evidence of ownership of other
Securities or other Property in such manner as such Holder shall direct as
required in connection with the consummation of such transaction upon which the
exercise or exchange is conditioned. If, at any time prior to the consummation
of a conditional exercise or exchange, such Holder shall give notice to the
Issuer that such transaction has been abandoned or such Holder has withdrawn
from participation in such transaction, the Issuer shall return the items
delivered pursuant to Section 4.3(a), and such Holder's election to exercise
such Warrant shall be deemed rescinded.
ARTICLE V
ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES
5.1 GENERAL.
The Exercise Price and the number and kind of Warrant Shares issuable upon
exercise of each Warrant shall be subject to adjustment from time to time in
accordance with this Article V.
5.2 DISTRIBUTIONS, SUBDIVISIONS AND COMBINATIONS.
If, at any time after the Closing Date, the Issuer shall:
(i) make a Distribution in shares of Common Stock;
(ii) subdivide, split or reclassify its outstanding shares of
Common Stock into a larger number of shares of Common Stock; or
(iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock;
then (A) the number of Warrant Shares issuable upon exercise of each Warrant
shall be adjusted so as to equal the number of Warrant Shares that the Holder of
such Warrant would have held immediately after the occurrence of such event if
the Holder had exercised such Warrant for shares of Common Stock immediately
prior to the occurrence of such event (or, in the case of clause (i), the record
date therefor) and (B) the Exercise Price shall be adjusted to be equal to the
product of (x) the Exercise Price immediately prior to the occurrence of such
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event and (y) a fraction (1) the numerator of which is the number of Warrant
Shares issuable upon exercise of such Warrant immediately prior to the
adjustment in clause (A) and (2) the denominator of which is the number of
Warrant Shares issuable upon exercise of such Warrant immediately after the
adjustment in clause (A). An adjustment made pursuant to this Section 5.2 shall
become effective immediately after the occurrence of such event retroactive to
the record date, if any, for such event.
5.3 ISSUANCE OF SHARES OF COMMON STOCK.
(a) Issuances Below Fair Market Value. If, at any time after the
Closing Date and prior to a Public Market Issuance, the Issuer shall issue or
sell (or, in accordance with Section 5.3(b), shall be deemed to have issued or
sold) any shares of Common Stock (other than any issuance for which an
adjustment is made pursuant to Section 5.2 or 5.4 or no adjustment is required
pursuant to Section 5.8(d)) without consideration or for a consideration per
share less than the Fair Market Value for such Common Stock determined as of the
date of such issuance or sale, then, effective immediately upon such issuance or
sale, the Exercise Price and the number of Warrant Shares issuable upon exercise
of each Warrant shall be adjusted as follows:
(i) The Exercise Price shall be reduced to an amount equal
to the product of (x) the Exercise Price in effect immediately prior to such
issuance or sale and (y) a fraction, (I) the numerator of which shall be the sum
of (x) the product of (1) the number of shares of Common Stock outstanding (on a
Fully Diluted Basis) immediately prior to such issuance or sale and (2) the Fair
Market Value of one share of Common Stock as of the date of such issuance or
sale plus (y) the aggregate consideration, if any, received by the Issuer upon
such issuance or sale, and (II) the denominator of which shall be the product of
(x) the number of shares of Common Stock outstanding (on a Fully Diluted Basis)
immediately after such issuance or sale (prior to any adjustment pursuant to
clause (ii) below) and (y) the Fair Market Value for one share of Common Stock
immediately prior to such issuance or sale.
(ii) The number of Warrant Shares issuable upon exercise of
such Warrant shall be increased by multiplying the number of Warrant Shares
issuable upon exercise of such Warrant immediately prior to such issuance or
sale by a fraction (x) the numerator of which shall be the Exercise Price in
effect immediately prior to the adjustment in Section 5.3(a)(i) and (y) the
denominator of which shall be the Exercise Price in effect immediately after
such adjustment.
(b) Issuance of Options or Convertible Securities. For the
purposes of Section 5.3(a), the issuance or sale of Options or Convertible
Securities shall be deemed, in accordance with this Section 5.3(b), to be the
issuance of shares of Common Stock.
(i) Issuance of Options. If the Issuer in any manner issues
or grants any Options, then the total maximum number of shares of Common Stock
issuable upon the exercise of such Options (or upon conversion or exchange of
the total maximum amount of Convertible Securities issuable upon the exercise of
such Options) shall be deemed, for purposes of Section 5.3(a), to be outstanding
and to have been issued and sold by the Issuer. For purposes of Section 5.3(a),
the shares of Common Stock issuable upon exercise of Options or upon conversion
or exchange of Convertible Securities issuable upon exercise of Options for
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Convertible Securities shall be deemed to have been issued and sold at a price
per share equal to (A) the sum of (x) the total amount, if any, received or
receivable by the Issuer as consideration for the issuance or granting of such
Options plus (y) the minimum aggregate amount of additional consideration, if
any, payable to the Issuer upon the exercise of all such Options plus (z) in the
case of such Options for Convertible Securities, the minimum aggregate amount of
additional consideration, if any, payable to the Issuer upon conversion or
exchange of such Convertible Securities divided by (B) the total maximum number
of shares of Common Stock issuable upon exercise of such Options or upon the
conversion or exchange of all such Convertible Securities issuable upon the
exercise of such Options.
