__________________________________________________________
WARRANT AGREEMENT
Dated as of September 4, 1998
By and Between
WIRELESS ONE, INC.
and
FIRST CHICAGO TRUST COMPANY OF NEW YORK,
Warrant Agent
____________________
Warrants to Purchase Shares of Common Stock
(Par Value $0.01 Per Share)
__________________________________________________________
PAGE
TABLE OF CONTENTS
PAGE
ARTICLE I
ISSUANCE, FORM, EXECUTION, DELIVERY
AND REGISTRATION OF WARRANT CERTIFICATES
SECTION 1.01. ISSUANCE OF WARRANTS.............................1
SECTION 1.02. FORM OF WARRANT CERTIFICATES.....................3
SECTION 1.03. EXECUTION OF WARRANT CERTIFICATES................3
SECTION 1.04. AUTHENTICATION AND DELIVERY......................3
SECTION 1.05. SEPARATION OF WARRANTS AND NOTES.................4
SECTION 1.06. REGISTRATION.....................................4
SECTION 1.07. REGISTRATION OF TRANSFERS OR EXCHANGES...........5
SECTION 1.08. LOST, STOLEN, DESTROYED, DEFACED OR MUTILATED
WARRANT CERTIFICATES............................7
SECTION 1.09. OFFICES FOR EXERCISE, ETC........................8
ARTICLE II DURATION, EXERCISE OF WARRANTS;
EXERCISE PRICE AND REPURCHASE OF WARRANTS
SECTION 2.01. DURATION OF WARRANTS.............................9
SECTION 2.02. EXERCISE, EXERCISE PRICE, SETTLEMENT AND
DELIVERY .......................................9
SECTION 2.03. CANCELLATION OF WARRANT CERTIFICATES............12
SECTION 2.04. DELIBERATELY OMITTED............................12
ARTICLE III OTHER PROVISIONS RELATING TO
RIGHTS OF HOLDERS OF WARRANTS
SECTION 3.01. ENFORCEMENT OF RIGHTS...........................12
SECTION 3.02. OBTAINING STOCK EXCHANGE LISTINGS...............13
ARTICLE IV CERTAIN COVENANTS OF THE COMPANY
SECTION 4.01. PAYMENT OF TAXES................................13
SECTION 4.02. RULES 144 AND 144A..............................14
SECTION 4.03. SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS...........................................14
SECTION 4.04. RESOLUTION OF PREEMPTIVE RIGHTS, IF ANY.........14
ARTICLE V ADJUSTMENTS
SECTION 5.01. ADJUSTMENT OF EXERCISE RATE; NOTICES............14
SECTION 5.02. FRACTIONAL WARRANT SHARES.......................23
ARTICLE VI CONCERNING THE WARRANT AGENT
SECTION 6.01. WARRANT AGENT...................................24
SECTION 6.02. CONDITIONS OF WARRANT AGENT'S OBLIGATIONS.......24
SECTION 6.03. RESIGNATION AND APPOINTMENT OF SUCCESSOR........29
ARTICLE VII MISCELLANEOUS
SECTION 7.01. AMENDMENT.......................................30
SECTION 7.02. NOTICES AND DEMANDS TO THE COMPANY AND
WARRANT AGENT .................................31
SECTION 7.03. ADDRESSES FOR NOTICES TO PARTIES AND FOR
TRANSMISSION OF DOCUMENTS......................31
SECTION 7.04. NOTICES TO HOLDERS..............................32
SECTION 7.05. APPLICABLE LAW..................................32
SECTION 7.06. PERSONS HAVING RIGHTS UNDER AGREEMENT...........32
SECTION 7.07. HEADINGS........................................33
SECTION 7.08. COUNTERPARTS....................................33
SECTION 7.09. INSPECTION OF AGREEMENT.........................33
SECTION 7.10. AVAILABILITY OF EQUITABLE REMEDIES..............33
SECTION 7.11. OBTAINING OF GOVERNMENTAL APPROVALS.............33
PAGE
EXHIBIT A - Form of Warrant Certificate....................A-1
EXHIBIT B - Certificate to Be Delivered upon Exchange or
Registration of Transfer of Warrants..........C-1
EXHIBIT C - Form of Certificate to Be Delivered in
Connection with Transfers to Accredited
Investors.....................................D-1
EXHIBIT D - Warrant Registration Rights Agreement..........E-1
PAGE
INDEX OF DEFINED TERMS
DEFINED TERM PAGE
Accredited Investor ............................................6
Adjustment Fraction ............................................2
Affiliate .....................................................21
Agreement ......................................................1
Anticipated Option Adjustment ..................................3
Business Day ...................................................9
Capital Stock .................................................22
Cashless Exercise .............................................10
Cashless Exercise Ratio .......................................10
Common Stock ...................................................2
Company ......................................................1
Current Market Value ..........................................22
Definitive Warrants ............................................3
Election to Exercise ..........................................10
Exercise Date .................................................11
Exercise Price .................................................9
Exercise Rate ..................................................9
Expiration Date ................................................9
fully diluted basis ............................................2
Global Shares .................................................12
Independent Financial Expert ..................................23
Issue Date ....................................................18
Officers' Certificate .........................................26
Person .....................................................10
Private Placement Legend .......................................6
Purchase Agreement .............................................1
Purchasers .....................................................1
QIB.............................................................6
Registrar ......................................................4
Related Parties ...............................................25
Requisite Warrant Holders .....................................31
Resale Restriction Termination Date ............................5
Securities Act .................................................5
Surviving Person ..............................................19
Warrant Agent ..................................................1
Warrant Agent Office ...........................................8
Warrant Certificates ...........................................1
Warrant Exercise Office ........................................8
Warrant Register ...............................................4
Warrant Registration Rights Agreement ..........................1
Warrant Shares .................................................2
Warrants ......................................................1
WARRANT AGREEMENT
WARRANT AGREEMENT ("AGREEMENT"), dated as of September 4, 1998 by
and between WIRELESS ONE, INC. (the "COMPANY"), a Delaware corporation, and
FIRST CHICAGO TRUST COMPANY OF NEW YORK, as warrant agent (with any
successor Warrant Agent, the "WARRANT AGENT").
WHEREAS, the Company has entered into a discretionary note
purchase agreement (the "PURCHASE AGREEMENT") dated September 4, 1998 with
the purchasers listed in Schedule I thereto (the "PURCHASERS") in which the
Company may request that the Purchasers purchase from time to time up to
$20,000,000 of Notes (as defined in the Purchase Agreement) and, upon each
such issuance of Notes, the Company shall issue warrants (the "WARRANTS")
entitling the holders to purchase shares of Common Stock (as defined
herein), in an amount equal to the product of: (i) 6% of the outstanding
shares of Common Stock on a fully diluted basis on the date of such
issuance and (ii) the face amount of Notes issued on such issue date
divided by $20,000,000, to be issued pro rata to each such Purchaser in
proportion to the principal amount of Notes purchased by such Purchaser
divided by the aggregate principal amount of Notes issued on such date.
The certificates evidencing the Warrants are herein referred to
collectively as the "WARRANT CERTIFICATES"; and
WHEREAS, the holders of the Warrants are entitled to the benefits
of a Warrant Registration Rights Agreement dated as of September 4, 1998
between the Company and the Initial Purchasers (the "WARRANT REGISTRATION
RIGHTS AGREEMENT") attached hereto as EXHIBIT E; and
WHEREAS, the Company desires the Warrant Agent as warrant agent
to assist the Company in connection with the issuance, exchange,
cancellation, replacement and exercise of the Warrants, and in this
Agreement wishes to set forth, among other things, the terms and conditions
on which the Warrants may be issued, exchanged, canceled, replaced and
exercised;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
ISSUANCE, FORM, EXECUTION, DELIVERY AND
REGISTRATION OF WARRANT CERTIFICATES
SECTION 1.01. ISSUANCE OF WARRANTS. Warrants shall be
originally issued in connection with the issuance of the Notes. At such
time as the Company issues any Notes, the Company shall also issue to the
Purchaser thereof a number of Warrants equal to (i) the face amount of the
Notes issued to such Purchaser, divided by (ii) $100,000. Such Warrants
shall be separately transferable from the Notes.
Each Warrant Certificate shall evidence the number of Warrants
specified therein. Each Warrant evidenced by a Warrant Certificate shall
represent the right, subject to the provisions contained herein and
therein, to purchase from the Company (and the Company shall issue and sell
to the holder of such Warrant) an amount of fully paid, registered and non-
assessable shares of Common Stock equal to the product of: (i) 6% of the
outstanding shares of Common Stock on a fully diluted basis on the date of
initial issuance of such Warrants and (ii) 0.005, at an exercise price
determined in accordance with Section 2.02 hereof. The number of shares of
the Company's common stock, par value $0.01 per share (the "COMMON STOCK")
issuable upon exercise of a Warrant is subject to adjustment as provided
herein and in the Warrant. The shares of Common Stock issuable upon
exercise of a Warrant are hereinafter referred to as the "WARRANT SHARES"
and, unless the context otherwise requires, such term shall also include
any other securities or property issuable and deliverable upon exercise of
a Warrant as provided in Article V, subject to adjustment as provided
herein and in the Warrant. As used in this Agreement, the term "FULLY
DILUTED BASIS" means, on any specified date, giving effect to exercise of
the Warrants to be issued on such date, all outstanding Warrants, and all
other options, warrants or other securities convertible into or
exchangeable for shares of Common Stock. For the purposes of determining
the number of shares of Common Stock outstanding on a fully diluted basis
on any specified date prior to the earlier of (i) October 3, 1998 and
(ii) the cancellation and exchange of certain employee options pursuant to
the Anticipated Option Adjustment (as defined below), the number of shares
of Common Stock issuable upon the exercise of all outstanding options shall
be deemed to be 813,105, whether or not such Anticipated Option Adjustment
is completed as of the date thereof; provided, however, in the event that
as a result of the failure to consummate, or any adjustment to, the
Anticipated Option Adjustment the number of shares of Common Stock issuable
upon exercise of options actually outstanding as of October 3, 1998 is
greater than or less than 813,105, then the number of shares of Common
Stock issuable upon the exercise of each Warrant shall be increased or
decreased (as the case may be) to a number determined by multiplying the
number of shares of Common Stock theretofore issuable upon exercise of each
Warrant by a fraction (the "ADJUSTMENT FRACTION"), the numerator of which
shall be the number of shares of Common Stock outstanding on the date of
issuance of such Warrant assuming that the number of shares of Common Stock
issuable upon exercise of options outstanding as of such date is the number
of shares of Common Stock issuable upon exercise of options outstanding as
of October 3, 1998 and the denominator of which shall be the number of
shares of Common Stock outstanding on the date of issuance of such Warrant
assuming that the number of shares of Common Stock issuable upon exercise
of options outstanding as of such date is 813,105, in each case as
determined on a fully diluted basis. In the event that any Warrant Shares
shall have been issued upon exercise of any Warrants on or prior to
October 3, 1998, the Company shall issue additional Warrant Shares to each
holder of outstanding Warrant Shares, or shall cancel Warrants Shares of
such holder, as the case may be, in an amount equal to (x) the number of
Warrant Shares held by such holder on October 3, 1998 prior to any such
issuance or cancellation, multiplied by (y) the Adjustment Fraction minus
1. As used herein, the term "ANTICIPATED OPTION ADJUSTMENT" shall mean a
proposed adjustment to the Company's 1995 Long-Term Performance Incentive
Plan occurring prior to October 3, 1998 whereby the holders of certain
options to acquire Common Stock outstanding on the date hereof will
exchange their existing options for a number of options less than the
number held by them as of the date hereof, which options shall have an
exercise price equal to or greater than the average of the NASDAQ reported
high and low bid prices on shares of Common Stock on September 4, 1998.