(ii) Issuance of Convertible Securities. If the Issuer in any
manner issues or sells any Convertible Securities, then the maximum number of
shares of Common Stock issuable upon the conversion or exchange of such
Convertible Securities shall be deemed, for purposes of Section 5.3(a), to be
outstanding and to have been issued and sold by the Issuer. For purposes of
Section 5.3(a), the shares of Common Stock issuable upon conversion or exchange
of Convertible Securities shall be deemed to have been issued and sold at a
price per share equal to (A) the sum of (x) the total amount received or
receivable by the Issuer as consideration for the issuance or sale of such
Convertible Securities plus (y) the minimum aggregate amount of additional
consideration, if any, payable to the Issuer upon the conversion or exchange
thereof divided by (B) the total maximum number of shares of Common Stock
issuable upon the conversion or exchange of all such Convertible Securities.
(iii) Superseding Adjustment. If, at any time after any
adjustment of the Exercise Price and the number of Warrant Shares issuable upon
exercise of the Warrants shall have been made pursuant to Section 5.3(a) as a
result of the issuance of Options or Convertible Securities, or after any new
adjustment of the Exercise Price and the number of Warrant Shares shall have
been made pursuant to this Section 5.3(b)(iii) (each of the foregoing, a
"Previous Adjustment"):
(A) such Options or the right of conversion or
exchange of such Convertible Securities shall expire, or be
terminated or surrendered, and all or a portion of such
Options or the right of conversion or exchange with respect to
all or a portion of such Convertible Securities, as the case
may be, shall not have been exercised or treated as having
been exercised or otherwise canceled or acquired by the Issuer
in connection with any settlement, including any Cash
settlement, of such Options or the rights of conversion or
exchange of such Convertible Securities;
(B) there has been any change in the number of shares
of Common Stock issuable upon the exercise of such Options or
upon the conversion or exchange of such Convertible Securities
(including as a result of a change in the number of
Convertible Securities issuable upon the exercise of such
Options or the operation of anti-dilution provisions
applicable thereto); or
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(C) the consideration per share for which shares of
Common Stock are issuable upon the exercise of such Options or
upon the conversion or exchange of such Convertible Securities
shall be changed;
then, with respect to the unexercised portion of any then
outstanding Warrants, the Previous Adjustment shall be
rescinded and annulled and the shares of Common Stock which
were deemed to have been issued and that gave rise to the
Previous Adjustment shall no longer be deemed to have been
issued. Thereupon, a recomputation shall be made of the
adjustment, if any, of the Exercise Price and the number of
Warrant Shares issuable upon exercise of such Warrants as a
consequence of such Options or Convertible Securities on the
basis of:
(1) treating the number of shares of Common Stock, if
any, theretofore actually issued or issuable pursuant to
the previous exercise of such Options or such right of
conversion or exchange (including Options or rights
treated as exercised, otherwise cancelled or acquired in
connection with any settlement), as having been issued
on the date of such issuance as determined for purposes
of the Previous Adjustment and for the total amount of
consideration actually received and receivable therefor
(determined in the manner described in Section 5.3(b)(i)
or (ii), as the case may be);
(2) treating the maximum number of shares of Common
Stock (x) issuable upon the exercise (or upon the
conversion or exchange of Convertible Securities
issuable upon the exercise) of all Options which then
remain outstanding and (y) issuable upon the conversion
or exchange of all Convertible Securities which then
remain outstanding, as having been issued; and
(3) making the computations called for in Section
5.3(a) hereof on the basis of the revised terms of such
outstanding Options or Convertible Securities, as the
case may be, as if they were newly issued at the time of
such revision.
Any adjustment of the Exercise Price and the number of Warrant Shares issuable
upon exercise of the Warrants resulting from such recomputation shall supersede
the Previous Adjustment.
(iv) No Further Adjustments. Any adjustment of the Exercise
Price or the number of Warrant Shares issuable upon the exercise of Warrants to
be made pursuant to this Section 5.3 with respect to the issuance of (A) any
Options, (B) any Convertible Securities issuable upon the exercise of such
Options or (C) any shares of Common Stock issuable upon the exercise of such
Options or the conversion or exchange of such Convertible Securities shall be
made effective upon the issuance of such Options. Any adjustment of the Exercise
Price or the number of Warrant Shares issuable upon the exercise of Warrants to
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be made pursuant to this Section 5.3 with respect to the issuance of (x) any
Convertible Securities (other than Convertible Securities issuable upon the
exercise of Options) or (y) any shares of Common Stock issuable upon the
conversion or exchange of such Convertible Securities shall be made effective
upon the issuance of such Convertible Securities. No further adjustment of the
Exercise Price or the number of Warrant Shares issuable upon the exercise of
Warrants shall be made upon the actual issuance of shares of Common Stock or of
Convertible Securities upon the exercise of such Options or upon the actual
issuance of shares of Common Stock upon conversion or exchange of Convertible
Securities, except as provided in this Section 5.3.
5.4 DISTRIBUTIONS OF ASSETS OR SECURITIES OTHER THAN COMMON STOCK.
If (x) at any time after the Closing Date, the Issuer shall distribute to
the holders of its shares of Common Stock in respect of their ownership of
Common Stock (other than a distribution of shares of Common Stock referred to in
Section 5.2), rights to purchase any of its Securities (other than those
referred to in Section 5.3), evidences of its Indebtedness, Cash or other
Property and (y) the Issuer is unable to comply with Section 6.3 below, then the
Exercise Price and the number of Warrant Shares issuable upon exercise of each
Warrant shall be adjusted as set forth below:
(a) The Exercise Price shall be reduced to an amount equal to the
product of (i) the Exercise Price in effect immediately prior to such
distribution and (ii) a fraction (A) the numerator of which shall be (x) the
product of (1) the number of shares of Common Stock outstanding (on a Fully
Diluted Basis) as of the record date for determining equity holders entitled to
such distribution and (2) the Fair Market Value for one share of Common Stock as
of such record date less (y) the Fair Market Value of the portion of the
Securities, evidences of Indebtedness, Cash or other Property distributed or to
be distributed with respect to the shares of Common Stock, and (B) the
denominator of which shall be the product of (1) the number of shares of Common
Stock outstanding (on a Fully Diluted Basis) as of the record date for
determining equity holders entitled to such distribution and (2) the Fair Market
Value for the Common Stock (prior to any adjustment pursuant to clause (b)
below) as of the record date for determining equity holders entitled to such
distribution.