SECTION 1.02. FORM OF WARRANT CERTIFICATES. The Warrant
Certificates will be issued in registered form as definitive Warrant
Certificates (the "DEFINITIVE WARRANTS"), substantially in the form of
EXHIBIT A attached hereto.
SECTION 1.03. EXECUTION OF WARRANT CERTIFICATES. The Warrant
Certificates shall be executed on behalf of the Company by the chairman of
its board of directors, its president, its chief financial officer or any
vice president and attested by its secretary or assistant secretary. Such
signatures may be the manual or facsimile signatures of the present or any
future such officers. The seal of the Company may be in the form of a
facsimile thereof and may be impressed, affixed, imprinted or otherwise
reproduced on the Warrant Certificates. Typographical and other minor
errors or defects in any such reproduction of any such signature shall not
affect the validity or enforceability of any Warrant Certificate that has
been duly countersigned and delivered by the Warrant Agent.
In case any officer of the Company who shall have signed any of
the Warrant Certificates shall cease to be such officer before the Warrant
Certificate so signed shall be authenticated and delivered by the Warrant
Agent or disposed of by the Company, such Warrant Certificate nevertheless
may be authenticated and delivered or disposed of as though the person who
signed such Warrant Certificate had not ceased to be such officer of the
Company. Any Warrant Certificate may be signed on behalf of the Company by
such persons as, at the actual date of the execution of such Warrant
Certificate, shall be the proper officers of the Company, although at the
date of the execution and delivery of this Agreement any such person was
not such an officer.
SECTION 1.04. AUTHENTICATION AND DELIVERY. Subject to the
immediately following paragraph, Warrant Certificates shall be
authenticated by manual signature and dated the date of authentication by
the Warrant Agent and shall not be valid for any purpose unless so
authenticated and dated. The Warrant Certificates shall be numbered and
shall be registered in the Warrant Register (as defined in Section 1.06
hereof).
Upon the receipt by the Warrant Agent of a written order of the
Company, which order shall be signed by the chairman of its board of
directors, its president, its chief financial officer or any vice president
and attested by its secretary or assistant secretary, and shall specify the
amount of Warrants to be authenticated, the date of such Warrants and such
other information as the Warrant Agent may reasonably request, without any
further action by the Company, the Warrant Agent is authorized, upon
receipt from the Company at any time and from time to time of the Warrant
Certificates, duly executed as provided in Section 1.03 hereof, to
authenticate the Warrant Certificates and upon the holder's request deliver
them. Such authentication shall be by a duly authorized signatory of the
Warrant Agent (although it shall not be necessary for the same signatory to
sign all Warrant Certificates).
In case any authorized signatory of the Warrant Agent who shall
have authenticated any of the Warrant Certificates shall cease to be such
authorized signatory before the Warrant Certificate shall be disposed of by
the Company or the Warrant Agent, such Warrant Certificate nevertheless may
be delivered or disposed of as though the person who authenticated such
Warrant Certificate had not ceased to be such authorized signatory of the
Warrant Agent; and any Warrant Certificate may be authenticated on behalf
of the Warrant Agent by such persons as, at the actual time of
authentication of such Warrant Certificates, shall be the duly authorized
signatories of the Warrant Agent, although at the time of the execution and
delivery of this Agreement any such person is not such an authorized
signatory.
The Warrant Agent's authentication on all Warrant Certificates
shall be in substantially the form set forth in EXHIBIT A hereto.
SECTION 1.05. SEPARATION OF WARRANTS AND NOTES. The Notes and
the Warrants will be separately transferable upon the issuance thereof.
SECTION 1.06. REGISTRATION. The Company will keep, at the
office or agency maintained by the Company for such purpose, a register or
registers in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of, and
registration of transfer and exchange of, Warrants as provided in this
Article. Each Person designated by the Company from time to time as a
Person authorized to register the transfer and exchange of the Warrants is
hereinafter called, individually and collectively, the "REGISTRAR." The
Company hereby initially appoints the Warrant Agent as Registrar. Upon
written notice to the Warrant Agent and any acting Registrar, the Company
may appoint a successor Registrar for such purposes.
The Company will at all times designate one Person (who may be
the Company and who need not be a Registrar) to act as repository of a
master list of names and addresses of the holders of Warrants (the "WARRANT
REGISTER"). The Warrant Agent will act as such repository unless and until
some other Person is, by written notice from the Company to the Warrant
Agent and the Registrar, designated by the Company to act as such. The
Company shall cause each Registrar to furnish to such repository, on a
current basis, such information as to all registrations of transfer and
exchanges effected by such Registrar, as may be necessary to enable such
repository to maintain the Warrant Register on as current a basis as is
practicable.
SECTION 1.07. REGISTRATION OF TRANSFERS OR EXCHANGES.
(a) TRANSFER OR EXCHANGE OF DEFINITIVE WARRANTS. When
Definitive Warrants are presented to the Warrant Agent with a request from
the holder:
(i) to register the transfer of the Definitive Warrants; or
(ii) to exchange such Definitive Warrants for an equal number of
Definitive Warrants of other authorized denominations,
the Warrant Agent shall register the transfer or make the exchange as
requested if the requirements under this Warrant Agreement as set forth in
this Section 1.07 hereof for such transactions are met; provided, however,
that the Definitive Warrants presented or surrendered by a holder for
registration of transfer or exchange:
(x) shall be duly endorsed or accompanied by a written instruction of
transfer or exchange in form satisfactory to the Company and the
Warrant Agent, duly executed by such holder or by his attorney,
duly authorized in writing and accompanied by the address for
notices of each transferee of such Warrant; and
(y) in the case of Warrants the offer and sale of which have not been
registered under the Securities Act of 1933, as amended (the
"SECURITIES ACT") and are presented for transfer or exchange
prior to (X) the date which is two years (or such shorter period
as may be prescribed by Rule 144(k) (or any successor provision
thereto)) after the later of the date of original issuance of the
Warrants and the last date on which the Company or any affiliate
of the Company was the owner of such Warrants, or any predecessor
thereto, and (Y) such later date, if any, as may be required by
any subsequent change in applicable law (the "RESALE RESTRICTION
TERMINATION DATE"), such Warrants shall be accompanied by the
following additional information and documents, as applicable:
(A) if such Warrants are being delivered to the Warrant Agent by
a holder for registration in the name of such holder,
without transfer, a certification from such holder to that
effect (in substantially the form of EXHIBIT B hereto); or
(B) if such Warrants are being transferred to an "accredited
investor" within the meaning of Rule 501 under the
Securities Act (an "ACCREDITED INVESTOR"), delivery by the
transferor of a certification to that effect (in
substantially the form of EXHIBIT B hereto), and delivery by
the proposed transferee of a Transferee Certificate for
Accredited Investors (in substantially the form of EXHIBIT C
hereto); or
(C) if such Warrants are being transferred to a qualified
institutional buyer as such term is defined in Rule 144A
under the Securities Act (a "QIB") in accordance with Rule
144A under the Securities Act, a certification from the
transferor to that effect (in substantially the form of
EXHIBIT B hereto); or
(D) if such Warrants are being transferred in reliance on Rule
144 under the Securities Act, delivery by the transferor of
(i) a certification from the transferor to that effect (in
substantially the form of EXHIBIT B hereto), and (ii) an
opinion of counsel reasonably satisfactory to the Company
and the Warrant Agent to the effect that such transfer is in
compliance with the Securities Act and all applicable state
securities laws; or
(E) if such Warrants are being transferred in reliance on
another exemption from the registration requirements of the
Securities Act, a certification from the transferor to that
effect (in substantially the form of EXHIBIT B hereto) and
an opinion of counsel reasonably satisfactory to the Company
and the Warrant Agent to the effect that such transfer is in
compliance with the Securities Act and all applicable state
securities laws; provided that the Company may, based upon
the views of its own counsel, instruct the Warrant Agent not
to register such transfer in any case where the proposed
transferee is not a QIB or an Accredited Investor.
(b) PRIVATE PLACEMENT LEGEND. Upon the transfer or exchange of
Warrant Certificates not bearing the legend set forth in the first
paragraph of EXHIBIT A attached hereto (the "PRIVATE PLACEMENT LEGEND"),
the Warrant Agent shall deliver Warrant Certificates that do not bear the
Private Placement Legend. Upon the transfer, exchange or replacement of
Warrant Certificates bearing the Private Placement Legend, the Warrant
Agent shall deliver Warrant Certificates that bear the Private Placement
Legend unless, and the Warrant Agent is hereby authorized to deliver
Warrant Certificates without the Private Placement Legend if, (i) there is
delivered to the Warrant Agent an opinion of counsel reasonably
satisfactory to the Company and the Warrant Agent to the effect that
neither such legend nor the related restrictions on transfer are required
in order to maintain compliance with the provisions of the Securities Act
or (ii) the Warrants to be transferred or exchanged represented by such
Warrant Certificates are being transferred or exchanged pursuant to an
effective registration statement under the Securities Act.
(c) OBLIGATIONS WITH RESPECT TO TRANSFERS OR EXCHANGES OF
DEFINITIVE WARRANTS.
(i) To permit registrations of transfers or exchanges in accordance
with this Agreement, the Company shall execute, at the Warrant
Agent's request, and the Warrant Agent shall authenticate,
Definitive Warrants.
(ii) All Definitive Warrants issued upon any registration, transfer or
exchange of Definitive Warrants shall be the valid obligations of
the Company, entitled to the same benefits under this Warrant
Agreement as the Definitive Warrants surrendered upon the
registration of transfer or exchange.