(b) The number of Warrant Shares issuable upon exercise of such
Warrant shall be increased by multiplying (i) the number of Warrant Shares
issuable upon exercise of such Warrant immediately prior to such distribution
and (ii) a fraction, (A) the numerator of which shall be the Exercise Price in
effect immediately prior to the adjustment in Section 5.4(b) and (B) the
denominator of which shall be the Exercise Price in effect immediately after
such adjustment.
5.5 CAPITAL REORGANIZATION, CAPITAL RECLASSIFICATIONS, MERGER, ETC.
(a) If, at any time after the Closing Date, (i) there shall be (A)
any capital reorganization or any reclassification of the Capital Stock of the
Issuer (other than a change in par value or as a result of a stock dividend, or
as a result of a Distribution or subdivision, split-up or combination of shares
of Common Stock to which Section 5.2 applies or any Distribution to which
Section 5.4 applies); (B) any consolidation, merger or business combination of
the Issuer with another Person; (C) any sale or conveyance by the Issuer of all
or substantially all of its assets or Property to another Person or (D) any
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conversion (statutory or otherwise) of the Issuer from a corporation to a
different form of entity; and (ii) the transaction shall be effected in such a
way that holders of shares of Common Stock shall be entitled to receive
Securities, Cash or other Property with respect to or in exchange for shares of
Common Stock, then the Issuer shall cause effective provision to be made so
that, in lieu of the number of Warrant Shares issuable upon exercise of such
Warrant, effective as of the effective date of such event retroactive to the
record date, if any, of such event, such Warrant shall be exercisable for the
kind and number of Securities, Cash or other Property to which a holder of such
number of Warrant Shares would have been entitled upon such event. In any such
case, if necessary, the provisions of this Agreement and the Warrants with
respect to the rights and interests thereafter of the Holders of the Warrants
shall be appropriately adjusted so as to be applicable, as nearly as may
reasonably be, to any Securities, Cash or other Property thereafter deliverable
upon the exercise of the Warrants.
(b) The provisions of this Section 5.5 shall not operate as a
waiver of any restriction on any of the actions or transactions described above
that may be contained in any other agreement or instrument, including the Other
Equity Documents.
5.6 ABOVE MARKET PURCHASES OF SECURITIES.
(a) If, at any time after the Closing Date and prior to a Public
Market Issuance, the Issuer or any Subsidiary shall repurchase (a "Repurchase"),
by self-tender offer or otherwise, any Securities of the Issuer at an aggregate
repurchase price that exceeds the aggregate single-day Fair Market Value for the
Securities repurchased determined as of the Business Day immediately prior to
the earliest of (x) the date of such Repurchase, (y) the commencement of an
offer to repurchase or (z) the public announcement of either (x) or (y) (such
date being referred to as the "Determination Date"), then the Exercise Price and
the number of Warrant Shares issuable upon exercise of each Warrant shall be
adjusted as follows:
(i) The Exercise Price shall be reduced to an amount equal
to the product of the Exercise Price in effect immediately prior to such
issuance or sale and a fraction, (A) the numerator of which shall be (x) the
product of (1) the Fair Market Value for one share of Common Stock as of the
Determination Date and (2) the number of shares of Common Stock outstanding (on
a Fully Diluted Basis) immediately following the consummation of the Repurchase
less (y) the Repurchase Premium, and (B) the denominator of which shall be (x)
the product of (1) the Fair Market Value for one share of Common Stock as of the
Determination Date and (2) the number of shares of Common Stock outstanding (on
a Fully Diluted Basis) immediately following the consummation of the Repurchase.
(ii) The number of Warrant Shares issuable upon exercise of
such Warrant shall be increased to the number of shares determined by
multiplying (i) the number of Warrant Shares issuable upon exercise of such
Warrant immediately prior to such Repurchase times (ii) a fraction (A) the
numerator of which shall be the Exercise Price in effect immediately prior to
the adjustment in clause (i) of this Section 5.6 and (B) the denominator of
which shall be the Exercise Price in effect immediately after such adjustment.
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(b) The amount by which the aggregate repurchase price for all
Securities repurchased in any Repurchase exceeds the aggregate Fair Market Value
for such Securities is referred to as the "Repurchase Premium".
5.7 OTHER ACTIONS AFFECTING EQUITY SECURITIES.
If at any time or from time to time the Issuer shall take any action
affecting its Capital Stock (including, without limitation, the creation of
equity appreciation rights or phantom equity), other than any action of a type
otherwise described in this Article V, then the number of Warrant Shares
issuable upon exercise of each Warrant shall be adjusted (with a corresponding
adjustment to the Exercise Price) to such extent, if any, and in such manner and
at such time, as the Board shall, in the good faith exercise of its reasonable
business judgment, determine to be equitable in the circumstances, provided that
no such adjustment shall decrease the number of Warrant Shares issuable upon
exercise of such Warrant or increase the Exercise Price.
5.8 MISCELLANEOUS.
(a) Calculation of Consideration Received. If any shares of Common
Stock, Options, Convertible Securities or Other Equity Securities are issued or
sold or deemed to have been issued or sold for Cash, then the consideration
received therefor shall be deemed to be the net amount received or to be
received by the Issuer therefor. If any shares of Common Stock, Options,
Convertible Securities or Other Equity Securities are issued or sold for
consideration other than Cash (including in connection with any merger in which
the Issuer issues such Securities), then the amount of the consideration other
than Cash received by the Issuer shall be the Fair Market Value of such
consideration, as of the date of receipt.
(b) Treasury Shares. The number of shares of Common Stock
outstanding at any given time does not include shares of Common Stock owned or
held by or for the account of the Issuer or any Subsidiary, and the disposition
of any shares of Common Stock so owned or held shall be considered an issuance
of shares of Common Stock.
(c) Notice; Adjustment Rules. Whenever the Exercise Price or the
number of Warrant Shares shall be adjusted as provided in this Article V, the
Issuer shall provide to each Holder a statement, signed by a Responsible Officer
of the Issuer, describing in detail the facts requiring such adjustment and
setting forth a calculation of the Exercise Price and the number of Warrant
Shares applicable to each Warrant after giving effect to such adjustment. Each
fiscal year (to the extent applicable), the Issuer shall cause its certified
public accountants to provide to each Holder a statement, signed by such
certified public accountant, verifying the statement contemplated by the
previous sentence. All calculations under this Article V shall be made to the
nearest one thousandth of a cent ($.00001) or to the nearest one-thousandth of a
share, as the case may be. Adjustments pursuant to this Article V shall apply to
successive events or transactions of the types covered thereby. Notwithstanding
any other provision of this Article V, no adjustment shall be made to the number
of Warrant Shares or to the Exercise Price if such adjustment represents less
than 1% of the number of Warrant Shares previously required to be so delivered,
but any lesser adjustment shall be carried forward and shall be made at the time
and together with the next subsequent adjustment which together with any
adjustments so carried forward shall amount to 1% or more of the number of
Warrant Shares to be so delivered.
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(d) Excluded Issuances. Notwithstanding any other provision of
this Article V, no adjustment shall be made pursuant to this Article V in
respect of (i) the issuance of shares of Common Stock for cash in any
underwritten Public Offering pursuant to a registration statement declared
effective under the Securities Act; (ii) the issuance of shares of Common Stock
pursuant to any adjustment provided for in this Article V; (iii) the issuance of
shares of Common Stock, Options, Convertible Securities or Cash or other
Property as a distribution to the holders of shares of Common Stock if,
simultaneously with such distribution or dividend payment, the Holders received
full payment or distribution of all amounts required by Section 6.3; (iv) Common
Stock or Options to purchase Common Stock issued to employees, officers,
directors or consultants of the Issuer or any Subsidiary pursuant to the terms
of any of the NextWave Wireless LLC 2005 Units Plan, CYGNUS Communications,
Inc.'s 2004 Stock Option Plan and the 2005 PacketVideo Equity Incentive Plan (as
in effect on the date hereof); provided, however, that all of such Common Stock
and Options are issued for not less than (or have an exercise price equal to not
less than) the single-day Fair Market Value of such Common Stock as of the grant
date; (v) Common Stock or Options to purchase Common Stock issued to employees,
officers, directors or consultants of CYGNUS Communications, Inc. or any
Subsidiary of CYGNUS Communications, Inc. pursuant to the conversion of options
to purchase CYGNUS common stock into options to purchase Common Stock on the
conversion terms set forth in CYGNUS Communications, Inc.'s 2004 Stock Option
Plan (as in effect on the date hereof); (vi) Common Stock or Options to purchase
Common Stock issued to employees, officers, directors or consultants of
PacketVideo Corporation or any Subsidiary of PacketVideo Corporation pursuant to
the conversion of options to purchase PacketVideo common stock into options to
purchase Common Stock on the conversion terms set forth in the 2005 PacketVideo
Equity Incentive Plan (as in effect on the date hereof) provided, that
Securities issued pursuant to this clause (vi) and clause (vii), in the
aggregate, may not exceed 0.5% of the Common Stock (on a Fully Diluted Basis)
immediately after giving effect to the Conversion; (vii) Securities issued
pursuant to transactions involving technology licensing, research or development
activities, the use or acquisition of strategic assets, properties or rights, or
the distribution, manufacture or marketing of the Company's products, which
transactions are for non-financing purposes; provided, that Securities issued
pursuant to this clause (vii) and clause (vi), in the aggregate, may not exceed
0.5% of the Common Stock (on a Fully Diluted Basis) immediately after giving
effect to the Conversion; (viii) Securities issued in private placements for per
share consideration equal to at least 80% of Fair Market Value; provided, that
the aggregate net proceeds to the Company during the term of this Agreement from
such private placements shall not exceed $200 million; and (ix) Securities
issued upon the exercise of conversion or exchange rights, options or
subscription calls, warrants (including the Warrants), commitments or claims
(collectively, "Excluded Issuances").