(iii)Prior to due presentment for registration of transfer of any
Warrant, the Warrant Agent and the Company may deem and treat the
Person in whose name any Warrant is registered as the absolute
owner of such Warrant, and neither the Warrant Agent nor the
Company shall be affected by notice to the contrary.
SECTION 1.08. LOST, STOLEN, DESTROYED, DEFACED OR MUTILATED
WARRANT CERTIFICATES. Upon receipt by the Company and the Warrant Agent
(or any agent of the Company or the Warrant Agent, if requested by the
Company) of evidence satisfactory to them of the loss, theft, destruction,
defacement, or mutilation of any Warrant Certificate and of indemnity
satisfactory to them and, in the case of mutilation or defacement, upon
surrender thereof to the Warrant Agent for cancellation, then, in the
absence of notice to the Company or the Warrant Agent that such Warrant
Certificate has been acquired by a bona fide purchaser or holder in due
course, the Company shall execute, and an authorized signatory of the
Warrant Agent shall manually authenticate and deliver, in exchange for or
in lieu of the lost, stolen, destroyed, defaced or mutilated Warrant
Certificate, a new Warrant Certificate representing a like number of
Warrants, bearing a number or other distinguishing symbol not
contemporaneously outstanding. Upon the issuance of any new Warrant
Certificate under this Section in a name other than the prior registered
holder of the lost, stolen, destroyed, defaced or mutilated Warrant
Certificate, the Company may require the payment from the holder of such
Warrant Certificate of a sum sufficient to cover any tax, stamp tax or
other governmental charge that may be imposed in relation thereto. Every
substitute Warrant Certificate executed and delivered pursuant to this
Section in lieu of any lost, stolen or destroyed Warrant Certificate shall
constitute an additional contractual obligation of the Company, whether or
not the lost, stolen or destroyed Warrant Certificate shall be at any time
enforceable by anyone, and shall be entitled to the benefits of (but shall
be subject to all the limitations of rights set forth in) this Agreement
equally and proportionately with any and all other Warrant Certificates
duly executed and delivered hereunder. The provisions of this Section 1.08
are exclusive with respect to the replacement of lost, stolen, destroyed,
defaced or mutilated Warrant Certificates and shall preclude (to the extent
lawful) any and all other rights or remedies notwithstanding any law or
statute existing or hereafter enacted to the contrary with respect to the
replacement of lost, stolen, destroyed, defaced or mutilated Warrant
Certificates.
The Warrant Agent is hereby authorized to authenticate in
accordance with the provisions of this Agreement and deliver the new
Warrant Certificates required pursuant to the provisions of this Section.
SECTION 1.09. OFFICES FOR EXERCISE, ETC. So long as any of the
Warrants remain outstanding, the Company will designate and maintain in the
Borough of Manhattan, The City of New York: (a) an office or agency where
the Warrant Certificates may be presented for exercise (each a "WARRANT
EXERCISE OFFICE"), (b) an office or agency where the Warrant Certificates
may be presented for registration of transfer and for exchange, and (c) an
office or agency where notices and demands to or upon the Company in
respect of the Warrants or of this Agreement may be served. The Company
may from time to time change or rescind such designation, as it may deem
desirable or expedient; provided, however, that so long as any Warrants
remain outstanding an office or agency shall at all times be maintained in
the Borough of Manhattan, The City of New York, as provided in the first
sentence of this Section. In addition to such office or offices or agency
or agencies, the Company may from time to time designate and maintain one
or more additional offices or agencies within or outside The City of New
York, where Warrant Certificates may be presented for exercise or for
registration of transfer or for exchange, and the Company may from time to
time change or rescind such designation, as it may deem desirable or
expedient. The Company will give to the Warrant Agent written notice of
the location of any such office or agency and of any change of location
thereof. The Company hereby designates the Warrant Agent at its principal
corporate trust office identified in Section 7.03 in the Borough of
Manhattan, The City of New York (the "WARRANT AGENT OFFICE"), as the
initial agency maintained for each such purpose. In case the Company shall
fail to maintain any such office or agency or shall fail to give such
notice of the location or of any change in the location thereof,
presentations and demands may be made and notice may be served at the
Warrant Agent Office and the Company appoints the Warrant Agent as its
agent to receive all such presentations, surrenders, notices and demands.
ARTICLE II
DURATION, EXERCISE OF WARRANTS; EXERCISE PRICE
AND REPURCHASE OF WARRANTS
SECTION 2.01. DURATION OF WARRANTS. Subject to the terms and
conditions established herein, the Warrants shall expire at 5:00 p.m., New
York City time, on the date seven years following the date of the initial
issuance of such Warrant. The applicable date of expiration of a
particular Warrant is referred to herein as the "EXPIRATION DATE" of such
Warrant. Each Warrant may be exercised on any Business Day (as defined
below) on or after the Issue Date (as defined in Section 5.01(d)) and on or
prior to the close of business on the Expiration Date.
Any Warrant not exercised before the close of business on the
Expiration Date thereof shall become void, and all rights of the holder
under the Warrant Certificate evidencing such Warrant and under this
Agreement shall cease.
"BUSINESS DAY" shall mean any day on which (i) banks in The City
of New York, (ii) the principal U.S. securities exchange or market, if any,
on which any Common Stock is listed or admitted to trading and (iii) the
principal U.S. securities exchange or market, if any, on which the Warrants
are listed or admitted to trading, are open for business.
SECTION 2.02. EXERCISE, EXERCISE PRICE, SETTLEMENT AND DELIVERY.
(a) Subject to the provisions of this Agreement, a holder of a Warrant
shall have the right to purchase from the Company on or after the Issue
Date and on or prior to the close of business on the Expiration Date
thereof an amount of fully paid, registered and non-assessable Warrant
Shares determined in accordance with Section 1.01 (and any other securities
or property purchasable or deliverable upon exercise of such Warrant as
provided in Article V), subject to adjustment in accordance with Article V
hereof, at a per share purchase price equal to 110% of the last reported
market price per share of Common Stock on or prior to 12:00 noon (New York
time) on the Issue Date, determined (i) by reference to the US national
securities exchange or quotation system on which the Company's Common Stock
is listed or quoted, (ii) if (i) above is not available at such time, by
reference to a reputable quotation service or a newspaper of general
circulation in the Borough of Manhattan, The City and The State of New York
customarily published on each Business Day, designated by the Company, or
(iii) if (i) and (ii) are not available, in accordance with subparagraph
(i) of the definition of Current Market Value (defined in Section 5.01(n)),
which price shall be set forth in each Warrant Certificate (the "EXERCISE
PRICE"). The number and amount of Warrant Shares issuable upon exercise of
a Warrant (the "EXERCISE RATE") shall be subject to adjustment from time to
time as set forth in Article V hereof.
"PERSON" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof or any other entity, including any predecessor of any
such entity.
(b) Warrants may be exercised on or after the Issue Date by (i)
surrendering at any Warrant Exercise Office the Warrant Certificate
evidencing such Warrants with the form of election to purchase Warrant
Shares set forth on the reverse side of the Warrant Certificate (the
"ELECTION TO EXERCISE") duly completed and signed by the registered holder
or holders thereof or by the duly appointed legal representative thereof or
by a duly authorized attorney, and in the case of a transfer, such
signature shall be guaranteed by an eligible guarantor institution, and
(ii) paying in full the Exercise Price for each such Warrant exercised.
Each Warrant may be exercised only in whole.
(c) Simultaneously with the exercise of each Warrant, payment in
full of the aggregate Exercise Price may be made, at the option of the
holder, (i) in cash or by certified or official bank check, (ii) by a
Cashless Exercise (as defined below) or (iii) by any combination of (i) and
(ii), to the office or agency where the Warrant Certificate is being
surrendered; provided, however, in the event that the Current Market Value
(calculated as set forth herein) per share of Common Stock on the date of
exercise is less than the Exercise Price, payment in full of the aggregate
Exercise Price may be made only in cash or by certified check. For
purposes of this Agreement, a "CASHLESS EXERCISE" shall mean an exercise of
a Warrant in accordance with the immediately following two sentences. To
effect a Cashless Exercise, the holder may exercise a Warrant or Warrants
without payment of the Exercise Price in cash by surrendering such Warrant
or Warrants (represented by one or more Warrant Certificates) and, in
exchange therefor, receiving such number of shares of Common Stock equal to
the product of (1) that number of shares of Common Stock for which such
Warrant or Warrants are exercisable and which would be issuable in the
event of an exercise with payment in cash of the Exercise Price and (2) the
Cashless Exercise Ratio (as defined below). The "CASHLESS EXERCISE RATIO"
shall equal a fraction, the numerator of which is the excess of the Current
Market Value (calculated as set forth in this Agreement) per share of
Common Stock on the date of exercise over the Exercise Price per share of
Common Stock as of the date of exercise and the denominator of which is the
Current Market Value per share of Common Stock on the date of exercise.
Upon surrender of a Warrant Certificate representing more than one Warrant
in connection with a holder's option to elect a Cashless Exercise, such
holder must specify the number of Warrants for which such Warrant
Certificate is to be exercised (without giving effect to such Cashless
Exercise). All provisions of this Agreement shall be applicable with
respect to a Cashless Exercise of a Warrant Certificate for less than the
full number of Warrants represented thereby. No payment or adjustment
shall be made on account of any distributions of dividends on the Common
Stock issuable upon exercise of a Warrant. If the Company has not effected
the registration under the Securities Act of the offer and sale of the
Warrant Shares by the Company to the holders of the Warrants on or prior to
the Exercise Date (as defined below) thereof, the Company may elect to
require that the holders of the Warrants effect the exercise thereof solely
pursuant to the Cashless Exercise option and may also amend the Warrants to
eliminate the requirement for payment of the Exercise Price with respect to
such Cashless Exercise option. The Warrant Agent shall have no obligation
under this section to calculate the Cashless Exercise Ratio.
(d) Upon surrender of a Warrant Certificate and payment and
collection of the Exercise Price at any Warrant Exercise Office (other than
any Warrant Exercise Office that also is an office of the Warrant Agent),
such Warrant Certificate and payment shall be promptly delivered to the
Warrant Agent. The "EXERCISE DATE" for a Warrant shall be the date when
all of the items referred to in the first sentence of paragraphs (b) and
(c) of this Section 2.02 are received by the Warrant Agent at or prior to
11:00 a.m., New York City time, on a Business Day and the exercise of the
Warrants will be effective as of such Exercise Date. If any items referred
to in the first sentence of paragraphs (b) and (c) are received after 11:00
a.m., New York City time, on a Business Day, the exercise of the Warrants
to which such item relates will be effective on the next succeeding
Business Day. Notwithstanding the foregoing, in the case of an exercise of
Warrants on the Expiration Date thereof, if all of the items referred to in
the first sentence of paragraphs (b) and (c) are received by the Warrant
Agent at or prior to 5:00 p.m., New York City time, on such Expiration
Date, the exercise of the Warrants to which such items relate will be
effective on such Expiration Date.
(e) Upon the exercise of a Warrant in accordance with the terms
hereof, the receipt of a Warrant Certificate and payment of the Exercise
Price (or election of the Cashless Exercise option), the Warrant Agent
shall: (i) except to the extent exercise of the Warrant has been effected
through a Cashless Exercise, cause an amount equal to the aggregate
Exercise Price to be paid to the Company by crediting such amount in
immediately available funds to the account designated by the Company in
writing to the Warrant Agent for that purpose; (ii) advise the Company
immediately by telephone of the amount so deposited to the Company's
account and promptly confirm such telephonic advice in writing; and (iii)
as soon as practicable, advise the Company in writing of the number of
Warrants exercised in accordance with the terms and conditions of this
Agreement and the Warrant Certificates, the instructions of each exercising
holder of the Warrant Certificates with respect to delivery of the Warrant
Shares to which such holder is entitled upon such exercise, and such other
information as the Company shall reasonably request.
(f) Subject to Section 5.02 hereof, as soon as practicable after
the exercise of any Warrant or Warrants in accordance with the terms
hereof, the Company shall issue or cause to be issued to or upon the
written order of the registered holder of the Warrant Certificate
evidencing such exercised Warrant or Warrants, a certificate or
certificates evidencing the Warrant Shares to which such holder is
entitled, in fully registered form, registered in such name or names as may
be directed by such holder pursuant to the Election to Exercise, as set
forth on the reverse of the Warrant Certificate. Such certificate or
certificates evidencing the Warrant Shares shall be deemed to have been
issued and any persons who are designated to be named therein shall be
deemed to have become the holders of record of such Warrant Shares as of
the close of business on the Exercise Date. The Warrant Shares may
initially be issued in global form (the "GLOBAL SHARES"). Such Global
Shares shall represent such of the outstanding Warrant Shares as shall be
specified therein and each Global Share shall provide that it represents
the aggregate amount of outstanding Warrant Shares from time to time
endorsed thereon and that the aggregate amount of outstanding Warrant
Shares represented thereby may from time to time be reduced or increased,
as appropriate. Any endorsement of a Global Share to reflect any increase
or decrease in the amount of outstanding Warrant Shares represented thereby
shall be made by the registrar for the Warrant Shares and the Depositary
(referred to below) in accordance with instructions given by the holder
thereof. The Depository Trust Company shall (if possible) act as the
Depositary with respect to the Global Shares until a successor shall be
appointed by the Company and the registrar for the Warrant Shares. After
exercise of any Warrant or Warrant Shares, the Company shall also issue or
cause to be issued to or upon the written order of the registered holder of
such Warrant Certificate, a new Warrant Certificate, countersigned by the
Warrant Agent pursuant to written instruction, evidencing the number of
Warrants, if any, remaining unexercised unless such Warrants shall have
expired.
SECTION 2.03. CANCELLATION OF WARRANT CERTIFICATES. In the
event the Company shall purchase or otherwise acquire Warrants, the Warrant
Certificates evidencing such Warrants may thereupon be delivered to the
Warrant Agent, and if so delivered, shall at the Company's written
instruction be canceled by it and retired. The Warrant Agent shall cancel
all Warrant Certificates properly surrendered for exchange, substitution,
transfer or exercise. Upon the Company's written request, the Warrant
Agent shall deliver such canceled Warrant Certificates to the Company.
SECTION 2.04. DELIBERATELY OMITTED.
ARTICLE III
OTHER PROVISIONS RELATING TO
RIGHTS OF HOLDERS OF WARRANTS
SECTION 3.01. ENFORCEMENT OF RIGHTS. (a) Notwithstanding any
of the provisions of this Agreement, any holder of any Warrant Certificate,
without the consent of the Warrant Agent, the holder of any Warrant Shares
or the holder of any other Warrant Certificate, may, in and for his own
behalf, enforce, and may institute and maintain any suit, action or
proceeding against the Company suitable to enforce, his right to exercise
the Warrant or Warrants evidenced by his Warrant Certificate in the manner
provided in such Warrant Certificate and in this Agreement.
(b) Neither the Warrants nor any Warrant Certificate shall
entitle the holders thereof to any of the rights of shareholders of the
Company, including, without limitation, the right to vote or to receive any
dividends or other payments or to consent or to receive notice as
shareholders in respect of the meetings of shareholders or for the election
of directors of the Company or any other matter, or any rights whatsoever
as shareholders of the Company.
SECTION 3.02. OBTAINING STOCK EXCHANGE LISTINGS. In the event
that, upon the initial exercise of any Warrant, the Common Stock of the
Company is authorized for quotation on the Nasdaq National Market or the
Nasdaq SmallCap Market or is listed on any National Securities Exchange
(within the meaning of Section 6 of the Exchange Act), the Company will, at
or prior to the time the Warrants are exercised and the Warrant Shares are
issued, take all action which may be necessary so that all Warrant Shares,
upon issuance, will be authorized for quotation or listed on each such
market or exchange on which the Common Stock of the Company is authorized
for quotation or listed at such time; provided that, with respect to
Warrants issued subsequent to such initial exercise the Company will, as
promptly as practicable, take all action which may be necessary so that the
Warrant Shares issuable upon the exercise of such Warrants will be
authorized for quotation or listed on each such market or exchange on which
the Common Stock of the Company is authorized for quotation or listed; and,
provided further that, in the event that the Common Stock becomes so
authorized for quotation or listed following the initial exercise of any
Warrants or any such subsequent issuance of Warrants, the Company shall
provide that all Warrant Shares issuable upon exercise of the Warrants will
also be authorized for quotation or listed on each such market or exchange
on which the Common Stock of the Company is authorized for quotation or
listed at such time.
ARTICLE IV
CERTAIN COVENANTS OF THE COMPANY
SECTION 4.01. PAYMENT OF TAXES. The Company will pay all
documentary stamp taxes attributable to the initial issuance of Warrants
and of the Warrant Shares upon the exercise of Warrants; provided, however,
that the Company shall not be required to pay any tax or other governmental
charge which may be payable in respect of any transfer or exchange of any
Warrant Certificates or any certificates for Warrant Shares in a name other
than the registered holder of a Warrant Certificate surrendered upon the
exercise of a Warrant. In any such case, no transfer or exchange shall be
made unless or until the Person or Persons requesting issuance thereof
shall have paid to the Company the amount of such tax or other governmental
charge or shall have established to the satisfaction of the Company that
such tax or other governmental charge has been paid or an exemption is
available therefrom.
SECTION 4.02. RULES 144 AND 144A. The Company covenants that it
will file the reports required to be filed by it under the Securities Act
and the Exchange Act and the rules, regulations and policies adopted by the
Securities and Exchange Commission thereunder in a timely manner in
accordance with the requirements of the Securities Act and the Exchange Act
and, if at any time the Company is not required to file such reports, it
will make available such information as is necessary to permit sales
pursuant to Rule 144A under the Securities Act.
SECTION 4.03. SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS. The Company will also agree to comply with all applicable laws,
including the Securities Act and any applicable state securities laws, in
connection with the offer and sale of Common Stock (and other securities
and property deliverable) upon exercise of the Warrants; provided, however,
except as provided in the Warrant Registration Rights Agreement, nothing
contained in this Section 4.03 or any other provision of this Agreement
shall require the Company to register any offer or sale of the Warrants or
the Common Stock (or other securities issuable or property deliverable)
upon exercise of the Warrants with the Securities and Exchange Commission
or any state agency.
SECTION 4.04. RESOLUTION OF PREEMPTIVE RIGHTS, IF ANY. The
Warrant Shares shall not be subject to any preemptive or similar rights.
ARTICLE V
ADJUSTMENTS
SECTION 5.01. ADJUSTMENT OF EXERCISE RATE; NOTICES. The
Exercise Rate is subject to adjustment from time to time as provided in
this Section.
(a) ADJUSTMENT FOR CHANGE IN CAPITAL STOCK. If, on or after the
Issue Date (as defined herein), the Company:
(i) pays a dividend or makes a distribution on shares of its
Common Stock payable in shares of its Common Stock or other Capital
Stock of the Company;
(ii) subdivides or splits any of its outstanding shares of Common
Stock into a greater number of shares;
(iii) combines any of its outstanding shares of Common Stock into
a smaller number of shares; or
(iv) increase or decrease the number of shares of Common Stock
outstanding by reclassification of its Common Stock;
then the Exercise Rate in effect immediately prior to such action for each
Warrant then outstanding shall be adjusted to a number determined by
multiplying the number of shares of Common Stock that such holder would
have owned or have been entitled to receive upon exercise had such Warrants
been exercised immediately prior to the happening of the events described
above (or, in the case of a dividend or distribution of Common Stock or
other shares of Capital Stock, immediately prior to the record date
therefor) by a fraction, the numerator of which shall be the total number
of shares of Common Stock outstanding immediately after the happening of
the events described above and the denominator of which shall be the total
number of shares of Common Stock outstanding immediately prior to the
happening of the events described above, in each case determined on a fully
diluted basis; the Exercise Price for each Warrant shall be adjusted to a
number determined by dividing the Exercise Price immediately prior to such
event by the aforementioned fraction. An adjustment made pursuant to this
Section 5.01(a) shall become effective immediately after the effective date
of such event, retroactive to the record date therefor in the case of a
dividend or distribution in shares of Common Stock or other shares of the
Company's capital stock. If there are no outstanding shares of Common
Stock that are of the same class as the Warrant Shares at the time of any
such action and such action has therefore been taken only in respect of
shares of another class of Common Stock, such adjustment shall relate to
the Warrant Shares as Warrant Shares (and not in the form of shares of
Common Stock) if it would not frustrate the intent and purposes of, and to
the extent indicated by, this Section 5.01.
In the event that such dividend or distribution is not so paid or
made or such subdivision, combination or reclassification is not effected,
the Exercise Rate shall again be adjusted to be the Exercise Rate which
would then be in effect if such record date or effective date had not been
so fixed.