ARTICLE VI
COVENANTS OF THE ISSUER
6.1 NOTICES OF CERTAIN ACTIONS.
(a) Corporate Events. In the event that the Issuer proposes to:
(i) authorize the issuance to holders of Capital Stock of
the Issuer of rights or warrants to subscribe for or purchase Capital Stock of
the Issuer;
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(ii) authorize a Distribution to any holder of evidences of
its Indebtedness, Cash or other Property;
(iii) become a party to any consolidation or merger for which
approval of any holders of Capital Stock of the Issuer will be required, or to a
conveyance or transfer of all or substantially all the Property of the Issuer;
(iv) effect any capital reorganization or reclassification of
any Capital Stock of the Issuer (other than a change in par value);
(v) commence a voluntary or involuntary dissolution,
liquidation or winding up of the Issuer;
(vi) purchase or otherwise acquire any Capital Stock of the
Issuer; or
(vii) take any other action which would result in an
adjustment in the Exercise Price or the number of Warrant Shares issuable upon
exercise of the Warrants.
then the Issuer shall provide a written notice to each Holder stating (A) the
date as of which the holders of record of Capital Stock of the Issuer to be
entitled to receive any such rights or Distributions are to be determined, (B)
the material terms of any such consolidation or merger and the expected
effective date thereof or (C) the material terms of any such conveyance,
transfer, reorganization, reclassification, dissolution, liquidation or winding
up, and the date as of which it is expected that holders of record of shares of
Capital Stock of the Issuer will be entitled to exchange their Capital Stock of
the Issuer for Securities or other Property, if any, deliverable upon such
conveyance, transfer, reorganization, reclassification, dissolution, liquidation
or winding up. Such notice shall be given not later than seven Business Days
prior to the effective date (or the applicable record date, if earlier) of such
event.
(b) Change of Control. Not less than fifteen Business Days prior
to any Change of Control, but in no event later than the third Business Day
following the Issuer becoming aware thereof, the Issuer shall provide written
notice to each Holder of the occurrence of such Change of Control, together with
a brief description thereof.
6.2 MERGER AND CONSOLIDATION OF THE ISSUER.
The Issuer will not, and will not permit any of its Affiliates to
(i) merge or consolidate with or into any other Person or (ii) sell, transfer or
lease all or substantially all of its assets or Property (in either case in a
transaction in connection with which holders of Equity Interest of the Issuer
shall be entitled to receive with respect to or in exchange for such Capital
Stock, Securities of the successor or purchasing Person, Cash or other
Property), unless, to the extent applicable, the successor or purchasing Person
expressly assumes, by supplemental agreement reasonably satisfactory in form and
substance to the Requisite Holders, the due and punctual performance and
observance of each and every covenant and condition of this Agreement to be
performed and observed by the Issuer.
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6.3 DIVIDENDS; DISTRIBUTIONS.
If at any time prior to the Expiration Time the Issuer makes any
Distribution (whether in Securities of the Issuer, Cash or other Property) on
its Capital Stock, then the Issuer shall simultaneously pay to the Holder of
each Warrant, the Securities of the Issuer, Cash or other Property that would
have been paid or delivered to such Holder on the Warrant Shares receivable upon
the exercise in full of such Warrant had such Warrant been fully exercised
immediately prior to the record date for such Distribution or, if no record is
taken, the date as of which the record holders of Warrant Shares entitled to
such Distribution are to be determined; provided, however, that none of the
adjustments set forth in Article V shall be made by reason of any such
Distribution on its Capital Stock if the Issuer makes the full Distribution on
the Warrants required by this Section 6.3. If the Issuer is prevented from
making any payment required by this Section 6.3, the adjustments in Article V
shall be made and the Issuer shall have no further obligation under this Section
6.3 with respect to such Distribution.
6.4 NO AVOIDANCE.
The Issuer will not, by amendment of its Governing Documents or through
any reorganization, Transfer of Properties, consolidation, merger, dissolution,
issue or sale of Securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be observed or
performed hereunder by the Issuer. The Issuer shall at all times in good faith
assist in the carrying out of all the provisions of this Agreement and in the
taking of all such action as may be necessary or appropriate in order to protect
the rights of the Holders hereunder against impairment.
6.5 SALE OF WARRANTS.
In any merger, consolidation, reorganization, repurchase or
reclassification or similar transaction, in which holders of Capital Stock of
the Issuer sell or otherwise Transfer Capital Stock of the Issuer held by them,
the Issuer will cause the transaction to be structured to permit the Holders to
deliver Warrants in connection with any such transaction without requirement for
exercise thereof as a condition to participation and for consideration not less
than the consideration such Holders would have received had such Holders
exercised their Warrants immediately prior thereto, less any applicable Exercise
Price.
ARTICLE VII
MISCELLANEOUS
7.1 NOTICES.
All notices and other communications provided for or permitted hereunder
shall be made by hand-delivery, first-class mail, telecopier or overnight air
courier guarantying next day delivery:
(i) if to the Issuer, to:
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Nextwave Wireless Inc.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier No.: [_________]
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
(ii) if to any Holder, to such Holder's address as set forth
on Schedule I hereto.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and the next business day after timely delivery to
the courier, if sent by overnight air courier guarantying next day delivery. The
parties may change the addresses to which notices are to be given by giving five
days' prior notice of such change in accordance herewith.
7.2 NO VOTING RIGHTS; LIMITATION OF LIABILITY.
Except as otherwise provided herein or in the Other Equity Documents, no
Warrant shall entitle the holder thereof to any voting rights or any other
rights as a stockholder of the Issuer, as such. No provision hereof, in the
absence of affirmative action by the Holder to purchase Warrant Shares, and no
enumeration herein of the rights or privileges of the Holder shall give rise to
any liability of such Holder for the Exercise Price of Warrant Shares acquirable
by exercise hereof or as an equity holder of the Issuer.
7.3 AMENDMENTS AND WAIVERS.
(a) Written Document. Any provision of this Agreement may be
amended or waived, but only pursuant to a written agreement signed by the Issuer
and the Requisite Holders, provided that no such amendment or modification shall
without the written consent of each Holder affected thereby (i) shorten the
Expiration Time of any Warrant, (ii) increase the Exercise Price of any Warrant,
(iii) change any of the provisions of this Section 8.3(a) or the definition of
"Requisite Holders" or any other provision hereof specifying the number or
percentage of Holders required to waive, amend, or modify any rights hereunder
or required to make any determination or grant any consent hereunder or
otherwise to act with respect to this Agreement or any Warrants, (iv) change any
of the provisions of Article V or (v) increase the obligations of any Holder.