If after an adjustment a holder of a Warrant upon exercise of
such Warrant may receive shares of two or more classes of Capital Stock of
the Company, the Exercise Rate shall thereafter be subject to adjustment
upon the occurrence of an action taken with respect to any such class of
Capital Stock as is contemplated by this Article V with respect to the
Common Stock, on terms comparable to those applicable to Common Stock in
this Article V.
(b) ADJUSTMENT FOR CASH DIVIDENDS AND OTHER DISTRIBUTIONS. In
the event that at any time or from time to time the Company shall
distribute to all holders of Common Stock (i) any dividend or other
distribution of cash, evidences of its indebtedness, shares of its capital
stock or any other assets, properties or debt securities or (ii) any
options, warrants or other rights to subscribe for or purchase any of the
foregoing (other than, in each case, (x) any rights, options, warrants or
securities described in Section 5.01(c) and (y) any cash dividends or other
cash distributions from current or retained earnings), then the number of
shares of Common Stock issuable upon the exercise of each Warrant shall be
increased to a number determined by multiplying the number of shares of
Common Stock issuable upon the exercise of such Warrant immediately prior
to the record date for any such dividend or distribution by a fraction, the
numerator of which shall be the Current Market Value per share of Common
Stock on the record date for such dividend or distribution and the
denominator of which shall be such Current Market Value per share of Common
Stock on the record date for such dividend or distribution less the sum of
(x) the amount of cash, if any, distributed per share of Common Stock and
(y) the fair value (as determined in good faith by the board of directors
of the Company, whose determination shall be evidenced by a board
resolution filed with the Warrant Agent, a copy of which will be sent to
Holders upon request) of the portion, if any, of the distribution
applicable to one share of Common Stock consisting of evidences of
indebtedness, shares of stock, securities, other assets or property,
warrants, options or subscription or purchase rights; and the Exercise
Price shall be adjusted to a number determined by dividing the Exercise
Price immediately prior to such record date by the aforementioned fraction.
Such adjustments shall be made whenever any distribution is made and shall
become effective as of the date of distribution, retroactive to the record
date for any such distribution; provided, however, that the Company is not
required to make an adjustment pursuant to this Section 5.01(b) for any
Warrant if at the time of such distribution the Company makes the same
distribution to the Holder of such Warrant as it makes to holders of Common
Stock pro rata based on the number of shares of Common Stock for which such
Warrant is exercisable. No adjustment shall be made pursuant to this
Section 5.01(b) which shall have the effect of decreasing the number of
shares of Common Stock issuable upon exercise of each Warrant or increasing
the Exercise Price.
(c) ADJUSTMENT FOR RIGHTS ISSUED TO ALL HOLDERS OF COMMON
STOCK. In the event that at any time or from time to time the Company
shall issue to all holders of Common Stock without any charge, rights,
options or warrants entitling the holders thereof to subscribe for
additional shares of Common Stock, or securities convertible into or
exchangeable or exercisable for additional shares of Common Stock,
entitling such holders to subscribe for or purchase shares of Common Stock
at a price per share that is lower at the record date for such issuance
than the then Current Market Value per share of Common Stock, then the
number of shares of Common Stock issuable upon the exercise of each Warrant
shall be increased to a number determined by multiplying the number of
shares of Common Stock theretofore issuable upon exercise of each Warrant
by a fraction, the numerator of which shall be the number of shares of
Common Stock outstanding on the date of issuance of such rights, options,
warrants or securities plus the number of additional shares of Common Stock
offered for subscription or purchase or into or for which such securities
that are issued are convertible, exchangeable or exercisable, and the
denominator of which shall be the number of shares of Common Stock
outstanding on the date of issuance of such rights, options, warrants or
securities plus the total number of shares of Common Stock which the
aggregate consideration expected to be received by the Company (assuming
the exercise or conversion of all such rights, options, warrants or
securities) would purchase at the then Current Market Value per share of
Common Stock, in each case as determined on a fully diluted basis. In the
event of any such adjustment, the Exercise Price shall be adjusted to a
number determined by dividing the Exercise Price immediately prior to such
date of issuance by the aforementioned fraction. Such adjustment shall be
made immediately after such rights, options or warrants are issued and
shall become effective, retroactive to the record date for the
determination of stockholders entitled to receive such rights, options,
warrants or securities. No adjustment shall be made pursuant to this
Section 5.01(c) which shall have the effect of decreasing the number of
shares of Common Stock purchasable upon exercise of each Warrant or of
increasing the Exercise Price.
(d) ADJUSTMENT FOR SALE OF COMMON STOCK BELOW CURRENT MARKET
VALUE. If, after the Issue Date, the Company grants or sells any Common
Stock or any securities convertible into or exchangeable or exercisable for
any Common Stock (other than (1) pursuant to the exercise of the Warrants,
(2) pursuant to any security outstanding as of the Issue Date convertible
into, or exchangeable or exercisable for, shares of Common Stock (3) upon
the conversion, exchange or exercise of any convertible, exchangeable or
exercisable security as to which upon the issuance thereof an adjustment
pursuant to this Article V has been made or which did not require any
adjustment pursuant to this Article V or (4) upon the conversion, exchange
or exercise of convertible, exchangeable or exercisable securities of the
Company outstanding on the Issue Date (to the extent in accordance with the
terms of such securities as in effect on such date)) at a price below the
then Current Market Value (calculated as set forth in Section 5.01(n)
hereof), then the number of shares of Common Stock issuable upon the
exercise of each Warrant shall be increased to a number determined by
multiplying the number of shares of Common Stock theretofore issuable upon
exercise of each Warrant by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding immediately after such sale or
issuance plus the number of additional shares of Common Stock offered for
subscription or purchase or into or for which such securities that are
issued are convertible, exchangeable or exercisable, and the denominator of
which shall be the number of shares of Common Stock outstanding immediately
prior to such sale or issuance plus the total number of shares of Common
Stock which the aggregate consideration received, upon such sale or grant,
or expected to be received by the Company (assuming the exercise or
conversion of all such rights, options, warrants or securities, if any),
would purchase at the then Current Market Value per share of Common Stock,
and the Exercise Price shall be adjusted to a number determined by dividing
the Exercise Price immediately prior to such date of issuance by the
aforementioned fraction. Such adjustments shall be made whenever such
rights, options or warrants or convertible securities are issued. No
adjustment shall be made pursuant to this Section 5.01(d) which shall have
the effect of decreasing the number of shares of Common Stock issuable upon
exercise of each warrant or of increasing the Exercise Price. For purposes
of this Section 5.01(d) only, any issuance of Common Stock, or rights,
options or warrants to subscribe for, or other securities convertible into
or exercisable or exchangeable for, Common Stock, which issuance (or
agreement to issue) (A) is in exchange for or otherwise in connection with
the acquisition of the property (excluding any such exchange exclusively
for cash) of any Person and (B) is at a price per share equal to the
Current Market Value at the time of signing a definitive agreement, shall
be deemed to have been made at a price per share equal to the Current
Market Value per share at the record date with respect to such issuance or
the time of closing or consummation of such exchange or acquisition, if
such record date, closing or consummation is within 90 days of the date of
such definitive agreement. For the purposes of this subsection (d), the
fair market value of any property acquired by the Company shall be
determined in good faith by the board of directors of the Company whose
determination shall be evidenced by a board resolution filed with the
Warrant Agent, a copy of which will be sent to Holders upon request.
No adjustment shall be made under this paragraph (d) for any
adjustment which is the subject of paragraphs (a) and (f) of this Section
5.01.
No adjustment in the Exercise Rate shall be made under this
paragraph (d) upon the conversion, exchange or exercise of options to
acquire shares of Common Stock by present, future or former officers,
directors, employees or consultants of the Company; provided that the
exercise price of such options, at the time of issuance thereof, is at
least equal to the then Current Market Value of the Common Stock underlying
such options.
"ISSUE DATE" means, with respect to any Warrant, the date of
initial issuance of such Warrant by the Company.
(e) NOTICE OF ADJUSTMENT. Whenever the Exercise Price or the
Exercise Rate is adjusted, as herein provided, the Company shall deliver to
the Warrant Agent a certificate of a firm of independent accountants
selected by the board of directors of the Company (who may be the regular
accountants employed by the Company) setting forth, in reasonable detail,
the event requiring the adjustment and the method by which such adjustment
was calculated (including a description of the basis on which (i) the board
of directors of the Company determined the fair market value of any
evidences of indebtedness, other securities or property or warrants,
options or other subscription or purchase rights and (ii) the Current
Market Value of the Common Stock was determined, if either of such
determinations were required), and specifying the Exercise Price and the
number of shares of Common Stock issuable upon exercise of Warrants after
giving effect to such adjustment. The Company shall, by written
instructions to the Warrant Agent, promptly cause the Warrant Agent to mail
a copy of such certificate to each Holder in accordance with the terms
hereof. The Warrant Agent shall be entitled to rely on such certificate
and shall be under no duty or responsibility with respect to any such
certificate, except to exhibit the same from time to time, to any Holder
desiring an inspection thereof during regular business hours. The Warrant
Agent shall not at any time be under any duty or responsibility to any
Holder to determine whether any facts exist which may require any
adjustment of the Exercise Price or the number of shares of Common Stock or
other stock issuable on exercise of the Warrants, or with respect to the
nature or extent of any such adjustment when made, or with respect to the
method employed in making such adjustment or the validity or value of any
shares of Common Stock, evidences of indebtedness, warrants, options, or
other securities or property.
(f) REORGANIZATION OF COMPANY; SPECIAL DISTRIBUTIONS. (i) If
the Company, in a single transaction or through a series of related
transactions, consolidates with or merges with or into any other Person or
sells, assigns, transfers, leases, conveys or otherwise disposes of all or
substantially all of its properties and assets to another Person or group
of affiliated Persons or is a party to a merger or binding share exchange
which reclassifies or changes its outstanding Common Stock (a "FUNDAMENTAL
TRANSACTION"), as a condition to consummating any such transaction the
Person formed by or surviving any such consolidation or merger if other
than the Company or the Person to whom such transfer has been made (the
"SURVIVING PERSON") shall enter into a supplemental warrant agreement. The
supplemental warrant agreement shall provide (a) that the holder of a
Warrant then outstanding may exercise it for the kind and amount of
securities, cash or other assets which such holder would have received
immediately after the Fundamental Transaction if such holder had exercised
the Warrant immediately before the effective date of the transaction
(whether or not the Warrants were then exercisable and without giving
effect to the Cashless Exercise option); it being understood that the
Warrants will remain exercisable only in accordance with their terms so
that conditions to exercise will remain applicable, such as payment of
Exercise Price, assuming (to the extent applicable) that such holder
(i) was not a constituent Person or an affiliate of a constituent Person to
such transaction, (ii) made no election with respect thereto, and (iii) was
treated alike with the plurality of non-electing holders, and (b) that the
Surviving Person shall succeed to and be substituted to every right and
obligation of the Company in respect of this Agreement and the Warrants.
The supplemental warrant agreement shall provide for adjustments which
shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Article V. The Surviving Person shall mail to holders
of Warrants at the addresses appearing on the Warrant Register a notice
briefly describing the supplemental warrant agreement. If the issuer of
securities deliverable upon exercise of Warrants is an affiliate of the
Surviving Person, that issuer shall join in the supplemental warrant
agreement.
(ii) Notwithstanding the foregoing, if the Company enters into a
Fundamental Transaction with another Person (other than a subsidiary of the
Company) and consideration is payable to holders of shares of Common Stock
(or other securities or property issuable or deliverable upon exercise of
the Warrants) in connection with such Fundamental Transaction which
consideration consists solely of cash, then the holders of Warrants shall
be entitled to receive cash on the date of such event on an equal basis
with holders of such shares (or other securities issuable or deliverable
upon exercise of the Warrants) as if the Warrants had been exercised
immediately prior to such event, less the aggregate Exercise Price
therefor. Upon receipt of such payment, if any, the rights of a holder of
such Warrant shall terminate and cease and such holder's Warrants shall
expire.
(iii) If this paragraph (f) applies, it shall supersede the
application of paragraph (a) of this Section 5.01.
(g) COMPANY DETERMINATION FINAL. Any determination that the
Company or the board of directors of the Company must make pursuant to this
Article V shall be conclusive.
(h) WARRANT AGENT'S ADJUSTMENT DISCLAIMER. The Warrant Agent
shall have no duty to determine when an adjustment under this Article V
should be made, how it should be made or what it should be. The Warrant
Agent shall have no duty to determine whether a supplemental warrant
agreement under paragraph (f) need be entered into or whether any
provisions of any supplemental warrant agreement are correct. The Warrant
Agent shall not be accountable for and makes no representation as to the
validity or value of any securities or assets issued upon exercise of
Warrants. The Warrant Agent shall not be responsible for the Company's
failure to comply with this Article V.
(i) ADJUSTMENT FOR TAX PURPOSES. In the event of a taxable
distribution to holders of shares of Common Stock which results in an
adjustment to the number of shares of Common Stock or other consideration
for which such a Warrant may be exercised, the holders of the Warrants may,
in certain circumstances, be deemed to have received a distribution subject
to United States federal income tax as a dividend.
(j) UNDERLYING WARRANT SHARES. The Company shall at all times
reserve and keep available, free from preemptive rights, out of its
authorized but unissued Common Stock or Common Stock held in the treasury
of the Company, for the purpose of effecting the exercise of Warrants, the
full number of Warrant Shares then deliverable upon the exercise of all
Warrants then outstanding and payment of the exercise price, and the shares
so deliverable shall be fully paid and nonassessable and free from all
liens and security interests.
(k) SPECIFICITY OF ADJUSTMENT. Regardless of any adjustment in
the number or kind of shares purchasable upon the exercise of the Warrants,
Warrant Certificates theretofore or thereafter issued may continue to
express the same number and kind of Warrant Shares per Warrant as are
stated on the Warrant Certificates initially issuable pursuant to this
Agreement.
(l) NOTICE OF ACTIONS RESULTING IN ADJUSTMENT. (a) In the event
that the Company shall propose to (a) pay any dividend payable in
securities of any class to the holders of its Common Stock or to make any
other non-cash dividend or distribution to the holders of its Common Stock,
(b) offer the holders of its Common Stock rights to subscribe for or to
purchase any securities convertible into shares of Common Stock or shares
of stock of any class or any other securities, rights or options, (c) issue
any (i) shares of Common Stock, (ii) rights, options or warrants entitling
the holders thereof to subscribe for shares of Common Stock, or (iii)
securities convertible into or exchangeable or exercisable for Common Stock
(in the case of (i), (ii) and (iii), only if such issuance or adjustment
would result in an adjustment hereunder), (d) effect any capital
reorganization, reclassification, consolidation or merger, (e) effect the
voluntary or involuntary dissolution, liquidation or winding-up of the
Company or (f) make a tender offer or exchange offer with respect to the
Common Stock, the Company shall, within five (5) days of the date on which
the Company's proposal to take such action is made public, send the Holder
and the Warrant Agent a notice of such proposed action or offer. Such
notice shall be mailed by the Company to the Holders at their addresses as
they appear in the Certificate Register, which shall specify the record
date for the purposes of such dividend, distribution or rights, or the date
such issuance or event is to take place and the date of participation
therein by the holders of Common Stock, if any such date is to be fixed,
and shall briefly indicate the effect of such action on the Common Stock
and on the number and kind of any other shares of stock and on other
property, if any, and the number of shares of Common Stock and other
securities, if any, issuable upon exercise of each Warrant and the Exercise
Price after giving effect to any adjustment pursuant to Article 5 which
will be required as a result of such action. Such notice shall be given by
the Company as promptly as possible and (x) in the case of any action
covered by clause (a) or (b) above, at least 10 days prior to the record
date for determining holders of the Common Stock for purposes of such
action or (y) in the case of any other such action, at least 20 days prior
to the date of the taking of such proposed action or the date of
participation therein by the holders of Common Stock, whichever shall be
the earlier.
(m) MULTIPLE ADJUSTMENTS. After an adjustment to the Exercise
Rate or Exercise Price for outstanding Warrants under this Article V, any
subsequent event requiring an adjustment under this Article V shall cause
an adjustment to the Exercise Rate or Exercise Price for outstanding
Warrants as so adjusted.
(n) DEFINITIONS.
"AFFILIATE" means, with respect to any Person, any other Person
that, directly or indirectly, controls, is controlled by or is under common
control with such Person, or is a director or officer of such Person. For
purposes of this definition, the term "CONTROL" (including the terms
"CONTROLLING," "CONTROLLED BY" and "UNDER COMMON CONTROL WITH") of a Person
means the possession, direct or indirect, of the power to vote 5% or more
of the Voting Stock of such Person or to direct or cause the direction of
the management and policies of such Person, whether through the ownership
of voting securities, by contract or otherwise.
"CAPITAL STOCK" means, with respect to any Person, any and all
shares, interests, partnership interests, participations, rights in or
other equivalents (however designated and whether voting or non-voting) of,
such Person's capital stock, and any rights (other than debt securities
convertible into capital stock), warrants or options exchangeable for or
convertible into such capital stock whether outstanding on the Issue Date
or issued after the Issue Date.
"CURRENT MARKET VALUE" per share of Common Stock of the Company
or any other security at any date means (i) if the security is not
registered under the Exchange Act, (a) the value of the security,
determined in good faith by the board of directors of the Company and
certified in a board resolution, based on the most recently completed
arm's-length transaction between the Company and a Person other than an
Affiliate of the Company and the closing of which occurs on such date or
shall have occurred within the six-month period preceding such date, or (b)
if no such transaction shall have occurred on such date or within such
six-month period, the fair market value of the security as determined by a
nationally or regionally recognized Independent Financial Expert (as
defined herein) (provided that, in the case of the calculation of Current
Market Value for determining the cash value of fractional shares, any such
determination within six months that is, in the good faith judgment of the
board of directors of the Company, a reasonable determination of value, may
be utilized) or (ii) (a) if the security is registered under the Exchange
Act, the average of the daily closing sales prices of the securities for
the 20 consecutive trading days immediately preceding such date, or (b) if
the security has been registered under the Exchange Act for less than 20
consecutive trading days before such date, then the average of the closing
sales prices for all of the trading days before such date for which closing
sales prices are available, in the case of each of (ii)(a) and (ii)(b), as
certified to the Warrant Agent by the President, any Vice President or the
Chief Financial Officer of the Company. The closing sales price for each
such trading day shall be: (A) in the case of a security listed or
admitted to trading on any US national securities exchange or quotation
system, the closing sales price, regular way, on such day, or if no sale
takes place on such day, the average of the closing bid and asked prices on
such day, (B) in the case of a security not then listed or admitted to
trading on any US national securities exchange or quotation system, the
last reported sale price on such day, or if no sale takes place on such
day, the average of the closing bid and asked prices on such day, as
reported by a reputable quotation source designated by the Company, (C) in
the case of a security not then listed or admitted to trading on any US
national securities exchange or quotation system and as to which no such
reported sale price or bid and asked prices are available, the average of
the reported high bid and low asked prices on such day, as reported by a
reputable quotation service, or a newspaper of general circulation in the
Borough of Manhattan, The City and State of New York customarily published
on each Business Day, designated by the Company, or, if there shall be no
bid and asked prices on such day, the average of the high bid and low asked
prices, as so reported, on the most recent day (not more than 30 days prior
to the date in question) for which prices have been so reported and (D) if
there are not bid and asked prices reported during the 30 days prior to the
date in question, the Current Market Value shall be determined as if the
securities were not registered under the Exchange Act.
"INDEPENDENT FINANCIAL EXPERT" means a U.S. investment banking
firm of national standing in the United States (i) which does not, and
whose directors, officers and employees or Affiliates do not have a direct
or indirect material financial interest for its proprietary account in the
Company or any of its Affiliates and (ii) which, in the judgment of the
board of directors of the Company, is otherwise independent with respect to
the Company and its Affiliates and qualified to perform the task for which
it is to be engaged.
(o) WHEN DE MINIMIS ADJUSTMENT MAY BE DEFERRED. The adjustments
required by the preceding Sections of this Article V shall be made whenever
and as often as any specified event requiring an adjustment shall occur,
except that no adjustment of the Exercise Price or the number of shares of
Common Stock issuable upon exercise of Warrants that would otherwise be
required by the preceding Sections of this Article V shall be made unless
and until such adjustment either by itself or with other adjustments not
previously made increases or decreases by at least 1% the Exercise Price or
the number of shares of Common Stock issuable upon exercise of Warrants
immediately prior to the making of such adjustment. Any adjustment
representing a change of less than such minimum amount shall be carried
forward and made as soon as such adjustment, together with other
adjustments required by this Article V and not previously made, would
result in a minimum adjustment. For the purpose of any adjustment, any
specified event shall be deemed to have occurred at the close of business
on the date of its occurrence. In computing adjustments under this Article
V, fractional interests in Common Stock shall be taken into account to the
nearest one-thousandth of a share.
(p) ADJUSTMENT OF EXERCISE PRICE. In addition, notwithstanding
any other provisions of this Article V, the Company may reduce the Exercise
Price (to an amount not less than the par value of the Common Stock) for a
period of time not less then 20 business days as deemed appropriate and
determined in good faith by the board of directors of the Company.