20
(b) No Waiver. No failure on the part of any Holder to exercise
and no delay in exercising, and no course of dealing with respect to, any right,
power or privilege under this Agreement or the Warrants shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, power or
privilege under this Agreement or the Warrant preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.
7.4 REMEDIES.
Each Holder shall have all rights and remedies reserved for such Holder
pursuant to this Agreement, all rights and remedies which such Holder has been
granted at any time under any other agreement or instrument and all of the
rights and remedies such Holder may have at law or in equity. The remedies
provided herein are cumulative and not exclusive. Any Person having any rights
under any provision of this Agreement will be entitled to enforce such rights
specifically, to recover damages by reason of any breach of any provision of
this Agreement and to exercise all other rights granted by law or equity.
7.5 BINDING EFFECT.
Subject to the limitations set forth in this Agreement and the Other
Equity Documents, each Holder shall have the right to assign or otherwise
Transfer its rights under this Agreement or any Warrants or Warrant Shares held
by it. The Issuer shall not assign its rights or obligations hereunder without
the prior written consent of the Requisite Holders. This Agreement shall be
binding upon and inure to the benefit of the Issuer, each Holder and their
successors and permitted assigns.
7.6 COUNTERPARTS.
This Agreement may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement.
7.7 GOVERNING LAW; JURISDICTION AND VENUE.
(a) ALL QUESTIONS CONCERNING THE CONSTRUCTION, INTERPRETATION AND
VALIDITY OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE DOMESTIC LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY CHOICE
OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK OR ANY
OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY
JURISDICTION OTHER THAN THE STATE OF NEW YORK.
(b) THE PARTIES TO THIS AGREEMENT AGREE THAT JURISDICTION AND
VENUE IN ANY ACTION BROUGHT BY ANY PARTY HERETO PURSUANT TO THIS AGREEMENT SHALL
EXCLUSIVELY LIE IN ANY FEDERAL OR STATE COURT LOCATED IN THE COUNTY OF NEW YORK
IN THE STATE OF NEW YORK. BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE
PARTIES HERETO IRREVOCABLY SUBMIT TO THE JURISDICTION OF SUCH COURTS FOR
THEMSELVES AND IN RESPECT OF THEIR PROPERTY WITH RESPECT TO SUCH ACTION. THE
21
PARTIES HERETO IRREVOCABLY AGREE THAT VENUE WOULD BE PROPER IN SUCH COURT, AND
HEREBY WAIVE ANY OBJECTION THAT SUCH COURT IS AN IMPROPER OR INCONVENIENT FORUM
FOR THE RESOLUTION OF SUCH ACTION.
(c) THE COMPANY AND THE ISSUER HEREBY AGREE THAT SERVICE UPON THEM
BY REGISTERED OR CERTIFIED MAIL (RETURN RECEIPT REQUESTED) SHALL CONSTITUTE
SUFFICIENT NOTICE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF THE HOLDERS TO BRING
PROCEEDINGS AGAINST EITHER THE COMPANY OR THE ISSUER IN THE COURTS OF ANY OTHER
JURISDICTION.
7.8 WAIVER OF JURY TRIAL.
EACH PARTY HERETO HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION (a) ARISING UNDER THIS AGREEMENT OR ANY OTHER
EQUITY DOCUMENT OR (b) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
DEALINGS OF THE PARTIES HERETO OR ANY OF THEM IN RESPECT TO THIS AGREEMENT OR
ANY OTHER EQUITY DOCUMENT, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE. EACH PARTY
HERETO HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE
OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR
RIGHTS TO TRIAL BY JURY.
7.9 BENEFITS OF THIS AGREEMENT.
Nothing in this Agreement shall be construed to give to any Person other
than the Issuer and each Holder of a Warrant or a Warrant Share any legal or
equitable right, remedy or claim hereunder.
7.10 HEADINGS.
The headings in this Agreement are for convenience of reference only and
shall not limit or otherwise affect the meaning hereof.
7.11 AGGREGATION OF WARRANTS AND WARRANT SHARES.
All Warrants and Warrant Shares held or acquired by any Person and its
Affiliates shall be aggregated together for purposes of measuring any numerical
thresholds used in determining the availability to such Person and its
Affiliates, taken collectively, of rights under this Agreement and the
applicability of obligations and restrictions under this Agreement.
22
7.12 OPERATIVE DATE.
This Agreement shall become operative on the date hereof.
* * * *
23
IN WITNESS WHEREOF, each party hereto has caused this Warrant
Agreement to be duly executed and delivered by its authorized signatory, all as
of the date and year first above written.
NEXTWAVE WIRELESS INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Executive Vice President
Signature Page to Warrant Agreement
AVENUE INVESTMENTS, L.P.
By: Avenue Partners, LLC, its General
Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Member
Signature Page to Warrant Agreement
AVENUE SPECIAL SITUATIONS FUND IV, L.P.
By: Avenue Capital Partners IV, LLC, its
General Partner
By: GL Partners IV, LLC, its Managing
Member
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Member
Signature Page to Warrant Agreement
DK ACQUISITION PARTNERS, L.P.
By: ▇.▇. ▇▇▇▇▇▇▇▇ & Co., its General
Partner
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: General Partner
Signature Page to Warrant Agreement
HIGHBRIDGE INTERNATIONAL LLC
By: Highbridge Capital Management, LLC
By: /s/ ▇▇▇▇ ▇. Chill
---------------------------
Name: ▇▇▇▇ ▇. Chill
Title: Managing Director
Signature Page to Warrant Agreement
INVESTCORP INTERLACHEN MULTI-STRATEGY
MASTER FUND LIMITED
By: Interlachen Capital Group LP,
an Authorized Signatory
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
Signature Page to Warrant Agreement
POLYGON DEBT HOLDINGS LIMITED
By: Polygon Investment Partners LLP,
its investment manager
By: /s/ ▇. ▇▇▇▇▇▇▇
---------------------------
Name: ▇. ▇▇▇▇▇▇▇
Title: PM
Signature Page to Warrant Agreement
SILVER OAK CAPITAL, L.L.C.,
as agent for and on behalf of the
entities attached hereto
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
Signature Page to Warrant Agreement
Schedule I
----------
HOLDERS
Name and Address
----------------
AVENUE INVESTMENTS, L.P.
Address: Avenue Capital Group
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
E-Mail: ▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇; ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to
O'Melveny & ▇▇▇▇▇ LLP
Times Square Tower
▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
AVENUE SPECIAL SITUATIONS FUND IV, L.P.
Address: Avenue Capital Group
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
E-Mail: ▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇; ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to
O'Melveny & ▇▇▇▇▇ LLP
Times Square Tower
▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Name and Address
----------------
DK ACQUISITION PARTNERS, L.P.
Address:
Credit Contact: DK Acquisition Partners, L.P.
c/o Davidson Kempner Capital Management
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
E-Mail: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
Operations Contact: DK Acquisition Partners, L.P.
c/o Davidson Kempner Capital Management
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
E-Mail: ▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
HIGHBRIDGE INTERNATIONAL LLC
Address: c/o Highbridge Capital Management, LLC
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇. ▇▇▇▇▇▇/▇▇▇▇ ▇. Chill
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇/▇▇▇▇.▇▇▇▇▇@▇▇▇▇▇.▇▇▇
INVESTCORP INTERLACHEN MULTI-STRATEGY MASTER FUND LIMITED
Address: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇ and Legal Department
POLYGON DEBT HOLDINGS LIMITED
Address: ▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇, ▇.▇.
Tel: ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇
Fax: ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇
E-mail: ▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇
Name and Address
----------------
SILVER OAK CAPITAL, L.L.C.,
Address:
Operational/Administrative Contract: Angelo, Gordon, & Co., L.P.
Accounting Department
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Closing Documentation/Credit Contract: Angelo, Gordon, & Co., L.P.
Accounting Department
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Exhibit A to the Warrant Agreement
----------------------------------
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES OR BLUE SKY LAWS. THESE SECURITIES MAY NOT BE
SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER SAID ACT OR APPLICABLE STATE SECURITIES OR BLUE SKY LAWS.
ADDITIONALLY, THE TRANSFER OF THESE SECURITIES IS SUBJECT TO THE
CONDITIONS SPECIFIED IN THE PURCHASE AGREEMENT AND THE WARRANT AGREEMENT, EACH
DATED AS OF JULY 17, AMONG THE ISSUER HEREOF AND CERTAIN OTHER SIGNATORIES
THERETO. UPON THE FULFILLMENT OF CERTAIN CONDITIONS, THE ISSUER HEREOF HAS
AGREED TO DELIVER TO THE HOLDER HEREOF A NEW CERTIFICATE, NOT BEARING THIS
LEGEND, FOR THE SECURITIES REPRESENTED HEREBY REGISTERED IN THE NAME OF THE
HOLDER HEREOF. COPIES OF SUCH AGREEMENTS MAY BE OBTAINED AT NO COST BY WRITTEN
REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE
ISSUER HEREOF.
NEXTWAVE WIRELESS INC.
No. W - [_________ ___], 2006
COMMON STOCK PURCHASE WARRANT
-----------------------------
THIS CERTIFIES that, for value received, [_______] (the
"Holder"), or its assigns, is entitled to purchase from Nextwave Wireless Inc.,
a Delaware corporation (the "Issuer"), [___](1) shares ("Warrant Shares") of
Common Stock, $.001 par value (the "Common Stock"), of the Issuer, at the price
(the "Exercise Price") of $.01 per share, at any time or from time to time
during the period commencing on the date hereof and ending at 5:00 P.M. Eastern
time, on July 15, 2009 (the "Expiration Time").
The Holder may exercise all or any part of such rights at any time
or from time to time prior to the Expiration Time.
This Warrant has been issued pursuant to the Warrant Agreement dated
as of July 17, 2006 (as amended, restated, supplemented or otherwise modified
from time to time, the "Warrant Agreement"), among the Issuer and the Holders
named therein, and is subject to the terms and conditions, and the Holder is
entitled to the benefits, thereof. A copy of the Warrant Agreement is on file
and may be inspected at the principal executive office of the Issuer. The Holder
of this certificate, by acceptance of this certificate, agrees to be bound by
--------
(1)Insert number of shares equal to 5% of outstanding common stock as of the
Conversion Date.
A-1
the provisions of the Warrant Agreement. Capitalized terms used but not defined
herein shall have the respective meanings given to such terms in the Warrant
Agreement.
SECTION 1. Exercise of Warrant. On any day on or prior to the
Expiration Time, the Holder may exercise this Warrant, in whole or in part, in
the manner set forth in Article IV of the Warrant Agreement.
SECTION 2. Exercise Price. The Exercise Price is subject to
adjustment from time to time as set forth in the Warrant Agreement.
SECTION 3. Exchange of Warrant. On any day on or prior to the
Expiration Time, the Holder may exchange this Warrant, in whole or in part, for
Warrant Shares by delivering to the Issuer this Warrant accompanied by a
properly completed Exchange Form in the form of Annex B attached hereto. The
number of Capital Stock to be received by the Holder upon such exchange shall be
determined as set forth in the Warrant Agreement.
SECTION 4. Transfer. Subject to the limitations set forth or
referred to in the Warrant Agreement, this Warrant may be Transferred by the
Holder by delivery to the Issuer of this Warrant accompanied by a properly
completed Assignment Form in the form of Annex C attached hereto.
SECTION 5. Lost, Stolen, Mutilated or Destroyed Warrant. If this
Warrant is lost, stolen, mutilated or destroyed, the Issuer will issue a new
Warrant of like denomination and tenor upon compliance with the provisions set
forth in the Warrant Agreement.
SECTION 7. Successors. All of the provisions of this Warrant by or
for the benefit of the Issuer or the Holder shall bind and inure to the benefit
of their respective successors and permitted assigns.
SECTION 8. Headings. Section headings in this Warrant have been
inserted for convenience of reference only and shall not affect the construction
of, or be taken into consideration in interpreting, this Warrant.
SECTION 9. GOVERNING LAW. THIS WARRANT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING
EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS EXCEPT TO THE EXTENT THAT THE NEW YORK
CONFLICTS OF LAWS PRINCIPLES WOULD APPLY THE APPLICABLE LAWS OF THE STATE OF THE
ISSUER'S ORGANIZATION TO INTERNAL MATTERS RELATING TO ENTITIES SUCH AS THE
ISSUER ORGANIZED THEREUNDER).
* * * * *
A-2
IN WITNESS WHEREOF, the undersigned has caused this Warrant to be
executed by its duly authorized officers and this Warrant to be dated as of the
date first set forth above.
NEXTWAVE WIRELESS INC.
By:
------------------------------------
Name:
Title:
Annex A to the Warrant
----------------------
EXERCISE FORM
[To be signed upon exercise of a Warrant]
TO NEXTWAVE WIRELESS INC.
The undersigned, being the Holder of the attached Warrant, hereby
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder _________ shares of Common Stock of Nextwave Wireless Inc.,
a Delaware corporation (the "Issuer") and requests that the certificates or
other evidence of ownership for such shares be issued in the name of, and be
delivered to, _______________________, whose address is_______________________
______________________________________________________________________________.
The undersigned warrants to the Issuer that the undersigned (a) is
not acquiring the Warrant Shares with a view to Transferring such Warrant Shares
in violation of the Securities Act of 1933, as amended (the "Securities Act")
and (b) acknowledges that the issuance of the Warrant Shares has not been
registered under the Securities Act and that the Warrant Shares may be resold
only if registered pursuant to the provisions of the Securities Act or if an
exemption therefrom is available.
The foregoing exercise is (check one):
______ Irrevocable
______ Conditioned upon the consummation of the transaction described
briefly below:
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
Dated:
---------------------- ------------------------------------
Name:
Title:
Annex B to the Warrant
----------------------
EXCHANGE FORM
[To be signed upon exchange of a Warrant]
TO NEXTWAVE WIRELESS INC.
The undersigned, being the Holder of the within Warrant, hereby
elects to exchange, pursuant to Section 4.2 of the Warrant Agreement referred to
in such Warrant, the portion of such Warrant representing the right to purchase
_________ shares of Common Stock of Nextwave Wireless Inc., a Delaware
corporation (the "Issuer"). The undersigned hereby requests that ------ the
certificates or evidence of ownership for the number of shares issuable in such
exchange pursuant to such Section 4.2 be issued in the name of, and be delivered
to, _____________, whose address is___________________________________________.
The undersigned warrants to the Issuer that the undersigned (a) is
not exchanging the Warrant Shares with a view to Transfer such Warrant Shares in
violation of the Securities Act of 1933, as amended (the "Securities Act") and
(b) acknowledges that the issuance of the Warrant Shares has not been registered
under the Securities Act and that the Warrant Shares may be resold only if
registered pursuant to the provisions of the Securities Act or if an exemption
therefrom is available.
The foregoing exchange is (check one):
______ Irrevocable
______ Conditioned upon the consummation of the transaction described
briefly below:
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
Dated:
------------------------ --------------------------------
Name:
Title:
Annex C to the Warrant
----------------------
ASSIGNMENT FORM
[To be signed only upon transfer of a Warrant]
For value received, the undersigned hereby sells, assigns and
transfers unto _________________________, all of the rights represented by the
within Warrant to purchase _______________ shares of Common Stock of Nextwave
Wireless Inc., a Delaware corporation (the "Issuer"), to which such Warrant
relates, and appoints ________________________ attorney to transfer such Warrant
on the books of the Issuer, with full power of substitution in the premises.
Dated:_______________________
________________________________________
Name:
Title:
By executing and delivering this Assignment Form to the Issuer, the
undersigned hereby agrees to become a party to, to be bound by, and to comply
with the provisions of the Warrant Agreement dated as of July 17, 2006 (as
amended, restated, supplemented or otherwise modified from time to time, the
"Warrant Agreement"), among the Issuer and the Holders, in the same manner as if
the undersigned were an original signatory to the Warrant Agreement.
The undersigned agrees that he, she or it shall be a "Holder", as such
term is defined in the Warrant Agreement.
Dated:_______________________
_____________________________________
Signature of transferee
_____________________________________
Print Name of transferee
_____________________________________
_____________________________________
Address
_____________________________________
Facsimile
_____________________________________
Telephone