SECTION 5.02. FRACTIONAL WARRANT SHARES. The Company shall not
be required to issue fractional Warrant Shares upon exercise of the
Warrants or distribute Warrant Certificates that evidence fractional
Warrant Shares. In the event a holder is required by Section 2.02(c) to
make a Cashless Exercise, the number of Warrant Shares issuable shall be
rounded up to the nearest whole number. In addition, in no event shall any
holder of Warrants be required to make any payment of a fractional cent.
In lieu of fractional Warrant Shares, there shall be paid to the registered
holders of Warrant Certificates at the time Warrants evidenced thereby are
exercised as herein provided an amount in cash equal to the same fraction
of the Current Market Value per Warrant Share on the Business Day preceding
the date the Warrant Certificates evidencing such Warrants are surrendered
for exercise. Such payments shall be made by check or by transfer to an
account maintained by such registered holder with a bank in The City of New
York. If any holder surrenders for exercise more than one Warrant
Certificate, the number of Warrant Shares deliverable to such holder may,
at the option of the Company, be computed on the basis of the aggregate
amount of all the Warrants exercised by such holder.
ARTICLE VI
CONCERNING THE WARRANT AGENT
SECTION 6.01. WARRANT AGENT. The Company hereby appoints First
Chicago Trust Company of New York as Warrant Agent of the Company in
respect of the Warrants and the Warrant Certificates upon the terms and
subject to the conditions set forth herein and in the Warrant Certificates;
and First Chicago Trust Company of New York hereby accepts such
appointment. The Warrant Agent shall have the powers and authority
specifically granted to and conferred upon it in the Warrant Certificates
and hereby and such further powers and authority to act on behalf of the
Company as the Company may hereafter grant to or confer upon it and it
shall accept in writing. All of the terms and provisions with respect to
such powers and authority contained in the Warrant Certificates are subject
to and governed by the terms and provisions hereof. The Warrant Agent may
act through agents and shall not be responsible for the misconduct or
negligence of any such agent appointed with due care.
SECTION 6.02. CONDITIONS OF WARRANT AGENT'S OBLIGATIONS. The
Warrant Agent accepts its obligations herein set forth upon the terms and
conditions hereof and in the Warrant Certificates, including the following,
to all of which the Company agrees and to all of which the rights hereunder
of the holders from time to time of the Warrant Certificates shall be
subject:
(a) The Warrant Agent shall be entitled to compensation to be
agreed upon with the Company in writing for all services rendered by
it and the Company agrees promptly to pay such compensation and to
reimburse the Warrant Agent for its reasonable out-of-pocket expenses
(including reasonable fees and expenses of counsel) incurred without
gross negligence or willful misconduct on its part in connection with
the services rendered by it hereunder. The Company also agrees to
indemnify the Warrant Agent and any predecessor Warrant Agent, their
directors, officers, affiliates, agents and employees for, and to hold
them and their directors, officers, affiliates, agents and employees
harmless against, any loss, liability or expense of any nature
whatsoever (including, without limitation, reasonable fees and
expenses of counsel) incurred without gross negligence or willful
misconduct on the part of the Warrant Agent, arising out of or in
connection with its acting as such Warrant Agent hereunder and its
exercise of its rights and performance of its obligations hereunder.
The obligations of the Company under this Section 6.02 shall survive
the exercise and the expiration of the Warrant Certificates and the
resignation and removal of the Warrant Agent.
(b) In acting under this Agreement and in connection with the
Warrant Certificates, the Warrant Agent is acting solely as agent of
the Company and does not assume any obligation or relationship of
agency or trust for or with any of the owners or holders of the
Warrant Certificates.
(c) The Warrant Agent may consult with counsel of its selection
and any advice or written opinion of such counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in accordance
with such advice or opinion.
(d) The Warrant Agent shall be fully protected and shall incur no
liability for or in respect of any action taken or omitted to be taken
or thing suffered by it in reliance upon any Warrant Certificate,
notice, direction, consent, certificate, affidavit, opinion of
counsel, instruction, statement or other paper or document reasonably
believed by it to be genuine and to have been presented or signed by
the proper parties.
(e) The Warrant Agent, and its officers, directors, affiliates
and employees ("RELATED PARTIES"), may become the owners of, or
acquire any interest in, Warrant Certificates, shares or other
obligations of the Company with the same rights that it or they would
have if it were not the Warrant Agent hereunder and, to the extent
permitted by applicable law, it or they may engage or be interested in
any financial or other transaction with the Company and may act on, or
as depositary, trustee or agent for, any committee or body of holders
of shares or other obligations of the Company as freely as if it were
not the Warrant Agent hereunder. Nothing in this Agreement shall be
deemed to prevent the Warrant Agent or such Related Parties from
acting in any other capacity for the Company.
(f) The Warrant Agent shall not be under any liability for
interest on, and shall not be required to invest, any monies at any
time received by it pursuant to any of the provisions of this
Agreement or of the Warrant Certificates.
(g) The Warrant Agent shall not be under any responsibility in
respect of the validity of this Agreement (or any term or provision
hereof) or the execution and delivery hereof (except the due execution
and delivery hereof by the Warrant Agent) or in respect of the
validity or execution of any Warrant Certificate (except its
authentication thereof).
(h) The recitals and other statements contained herein and in the
Warrant Certificates (except as to the Warrant Agent's authentication
thereon) shall be taken as the statements of the Company and the
Warrant Agent assumes no responsibility for the correctness of the
same. The Warrant Agent does not make any representation as to the
validity or sufficiency of this Agreement or the Warrant Certificates,
except for its due execution and delivery of this Agreement; provided,
however, that the Warrant Agent shall not be relieved of its duty to
authenticate the Warrant Certificates as authorized by this Agreement.
The Warrant Agent shall not be accountable for the use or application
by the Company of the proceeds of the exercise of any Warrant.
(i) Before the Warrant Agent acts or refrains from acting with
respect to any matter contemplated by this Warrant Agreement, it may
require:
(1) an officers' certificate (a certificate signed by the
chairman or a co-chairman of the board of directors of the
Company, the president, the chief financial officer, any
executive vice president or any senior vice president of the
Company signing alone, or by any vice president signing together
with the secretary, any assistant secretary, the treasurer, or
any assistant treasurer of the Company) (an "OFFICERS'
CERTIFICATE") stating on behalf of the Company that, in the
opinion of the signers, all conditions precedent, if any,
provided for in this Warrant Agreement relating to the proposed
action have been complied with; and
(2) if reasonably necessary in the sole judgment of the
Warrant Agent, an opinion of counsel for the Company stating
that, in the opinion of such counsel, all such conditions
precedent have been complied with, provided that such matter is
one customarily opined upon by counsel.
Each Officers' Certificate or, if requested or required by this
Agreement, an opinion of counsel with respect to compliance with a
condition or covenant provided for in this Warrant Agreement shall
include:
(1) a statement that the person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such person, he or
she has made such examination or investigation as is necessary to
enable him or her to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
(j) The Warrant Agent shall be obligated to perform such duties
as are specifically set forth herein and in the Warrant Certificates,
and no implied duties or obligations shall be read into this Agreement
or the Warrant Certificates against the Warrant Agent. The Warrant
Agent shall not be accountable or under any duty or responsibility for
the use by the Company of any of the Warrant Certificates duly
authenticated by the Warrant Agent and delivered by it to the Company
pursuant to this Agreement. The Warrant Agent shall have no duty or
responsibility in case of any default by the Company in the
performance of its covenants or agreements contained in the Warrant
Certificates or in the case of the receipt of any written demand from
a holder of a Warrant Certificate with respect to such default,
including, without limiting the generality of the foregoing, any duty
or responsibility to initiate or attempt to initiate any proceedings
at law or otherwise or, except as provided in Section 7.02 hereof, to
make any demand upon the Company.
(k) Unless otherwise specifically provided herein, any order,
certificate, notice, request, direction or other communication from
the Company made or given under any provision of this Agreement shall
be sufficient if signed by the chairman or a co-chairman of the board,
the president, the chief financial officer, any executive vice
president or any senior vice president of the Company signing alone,
or by any vice president signing together with the secretary, any
assistant secretary, the treasurer, or any assistant treasurer of the
Company.
(l) The Warrant Agent shall have no responsibility in respect of
any adjustment pursuant to Article V hereof.
(m) The Company agrees that it will perform, execute, acknowledge
and deliver, or cause to be performed, executed, acknowledged and
delivered, all such further and other acts, instruments and assurances
as may reasonably be required by the Warrant Agent for the carrying
out or performing by the Warrant Agent of the provisions of this
Agreement.
(n) The Warrant Agent is hereby authorized and directed to accept
written instructions with respect to the performance of its duties
hereunder from any one of the chairman or a co-chairman of the , the
president, the chief financial officer, any executive vice president
or any senior vice president alone, or any vice president together
with the secretary, assistant secretary, the treasurer or any
assistant treasurer, of the Company or any other officer or official
of the Company reasonably believed to be authorized to give such
instructions and to apply to such officers or officials for advice or
instructions in connection with its duties, and it shall not be liable
for any action taken or suffered to be taken by it in good faith in
accordance with instructions with respect to any matter arising in
connection with the Warrant Agent's duties and obligations arising
under this Agreement. Such application by the Warrant Agent for
written instructions from the Company may, at the option of the
Warrant Agent, set forth in writing any action proposed to be taken or
omitted by the Warrant Agent with respect to its duties or obligations
under this Agreement and the date on or after which such action shall
be taken and the Warrant Agent shall not be liable for any action
taken or omitted in accordance with a proposal included in any such
application on or after the date specified therein (which date shall
be not less than 10 Business Days after the Company receives such
application unless the Company consents to a shorter period); provided
that (i) such application includes a statement to the effect that it
is being made pursuant to this paragraph (n) and that unless objected
to prior to such date specified in the application, the Warrant Agent
will not be liable for any such action or omission to the extent set
forth in such paragraph (n) and (ii) prior to taking or omitting any
such action, the Warrant Agent has not received written instructions
objecting to such proposed action or omission.
(o) 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 or suffering 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 by a
certificate signed on behalf of the Company by any one of the chairman
of the board of directors, the president, the treasurer, the
controller, any vice president or the secretary or assistant secretary
of the Company or any other officer or official of the Company
reasonably believed to be authorized to give such instructions and
delivered to the Warrant Agent; and such certificate shall be full
authorization to the Warrant Agent for any action taken or suffered in
good faith by it under the provisions of this Agreement in reliance
upon such certificate.
(p) The Warrant Agent shall not be required to risk or expend its
own funds in the performance of its obligations and duties hereunder.
SECTION 6.03. RESIGNATION AND APPOINTMENT OF SUCCESSOR. (a)
The Company agrees, for the benefit of the holders from time to time of the
Warrant Certificates, that there shall at all times be a Warrant Agent
hereunder.
(b) The Warrant Agent may at any time resign as Warrant Agent by
giving written notice to the Company of such intention on its part,
specifying the date on which its desired resignation shall become
effective; provided, however, that such date shall be at least 60 days
after the date on which such notice is given unless the Company agrees to
accept less notice. Upon receiving such notice of resignation, the Company
shall promptly appoint a successor Warrant Agent, qualified as provided in
Section 6.03(d) hereof, by written instrument in duplicate signed on behalf
of the Company, one copy of which shall be delivered to the resigning
Warrant Agent and one copy to the successor Warrant Agent. As provided in
Section 6.03(d) hereof, such resignation shall become effective upon the
earlier of (x) the acceptance of the appointment by the successor Warrant
Agent or (y) 60 days after receipt by the Company of notice of such
resignation. The Company may, at any time and for any reason, and shall,
upon any event set forth in the next succeeding sentence, remove the
Warrant Agent and appoint a successor Warrant Agent by written instrument
in duplicate, specifying such removal and the date on which it is intended
to become effective, signed on behalf of the Company, one copy of which
shall be delivered to the Warrant Agent being removed and one copy to the
successor Warrant Agent. The Warrant Agent shall be removed as aforesaid
if it shall become incapable of acting, or shall be adjudged a bankrupt or
insolvent, or a receiver of the Warrant Agent or of its property shall be
appointed, or any public officer shall take charge or control of it or of
its property or affairs for the purpose of rehabilitation, conservation or
liquidation. Any removal of the Warrant Agent and any appointment of a
successor Warrant Agent shall become effective upon acceptance of
appointment by the successor Warrant Agent as provided in Section 6.03(d).
As soon as practicable after appointment of the successor Warrant Agent,
the Company shall cause written notice of the change in the Warrant Agent
to be given to each of the registered holders of the Warrants in the manner
provided for in Section 7.04 hereof.
(c) Upon resignation or removal of the Warrant Agent, if the
Company shall fail to appoint a successor Warrant Agent within a period of
60 days after receipt of such notice of resignation or removal, then the
holder of any Warrant Certificate or the retiring Warrant Agent may apply
to a court of competent jurisdiction for the appointment of a successor to
the Warrant Agent. Pending appointment of a successor to the Warrant
Agent, either by the Company or by such a court, the duties of the Warrant
Agent shall be carried out by the Company.
(d) Any successor Warrant Agent, whether appointed by the
Company or by a court, shall be a bank or trust company, or an Affiliate
thereof, in good standing, incorporated under the laws of the United States
of America or any State thereof and having, at the time of its appointment,
a combined capital surplus of at least $50 million. Such successor Warrant
Agent shall execute and deliver to its predecessor and to the Company an
instrument accepting such appointment hereunder and all the provisions of
this Agreement, and thereupon such successor Warrant Agent, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like
effect as if originally named as Warrant Agent hereunder, and such
predecessor shall thereupon become obligated to (i) transfer and deliver,
and such successor Warrant Agent shall be entitled to receive, all
securities, records or other property on deposit with or held by such
predecessor as Warrant Agent hereunder and (ii) upon payment of the amounts
then due it pursuant to Section 6.02(a) hereof, pay over, and such
successor Warrant Agent shall be entitled to receive, all monies deposited
with or held by any predecessor Warrant Agent hereunder.
(e) Any corporation or bank into which the Warrant Agent
hereunder may be merged or converted, or any corporation or bank with which
the Warrant Agent may be consolidated, or any corporation or bank resulting
from any merger, conversion or consolidation to which the Warrant Agent
shall be a party, or any corporation or bank to which the Warrant Agent
shall sell or otherwise transfer all or substantially all of its corporate
trust business, shall be the successor to the Warrant Agent under this
Agreement (provided that such corporation or bank shall be qualified as
aforesaid) without the execution or filing of any document or any further
act on the part of any of the parties hereto.
(f) No Warrant Agent under this Warrant Agreement shall be
personally liable for any action or omission of any successor Warrant
Agent.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. AMENDMENT. This Agreement and the terms of the
Warrants may be amended by the Company and the Warrant Agent, without the
consent of the holder of any Warrant Certificate, for the purpose of curing
any ambiguity, or of curing, correcting or supplementing any defective or
inconsistent provision contained herein or therein, or to effect any
assumptions of the Company's obligations hereunder and thereunder by a
successor corporation under certain circumstances.
The Company and the Warrant Agent may amend, modify or supplement
this Agreement and the terms of the Warrants, and waivers to departures
from the terms hereof and thereof may be given, with the consent of the
Requisite Warrant Holders (as defined below) for the purpose of adding any
provision to or changing in any manner or eliminating any of the provisions
of this Agreement or modifying in any manner the rights of holders of
Warrants. "REQUISITE WARRANT HOLDERS" means (i) in the case of any
amendment, modification, supplement or waiver affecting only Warrant
Holders as such, holders of a majority in number of the outstanding
Warrants, voting separately as a class, or (ii) in the case of any
amendment, modification, supplement or waiver affecting Warrant Holders, a
majority in number of Warrant Shares represented by the Warrants that would
be issuable assuming exercise thereof at the time such amendment,
modification, supplement or waiver is voted upon. Notwithstanding any
other provision of this Agreement, the Warrant Agent's consent must be
obtained regarding any supplement or amendment which alters the Warrant
Agent's rights or duties (it being expressly understood that the foregoing
shall not be in derogation of the right of the Company to remove the
Warrant Agent in accordance with Section 6.03 hereof). For purposes of any
amendment, modification or waiver hereunder, Warrants held by the Company
or any of its Affiliates (other than any Purchaser) shall be disregarded.
Any modification or amendment made in accordance with this
Agreement will be conclusive and binding on all present and future holders
of Warrant Certificates whether or not they have consented to such
modification or amendment or waiver and whether or not notation of such
modification or amendment is made upon such Warrant Certificates. Any
instrument given by or on behalf of any holder of a Warrant Certificate in
connection with any consent to any modification or amendment will be
conclusive and binding on all subsequent holders of such Warrant
Certificate.
SECTION 7.02. NOTICES AND DEMANDS TO THE COMPANY AND WARRANT
AGENT. If the Warrant Agent shall receive any notice or demand addressed
to the Company by the holder of a Warrant Certificate pursuant to the
provisions hereof or of the Warrant Certificates, the Warrant Agent shall
promptly forward such notice or demand to the Company.
SECTION 7.03. ADDRESSES FOR NOTICES TO PARTIES AND FOR
TRANSMISSION OF DOCUMENTS. All notices hereunder to the parties hereto
shall be deemed to have been given when sent by certified or registered
mail, postage prepaid, or by facsimile transmission, confirmed by first
class mail, postage prepaid, addressed to any party hereto as follows:
To the Company:
Wireless One, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
with copies to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
To the Warrant Agent:
First Chicago Trust Company of New York
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Tenders and Exchanges Administration
or at any other address of which either of the foregoing shall have
notified the other in writing.
SECTION 7.04. NOTICES TO HOLDERS. Notices to holders of
Warrants shall be mailed to such holders at the addresses of such holders
as they appear in the Warrant Register. Any such notice shall be
sufficiently given if sent by certified or registered mail (postage
prepaid) or by facsimile transmission, confirmed by first class mail
(postage prepaid) to the address of such holder.
SECTION 7.05. APPLICABLE LAW. THIS AGREEMENT AND EACH WARRANT
CERTIFICATE ISSUED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 7.06. PERSONS HAVING RIGHTS UNDER AGREEMENT. Nothing in
this Agreement expressed or implied and nothing that may be inferred from
any of the provisions hereof is intended, or shall be construed, to confer
upon, or give to, any Person or corporation other than the Company, the
Warrant Agent and the holders of the Warrant Certificates and, with respect
to Sections 4.03 and 4.04, the holders of Warrant Shares issued pursuant to
Warrants, any right, remedy or claim under or by reason of this Agreement
or of any covenant, condition, stipulation, promise or agreement hereof;
and all covenants (except for Sections 4.03 and 4.04 which shall be for the
benefit of all holders of Warrant Shares issued pursuant to Warrants),
conditions, stipulations, promises and agreements in this Agreement
contained shall be for the sole and exclusive benefit of the Company and
the Warrant Agent and their successors and of the holders of the Warrant
Certificates.
SECTION 7.07. HEADINGS. The descriptive headings of the several
Articles and Sections of this Agreement are inserted for convenience only
and shall not control or affect the meaning or construction of any of the
provisions hereof.
SECTION 7.08. COUNTERPARTS. This Agreement may be executed in
any number of counterparts, each of which so executed shall be deemed to be
an original; but such counterparts shall together constitute but one and
the same instrument.
SECTION 7.09. INSPECTION OF AGREEMENT. A copy of this Agreement
shall be available during regular business hours at the principal corporate
trust office of the Warrant Agent, for inspection by the holder of any
Warrant Certificate. The Warrant Agent may require such holder to submit
his Warrant Certificate for inspection by it.
SECTION 7.10. AVAILABILITY OF EQUITABLE REMEDIES. Since a
breach of the provisions of this Agreement could not adequately be
compensated by money damages, holders of Warrants shall be entitled, in
addition to any other right or remedy available to them, to an injunction
restraining such breach or a threatened breach and to specific performance
of any such provision of this Agreement, and in either case no bond or
other security shall be required in connection therewith, and the parties
hereby consent to such injunction and to the ordering of specific
performance.
SECTION 7.11. OBTAINING OF GOVERNMENTAL APPROVALS. The Company
will from time to time take all action required to be taken by it which may
be necessary to obtain and keep effective any and all permits, consents and
approvals of governmental agencies and authorities and securities acts
filings under U.S. federal and state laws, and the rules and regulations of
all stock exchanges on which the Warrants may become listed which may be or
become requisite in connection with the issuance, sale, transfer, and
delivery of the Warrant Certificates, the exercise of the Warrants or the
issuance, sale, transfer and delivery of the Warrant Shares issued upon
exercise of the Warrants.
[Signature Page Follows]
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the day and year first above written.
WIRELESS ONE, INC.
By:
Name:
Title: Chief Executive Officer
FIRST CHICAGO TRUST COMPANY OF NEW YORK,
Warrant Agent
By:
Name:
Title: