NOTE AND WARRANT PURCHASE,
PAYING AND CONVERSION/EXERCISE AGENCY AGREEMENT
INTELLICALL, INC.
CARROLLTON, TEXAS, U.S.A.
USD 5'000'000.--
8% Subordinated Convertible Notes of 1996 due
November 22, 2001 and 200'000 Warrants expiring
November 22, 2001
November 15, 1996
TABLE OF CONTENTS
DEFINITIONS
I. SUBJECT 3
II. ANNEXES 4
III. SALES RESTRICTIONS 5
IV. COMMISSION AND EXPENSES 8
V. WARRANTIES 9
VI. PAYMENT TO THE COMPANY 12
VII. CONDITIONS TO THE OBLIGATIONS
OF BANCA DEL GOTTARDO 12
VIII. INFORMATION MEMORANDUM 13
IX. PRINTING OF THE NOTES AND WARRANTS 13
X. SERVICING OF THE NOTES 15
XI. CANCELLATION OF NOTES AND COUPONS AND WARRANTS 16
XII. COVENANTS 17
XIII. RIGHT OF TERMINATION 18
XIV. COMMUNICATIONS 19
XV. APPLICABLE LAW AND JURISDICTION 19
XVI. EFFECTIVENESS 20
XVII. CURRENCY INDEMNITY 20
XVIII. ENTIRE AGREEMENT 20
XIX. AMENDMENT, CANCELLATION AND WAIVER 21
ANNEX A TERMS OF THE NOTES 22
ANNEX B DEFINITIVE NOTE (FACE) 38
ANNEX C INTEREST COUPONS 40
ANNEX D GLOBAL NOTE 41
ANNEX E TERMS OF THE WARRANTS 43
ANNEX F DEFINITIVE WARRANT (FACE) 60
ANNEX G GLOBAL WARRANT 62
ANNEX H CONVERSION AGENCY AGREEMENT 64
ANNEX I WARRANT AGENCY AGREEMENT 79
ANNEX J-1/J-2 CERTIFICATION OF NON U.S. BENEFICIAL OWNERSHIP 89/90
ANNEX K CERTIFICATE OF NO MATERIAL ADVERSE CHANGE 91
ANNEX L SPECIMEN SIGNATURE FORM 92
ANNEX M CERTIFICATE BY BANCA DEL GOTTARDO 93
NOTE AND WARRANT PURCHASE,
PAYING AND CONVERSION/EXERCISE AGENCY AGREEMENT
entered into effective as of November 15, 1996
between
INTELLICALL, INC.
being a corporation existing under the laws of the State of Delaware, whose head
office is situated at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
U.S.A.,(hereinafter called the "Company")
on the one part
and
BANCA DEL GOTTARDO
being a corporation duly organized with limited
liability and existing under the laws of Switzerland, whose registered office is
situated at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇,
on the other part
Some Definitions
The Company's 8% subordinated Convertible Notes of 1996 due November 22, 2001,
are referred to herein as the "Notes" and the Warrants of 1996 expiring November
22, 2001 as the "Warrants".
Until the Notes have been printed in definitive form pursuant to Article IX
hereof, the expression "Notes" herein shall include entitlements under the
Global Note, and the expressions "Noteholder(s)" and "Couponholder(s)", mutatis
mutandis, shall mean and include persons and entities entitled to the benefits
under the Global Note. Each Noteholder possesses a co-ownership in the Global
Note in relation to the principal amount of Notes of which he is an owner.
"Global Note" means a global note for the total principal amount of USD
5'000'000.-- issued in bearer form and representing 1'000 single Notes each in
the amount of USD 5'000.-- and representing the aforementioned total principal
amount. The Global Note will be destroyed by Banca del Gottardo when the Notes
are printed.
Until the Warrants have been printed in definitive form pursuant to Article IX
hereof, the expression "Warrants" herein shall include entitlements under the
Global Warrant, and the expressions "Warrantholder(s)", mutatis mutandis, shall
mean and include persons and entities entitled to the benefits under the Global
Warrant. Each Warrantholder possesses a co-ownership in the Global Warrant in
relation to the principal number of Warrants he is an owner of.
"Global Warrant" means a global warrant for the total number of 200'000 Warrants
issued in bearer form. The Global Warrant will be destroyed by Banca del
Gottardo when the Warrants are printed.
Global Note and Global Warrant are hereinafter sometimes collectively referred
to as the "Global Certificates".
I. SUBJECT
Subject to the terms and conditions hereof
- the Company, pursuant to authorization by its Board of Directors,
agrees to issue and sell to Banca del Gottardo USD 5'000'000.--
Notes at a price of 100% of their principal amount, and 200'000
Warrants in a ratio of one Note and 200 Warrants and
- Banca del Gottardo agrees not later than November 22, 1996
(1) to purchase (i.e. underwrite) on a firm basis for USD 5'000'000.
-- Notes at a price of 100% of their principal amount and
200'000 Warrants, and
(2) to offer the Notes and Warrants in a placement exclusively to
its clients and other financial institutions at a price of 100%
of their principal amount,
(i) Notes
with a total principal amount of USD 5'000'000.--
(United States Dollars five million)
maturing on November 22, 2001
bearing interest at the rate of 8% per annum, payable
semi-annually in arrear each
May 22 and November 22,
commencing May 22, 1997
until maturity
and
(ii) Warrants
in a total number of 200'000 (two hundred thousand)
expiring on November 22, 2001
The aggregate amount for which Notes and Warrants are sold are hereinafter
referred to as the "Proceeds".
The net Proceeds of the Notes will be utilized by the Company as follows:
A. USD 3'500'000.-- to be utilized to repay in the amount of USD
3'500'000.-- the variable Rate Senior Bridge Notes Due 1996,
Series A floated by the Company under a note purchase agreement
dated August 11, 1994 by and between the Company and Nomura
Holding America Inc.; and
B. the remaining proceeds are at the Company's free disposal for the
financing of acquisitions, working capital and general corporate
purposes.
Banca del Gottardo shall not have any responsibility for or be obliged to
concern itself with the application of the net Proceeds of the Notes.
II. ANNEXES
The contents of each of the Annexes attached hereto, i.e.
Annex A: Terms of the Notes
Annex B: Form of Definitive Note (face)
Annex C: Form of Interest Coupons
Annex D: Form of Global Note
Annex E: Terms of the Warrants
Annex F: Form of Definite Warrant (face)
Annex G: Form of Global Warrant
Annex H: Conversion Agency Agreement
Annex I: Warrant Agency Agreement
Annex J: Certification of Non U.S. Beneficial Ownership
Annex K: Form of Certificate of No Material Adverse Change
Annex L: Specimen signature form
Annex M: Certificate by Banca del Gottardo
shall constitute an integral part of this Agreement.
III. SALES RESTRICTIONS
a) The Notes and Warrants to be issued pursuant to this Agreement have not
been registered under the United States Securities Act of 1933, as amended (the
"Securities Act"), and may not be offered, sold or delivered, directly or
indirectly, in the United States or to, or for the account of, any U.S. person
except in transactions exempt from the registration requirements of the
Securities Act.
b) As to the Company, the Notes and Warrants are intended to be obligations
that are not required to be in registered form for purposes of United States
federal tax laws and the principal (to the extent characterized as original
issue discount) and interest payable on the Notes are intended to be "portfolio
interest" under Sections 871(h) and 881(c) of the United States Internal Revenue
Code of 1986 as amended (the "Code"). Accordingly, the Notes and the Warrants
may not, as part of any part of the initial distribution, be offered for sale or
resale, sold or delivered, directly or indirectly, to a person in the United
States or to a United States person. Banca del Gottardo (i) agrees and
represents that no Notes or Warrants will be offered, sold or delivered to or on
behalf of a person within the United States or a United States person, (ii)
represents and agrees that (a) it will not offer or sell, and, during the period
beginning on the earlier of the first date that the Notes and Warrants are
offered or the date on which the Notes are issued and ending on the date forty
(40) days after the later of the date upon which the Notes and Warrants were
first offered or the date of closing of this offering (the "Restricted Period"),
it will not offer or sell, Notes or Warrants to a person who is within the
United States or to a United States person, (b) it has not delivered and will
not deliver within the United States definitive Notes or coupons or definitive
Warrants that are sold during the Restricted Period, (c) it has and throughout
the Restricted Period will have in effect procedures reasonably designed to
ensure that its employees or agents who are directly engaged in selling Notes or
Warrants are aware that such Notes or Warrants may not be offered or sold during
the Restricted Period to a person who is within the United States or to a United
States person and (d) it has not entered and will not enter into any contractual
arrangement with respect to the distribution and delivery of the Notes and the
Warrants, except with its affiliates or with the prior written consent of the
Company, (iii) represents and agrees with respect to each affiliate that
acquires from it Notes or Warrants for the purpose of offering or selling such
Notes or Warrants during the Restricted Period, repeating and confirming the
representations and agreements contained in clauses (ii) (a), (b), (c) and (d)
on each such affiliate's behalf and (iv) represents and agrees that it will not
sell or deliver Notes and Warrants to a holder which is (a) immediately after
the sale or delivery, a "10-percent. shareholder" of the Company within the
meaning of Section 871 (h) (3) of the Code, (b) a bank on an extension of credit
made pursuant to a loan agreement entered into in the ordinary course of its
trade or business, (c) a controlled foreign corporation which is related to the
Company under section 864 (d) (4) of the Code, or (d) within a foreign country
which the United States Secretary of the Treasury has determined under section
871 (h) (6) of the Code that the exchange of information with the foreign
country is inadequate to prevent evasion of United States tax by United States
persons. Banca del Gottardo will deliver to the Company the certificate in the
form attached hereto as Annex M within ten business days of the commencement of
the Restricted Period. For purposes of this Agreement, whether an offer, sale or
delivery is made to a person within the United States or to a United States
person will be determined under the rules set out in the Code, and United States
Treasury Regulation Section 1.163-5(c)(2)(i)(D). Banca del Gottardo agrees that
it will comply fully with the selling restrictions set out in this Sub-Section
(b) and, in particular, Banca del Gottardo hereby covenants and agrees to the
effect set out in clauses (ii) and (iii) of the second preceding sentence.
c) The Notes will be represented initially by a temporary Global
Convertible Note (the "Global Note"), without interest coupons, and the Warrants
will be represented initially by a temporary Global Certificate (the "Global
Warrant"), the Global Note and Global Warrant to be deposited by the Company
with Banca del Gottardo, on the Payment Date. The Global Note may be exchanged,
as a whole or in part, for appropriate definitive Notes, in bearer form in the
denominations of USD 5'000.-- with interest coupons (the "coupons") attached,
and the Global Warrant may be exchanged, as a whole or in part, for appropriate
definitive Warrants, in bearer form not earlier than 40 days after the later of
the date on which the Notes and the Warrants are first offered or the Payment
Date, before which time no Notes represented by the Global Note or Warrants
represented by the Global Warrant or interest therein may be offered, sold or
transferred into the United States or to a U.S. person. Such exchange shall be
made upon certification, in the form attached hereto as Annex J-1, that the
beneficial owners of the Notes or Warrants either (i) are not United States
persons or U.S. persons or (ii) are financial institutions (within the meaning
of United States Treasury Regulation Section 1.165-12(c)(1)(v)) located outside
the United States that are not United States persons and have purchased such
Notes or Warrants for resale during the Restricted Period and certify they have
not acquired the Notes or the Warrants for purposes of resale directly or
indirectly to a United States person or to a person within the United States.
Any certificates provided by a clearing organization must be based on statements
provided to it by its members. A beneficial owner of Notes must exchange its
share of the Global Note for definitive Notes before such Notes or interests
therein may be transferred or as regards the Notes before interest payments or
other payments will be made and a beneficial owner of Warrants must exchange its
position of the Global Warrant for definitive Warrants before such Warrants will
be exercised. Banca del Gottardo agrees (i) to furnish to the Company a properly
completed certificate with respect to each Note and Warrant, in the form
attached hereto as Annex J-1 and J-2 (and, in the case of clearing
organizations, required statements of members of the clearing organization), on
the
earlier of the date of the first actual payment of interest on the Note or
the date of delivery by the Company of the Note or Warrant in definitive form,
and (ii) to issue definitive Notes and Warrants within a reasonable time after
the end of the Restricted Period (for this purpose, a temporary global security
is not a security in definitive form).
d) In this Agreement, references to "dollars" and "USD" are to United
States dollars, the term "United States" means the United States of America
(including the States and the District of Columbia), its territories, its
possessions and other areas subject to its jurisdiction, and the term "United
States person" means a citizen or resident of the United States, a corporation,
partnership or other entity created or organized in or under the laws of the
United States or any political subdivision thereof, or an estate or trust the
income of which is subject to United States federal income taxation regardless
of its source, "U.S. person" shall have the meaning set forth in Sections
230.901 through 904 of Title 17 of the United States Code of Federal Regulations
("Regulation S").
e) The following legends will appear on the Global Note and all Notes and
coupons issued pursuant to the Offer: (i) "Any United States person who holds
this obligation will be subject to limitations under the United States income
tax laws, including the limitations provided in sections 165(j) and 1287(a) of
the Internal Revenue Code", and (ii) "This Note has not been and will not be
registered under the United Stated Securities Act of 1933, as amended (the
"Securities Act"), and may not be offered, sold or delivered, directly or
indirectly, in the United States or to, or for the benefit of, any U.S. person
(as such terms are defined in Regulation S under the Securities Act) unless this
Note is registered under the Securities Act or an exemption from the
registration requirements of the Securities Act is available." The sections
referred to in the legend provide that, with certain exceptions, a United States
person will not be permitted to deduct any loss, and will not be eligible for
capital gain treatment with respect to any gain, realized on a sale, exchange or
redemption of such Notes or coupons.
f) The following legends will appear on the Global Warrant and all Warrants
issued pursuant to the Offer: "This Warrant has not been and will not be
registered under the United Stated Securities Act of 1933, as amended (the
"Securities Act"), and may not be offered, sold or delivered, directly or
indirectly, in the United States or to, or for the benefit of, any U.S. person
(as such terms are defined in Regulation S under the Securities Act) unless this
Warrant is registered under the Securities Act or an exemption from the
registration requirements of the Securities Act is available."
g) The Company represents, warrants and covenants that the Notes and the
Warrants have not been and shall not be offered or sold except in accordance
with Rule 903 promulgated under the Securities Act or in a transaction exempt
from the registration requirements of the
Securities Act. Each of the Company and Banca del Gottardo represents,
warrants and covenants that (i) none of it, its affiliates or any person acting
on its behalf has engaged or will engage in any directed selling efforts (as
defined in Rule 902 promulgated under the Securities Act) in the United States
and it has complied and will comply with the offering restrictions of Regulation
S under the Securities Act in connection with the offer of the Notes and the
Warrants, (ii) none of it, its affiliates or any person acting on its behalf has
utilized or will utilize any form of general solicitation or general advertising
(as such terms are used in Regulation D promulgated under the Securities Act) in
connection with the offer of the Notes and the Warrants in the United States,
(iii) none of it, its affiliates or any person acting on its behalf has made or
will make an offer of the Notes in circumstances that would require the
registration of the Notes or Warrants under the Securities Act and (iv) requests
to purchase Notes and/or Warrants shall be accepted only from persons who are
not within the United States.
h) Banca del Gottardo has been advised by the Company and acknowledges and
confirms that it is aware (a) that a violation or breach of any of the terms and
conditions of Article III of this Agreement could directly cause the Company to
become subject to damages and liabilities (including, but not limited to, excise
taxes, a loss of the interest deduction and assumption of withholding taxes)
under various United States securities and tax laws, and (b) that, as a
consequence, Banca del Gottardo could be held liable for such damages and
liabilities, in the event Banca del Gottardo violated or breached such terms and
conditions.
IV. COMMISSION AND EXPENSES
a) The Company will pay on November 22, ▇▇▇▇ ▇▇▇▇▇▇ time (the "Closing
Date") to Banca del Gottardo
(1) a managing and underwriting commission of 6% calculated on
the principal amount of the Notes
(2) USD 35'000.-- for out-of-pocket expenses incurred by Banca
del Gottardo, which shall include all its legal fees and
expenses.
The payment by the Company of (1) and (2) above will be made by deduction
from the payment by Banca del Gottardo to the Company of the Proceeds, resulting
in the Net Proceeds as per Article VI.
b) The Company shall further bear when ascertainable and due
- all present or future taxes, duties or other charges levied by
or within the United States of America in connection with the
execution and delivery of this Agreement, the Global Note and
the Global Warrant (excluding tax on interest or principal on
the Notes which is addressed in Annex A); and
- the commissions and expenses for the servicing and the
conversion of the Notes as per Article X and the exercise of
the Warrants as set forth in the Warrant Agency Agreement;
c) The Company will reimburse Banca del Gottardo on first demand for
all reasonable bank charges, legal fees and other reasonable costs
and expenses incurred or to be incurred by Banca del Gottardo in
case of or in connection with reorganization, merger,
restructuring or default, actual or threatened, of the Company as
well as in connection with the convening of a Noteholders' meeting
and the preservation and enforcement of any of the rights under
this Agreement, the Global Warrant or the Warrants, the Global
Note or the Notes.
d) Banca del Gottardo shall bear
- all costs and expenses in connection with the initial offering
and placement of the Notes and the Warrants incurred by it.
Banca del Gottardo shall further bear
- the cost for the printing and delivery to the holders of the
definitive Notes or of the definitive Warrants incurred by
Banca del Gottardo on behalf of the Company.
- all costs incurred by it in connection with the offering,
including the printing in Switzerland of the Information
Memorandum relating to the Notes and the Warrants.
V. WARRANTIES
A) The Company warrants to and for the benefit of Banca del
Gottardo that:
1. Status: it is a corporation duly incorporated and
existing in good standing under the laws of the State of
Delaware capable of suing and being sued and has the
power and authority to own its assets and to conduct the
business which it presently conducts;
2. Powers: it has the power to enter into, exercise its
rights and perform and comply with its obligations under
this Agreement;
3. Authorization and Consents: except as to the
registration requirements provided for
herein, all
actions, conditions and things required by the laws of
the State of Delaware and the United States of America
have been taken, fulfilled and done (including the
obtaining of the necessary consents) in order
a) to enable it lawfully to enter into, exercise its
rights and perform and comply with its obligations
under this Agreement; and
b) to ensure that those obligations are legally binding
and enforceable in accordance with their terms subject
to general equity principles, to applicable
bankruptcy, insolvency, conservatorship,
reorganization and other similar debtor relief laws,
and to other laws establishing liens and priorities or
otherwise relating to or affecting creditors-rights;
4. Non-Violation of Laws, etc: its entry into, and exercise
of its rights and/or performance of or compliance with
its obligations under this Agreement, the terms of the
Global Note and the Notes and the terms of the Global
Warrant and the Warrants do not and will not violate
in any material way
a) any law to which it is subject; or
b) its Certificate of Incorporation; or
c) except for matters for which the Company has received
a waiver, any agreement to which it is a party or
which is binding on it or its assets, and does not and
will not result in the existence of, or obligate it to
increase, any security interest in those assets,
except to the extent that such violations in the
aggregate would not have a material adverse effect on
the financial conditions of the Company;
5. Obligations Binding: its obligations under this
Agreement, the Global Note and the Notes, the Global
Warrant and the Warrants when duly executed are valid,
binding and enforceable in accordance with their terms
subject to general equity principles, to applicable
bankruptcy, insolvency, conservatorship, reorganization
and other similar debtor relief laws, and to other laws
establishing liens and priorities or otherwise relating
to or affecting creditors' rights;
6. Information Memorandum: the information pertaining to the
Company and its subsidiaries which is contained in the
Information Memorandum (defined in Article VIII) is
accurate in all material respects and there are no other
facts the omission of which makes any statement
therein materially misleading;
7. Accounts: the audited and unaudited consolidated
financial statements included as contained in the
Information Memorandum present fairly the results and
financial condition of the Company as a whole for the
periods and as of the dates thereof, and are in
accordance with generally accepted accounting principles
in the United States of America;
8. No Material Adverse Change: save as disclosed in the
Information Memorandum and the Company's filings with the
Securities and Exchange Commission in the U.S., there has
been no material adverse change in the consolidated
financial condition of the Company since September 30,
1996;
9. Litigation: except as disclosed in the Information Memo-
randum, no litigation, arbitration or administrative pro-
ceedings or judgment or award is current or, so far as
the Company is aware, threatened or pending
a) to restrain the entry into, exercise of its rights
under and/or performance or enforcement of or
compliance with its obligations under this
Agreement; or
b) which either individually or collectively are
material in the context of the issue and sale of the
Notes or the Warrants or the making and performance
of this Agreement;
10. No Breach or Default: neither failure by the Company to
comply with Article III nor any event described in
Sections 8, 9 or 10 of the Terms of the Notes has
occurred and is continuing. The Company is not in breach
or in default under any agreement to an extent or in a
manner which has had or could have a material adverse
effect on the financial condition of the Company and its
consolidated affiliates taken as a whole.
(B) Since the commitment of Banca del Gottardo to purchase the
Notes and the Warrants is made on the basis of the aforesaid
representations and warranties, the Company hereby undertakes
with Banca del Gottardo that it will hold Banca del Gottardo
harmless against all losses, liabilities, costs, charges and
expenses which it may incur as a noteholder as a result of or
in relation to any material misrepresentation or any material
breach of said representations and warranties by the Company,
and as long as any of the Notes and the Warrants are
outstanding Banca del Gottardo shall be given prompt notice by
the Company of any claim, action or proceeding which might
give rise to an obligation under this clause (B) of Article V.
This indemnification by the Company shall be in addition to
any other remedy available to Banca del Gottardo under
applicable law.
VI. PAYMENT TO THE COMPANY
On the Closing Date, Banca del Gottardo will pay to the Company the net
proceeds (the "Net Proceeds") of the offering - after compensation with the
commissions and expenses mentioned in Article IV against the Global Note and the
Global Warrant being delivered to Banca del Gottardo pursuant to Article VII.
Such net proceeds will be placed by Banca del Gottardo in US Dollars to the
credit of the Company in a US Dollar denominated account designated by the
Company.
Such net proceeds will be at the free disposal of the Company subject to
any Swiss National Bank regulations or other regulations that may be in force on
the Closing Date.
VII. CONDITIONS TO THE OBLIGATIONS OF BANCA DEL GOTTARDO
Banca del Gottardo shall have received from the Company at the latest on
November 20, 1996 the following documents:
(1) a copy of the Certificate of Incorporation, together with all
amendments thereto, of the Company certified by the Secretary
or the Assistant Secretary of the Company and a copy of a
Certificate of the Secretary of State of the State of Delaware
as to the good standing of the Company, each dated as of a
recent date;
(2) a certified copy of a resolution or resolutions duly adopted
by the Board of Directors of the Company signed by a duly
authorized officer of the Company, conferring the necessary
authority upon the person(s) signing this Agreement, the
Information Memorandum, the Global Note, the Notes, the Global
Warrant, the Warrants and any related documents; and a
certificate of the Secretary, or Assistant Secretary of the
Company as to the incumbency and signatures of the officer(s)
of the Company signing the documents provided for in this
clause (2) on behalf of the Company and the approval of this
Agreement and the Information Memorandum;
(3) Global Note (in the form of Annex D, without interest coupons
and without reproduction of the Terms of the Notes) and the
Global Warrant (in the form of Annex G) both duly issued and
signed by an authorized officer of the Company to be held in
escrow by Banca del Gottardo pending payment of the Net
Proceeds pursuant to Article VI;
(4) an executed copy of the Conversion Agency Agreement as set
forth in Annex H hereto;
(5) an executed copy of the Warrant Agency Agreement as set forth
in Annex I hereto;
(6) specimen signatures for the printing of the Notes;
(7) Certificate of No Material Adverse Change dated as of the
Closing Date and signed by an authorized officer of the
Company, substantially in the form of Annex K hereto;
(8) a legal opinion of Gardere & ▇▇▇▇▇, L.L.P., external U.S.
counsel to the Company on the laws of the United States of
America, dated as of the Closing Date;
(9) an opinion of the Company's Tax Counsel with respect to the
status of the Notes in respect of United States taxes, dated
as of the Closing Date;
(10) a certificate of two officers of the Company approving the
terms of the Notes and of the Warrants and the issue and sale
thereof by the Company;
(11) 2 copies of the Information Memorandum duly signed by an
authorized officer of the Company; and
Each of documents 5, 6, 7, 8, 9 and 11 shall be substantially as agreed by
the Company and Banca del Gottardo prior to the Closing Date.
VIII. INFORMATION MEMORANDUM
The Company will supply Banca del Gottardo on behalf of the holders
of the Notes in due time with information and documentation for the preparation
by Banca del Gottardo of the Information Memorandum (the "Information
Memorandum") relating to the Issue, in compliance with Swiss law.
The Information Memorandum shall be reviewed by the Company and Banca
del Gottardo.
IX. PRINTING OF THE NOTES AND WARRANTS
Banca del Gottardo shall provide for the printing of all, but not some
only, of the Notes or of the Warrants, at its cost on behalf of the Company. A
proof of the Notes and of the Warrants shall be approved by the Company, unless
the Company is then in default, prior to the printing thereof.
(1) The Notes shall
- be in the form of Annex B,
- have the Terms of the Notes (as per Annex A) reproduced in
English on the reverse side,
- be dated the Closing Date, and
- bear in facsimile the signature(s) of one or more duly
authorized officer(s) of the Company
- have Coupons attached, whereas
(2) the Coupons shall
- be in the form of Annex C, and
(3) The Warrants shall
- be in the form of Annex F
- have the Terms of the Warrants (as per Annex E) reproduced
in English on the reverse side
- to be dated the Closing Date, and
- bear in facsimile the signature(s) of one or more duly
authorized officer(s) of the Company.
(4) The Notes with Coupons attached shall be exchanged against the
Global Note delivered to Banca del Gottardo pursuant to
Article VII of this Agreement.
The Global Certificates so exchanged shall thereafter be cancelled and
returned to the Company.
The Company hereby irrevocably authorizes Banca del Gottardo to reproduce
on the Notes, the coupons and the Warrants the signature of the President of the
Company set forth in the specimen signature form of Annex L attached hereto,
with the same binding effect upon the Company as if the Notes and the coupons or
the Warrants had been issued and signed by the Company on the
Closing Date.
Notes and/or Coupons or Warrants which are mutilated, lost or destroyed may
be replaced by Banca del Gottardo in accordance with the respective provisions
of the Terms of the Notes and the Terms of the Warrants respectively.
X. SERVICING OF THE NOTES
(1) Transfer of funds
The Company will effect transfer of the funds in freely
disposable United States Dollars required to make any payment
of principal or interest on the Notes, including the
commissions referred to in paragraph (2) hereafter, to Banca
del Gottardo, Lugano, as Paying Agent, for value the
respective due date provided that, if such due date does not
fall on a Business Day, the Company shall be obliged to effect
transfer of such payments for value the Business Day
immediately preceding such due date. Any transfer risk shall
be borne by the Company.
"Business Day" means a day on which commercial banks are open
for domestic business and foreign exchange (including dealings in US Dollars) in
Lugano and New York.
Banca del Gottardo will supply the Company, by facsimile or
otherwise in writing received by the Company not less than
five Business Days prior to each due date for any payment
under the Notes, with any necessary information including
reference numbers and the name of a contact person for the
receipt of funds. Further information regarding the transfer
may be obtained by Banca del Gottardo from the Company at the
address set out in Article XIV below.
Banca del Gottardo shall credit the funds received to separate
non-interest bearing accounts with Banca del Gottardo for each
Coupon due date and/or redemption date. The receipt by Banca
del Gottardo of the due and punctual payment of the funds in
Lugano shall release the Company of its obligations under the
Global Note or under the Notes for the interest and principal,
to the extent of such payment.
Any funds held by Banca del Gottardo which will not be used as
a consequence of Coupons and Notes not having been collected
within the relevant period described by the Statute of
Limitations, shall be held by Banca del Gottardo at the
disposal of the Company. Banca del Gottardo shall promptly
after the expiry of the relevant period inform the Company
about the respective amount.
The risk of any exchange loss on the transfer of funds so held
by Banca del Gottardo from Banca del Gottardo to the Company shall be borne by
the Company, provided the transfer is made by order of, or with the consent of,
the Company.
(2) Commissions and Expenses
The Company will pay to Banca del Gottardo for the servicing
of the Notes a commission of
- 0.25% on the face amount of Coupons to be paid and - 0.125%
on the principal amount of Notes redeemed.
(3) Modalities
Except as provided in paragraph (1) of Article XI or in
Section 5 of the Terms of the Notes, any transfer by the
Company as per (1) and (2) above, shall be made in US Dollars
freely disposable, without any restrictions, and whatever the
circumstances may be, irrespective of the nationality or
domicile of the holder of Notes and/or Coupons, and without
requiring any affidavit, or the fulfilment of any other
formality.
(4) Paying Agency
The Company hereby appoints Banca del Gottardo as sole Paying
Agent (the "Paying Agent") and Banca del Gottardo agrees to pay to the
Noteholders all amounts to become due under the Notes.
The Company undertakes, in connection with the Issue, not to
appoint any institutions as paying agent without the consent
of Banca del Gottardo, which consent shall not be unreasonably
withheld and not to pay to other banks any commission or
remuneration for the payment of interest or principal on the
Notes.
XI. CANCELLATION OF NOTES AND COUPONS OR WARRANTS
The Company requests and authorizes Banca del Gottardo and Banca del
Gottardo undertakes to cancel and destroy all Coupons paid and Notes
redeemed, converted or replaced and Warrants exercised or replaced,
after the period prescribed by law, and to certify to the Company in
writing the serial numbers of Notes or Warrants, as the case may be,
destroyed, the dates when such destruction took place and the names
of the persons witnessing such destruction.
Banca del Gottardo reserves the right to record cashed Coupons as
well as redeemed, repaid, converted or replaced Notes and exercised or replaced
Warrants on video tape or other data carriers and to store them in this way
instead of keeping them physically during the period prescribed by law and to
destroy them subsequently. This reproduction of Coupons and/or Notes or Warrants
will remain in safekeeping at Banca del Gottardo during the statutory
limitation.
XII. COVENANTS
As long as any of the Notes or Warrants remain outstanding, the Company
undertakes:
(1) To send to Banca del Gottardo
a) Annual Reports, on Form 10-K, as filed with the United
States Securities and Exchange Commission (the "SEC"),
which report shall include or be accompanied by a copy of
the report of the Company's independent auditor', and
b) such regular and periodic reports on Form 10-Q and Form
8-K (deemed material) as the Company files with the SEC.
Banca del Gottardo is authorized to hold these documents at the disposal of
the Noteholders and/or holders of Coupons and/or Warrantholders for inspection.
(2) To provide Banca del Gottardo forthwith upon becoming aware
thereof with
- any change of its Certificate of Incorporation By-laws (if
any), and without waiting for Banca del Gottardo to take
any of the actions mentioned in Section 8, 9 or 10 of the
Terms of the Notes, with
- a notice in writing of any event provided for in Section 8,
9 or 10 of the Terms of the Notes.
(3) To hold meetings of the Board of Directors on a at least
quarterly basis, i.e. at least one meeting each quarter.
(4) To provide Banca del Gottardo with quarterly financial state-
ments of the Company by no later than the 45th day of the
month following the quarter covered by such statements. Such
statements shall provide Banca del Gottardo with a summary of
all of the Company's operation, in addition to a brief summary
of how the Net Proceeds of this issue have been
used by Company.
(5) To appoint two members of its Board of Directors upon request
of Banca del Gottardo, unless Banca del Gottardo has exercised
any similar right under any other agreement, and thereafter to
nominate such appointee for election by the Company's stock-
holders and use its best efforts to assure their election
until any Note or Notes shall be redeemed by the Company.
(6) (a) So long as any Notes are outstanding, to keep available
authorized shares of Common Stock sufficient to permit
all Notes or Warrants outstanding and unconverted or
unexercised to be converted or exercised in accordance
with the Provisions (Exhibit 1 to Annex H of the
Agreement) and the terms of the Warrants respectively;
(b) to assure that all shares of Common Stock delivered upon
conversion of Notes or exercise of Warrants will be
validly issued, fully-paid and non-assessable;
(c) to file, on or before February 3, 1997, if required, any
registration under the United States securities laws that
may be required before the Shares can be delivered upon
conversion of the Notes or exercise of Warrants and
freely marketed in the United States.
XIII. RIGHT OF TERMINATION
Notwithstanding anything contained in this Agreement, Banca del Gottardo
may by notice to the Company terminate this Agreement at any time before the
time on the Closing Date when payment would otherwise be due under this
Agreement to the Company in respect of the Notes and Warrants if:
(1) in the reasonable opinion of Banca del Gottardo, circumstances
shall be such as:
a) to prevent or to a material extent restrict payment for
the Notes and the Warrants in the manner contemplated in
this Agreement; or
b) to a material extent prevent or restrict settlement of
transactions in the Notes or Warrants in the market or
otherwise; or
(2) in the reasonable opinion of Banca del Gottardo, there shall
have been:
a) any change in national or international political, legal,
tax or regulatory conditions; or
b) any calamity or emergency
which has in the view of Banca del Gottardo caused a substantial
deterioration in the price and/or value of the Notes or the Warrants.
Any such termination of this Agreement shall be without liability on the
part of Banca del Gottardo or on the part of the Company.
Upon any such termination of this Agreement pursuant to Article XIII (i),
the parties hereto shall (except for the liability of the Company in relation to
expenses as provided in Article IV (a) (2) hereof and except for any liability
arising before or in relation to such termination) be released and discharged
from their respective obligations under this Agreement.
XIV. COMMUNICATIONS
All communications among Banca del Gottardo and the Company regarding this
Agreement shall be made in the English language, by telex or facsimile, followed
by registered letter, and shall be transmitted
by the Company to: by Banca del Gottardo to:
Banca del Gottardo Intellicall, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
▇.▇.▇.
Attn: Capital Market Department Attn: Chief Financial Officer
Telex No.: 841 052
Facsimile: 0114191 808 18 43 Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
XV. APPLICABLE LAW AND JURISDICTION
The Terms of this Agreement shall be governed by Swiss law, save and except
that paragraph 8 of the terms of the Notes shall be governed by the laws of the
State of New York.
Any dispute which might arise between Banca del Gottardo on the one hand
and the Company on the other hand regarding this Agreement shall fall within the
jurisdiction of the ordinary Courts of Justice of the Canton of Ticino, the
place of jurisdiction being Lugano, with the right of appeal to the Swiss
Federal Court of Justice in Lausanne where the law permits.
Solely for purposes of the preceding paragraph and for the purpose of
execution of a judgment in Switzerland, the Company elects legal and special
domicile at Banca del Gottardo's office in
Lugano, and Banca del Gottardo shall send to the Company as soon as
possible any documents received by it in this connection.
Banca del Gottardo shall also be at liberty to enforce its rights and to
take legal action before the competent courts of the United States of America,
in which case Swiss law shall be applicable with respect to the construction and
interpretation of this Agreement.
XVI. EFFECTIVENESS
The effectiveness of this Agreement is subject to:
(a) the receipt by Banca del Gottardo of all documents as
requested in Article VII of this Agreement, in a form
acceptable to Banca del Gottardo,
(b) no exercise of the Right of Termination as per Article XIII.
XVII. CURRENCY INDEMNITY
If any sum due from the Company in favour of the Paying Agent has to be
converted from United States Dollars (the "first currency") into another
currency (the "second currency") for the purpose of (i) making or filing a claim
or proof against the Company, (ii) obtaining an order or judgment in any court
or other tribunal or (iii) enforcing any order or judgment given or made in
relation hereto, the Company shall indemnify and hold harmless Banca del
Gottardo from and against any loss suffered as a result of any discrepancy
between (a) the rate of exchange used for such pur pose to convert the sum in
question from the first currency into the second currency and (b) the rate or
rates of exchange at which Banca del Gottardo may in the ordinary course of
business purchase the first currency with the second currency upon receipt of a
sum paid to them in the second currency in satisfaction in whole or in part of
any such order, judgment, claim or proof.
This indemnity shall constitute a separate and independent obligation from
the other obligations contained herein, shall give rise to a separate and
independent cause of action and shall apply, irrespective of any waiver granted
by Banca del Gottardo from time to time and shall continue in full force and
effect notwithstanding any judgment or order for a liquidated sum or sums in
respect of amounts due hereunder or under any such judgment or order. Any such
loss or damage aforesaid shall be deemed to constitute a loss suffered by Banca
del Gottardo and no further proof or evidence of any actual loss shall be
required by the Company.
XVIII. ENTIRE AGREEMENT
This Agreement together with the Annexes hereto and other agreements and
documents delivered pursuant hereto set forth the entire agreement and
understanding of the parties in respect of the subject matter hereof and thereof
and supersede all prior agreements, arrangements and understandings relating to
the subject matter hereof and thereof.
XIX. AMENDMENT, CANCELLATION AND WAIVER
This Agreement and the Annexes hereto may be amended, modified, superseded
or cancelled, and any of the terms hereof or thereof may be waived, only by a
written instrument executed by the Company and Banca del Gottardo hereto or
thereto, as the case may be, or, in the case of a waiver, by the party or
parties waiving compliance. The failure of any party at any time or times to
require performance of any provision hereof or of any Annex hereto shall in no
manner affect the rights at a later time to enforce the same. No waiver by any
party of any condition or of the breach of any term contained in this Agreement
or in any Annex hereto, whether by conduct or otherwise, in any one or more
instances, shall be deemed to be construed as a further or continuing waiver of
any such breach or the breach of any other term of this Agreement or of the
Annexes hereto.
THUS DONE AND SIGNED in 2 originals, of which one is for the Company,
in Carrollton/Lugano effective as of November 15, 1996
INTELLICALL, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ date signed
11/15/96
BANCA DEL GOTTARDO
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇ date signed
11/15/96
10.
ANNEX A
TERMS OF THE "CONVERTIBLE NOTES" OF THE COMPANY
(1) Form and Denomination
The Notes are issuable in bearer form in the denominations of USD 5'000.--
nominal amount each, with interest coupons (the "Coupons") attached. The Notes
will be represented initially by a temporary Global Note (the "Global Note"),
without interest coupons, to be deposited by the Company with Banca del Gottardo
on the Payment Date. The Global Note may be exchanged, as a whole or in part,
for appropriate definitive Notes, in bearer form in denominations of USD
5'000.-- with the Coupons attached, not earlier than 40 days after the later of
the date on which the Notes are first offered or the Payment Date. Such exchange
shall be made upon certification that the beneficial owners of the Notes either
(i) are not United States persons or U.S. persons or (ii) are financial
institutions (as defined in United States Treasury Regulation Section
1.165-12(c)(1)(v)) located outside the United States that are not United States
persons and that have purchased such Notes for purposes of resale directly or
indirectly to a United States person or U.S. person within the United States
during the Restricted Period and that certify that they have not acquired the
Notes for purposes of resale directly or indirectly to a United States person or
to a person within the United States. A beneficial owner of Notes must exchange
its share of the Global Note for definitive Notes before such Notes or interests
therein may be transferred or interest payments or other payments in respect of
the Notes will be made.
For purposes hereof, (i) the term "Restricted Period" means the period
beginning on the earlier of the first date that the Notes are offered or the
date on which the Notes are issued (the "Payment Date") and ending on the date
forty (40) days after the later of the date upon which the Notes and Warrants
were first offered or the date of closing of this offering, (ii) the term
"United States" means the United States of America (including the States and the
District of Columbia), its possessions, its territories and other areas subject
to its jurisdiction, (iii) the term "United States person" means a citizen or
resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States or any political
subdivision thereof, or an estate or trust the income of which is subject to
United States federal income taxation regardless of its source and (iv) the term
"U.S. person" has the meaning set forth in Sections 230.901 through .904 of
Title 17 of the United States Code of Federal Regulations ("Regulation S").
(2) Interest
The Notes bear interest from the Payment Date at the rate of 8% per annum,
payable semi-annually in arrear on May 22 and November 22 of each year until
maturity (the "Coupon Due Dates")
whereby the first payment shall be made on May 22, 1997 in respect of the
period from November 22, 1996 to May 22, 1997. Such interest is payable in
United States Dollars. Each Note will cease to bear interest on the date on
which they become due for redemption or repayment unless payment of principal
and/or premium (if any) is improperly withheld or refused or default is
otherwise made in respect of such payment. In such event, interest will continue
to accrue (as well after as before any judgment) up to but exluding the date on
which payment in full of the principal of such Note is made or (if earlier) the
date on which, payment in full of the principal thereof having been received by
Banca del Gottardo, notice to that effect shall have been given to the holders
of the Notes. Interest is computed on the basis of a 360-day year of twelve
30-day months.
(3) Repayment
The Company undertakes to repay the principal amount of the Notes, unless
previously redeemed, without any previous notice on November 22, 2001.
(4) Optional Redemption and Conversion
(a) The Company reserves the right to call all, but not part, of the
outstanding Notes for redemption on February 4, 1997, or thereafter up to
the close of business on October 30, 2001, at a price of 110% of the
principal amount thereof, together with interest accrued to the date of
such redemption provided that the average of the daily closing sales prices
of a Share for a period of 30 consecutive trading days, the last day of
which trading days is not more than 10 days prior to the day upon which the
Company sends a notice to Banca del Gottardo of its intention to redeem the
Notes under this sub-section (a), is at least 200% of the Conversion Price
in effect on such last day (taking into account any retroactive adjustment
not then reflected in the Conversion Price). The closing sales price for
any day shall be the average of the closing prices on the New York Stock
Exchange and if not listed any longer thereon, the average of the closing
bid and asked prices on the National Association of Securities Dealers
Automated Quotation (NASDAQ). All outstanding Notes will become due 60 days
after receipt of the aforesaid notice of early redemption by Banca del
Gottardo.
As long as the Shares are listed on a stock exchange or exchanges in
the United States of America, reference in this sub-section (a) to the
sales price for any day shall be deemed to refer to the closing price
(regular way) of a Share as reported by the principal stock exchange on
which the Shares are listed for such day. If no such sales price is
reported for one or more trading days, such day or days shall not be deemed
as trading day or days and shall be disregarded in the calculation of the
said 30 trading day period.
(b) Each Noteholder will have the right to require the Company to
redeem any Note or Notes on
November 22, 2000 at a price of 106% of the principal amount thereof,
together with interest accrued to the due date of redemption. This right
will have to be exercised by giving notice and surrendering the Note(s), so
to be redeemed to Banca del Gottardo, Lugano, at any time on or after
September 1, 2000 and prior to September 30, 2000 accompanied by an
irrevocable request for redemption. Notes called for redemption will become
due on November 22, 2000. Notes called for redemption shall cease to bear
interest from the date fixed for such redemption, unless the Company shall
default in providing for the payment of the redemption price. The Notes
must be presented for repayment with all unmatured Coupons attached. An
amount equal to any missing unmatured Coupon shall be deducted from the
amount due on redemption. Such Coupons shall, however, be paid upon
subsequent presentation provided they shall not have become barred pursuant
to Section 11 hereof.
(5) Payments
Payments with respect to the Notes and Coupons shall be made in
dollars of the United States of America against presentation and surrender
of such Notes or Coupons in the manner specified below. Such payments shall
be made without cost to the Noteholders, without any limitations and under
all circumstances notwithstanding any transfer restrictions, regardless of
any bilateral or multilateral payment or clearing agreement in existence
between the United States of America and the Swiss Confederation,
irrespective of the nationality, residence or domicile of any of the
Noteholders and without requiring any affidavit or the fulfillment of any
formalities. The funds required for the payment of principal and interest
shall be made available to Banca del Gottardo in Switzerland as Paying
Agent by the Company prior to each Coupon Due Date. The receipt of the
funds by Banca del Gottardo in Switzerland shall release the Company from
its obligations in respect of the payments due on the respective dates for
principal and interest.
Banca del Gottardo will arrange for payment of such funds as and when
due to the holders of Notes and Coupons. Notes and coupons may be presented
for payment at the principal amount printed on the Notes and the amount of
interest printed on the Coupons only at the offices in Switzerland of Banca
del Gottardo. No payment on the Notes or Coupons will be made by transfer
to an account in, or by mailing to an address in, the United States.
(6) Tax Status
All payments of principal and interest on the Notes and Coupons by the
Company shall be made without deduction for or on account of any present or
future tax, assessment or other governmental charge ("Taxes") imposed upon
such payment by the United States of America or any political subdivision
or taxing authority thereof or therein (the "United States"). If the
Company shall at any time be required by law to withhold any such Taxes,
the Company will pay as additional amounts to
Banca del Gottardo for the account of the holders of Notes and
Coupons, such amounts as may be necessary so that every net payment on each
Note or Coupon, after withholding for or on account of any such Taxes
(including any backup withholding tax or similar charge that may be
required in order for such payment to be made without any certification or
disclosure of the nationality, residence or identity of the beneficial
owner of such Note or Coupon) will not be less than the amount provided in
such Note or Coupon to be then due or payable; provided, however, that the
Company will not be required to pay such additional amounts for or on
account of any such Taxes that are imposed (i) otherwise than by
withholding from a payment on a Note or Coupon, (ii) upon a holder of a
Note or Coupon who is subject to taxation by the United States for any
reason other than such holder's ownership or receipt of payments in respect
of such Note or Coupon, or (iii) on interest or principal received by a
holder of a Note or Coupon which is (a) a "10-per cent. shareholder" of the
Company within the meaning of section 871(h) (3) (B)(a) of the Code, (b) a
bank or an extension of credit made pursuant to a loan agreement entered
into in the ordinary course of its trade or business, (c) a controlled
foreign corporation which is related to the Company under section 864(d)(4)
of the Code, (d) other than a nonresident individual or a foreign
corporation (as determined under United States tax principles) with respect
to the United States, or (e) a holder whose Note or Coupon is presented for
retirement or redemption, or payment is otherwise made, other than outside
the United States as provided in United States Treasury Regulations. Any
reference in this Note to the payment of principal or interest shall be
deemed to include payment of the additional amounts payable pursuant to the
provisions of this paragraph.
If, as the result of any change in, enactment of, or amendment to any
laws or regulations of the United States or any political subdivision or
taxing authorities thereof affecting taxation, or any change in the
official application of such laws or regulations, or any change in,
execution of or amendment to any treaty or treaties affecting taxation to
which the United States is a party, it is determined by the Company that it
would be required at any time to pay additional amounts pursuant to the
preceding paragraph, the Company is entitled to redeem the Notes, as a
whole but not in part, on giving not more than 60 days' but not less than
30 days' prior notice to Banca del Gottardo, on or after May 22, 1997 at
par.
Notice of redemption shall be given by the Company in writing to Banca
del Gottardo and such notice so given shall constitute good and sufficient
notice and shall be binding upon all holders of the Notes, regardless of
who they may be or where they may be located.
Banca del Gottardo shall as soon as practicable notify the Noteholders
of such redemption in accordance with Section 12 hereof.
The Company has been advised by Banca del Gottardo that pursuant to
the Swiss federal laws at present in force, interest payments on the Notes
are not subject to Swiss withholding tax.
(7) Authorizations
The Company has confirmed to Banca del Gottardo that no authorizations
or approvals are required under the laws of the United States for
performance of its obligations hereunder, except for the registration
requirements provided for herein.
(8) Status of the Notes and Subordination
1. Note Subordinated to Senior Indebtedness
The Company, for itself, its successors and assigns, covenants and
agrees, and each Holder of this Note ("Holder"), by his or its
acceptance hereof, likewise covenants and agrees, that the
indebtedness evidenced by this Note (and any renewals,
refinancings, modifications or extensions thereof), including the
principal of and interest thereon and any interest payable on such
interest and all fees, costs and expenses (including attorneys'
fees and collection costs) payable in connection with this Note,
and all requirements of the Company contained in this Note shall
be subordinate and junior in right of payment, to the extent and
in the manner hereinafter set forth, to the prior payment in full
of all Senior Indebtedness (as hereinafter defined), and that each
holder of Senior Indebtedness whether now outstanding or hereafter
created, incurred, assumed or guaranteed shall be deemed to have
acquired Senior Indebtedness in reliance upon the covenants and
provisions contained in this Note.
For purposes of this Note, the term "Senior Indebtedness" shall
mean any and all indebtedness, liabilities and obligations
consisting of all principal of and premium (if any) and accrued
and unpaid interest (including but not limited to interest
accruing after the commencement by or against the Company under
the Federal Bankruptcy Code (as now or hereafter in effect),
whether or not allowed as a claim), whether existing on the date
of this Note or hereafter incurred and whether created directly or
indirectly, acquired by assignment or otherwise, absolute or
contingent, joint or several, liquidated or unliquidated, due or
not due, contractual or tortuous, secured or unsecured, in respect
of (A) the indebtedness, obligations and liabilities of the
Company incurred pursuant to the Loan and Security Agreement with
Finova Capital Corporation ("Finova") dated November 22, 1996 up
to an aggregate principal amount of USD 12'000'000.--, as from
time to time amended (the "Loan Agreement"), (B) the indebtedness,
obligations and liabilities of the Company pursuant to that
certain Secured Revolving Credit Note, dated November 22, 1996
(the "Revolving Note") up to an aggregate principal amount of USD
12'000'000.-- executed by the Company, as may be modified or
amended from time to time, (C) any and all amendments,
modifications, supplements, renewals, refinancings, extensions,
replacements, restatements, substitutions, assignments, guaranties
and endorsements of any of the indebtedness, obligations and
liabilities described in clauses (A) and (B) above (collectively,
the "Finova Debt"), (D)
indebtedness of the Company incurred after
the date hereof for money borrowed which is secured by any portion
of the assets of the Company and (or any of its subsidiaries
representing the incurrence of indebtedness from a third party
provided that any such incurrence of indebtedness from a third
party shall have been consented to by the Majority Holders (as
hereinafter defined), (E) all obligations incurred after the date
hereof required to be classified and accounted for as a capital
lease on the face of the balance sheets of the Company prepared in
accordance with generally accepted accounting principles provided
that such obligations shall have been consented to by the
Purchaser, (F) all factoring arrangements or similar type
arrangements entered into after the date hereof by the Company or
any of its subsidiaries, provided that such arrangements shall
have been consented to by the Purchaser, (G) all obligations
consisting of guaranties, endorsements, modifications, renewals,
refinancings, extensions or replacements of any obligations
described in clauses (D) through (G) above, provided, that any
such guaranties, endorsements, modifications, renewals,
refinancings, extensions or replacements shall have been consented
to by the holders holding in the aggregate at least 50.1% of the
outstanding principal amount of the Senior Indebtedness then
outstanding including any such modifications, renewals,
refinancings, extension or replacements thereof (the "Majority
Holders"), and (H) all fees, costs, expenses (including attorneys'
fees), indemnities and other amounts at any time due and payable
in connection with any of the foregoing.
2. Note Subordinated to Prior Payment of All Senior Indebtedness on
Dissolution, Liquidation, Reorganization, etc. of the Company
Upon any payment or distribution of the assets of the Company of
any kind or character, whether in cash, property or securities to
creditors upon any total or partial liquidation, dissolution or
reorganization of, or similar proceeding relating to, the Company
or its property (whether voluntary or involuntary, or in
bankruptcy, insolvency, reorganization, liquidation or
receivership proceedings), or upon an assignment for the benefit
of creditors, or any other marshaling of the assets and
liabilities of the Company, or otherwise, then in such event, any
payment or distribution of any kind or character, whether in cash,
property or securities, which shall be payable or deliverable upon
or with respect to the indebtedness evidenced by this Note shall
be paid or delivered directly to the holders of Senior
Indebtedness, ratably according to the aggregate amounts of
principal remaining unpaid on account of such Senior Indebtedness
held by each until the Senior Indebtedness has been fully paid and
satisfied (including premium, if any, and interest thereon
accruing after commencement of such proceedings whether or not an
allowed claim). The Holder hereby assigns to the holders of the
Senior Indebtedness, the right, in the name of the Holder, to file
appropriate claims or proofs of claim in respect of this Note and
vote the
full amount of indebtedness represented by this Note in
any proceeding of the type described in the immediately proceeding
paragraph, including but not limited to a proceeding to confirm a
plan of reorganization in a bankruptcy case, as directed and
consented to by the Majority Holders. The Holder agrees to take or
refrain from taking any and all actions as required or requested
by the Majority Holders and to cooperate fully with the Majority
Holders in furtherance of and without hindrance of such filing of
claims or proofs of claim and such voting. This assignment shall
expire automatically at such time as the Senior Indebtedness has
been repaid in full.
3. Payments
The Company agrees not to pay to the Holder, and by accepting this
Note Holder agrees not to take or receive from the Company, in any
manner whatsoever, the whole or any part of indebtedness evidenced
by this Note, including without limitation any payment of
principal of or interest on this Note, unless and until the Senior
Indebtedness shall have been fully paid and satisfied; provided,
however, that notwithstanding the foregoing, the Holder shall have
the right to receive and retain from the Company, and the Company
shall have the right to pay to the Holder, scheduled payments of
interest only as and when they become due as provided herein, so
long as (i) the Company is not in default with respect to any
payment of principal, premium, if any, or interest on any Senior
Indebtedness, and (ii) no default or event of default exists and
is continuing, or would exist immediately after giving effect to
such payment to Holder, under any of the terms and provisions of
the documents relating to any of the Senior Indebtedness.
4. Proceedings
Holder shall not commence any action for the enforcement of this
Note (except an action commenced to avoid the expiration of an
applicable statute of limitations) and will not initiate or join
with any creditor, unless the Majority Holders shall also join, in
bringing any proceeding against the Company under any bankruptcy
or insolvency law or statute of the federal or any state
government or under any such law or statute relating to the relief
of debtors, readjustment of indebtedness, reorganization,
arrangement of debt, receivership or liquidation, and will not be
a proponent or co-proponent of a plan of reorganization in a
bankruptcy proceeding, unless and until all Senior Indebtedness
shall have been paid and satisfied in full or the Holder has
received the prior written consent of the Majority Holders.
5. Payments and Distributions Received by Holder
Should any payment or distribution (except payments currently due
which are received by the
Holder as permitted herein) be received
by the Holder with respect to this Note prior to the payment and
satisfaction in full of all Senior Indebtedness, the Holder will
forthwith deliver such payments and distributions or proceeds
thereof to the holders of Senior Indebtedness, ratably according
to the aggregate amount of principal remaining unpaid on account
of such Senior Indebtedness held by each in precisely the form
received (except for the endorsements or assignment of the Holder
where necessary), for application to the Senior Indebtedness held
by such holders, and, until so delivered, the same shall be held
in trust by the Holder as property of the holders of Senior
Indebtedness.
6. Rights Concerning Senior Indebtedness
Without affecting the rights of the holders of Senior
Indebtedness, the Holder agrees that, with or without notice to or
further assent from the Holder, any holder of Senior Indebtedness
may at any time, and from time to time, either prior to or after
any default by the Company with respect to any indebtedness (a)
advance or refuse to advance additional credit and make other
accommodations to or for the account of the Company, (b) by
written agreement or otherwise, extend, refinance, renew or
change, modify, compromise, release, refuse to extend, renew or
change the Senior Indebtedness or any part thereof and waive any
default under all or any part thereof, and modify, rescind or
waive any provision of any related agreement or collateral
undertaking, including but not by way of limitation any provision
relating to acceleration or maturity, (c) fail to set off any or
all accrued balance or deposit balances or any part thereof on any
holder's books in favor of such holders and/or release the same,
(d) sell, surrender, release, exchange, resort to, realize upon or
apply, or fail to do any of the foregoing, with respect to any
collateral securing any part thereof held by any of the holders of
Senior Indebtedness or available to any of the holders of Senior
Indebtedness for the Senior Indebtedness, and (e) generally deal
with the Company in such manner as any of the holders of Senior
Indebtedness may see fit, including, without limiting the
generality of the foregoing, any forbearance, failure, delay or
refusal by any of the holders of Senior Indebtedness to exercise
any rights or remedies any of the holders of Senior Indebtedness
may have against the Company, all without impairing or affecting
any of such holders' rights and remedies. Each such action and
each such failure to act by any of the holders of Senior
Indebtedness shall be deemed to be at the request of the Holder
and in reliance on this Agreement. No failure by any of the
holders of Senior Indebtedness to file, record or otherwise
perfect any lien or security interest, nor any improper filing or
recording, nor any failure by any of the holders of Senior
Indebtedness to insure or protect any of its collateral nor any
other dealing (or failure to deal) with any such collateral by any
of the holders of Senior Indebtedness, shall impair or release the
rights of any of the holders of Senior Indebtedness hereunder.
7. Repayment of Purchaser
Notwithstanding anything to the contrary contained herein, in the
event, and at such time as, the holders of Senior Indebtedness,
and their respective successors and assigns, have been repaid in
full all such Senior Indebtedness as described in clauses (A)
through (C), inclusive, and clause (H) as it relates to clauses
(A) through (C) of the definition of "Senior Indebtedness"
contained in this Section 8, Subsection 1, hereof, and all
obligations by the holders of Finova Debt to make Loans (as
defined in the Loan Agreement) has terminated, and all preference
periods under any bankruptcy laws as they might apply to the
holders of Senior Indebtedness, and it successors and assigns,
have expired, the restrictions set forth in this Section 8 of this
Note shall not thereafter be applicable to the Holder of this
Note.
8. Each Holder acknowledges that Finova is relying on the terms and
provisions of this Sub-Section 8 in connection with its execution
of the Loan Agreement a copy of which Loan Agreement is held by
Banca del Gottardo, pursuant to which Finova has consented to the
issuance of the Note by the Company, and each Holder hereby
acknowledges and agrees that the terms and provisions of this
Sub-Section 8 shall inure to the benefit of Finova.
(9) Conversion
Exhibit 1 to Annex H attached to the Agreement dated November 15, 1996
and entered into between the Company and Banca del Gottardo, which is
available for inspection at the Head Office in Lugano of Banca del
Gottardo, as Conversion Agent for the Notes, contains full provisions
relevant to conversion of the Notes into freely transferable Shares of
Common Stock which are duly registered under the 1933 Securities Act. The
following is a summary of such provisions:
The conversion price will be fixed on December 18, 1996 whereby such
conversion price shall be the equivalent of the average of the closing
prices of the shares of Common Stock during the period from November 4 to
December 18, 1996, but shall in any event not be higher than USD 5.00 (Such
price hereinafter called the "Conversion Price").
The holder of 10 Notes or more will be entitled at any time on and
after February 3, 1997 up to the close of business on November 22, 2001,
subject to prior redemption, to convert the Notes, at the principal amount
thereof, into freely transferable and non-restricted (such non-restriction
being subject to the effectiveness of a registration statement under the
U.S. securities laws covering such common stock, if required,) shares of
Common Stock of the Company, at the Conversion Price, subject to adjustment
as described below. No payment or adjustment will be made on conversion of
any Note for interest accrued thereon or dividends on any Common Stock
issued, except that accrued interest will be paid on the conversion of any
Note which has been called for redemption prior to the
conversion date. The Company is not required to issue fractional
shares of Common Stock upon conversion of Notes and, in lieu thereof, will
pay a cash adjustment based upon the market price of the Common Stock on
the last trading day prior to the date of conversion. In the case of Notes
called for redemption, conversion rights will expire at the close of
business on the fifth business day prior to the redemption date. Notes may
be presented for conversion only to an office of Banca del Gottardo outside
the United States and Banca del Gottardo will deliver Common Stock or other
consideration received upon conversion only to an account or address
outside the United States.
The Conversion Price is subject to adjustment in the following events
occurring after December 18, 1996:
- the issuance of stock of the Company as a dividend or
distribution on the Common Stock;
- subdivisions of outstanding shares of the Common Stock into a
greater number of shares;
- combinations of outstanding shares of Common Stock into a
smaller number of shares;
- reclassification of the Common Stock into other shares of the
Company's capital stock;
- issuance to all holders of Common Stock of certain rights or
warrants entitling them to subscribe for Common Stock at a
price per share less than the current market price but not for
shares issuable under the Company's stock option and stock
purchase plans; and
- the distribution to all holders of Common Stock of debt
securities or assets of the Company or rights or warrants to
purchase assets or debt securities of the Company (excluding
cash dividends or distributions from retained earnings).
No adjustment in the Conversion Price will be made unless such
adjustment would require an increase or decrease of at least USD 0.05 in
the Conversion Price then in effect; but any adjustment that would
otherwise be required to be made shall be carried forward and taken into
account in any subsequent adjustment. No adjustment need be made for rights
to purchase Common Stock pursuant to a Company dividend or interest
reinvestment plan. The Company may at any time reduce the Conversion Price
by any amount, provided that the Conversion Price is not less than the par
value of a share of Common Stock. If the Company consolidates or merges
into or transfers or leases all or substantially all of its assets to any
person, or is a party to a merger that reclassifies or changes its
outstanding Common Stock, the Notes will become convertible into the kind
and amount of securities, cash or other assets which the Holders would have
owned immediately after the transaction if the holders had converted the
Notes immediately before the effective date of the transaction.
(10) Events of Default
Subject to the provisions of ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ as regards
all Notes or Holders having 10% or more of the aggregate principal amount
of all Notes outstanding shall have the right to declare by notice to the
Company the Notes held by such Holder, plus accrued interest, to be due and
payable if any of the following events of default shall occur:
(a) default in the payment of principal, or, for a period of 15 days,
in the payment of interest on any Note; or
(b) default in the performance or observance in any material respect
of any covenant or agreement of the Company in the Notes if such
default continues for a period of 30 days after notice thereof has
been given to the Company; or
(c) a default shall occur under any evidence of indebtedness for money
borrowed by the Company or under any instrument under which there
may be issued or by which there may be secured or guaranteed any
indebtedness for money borrowed by the Company, which default
involves the failure to pay when due (after any applicable grace
period and subject to any extension or postponement of such
maturity), or results in the acceleration of, indebtedness in an
amount in excess of USD 500'000.-- without such indebtedness
having been discharged or such default or acceleration having been
waived, rescinded or annulled, within a period of 30 days after
notice thereof shall have been given to the Company; or
(d) the entry of a decree or order in respect of the Company in an
involuntary case under any bankruptcy, insolvency or other similar
law, or appointing a receiver, liquidator, trustee or other
similar official of the Company or for any substantial part of its
property, or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order unstayed
and in effect for a period of 45 consecutive days; or
(e) the Company shall commence a voluntary case under any bankruptcy,
insolvency or other similar law, or consent to the appointment of
or taking possession by a receiver, liquidator, trustee or other
similar official, of the Company or for any substantial part of
its property, or the making by it of a general assignment for the
benefit of creditors, or if it shall fail generally to pay its
debts as they become due, or shall take any corporate action in
furtherance of any of the foregoing; or
(f) if the Company shall merge or consolidate, or sell or convey all
or substantially all of its assets to, any other corporation,
unless (i) the Company is the surviving corporation, or (ii)
the surviving or transferee corporation expressly assumes all
obligations of the Company under the Notes by supplemental
agreement, confirmed by an opinion of U.S. counsel reasonably
satisfactory to Banca del Gottardo and the Company, or (iii) the
Company or the surviving or transferee corporation irrevocably
deposits in trust with Banca del Gottardo, money or U.S.
government obligations sufficient to pay principal and interest on
the Notes to maturity.
Upon the occurrence of an event of default, the Company shall promptly
give notice thereof to Banca del Gottardo which shall publish such notice
of default in accordance with Section 12 hereof. Banca del Gottardo shall
in relation to any event of default have no other obligation than the
publication of such event of default.
The principal amount of all Notes declared to be due and payable plus
accrued interest thereon shall become due and payable 15 days after notice
to the Company by Banca del Gottardo or by each Holder of such event of
default; provided, however, that such declaration shall be rescinded if,
within 15 days of such notice, such event of default shall have been
remedied by payment, in the case of a payment default, or in a manner
reasonably satisfactory to Banca del Gottardo.
In the event that a Resolution or Extraordinary Resolution is passed
at a meeting of Holders held pursuant to Section 15, any actions taken
pursuant to this Section 10 by a Holder shall be subject to any previously
taken action pursuant to such Section 15.
(11) Prescription
In accordance with the Swiss Statute of Limitations the coupons will
become barred five years and the Notes ten years after their respective due
dates.
(12) Notices and Publications
All notices to the Holders shall be deemed to have been duly given if
published in the Feuille Officielle Suisse du Commerce and in a daily
newspaper in Zurich and Lugano. All notices to the Company by any Holder
shall be deemed to have been duly given if sent by cable or telex to the
principal office of the Company.
(13) Listing of the Notes
No application will be made for the admission and quotation of the
Notes on any stock exchange.
(14) Replacement of Notes or Coupons
If any Note or coupon is defaced, mutilated, destroyed, stolen or
lost, it may be renewed or replaced at the head office of Banca del
Gottardo in Lugano, Switzerland on payment of such costs as may be incurred
in connection therewith and on presentation of such evidence and indemnity
as Banca del Gottardo may require. Defaced or mutilated Notes or coupons
must be surrendered before replacements may be issued.
(15) Noteholders' Meeting
a) A meeting of the Holders (hereinafter called a "Meeting") may be
convened by the Company or shall be convened by the Company if so
requested by Notes representing not less than 25% of the aggregate
principal amount of all Notes outstanding under the Terms of the
Notes (i) after the event of default shall have occurred and be
continuing to consider a waiver of an event of default or any
modification or amendment of the provisions of the terms of the
Notes, or (ii) a substitution of Banca del Gottardo.
The cost and expenses of a Meeting shall be borne by the Company.
b) Notice of the Meeting specifying the place, day and hour of the
Meeting shall be given at least 20 days prior to the proposed date
thereof (exclusive of the day on which the notice is given and the
day on which the Meeting is to be held) in accordance with Section
12 hereof. Such notice shall state generally the nature of the
business to be transacted at the Meeting thereby convened but
(except for an Extraordinary Resolution (as defined below)) it
shall not be necessary to specify in such notice the terms of any
resolution to be proposed.
c) The Meeting shall be held in Lugano and shall be chaired by a
representative of the Company or if such representative of the
Company shall not be present within 30 minutes after the time
appointed for the holding of the Meeting, the Noteholders present
shall choose one of their members to be chairman. The Meeting
shall be conducted in the English language exclusively.
d) Resolutions shall only be passed if a quorum of two or more
persons holding 25% or more of the aggregate principal amount of
all Notes outstanding are present. The quorum at any Meeting for
passing an Extraordinary Resolution shall be two or more persons
holding two-thirds or more of the aggregate principal amount of
all Notes outstanding. Resolutions shall be passed if approved by
the absolute majority of votes cast save that an Extraordinary
Resolution shall be passed only if approved by three-fourths or
more of votes cast. Any resolution passed at a Meeting duly
convened and held in accordance with the terms of the Notes shall
be binding upon all the Holders, whether present or not present at
such
Meeting and whether or not voting, and upon all the holders
of coupons.
e) If within 30 minutes after the time appointed for any such Meeting
a quorum is not present, the Meeting shall, if convened upon the
request of Holders, be dissolved. In any other case, it shall
stand adjourned for such period being not less than 14 days nor
more than 28 days, and at such place as may be appointed by the
Company. At such adjourned Meeting, two or more persons present
holding 10% or more of the aggregate principal amount of all Notes
outstanding shall form a quorum, provided that if the business of
such adjourned Meeting includes consideration of a proposed
Extraordinary Resolution, the quorum shall be two or more persons
present holding one-third or more of the aggregate principal
amount of all Notes for the time being outstanding.
f) If within 30 minutes after the time appointed for any such
adjourned Meeting the respective quorum is not present the Meeting
shall stand further adjourned for such period being not less than
14 days nor more than 28 days, and at such place as may be
appointed by the Company and at such further adjourned Meeting two
or more persons present holding any Notes outstanding (whatever
the principal amount of the Notes so held by them) shall form a
quorum, provided that if the business of such further adjourned
Meeting includes consideration of a proposed Extraordinary
Resolution, the quorum shall be two or more persons present
holding one-third or more of the aggregate principal amount of all
Notes for the time being outstanding.
g) Notice of any adjourned Meeting or further adjourned Meeting shall
be given in the same manner as notice of an original Meeting and
such notice shall state, in the case of an adjourned Meeting, that
two or more persons present holding 10% (or in the case of a
Meeting the business of which includes consideration of a proposed
Extraordinary Resolution, one-third) or more of the aggregate
principal amount of all Notes for the time being outstanding will
form a quorum, or, in the case of a further adjourned Meeting,
that two or more persons present holding any Notes outstanding (or
in the case of a Meeting the business of which includes the
consideration of a proposed Extraordinary Resolution, two or more
persons present holding one-third or more of the aggregate
principal amount of all Notes for the time being outstanding),
shall form a quorum.
h) The voting rights of the Holders shall be determined according to
the principal amount of Notes held, each Note with a principal
amount of USD 5'000.-- giving the right to one vote. Holders of
the coupons shall not have any voting rights. Notes held by or on
behalf of the Company shall have no voting rights and shall be
disregarded for the purpose of this Section 15, save that the
Company shall be entitled to vote in respect of Notes held by it
for the benefit of and at the direction of an independent third
party. In the case of an equality of
votes the chairman shall have a casting vote in addition to the
vote or votes (if any) to which he may be entitled as a Holder.
i) Any director or officer of the Company and its lawyers and any
other person authorized on its behalf by it may attend and speak
at any Meeting.
j) The Meeting shall have the following powers exercisable by
Extraordinary Resolution with the consent of the Company:
(i) extension of the date fixed for final maturity of the
Notes;
(ii) reduction or cancellation of the principal payable on the
Notes;
(iii) reduction or cancellation of the rate or amount payable, or
extension of the date of payment, in respect of any
coupons;
(iv) alteration of the majority required to pass an Extra-
ordinary Resolution; and
(v) waiver of any Event of Default.
k) Any reference in these Terms of the Notes to an "Extraordinary
Resolution" shall be construed as references to resolutions of the
Holders passed in accordance with the foregoing provisions of this
Section 15 with respect to any of the matters stated in sub-
section j) above.
(16) Applicable Law and Jurisdiction
The terms, conditions and form of the Notes and coupons (the English
language version of which shall govern) shall be governed by and construed
in accordance with Swiss law.
Any action or proceedings against the Company relating to the Notes
may be brought and enforced in the ordinary courts of the Canton of Ticino,
venue being in the City of Lugano, or, if such courts fail to grant
jurisdiction in the ordinary courts of the Canton of Basle-City, venue
being in Basle, and the Company hereby irrevocably submits to the
jurisdiction of such courts in respect of any such action or proceeding,
with the right to appeal, as provided by law, to the Swiss Federal Court in
Lausanne, the judgment of which shall be final. Solely for that purpose,
the Company hereby elects legal and special domicile at the office of Banca
del Gottardo, ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇. The
Company covenants that so long as any Notes are outstanding it will
maintain an agent for service of process in Switzerland. The aforementioned
jurisdiction shall also be valid for the cancellation and replacement of
lost, stolen, defaced, mutilated or destroyed Notes and
coupons. Payment effected to a holder of Notes who has been identified
as the legitimate holder of a Note or coupon by a final judgment of a Swiss
court shall release the Company from its payment obligations under such
Note or coupon.
Any Noteholder shall also have the right to bring any legal action or
proceeding against the Company in respect of a Note or coupon and all
covenants contained therein in any state or federal court in the United
States of America which may have jurisdiction.
15.
ANNEX B
(Form of Subordinated Convertible Note)
No. ________________
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.
THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE
OFFERED, SOLD OR DELIVERED, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO,
OR FOR THE BENEFIT OF, ANY U.S. PERSON (AS SUCH TERMS ARE DEFINED IN REGULATION
S UNDER THE SECURITIES ACT) UNLESS THIS NOTE IS REGISTERED UNDER THE SECURITIES
ACT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IS
AVAILABLE.
INTELLICALL, INC.
(Incorporated in the State of Delaware)
USD 5'000.--
8% Subordinated Notes due November 22, 2001
Convertible into freely transferable and non-restricted shares
of Common Stock of the Company
INTELLICALL, INC. (the "Company"), for value received, hereby certifies that it
owes to the bearer, payable upon presentation and surrender hereof, the
principal amount of 5'000.-- US Dollars (USD five thousand) on November 22, 2001
or on such earlier date as such principal amount may become due in accordance
with the Terms of the Notes appearing on the reverse hereof, and interest from
November 22, 1996 on said principal amount at the rate of 8% (eight percent) per
annum, payable in cash, semi-annually in arrear on May 22 and November 22 of
each year and at maturity, beginning on May 22, 1997 for the period from
November 22, 1996 to May 22, 1997, until payment of said principal amount has
been made or duly provided for, but only, in the case of interest due on or
before maturity, upon presentation and surrender of the interest coupons
attached hereto as they shall severally become due, all in accordance with
the Terms of the Notes.
This Note is one of a duly authorized issue of 8% Notes due November 22, 2001 of
the Company in the aggregate principal amount of 5'000'000.-- US Dollars (the
"Notes") issued pursuant to a Note and Warrant Purchase, Paying and
Conversion/Exercise Agency Agreement, dated as of November 15, 1996 (the
"Agreement"), between the Company of the first part and Banca del Gottardo of
the second part. The Notes are issued subject to and with the benefit of the
Agreement.
IN WITNESS WHEREOF, the Company has caused this Note to be duly executed under
its corporate seal as of November 22, 1996.
INTELLICALL, INC.
By: _____________________________
16.
ANNEX C
(Form of Coupon)
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.
THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE
OFFERED, SOLD OR DELIVERED, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO,
OR FOR THE BENEFIT OF, ANY U.S. PERSON (AS SUCH TERMS ARE DEFINED IN REGULATION
S UNDER THE SECURITIES ACT) UNLESS THIS NOTE IS REGISTERED UNDER THE SECURITIES
ACT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IS
AVAILABLE.
Coupon No. 1-10
INTELLICALL, INC.
Carrollton, TX, U.S.A.
US Dollars 5'000.--
8% Subordinated Notes due November 22, 2001
Note of US Dollars 5'000.-- (five thousand)
Semi-annual interest due on May 22 and November 22, 1997/2001 payable in cash on
the terms set forth in the Terms of the Notes:
US Dollars 200.--
INTELLICALL, INC.
By: _____________________________
(Reverse Coupon)
This coupon is payable at the head office in Lugano of ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇.
▇▇.
ANNEX D
(to be typed on security paper)
GLOBAL NOTE
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.
THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE
OFFERED, SOLD OR DELIVERED, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO,
OR FOR THE BENEFIT OF, ANY U.S. PERSON (AS SUCH TERMS ARE DEFINED IN REGULATION
S UNDER THE SECURITIES ACT) UNLESS THIS NOTE IS REGISTERED UNDER THE SECURITIES
ACT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IS
AVAILABLE.
INTELLICALL, INC.
USD 5'000'000.--
8% Subordinated Notes due November 22, 2001
Convertible into freely transferable and non-restricted shares
of Common Stock of the Company
This Global Note without interest coupons is a Global Note in respect of a duly
authorized issue of 8% Notes due November 22, 2001 (the "Notes") of Intellicall,
Inc. (the "Company"), a corporation duly organized and existing under the laws
of the State of Delaware, in the principal amount of five million US Dollars and
issued pursuant to a Note and Warrant Purchase, Paying and Conversion/Exercise
Agency Agreement (the "Agreement") dated as of November 15, 1996 between the
Company of the first part and Banca del Gottardo of the second part.
Subject to the provisions of the Agreement, Intellicall, Inc., for value
received, hereby promises to pay to the holder of this Global Note, payable upon
presentation and surrender hereof, the amount of US Dollar 5'000'000.-- (USD
five million) and interest thereon at 8% per annum, in accordance with the Terms
of the Notes set forth in Annex A of the Agreement.
In accordance with Section 1 of the Terms, this Global Note may be exchanged, as
a whole or in part, for definitive Notes, in bearer form in the denominations of
USD 5'000.--, with interest coupons attached, not earlier than 40 days after the
later of the date on which the Notes are first offered or the Payment Date,
before which time no Notes represented by this Global Note or interest herein
may be transferred into the United States or to a U.S. person. Such exchange
shall be made upon certification, in the form set forth in Annex J of the
Agreement and appended to this Global Note, that the beneficial owners of the
Notes are not United States persons or U.S. persons or are financial
institutions (as defined in the United States Treasury Regulation Section
1.165-12(c)(1)(v)) located outside the United States that have purchased such
Notes for resale during the Restricted Period and that certify that they have
not acquired the Notes for purposes of resale directly or indirectly to a United
States Person or a U.S. person or to a person within the United States. A
beneficial owner of Notes must exchange its share of the Global Note for
definitive Notes before interest payments or other payments in respect of the
Notes will be made.
The Terms of the Notes set forth in Annex A of the Agreement are hereby
incorporated by reference herein mutatis mutandis and, except as otherwise
provided herein, shall be binding on the Company and the holder hereof as if
fully set forth herein. Except as otherwise provided herein, the Company shall
make all payments hereunder as and when provided in the Terms of the Notes and
shall be bound by all its covenants set forth therein.
This Global Note shall be governed by and construed in accordance with the laws
of Switzerland.
IN WITNESS WHEREOF, the Company has caused this Global Note to be duly executed
under its corporate seal as of November 22, 1996.
Dated: November 22, ▇▇▇▇
▇▇▇▇▇ Security no.: 544'278
INTELLICALL, INC.
By: _____________________________
This Global Note shall not become valid for any purpose until this Global Note
has been authenticated by any two officers of Banca del Gottardo.
By: _____________________________ By: _____________________________
Authorized Officer Authorized Officer
ANNEX E
TERMS OF THE "WARRANTS" OF THE COMPANY
1. General
The Warrants are issuable in bearer form and have the benefit of and are
subject to the provisions for the exercise thereof contained in the Warrant
Agency Agreement to be dated as of November 22, 1996 between the Company
and Banca del Gottardo (the "Warrant Agent" or the "Standing Agent" as the
case may be) which will be available for inspection at the office in Lugano
of the Warrant Agent or its successor as Warrant Agent. The holders of the
Warrants (the "Holders") are deemed to have knowledge of the provisions of
such Agreement, all of which will be binding on them, provided, however,
that the rights of such Holders hereunder shall be governed by the terms
hereof.
The Standing Agent or the Warrant Agent may resign in its duties and be
discharged from all further duties as Agent or Warrant Agent in accordance
with the terms of the Warrant Agency Agreement. In such event a successor
Standing Agent or Warrant Agent, which will have the same duties as its
predecessor and will agree to be bound by the terms of the Warrant Agency
Agreement, will be appointed by the Company, or if the Company shall fail
to appoint such successor Standing Agent or Warrant Agent, by a court of
competent jurisdiction.
The Global Warrant may be exchanged, as a whole or in part, for appropriate
definitive Warrants, in bearer form, not earlier than 40 days after the
later of the date on which the Warrants are first offered or the Payment
Date. Such exchange shall be made upon certification that the beneficial
owners of the Warrants are not United States persons or U.S. persons or are
financial institutions (as defined in United States Treasury Regulation
Section 1.165-12(c)(1)(v)) located outside the United States that are not
United States persons and that the beneficial owners have not purchased
such Warrants for resale during the Restricted Period and that the
beneficial owners certify that they have not acquired the Warrants for
purposes of resale directly or indirectly to a United States person or to a
person within the United States. A beneficial owner of Warrants must
exchange its share of the Global Warrant for definitive Warrants before
such Warrants may be transferred or shares may be delivered upon exercise
of the Warrants in respect of the Warrants will be made.
For purposes hereof, (i) the term "Restricted Period" means the period
beginning on the earlier of the first date that the Notes are offered or
the date on which the Notes are issued (the "Payment Date") and ending on
the date forty (40) days afer the later of the date upon which the Notes
and Warrants were first offered or the date of closing of this offering,
(ii) the term "United States" means the United States of America (including
the States and the District of Columbia), its possessions, its territories
and other areas subject to its jurisdiction, (iii) the term "United States
person" means a
citizen or resident of the United States, a corporation, partnership or
other entity created or organized in or under the laws of the United States
or any political subdivision thereof, or an estate or trust the income of
which is subject to United States federal income taxation regardless of its
source and (iv) the term "U.S. person" has the meaning set forth in
Sections 230.901 through .904 of Title 17 of the United States Code of
Federal Regulations ("Regulation S").
2. Duration
The right to subscribe for and purchase shares of Warrant Stock represented
by the Warrants shall commence subject to Section 8 hereof on February 3,
1997 and shall expire November 22, 2001 at 5:00 P.M. US Eastern Time,
provided, however, that if, on such expiration date, the Company is then
required, pursuant to an effective request therefor, to effect, or is in
the process of effecting, a registration under the Securities Act for an
underwritten public offering in which shares of Warrant Stock are, pursuant
to this Warrant, entitled to be included, or if the Company is in default
of any obligations created by this Warrant, said right to subscribe for and
purchase shares of Warrant Sock shall expire at 5:00 P.M., US Eastern Time,
on the 30th day following the date on which such registration shall have
become effective (but in no event longer than 180 days beyond the date this
Warrant otherwise would have expired) or on the 30th day following the date
all of such defaults have been cured, as the case may be.
3. Warrant Price; Method of Exercise; Payment; Issuance of New Warrant;
Transfer and Exchange
The exercise price will be fixed on December 18, 1996 whereby such exercise
price shall be the equivalent of the average of the closing prices of
Common Stock during the period from November 4 to December 18, 1996, but
shall in any event not be higher than USD 5.-- (such price hereinafter
called the "Warrant Price").
The purchase right represented by this Warrant may be exercised at any time
and from time to time prior to expiration subject to Section 8 hereof.
In order to exercise the Warrants and receive certificates for Shares
legally issuable on such exercise, the Holder shall deposit 2'000 Warrants
or more with the Warrant Agent at its office in Lugano and accompanied by a
written notice (which notice must contain a certification of non-U.S.
beneficial ownership) signed by or on behalf of the Holder to the effect
that such Holder elects to exercise the Warrants and payment of the Warrant
Price (the "Warrant Consideration Amount"). As a further condition
precedent to the exercise of the Warrants, the Holder must pay all stamp,
issue, registration or other taxes and duties arising upon exercise in
Switzerland or payable in any jurisdiction upon the issue or delivery of
Shares, if any, to the exercising Holder or to the order of a person other
than the exercising Holder.
The date on which these conditions precedent to exercise as stated above
have been verified and recognized by the Warrant Agent as being fulfilled
in hereafter called the "Deposit Date". The Common Stock Warrant shall be
treated as exercised at the close of business in New York on the Exercise
Date. The "Exercise Date" for the Warrant means the business days in New
York immediately following the Deposit Date. The "Exercise Date" for the
Common Stock Warrant shall not be later than the Termination Date.
The Company shall not be obligated to issue any fraction of a Share upon
the exercise of any Warrant or make any payment for a fraction of a Share.
If more than one Warrant shall be exercised at one time by the same Holder,
the number of full Shares which shall be issuable upon exercise thereof
shall be computed on the basis of the aggregate number of shares issuable
upon the exercise of all the Warrants exercised by such Holder. Any Shares
issued upon the exercise of the Common Stock Warrants shall be delivered in
accordance with the instructions of the Holder.
In the event of any exercise of the rights represented by this Warrant
certificates for the shares of Warrant Stock so purchased shall be dated
the date of such exercise and delivered to the Holder hereof within a
reasonable time, not exceeding five Business Days after such exercise, and
the Holder hereof shall be deemed for all purposes to be the Holder of the
shares of Warrant Stock so purchased as of the date of such exercise.
Neither this Warrant nor any Warrant Stock has been registered under the
Securities Act. Accordingly, neither this Warrant nor any Warrant Stock is
transferable except as permitted under various exemptions contained in the
Securities Act, or upon satisfaction of the registration and prospectus
delivery requirements of the Securities Act.
4. Stock Fully Paid; Reservation of Shares
The Company covenants and agrees that all shares of Warrant Stock which may
be issued upon the exercise of this Warrant will, upon issuance, be fully
paid and non-assessable and free from all taxes, liens and charges with
respect to issuance. The Company further covenants and agrees that during
the period within which this Warrant may be exercised, the Company will at
all times have authorized and reserved for the purpose of the issue upon
exercise of the subscription rights evidenced by this Warrant a sufficient
number of shares of Common Stock to provide for the exercise of this
Warrant. If the Warrant Price is at any time less than the par value of the
Warrant Stock or if the Warrant at any time is exercisable by its delivery
alone and without payment of any additional consideration, the Company also
covenants and agrees to cause to be taken such action (whether by
decreasing the par value of the Warrant Stock, the conversion of the
Warrant Stock from par value to no par value, or otherwise) as will permit
the exercise of this Warrant without any
additional payment by the Holder hereof (other than payment of the Warrant
Price, if any, and applicable transfer taxes, if any), and the issuance of
the Warrant Stock, which Warrant Stock, upon such issuance, will be fully
paid and non-assessable.
The Company shall not by any action including, without limitation, amending
its certificate of incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking
if all such actions as may be necessary or appropriate to protect the
rights of the Holders hereof against impairment. Without limiting the
generality of the foregoing, the Company will (a) not increase the par
value of any shares of Common Stock receivable upon the exercise of this
Warrant above the amount payable therefor upon such exercise immediately
prior to such increase in par value, (b) take all such action as may be
necessary or appropriate in order that the Company may validly and legally
issue fully paid and non-assessable shares of Common Stock, free and clear
of any liens, claims, encumbrances and restrictions (other than as provided
herein) upon the exercise of this Warrant, and (c) use its best efforts to
obtain all such authorizations, exemptions or consents from any public
regulatory body having jurisdiction thereof as may be necessary to enable
the Company to perform its obligations under this Warrant.
5. Adjustment of Purchase Price and Number of Shares
The number and kind of securities purchasable upon the exercise of this
Warrant and the payment of the Warrant Price shall be subject to adjustment
from time to time upon the happening of certain events as follows:
a) Recapitalization, Reorganization, Reclassification, Consolidation,
Merger or Sale
In case of any recapitalization or reorganization of the Company
or any reclassification or change of outstanding Securities
issuable upon exercise of this Warrant (other than a change in par
value, or from par value to no par value, or from no par value to
par value or as a result of a subdivision or combination), or in
case of any consolidation or merger of the Company with or into
another corporation (other than a merger with another corporation
in which the Company is the surviving corporation and which does
not result in any reclassification or change other than a change
in par value, or from par value to no par value, or from no par
value to par value, or as a result of a subdivision or combination
- of outstanding Securities issuable upon exercise of this
Warrant), or in case of any sale or transfer to another
corporation of the Property of the Company as an entirety or
substantially as an entirety in connection with a liquidation or
dissolution of the Company, the Company or such successor or
purchasing corporation therefor, issue a new Warrant, providing
that the
Holder(s) of this Warrant shall have the right to exercise such
new Warrant and procure upon such exercise in lieu of each share
of Warrant Stock theretofore issuable upon exercise of this
Warrant the kind and the highest amount of shares of Stock, other
securities, money and property receivable upon such
recapitalization, reorganization, reclassification, change,
consolidation, merger, sale or transfer by a Holder of one share
of Common Stock issuable upon exercise of this Warrant had it
been exercised immediately prior to such recapitalization,
reorganization, reclassification, change, consolidation, merger
sale or transfer. Such new Warrant shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 5. The provisions of
this subsection (a) shall similarly apply to successive
recapitalizations, reorganizations, reclassifications, changes,
consolidations, mergers, sales and transfers.
b) Subdivision or Combination of Shares
If the Company, at any time while this Warrant is outstanding,
shall subdivide or combine any class or classes of its Common, (i)
in case of subdivision of shares, the Warrant Price shall be
proportionately reduced (as at the effective date of such
subdivision of, if the Company shall take a record of Holders of
its Common for the purpose of so subdividing, as at the applicable
record date, whichever is earlier) to reflect the increase in the
total number of shares of Common outstanding as a result of such
subdivision, or (ii) in the case of a combination of shares, the
Warrant Price shall be proportionately increased (as at the
effective date of such combination, or, if the Company shall take
a record of Holders of its Common for the purpose of so combining,
as at the applicable record date, whichever is earlier) to reflect
the reduction in the total number of shares of Common outstanding
as a result of such combination.
c) Certain Dividends and Distributions
If the Company, at any time while this Warrant is outstanding,
shall:
(i) Stock Dividends
Pay a dividend in, or make any other distribution of, shares
of any class or classes of Common, the Warrant Price shall
be adjusted, as at the date the Company shall take a record
of the holders of such class or classes of Common, for the
purpose of receiving such dividend or other distribution (or
if no such record is taken, as at the date of such payment
or other distribution), to that price determined by
multiplying the Warrant Price in effect immediately prior to
such record date (or if no such record is taken, then
immediately prior to such payment or other distribution), by
a fraction (1) the numerator of which shall be the total
number of shares of Common outstanding immediately prior to
such dividend or distribution, and (2) the denominator of
which shall be the total number of shares of Common
outstanding immediately after such dividend or distribution
(plus in the event that the Company paid cash for fractional
shares, the number of additional shares which would have
been outstanding had the Corporation issued fractional
shares in connection with said dividends); or
(ii) Liquidating Dividends, etc.
Make a distribution of its Property to the holders of its
Common as a dividend in liquidation or partial liquidation
or by way of return of capital other than as a dividend
payable out of funds legally available for dividends under
the laws of the State of Delaware, the Holder of this
Warrant shall, upon exercise and payment of the Warrant
Price, be entitled to receive, in addition to the number of
shares of Warrant Stock receivable thereupon, and without
payment of any additional consideration therefor, a sum
equal to the amount of such Property as would have been
payable to such Holder as owner of that number of shares of
Warrant Stock of the receivable by exercise of this Warrant,
had such Holder been the holder of record of such Warrant
Stock on the record date for such distribution, and an
appropriate provision therefor shall be made a part of any
such distribution.
d) Issuance of Additional Shares of Common
If the Company, at any time while this Warrant is outstanding,
shall issue any Additional Shares of Common (otherwise than as
provided in the foregoing subsections (a) through (c) of this
Section 4), at a price per share less than the Warrant Price then
in effect or less than (i) the Current Market Price then in effect
is such issue is pursuant to a public offering, or (ii)
ninety-five percent (95%) of the Current Market Price then in
effect if such issue is pursuant to a private placement in excess
of USD 3'500'000.-- in the aggregate, or without consideration,
then the Warrant Price upon each such issuance shall be adjusted
to that price determined by multiplying the Warrant Price by a
fraction:
(A) If issued for a consideration per share less than (i) the
Current Market Price then in effect if such issue is
pursuant to a public offering, or (ii) ninety-five percent
(95%) of the Current Market Price then in effect if such
issue is pursuant to a private placement in excess of USD
3'500'000.-- in the aggregate, or for no consideration:
1) the numerator of which shall be the number of shares
of Common outstanding immediately prior to the
issuance of such Additional Shares of Common plus the
number of shares of Common which the aggregate
consideration for the total
number of such Additional
Shares of Common so issued would purchase at (i) the
Current Market Price then in effect if such issue is
pursuant to a public offering, or (ii) ninety-five
percent (95%) of the Current Market Price then in
effect if such issue is pursuant to a private
placement in excess of USD 3'500'000.- - in the
aggregate, and
2) the denominator of which shall be the number of shares
of Common outstanding immediately after the issuance
of such Additional Shares of Common.
(B) If issued for a consideration per share of Common less
than the Warrant Price or for no consideration:
1) the numerator of which shall be the number of shares
of Common outstanding immediately prior to the
issuance of such Additional Shares of Common plus the
number of shares of Common which the aggregate
consideration for the total number of such Additional
Shares of Common so issued would purchase at the
Warrant Price, and
2) the denominator of which shall be the number of shares
of Common outstanding immediately after the issuance
of such Additional Shares of Common.
If such Additional Shares of Common shall be issued at a price
per share less than both the Warrant Price and the Current Market
Price, the Warrant Price shall be adjusted in the manner provided
in clauses (i) or (ii) of this subsection (d) which will result
in the greater reduction in the amount of the Warrant Price.
The provisions of this subsection (d) shall not apply under any
of the circumstances for which an adjustment is provided in
subsections (a), (b) or (c) of this Section 5. No adjustment of
the Warrant Price shall be made under this subsection (d) upon
the issuance of any Additional Shares of Common which are issued
pursuant to any Common Stock Equivalent if upon the issuance of
such Common Stock Equivalent (1) any adjustment shall have been
made pursuant to subsection (e) of this Section 5 or (2) no
adjustment was required pursuant to subsection (e) of this
Section 5.
e) Issuance of Common Stock Equivalents
In case the Company shall at any time while this Warrant is
outstanding, issue any Common Stock Equivalent and the price per
share of Common for which Additional Shares of Common may be
issuable thereafter pursuant to such Common Stock Equivalent shall
be less than the Warrant
Price then in effect on the date of issuance of such Common Stock
Equivalent or less than (i) the Current Market Price then in
effect if such issue is pursuant to a public offering, or (ii)
ninety five percent (95%) of the Current Market Price then in
effect if such issue is pursuant to a private placement in excess
of USD 3'500'000.-- in the aggregate, or if, after any such
issuance of Common Stock Equivalents, the price per share for
which Additional Shares of Common may be issuable thereafter is
amended (other than as a result of the operation of anti-dilution
provisions of or relating to Common Stock Equivalents outstanding
as of the date hereof pursuant to events or circumstances which
would also result in an adjustment in the Warrant Price), and
such price as so amended shall be less than the Warrant Price or
the Current Market Price in effect at the time of such amendment,
then the Warrant Price upon each such issuance or amendment shall
be adjusted as provided in the first sentence of subsection (d)
of this Section 4 on the basis that (1) the maximum number of
Additional Shares of Common issuable pursuant to all such Common
Stock Equivalents shall be deemed to have been issued (whether or
not such Common Stock Equivalents are actually then exercisable,
convertible or exchangeable in whole or in part) as of the
earlier of (A) the date on which the Company shall enter into a
firm contract for the issuance of such Common Stock Equivalent,
or (B) the date of actual issuance of such Common Stock
Equivalent, and (2) the aggregate consideration for such maximum
number of Additional Shares of Common shall be deemed to be the
minimum consideration received and receivable by the Company for
the issuance of such Additional Shares of Common pursuant to such
Common Stock Equivalent. No adjustment of the Warrant Price shall
be made under this subsection (e) upon the issuance of any
Convertible Security which is issued pursuant to the exercise of
any warrants or other subscription or purchase rights therefor,
if any adjustment shall previously have been made in the Warrant
Price then in effect upon the issuance of such warrants or other
rights pursuant to this subsection (e).
f) Other Provisions Applicable to Adjustments Under this Section A
The following provisions shall be applicable to the making of
adjustments in the Warrant Price hereinbefore provided in this
Section 5:
(i) Computation of Consideration
The consideration received by the Company shall be deemed to
be the following: (a) to the extent that any Additional
Shares of Common or any Common Stock Equivalents shall be
issued for a cash consideration, the consideration received
by the Company therefor, or, (b) if such Additional Shares
of Common or Common Stock Equivalents are offered by the
Company for subscription, the subscription price, or, (c) if
such Additional Shares of Common or Common Stock Equivalents
are sold to underwriters or dealers for
public offering without a subscription offering, the initial
public offering price, in any such case excluding any
amounts paid or receivable for accrued interest or accrued
dividends and without deduction of any compensation,
discounts, commissions, or expenses paid or incurred by the
Company for or in connection with the underwriting thereof
or otherwise in connection with the issue thereof; (d) to
the extent that such issuance shall be for a consideration
other than cash, then, except as herein otherwise expressly
provided, the fair market value of such consideration at the
time of such issuance as determined in good faith by the
Board. The consideration for any Additional Shares of Common
issuable pursuant to any Common Stock Equivalents shall be
the consideration received by the Corporation for issuing
such Common Stock Equivalents, plus the additional
consideration payable to the Corporation upon the exercise,
conversion or exchange of such Common Stock Equivalents. In
case of the issuance at any time of any Additional Shares of
Common or Common Stock Equivalents in payment or
satisfaction of any dividend upon any class of Stock other
than Common, the Corporation shall be deemed to have
received for such Additional Shares of Common or Common
Stock Equivalents a consideration equal to the mount of such
dividend so paid or satisfied. In any case in which the
consideration to be received or paid shall be other than
cash, the Board shall notify the Holder of this Warrant
through Banca del Gottardo of its determination of the fair
market value of such consideration prior to payment or
accepting receipt thereof. If, within thirty days after
receipt of said notice, the Holders of Warrants exercisable
for at least a majority of Warrant Stock then unissued shall
notify the Board in writing of their objection to such
determination, a determination of fair market value of such
consideration shall be made by arbitration in accordance
with the Rules of the American Arbitration Association, by
an arbitrator in the Borough of Manhattan, City of New York,
State of New York.
(ii) Readjustment of Warrant Price
Upon the expiration of the right to convert, exchange or
exercise any Common Stock Equivalent the issuance of which
effected an adjustment in the Warrant Price, if such Common
Stock Equivalent shall not have been converted, exercised or
exchanged, the number of shares of Common Stock deemed to be
issued and outstanding by reason of the fact that they were
issuable upon conversion, exchange or exercise of any such
Common Stock Equivalent shall no longer be computed as set
forth above, and the Warrant Price shall forthwith be
readjusted and thereafter be the price which it would have
been (but reflecting any other adjustments in the Warrant
Price made pursuant to the provisions of this Section 5
after the issuance of such Common Stock Equivalent) had the
adjustment of the Warrant Price been made in accordance with
the issuance or sale of the number of Additional Shares of
Common actually issued upon conversion, exchange
or issuance of such Common Stock Equivalent and thereupon
only the number of Additional Shares of Common actually so
issued shall be deemed to have been issued and only the
consideration actually received by the Company (computed as
in clause (i) of this subsection (g)) shall be deemed to
have been received by the Company.
(iii) Treasury Shares
The number of shares of Common at any time outstanding shall
not include any shares thereof then directly or indirectly
owned or held by or for the account of the Company or any of
its Subsidiaries.
g) Other Action Affecting Common
In case after the date hereof the Company shall take any action
affecting its common, other than an action described in any of the
foregoing subsections (a) through (f) of this Section 5,
inclusive, and the failure to make any adjustment would not
failure protect the purchase rights represented by this Warrant in
accordance with the essential intent and principle of this Section
5, then the Warrant Price shall be adjusted in such manner and at
such time as the Board may in good faith determine to be equitable
in the circumstances.
h) Adjustment of Number of Shares
Upon each adjustment in the Warrant Price pursuant to any
provision of this Section 5, the number of shares of Warrant Stock
purchasable hereunder shall be adjusted, to the nearest whole
share, to the product obtained by multiplying such number of
shares purchasable immediately prior to such adjustment in the
Warrant Price by a fraction, the numerator of which shall be the
Warrant Price immediately prior to such adjustment and the
denominator of which shall be the Warrant Price immediately
thereafter. If the Company shall be in default under any provision
contained in the last sentence of Section 5 of this Warrant so
that shares issued at the Warrant price adjusted in accordance
with this Section 5 would not be validly issued, the adjustment of
number of shares provided for in the foregoing sentence shall
nonetheless be made and the Holder of this Warrant shall be
entitled to purchase such greater number of shares at the lowest
price at which such shares may then be validly issued under
applicable law. Such exercise shall not constitute a waiver of any
claim arising against the Company by reason of its default under
Section 5 of this Warrant.
i) Notwithstanding anything in this Section 5 to the contrary,
neither the number of shares of Warrant Stock purchasable
hereunder nor the Warrant Price shall be adjusted with respect to
any Common Stock Equivalents issued and outstanding as of the date
of the issuance of this
Warrant, or the issuance of any Securities upon exercise or
conversion of any such Common Stock Equivalent, including,
without limitation, any Securities issued from time to time
pursuant to (i) the exercise of options outstanding as of the
date of issuance of the Warrant and held by present or former
directors, officers or employees of the Company, (ii) the
exercise of the Stock Purchase Warrant, dated July 31, 1992 (the
"Prudential Warrant"), purchased by The Prudential Insurance
Company of America ("Prudential"), (iii) the conversion features
of that certain Amended and Restated 10% Convertible Subordinated
Note Due 1999 issued to ▇.▇. ▇▇▇▇▇▇▇ Investment L.P. (the
"▇▇▇▇▇▇▇ Securities"), (iv) the exercise of the Warrant dated
August 11, 1994 (the "Nomura Warrant") issued to Nomura Holding
Company, Inc. ("Nomura"), (v) the exercise of the Warrants, dated
December 29, 1995 ("Gottardo 1995") issued to Banca del Gottardo,
(vi) the effect of any antidilution provisions contained in the
Prudential Warrant, the ▇▇▇▇▇▇▇ Securities, the Nomura Warrant
and the Gottardo 1995 Warrants and (vii) the issuance of up to
150'000 stock options per calendar year pursuant to the Company's
stock option or stock purchase plan.
6. Notice of Adjustments
Whenever the Warrant Price or number of Warrant Shares purchasable upon
exercise of this Warrant shall be adjusted pursuant to Section 5 hereof,
the Company shall deliver to Banca del Gottardo for certification to the
Holder(s) of the Warrant a certificate (the "Adjustment Certificate")
setting forth, in reasonable detail, the event requiring the adjustment,
the amount of the adjustment, the method by which such adjustment was
calculated (including a description of the basis on which the Board made
any determination hereunder), and the Warrant Price and number of Warrant
Shares purchasable hereunder after giving effect to such adjustment, and
shall cause copies of such certificate to be mailed (by first class mail
postage prepaid) to the Holder(s) of this Warrant promptly after each
adjustment; provided, however, that in the event that any Holder disagrees
with the calculations, amounts or other information with respect to the
adjustments set forth in the Adjustment Certificate, such Holder shall
within 10 Business Days after receipt of such Adjustment Certificate
request that the Company cause the independent accounting firm then
regularly engaged by it to audit its financial statements to propose and
execute and promptly deliver to the Holder(s) a certificate with respect to
each of the items set forth in the Adjustment Certificate. Such
determination as to adjustments of the accounting firm shall be final and
binding in the absence of manifest error.
7. Fractional Shares
No fractional shares of Warrant Stock will be issued in connection with any
exercise hereof, but in lieu of such fractional shares, the Company shall
cause the payment therefor equal in amount to the product of the applicable
fraction multiplied by the Warrant Price then in effect.
8. Definitions
For the purposes of this Warrant, the following terms have the following
meanings:
"Additional Shares of Common" shall mean all shares of Common issued by the
Corporation after the date hereof except Warrant Stock.
"Board" shall mean the Board of Directors of the Corporation.
"Business Day" shall mean any day except a Saturday, a Sunday or a legal
holiday in New York City.
"Closing Date" shall mean the date of the closing of the sale and delivery
of the Notes.
"Commission" shall mean the Securities and Exchange Commission or any other
Federal agency at the time administering the Securities Act.
"Common" shall mean the Common Stock and any capital stock of the Company
of any class which shall be authorized at any time after the date of this
Warrant and which shall have the right to participate in the distribution of
earnings and assets of the Company without limitation as to amount.
"Common Stock Equivalent" shall mean any Convertible Security or warrant,
option or other right to subscribe for or purchase any Additional Shares of
Common or any Convertible Security.
"Company" shall mean Intellicall, Inc., a Delaware corporation, and its
successors and assigns.
"Convertible Securities" shall mean evidences of Indebtedness, shares of
Stock or other Securities which are or may be at any time convertible into or
exchangeable for Additional Shares of Common. The term "Convertible Security"
shall mean one of the Convertible Securities.
"Current Market Price" means with respect to any Trading Day the last sale
price (regular way) of the Common on such day as reported on the New York Stock
Exchange Consolidated Tape (as published in the Wall Street Journal), or, if
such Common is not listed on the New York Stock Exchange, Inc. or reported on
such Consolidated Tape, then the last sale price on such day on the principal
domestic stock exchange on which such stock is then listed or admitted to
trading, or, if no sale takes place on such day on such exchange, the average of
the closing bid and asked prices on such day as officially quoted on such
exchange, or, if such Common is not then listed or admitted to trading on any
domestic stock exchange but is quoted in the National Market System
("NMS/NASDAQ") of the National Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ"), then the Current Market Price for each such Trading
Day shall be the last sale price on such day as quoted by NMS/NASDAQ, or, if no
sale takes place on such day or if such Common is neither listed or admitted to
trading on any domestic stock exchange nor quoted on such National Market
System, then the Current Market Price for each such Trading Day shall be the
average of the reported closing bid and asked price quotations on such day in
the over-the-counter market, as reported by NASDAQ, or, if not so reported, as
furnished by the National Quotation Bureau, Inc., or, if such firm at the time
is not engaged in the business of reporting such prices, as furnished by any
similar firm then engaged in such business as selected by the Company, or if
there is no such firm, as furnished by any member of the National Association of
Securities Dealers, Inc. selected by the Company with the written approval of
the Holders of Warrants execrable for a majority of the shares of Warrant Stock
usable under then outstanding Warrants. If at any time such Common is not listed
on any domestic exchange or quoted in the domestic over-the-counter market, the
Current Market Price shall be deemed to be an amount mutually agreed upon in
writing between the Corporation and the Holder of this Warrant within fifteen
days immediately following the date on which the Current Market Price is to be
determined. If no agreement as to Current Market Price is determined as stated
herein, (i) the Holder of this Warrant shall select an independent appraiser who
shall determine the fair market value per share of the Common which shall be the
Current Market Price, provided the Company shall agree to such Current Market
Price. If the Company shall not agree to the Current Market Price as determined
in the preceding sentence then (ii) the Company and Banca del Gottardo shall
each select an independent appraiser who shall, independently of the other
appraiser, determine the fair market value of the Common of the Company. If the
value determined by the appraiser whose determination is the higher of the two
appraisals does not exceed by more than ten percent (10%) the average of the
values determined by each appraiser, then the Current Market Price shall be the
average of the values determined by the two appraisers. If the value determined
by the appraiser whose determination is the higher of the two appraisals does
exceed by more than ten percent (10%) the average of the value determined by
each appraiser, then the two appraisers shall select a third independent
appraiser who shall, independently of the other appraisals, determine the fair
market value of the Common. The value determined by the appraiser whose
determination is the most discrepant from the average of the three appraisals
shall be discarded, and the Current Market Price shall equal the average of the
remaining two appraisals; except that in the event that the highest and lowest
appraisals are equally discrepant from the average of the three appraisals, the
Current Market Price shall be such average. The Company shall bear the expenses
of all appraisals.
"Governmental Body" shall mean any federal, state, county, city, town,
village, municipal or other governmental department, commission, board, bureau,
agency, authority or instrumentality, domestic or foreign.
"Holders" shall mean the Persons who shall from time to time own of record
any Warrant. The term "Holder" shall mean one of the Holders.
"Material Adverse Effect" means any change or changes or effect or effects
that individually or in the aggregate are or are likely to be materially adverse
to (i) the assets, business, operations, income, prospects or condition
(financial or otherwise) of the Company and its Subsidiaries taken as a whole,
(ii) the legality, validity or enforceability of the Warrants, and (iii) the
ability of the Corporation to fulfill its obligations under the Warrants.
"Note Purchase Agreement" shall mean the Note and Warrant Purchase, Paying
and Conversion/Exercise Agency Agreement, dated as of November 15, 1996, by and
between the Company and Banca del Gottardo as such Agreement may hereafter from
time to time be amended, modified or supplemented in accordance with the terms
thereof.
"Notes" shall mean collectively the Subordinated Convertible Notes (each as
defined in the Note Purchase Agreement).
"Person" shall mean and include an individual, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization or a government
or any department or agency thereof.
"Property" with respect to any Person, shall mean any interest in any kind
of property or asset, whether real, personal or mixed, tangible or intangible,
of such Person.
"Registrable Securities" shall mean (a) any Warrant Stock or other
Securities issued or issuable upon exercise of any Warrants, and (b) any
Securities issued or issuable with respect to any such Warrant Stock or other
Securities by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise. As to any particular Registrable Securities, once
issued such shares or securities shall cease to be Registrable Securities when
(i) a registration statement with respect to the sale of such Securities shall
have become effective under the Securities Act and such Securities shall have
been disposed of in accordance with such registration statement, (ii) they shall
have been distributed to the public pursuant to Rule 144 (or any successor
provision) under the Securities Act, (iii) they shall have been otherwise
transferred, new certificates for them not bearing a legend restricting further
transfer shall have been delivered by the Company and subsequent disposition of
them shall not require registration or qualification of them under the
Securities act or any similar state law then in force, (iv) they shall have
cased to be outstanding or (v) the Company agrees to remove the legend
restricting transferability in accordance with applicable law on the
certificates evidencing such Securities.
"Registration Expenses" shall mean all expenses incident to the Company's
performance of or compliance with Section 7, including, without limitation, all
registration, filing and National Association of Securities Dealers fees, all
fees and expenses of complying with securities or blue sky laws, all word
processing, duplicating and printing expenses, messenger and delivery expenses,
the fees and disbursements of counsel for the Company and of its independent
public accountants, including the expenses of any special audits or "cold
comfort" letters required by or incident to such performance and compliance, the
reasonable fees and disbursements of not more than one firm of attorneys
retained by the holders of the Registrable Securities being registered, premiums
and other costs of policies of insurance against liabilities arising out of the
public offering of the Registrable Securities being registered and any fees and
disbursements of underwriters customarily paid by issuers or sellers of
securities, but excluding underwriting discounts and commissions and transfer
taxes, if any, provided that, in any case where Registration Expenses are not to
be borne by the Company, such expenses shall not include salaries of Company
personnel or general overhead expenses of the Company, auditing fees, premiums
or other expenses relating to liability insurance required by underwriters of
the Company or other expenses for the preparation of financial statements or
other data normally prepared by the Corporation in the ordinary course of its
business or which the Company would have incurred in any event.
"Securities" shall mean any debt or equity securities of the Company
whether now or hereafter authorized, and any instrument convertible into or
exchangeable for Securities or a Security. "Security" shall mean one of the
Securities.
"Securities Act" shall mean as of any date the Securities Act of 1933, as
amended, or any similar Federal statute then in effect.
"Stock" shall include any and all shares, interests or other equivalents
(however designated) of, or participations in the capital stock of a corporation
of any class.
"Subsidiary" shall mean, with respect to any Person, any corporation or
other entity of which at least a majority of the outstanding Voting Stock is at
the time directly or indirectly owned or controlled by such Person or by one or
more of any entities directly or indirectly owned or controlled by such Person.
"Trading Day" shall mean any day on which equity securities are traded on
any national securities exchange or on NASDAQ.
"Voting Stock", as applied to the Stock of any corporation, shall mean
Stock of any class or classes (however designated) having ordinary voting power
for the election of a majority of the members of the Board of Directors (or
other governing body) of such corporation, other than Stock having such power
only by reason of the happening of a contingency.
"Warrant Price" shall mean the price specified in the first paragraph of
this Warrant and such other prices as shall result form the adjustments
specified in Section 4 hereof.
"Warrant Stock" shall mean the Common Stock issuable upon exercise of any
Warrant or Warrants.
"Warrants" shall mean the Warrants issued and sold pursuant to the Note
Purchase Agreement, including, without limitation, this Warrant.
9. Amendment and Waiver: Assignees
Any term, covenant, agreement or condition in this Warrant may be
amended, or compliance therewith may be waived (either generally or in a
particular instance and either retroactively or prospectively), by a
written instrument or written instruments executed by the Company and Banca
del Gottardo; provided, however, that no such amendment or waiver shall
reduce the number of shares of Warrant Stock issuable under the Warrants,
increase the Warrant Price, shorten the period during which the Warrants
may be exercised or modify any provision of this Section 9 without the
consent of the Holders of all Warrants then outstanding.
10. Loss or Mutilation
Upon receipt by the Warrant Agent of evidence satisfactory to it of
the ownership of and the loss, theft, destruction or mutilation of any
Warrant and (in the case of loss, theft or destruction) of indemnity
satisfactory to it, and (in the case of mutilation) upon surrender and
cancellation thereof, the Warrant Agent shall execute and deliver in lieu
thereof a new Warrant entitling the Holder to acquire without further
consideration the same number of Shares upon the same terms as the Warrant
so lost, stolen or destroyed or so surrendered and canceled. Any such
substitute Warrant shall constitute an original contractual obligation of
the Company, whether or not the allegedly lost, stolen or destroyed Warrant
shall be at any time enforceable by anyone. Applicants for a substitute
Warrant shall also comply with such other reasonable regulations and pay
such other reasonable charges as the Warrant Agent may prescribe.
11. Notices and Publications
All notices to the Holders shall be deemed to have been duly given if
published in the Feuille
Officielle Suisse du Commerce and in a daily newspaper in Lugano and
Zurich.
12. Governing Law
The terms, conditions and form of the Warrants and the Warrant Agency
Agreement shall be governed by and construed in accordance with Swiss law.
The issuance of the Common Stock upon exercise of the Warrants shall be
governed by and construed in accordance with the laws of the State of
Delaware.
Any action or proceedings against the Company relating to the Warrants
may be brought and enforced in the ordinary courts of the Canton of Ticino,
venue being in the City of Lugano, or if such courts fail to grant
jurisdiction in the ordinary courts of the Canton of Basle-City, venue
being in the city of Basle, and the Company hereby irrevocably submits to
the jurisdiction of such courts in respect of any such action or proceeding
in either case, with the right to appeal, as provided by law, to the Swiss
Federal Court in Lausanne, the judgment of which shall be final. Solely for
that purpose, the Company hereby elects legal and special domicile at the
principal office of Banca del Gottardo, ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇. The Company covenants that so long as any Warrants are
outstanding it will maintain an agent for service of process in
Switzerland. The aforementioned jurisdiction shall also be valid for the
cancellation and replacement of lost, stolen, defaced, mutilated or
destroyed Warrants. Issuance of Common Stock to a Holder who has been
identified as the legitimate Holder by a final judgment of a Swiss Court
shall release the Company from its obligations under such Warrants.
ANNEX F
FORM OF WARRANT
(FACE)
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD OR DELIVERED,
DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO, OR FOR THE BENEFIT OF, ANY
U.S. PERSON (AS SUCH TERMS ARE DEFINED IN REGULATION S UNDER THE SECURITIES ACT)
EXCEPT TO AN EFFECTIVE REGISTRATION STATEMENT, OR AN EXEMPTION FROM REGISTRATION
UNDER SAID ACT.
WARRANT
No. Warrant to Purchase __________ Shares of Common Stock
(subject to adjustment)
INTELLICALL, INC.
Incorporated Under the Laws of the State of Delaware
This Warrant entitles the holder hereof (the "Holder") to subscribe for and
purchase, during the period specified in this Warrant, one share (subject to
adjustment as hereinafter provided) of duly authorized, validly issued, fully
paid and non-assessable Common Stock, par value USD 0.01 per share ("Common
Stock") of INTELLICALL, INC., a Delaware corporation (the "Company"), at an
initial exercise price per share as determined pursuant to Section 3 of the
terms of the Warrants, subject, however, to the provisions and upon the terms
and conditions hereinafter set forth (such exercise price, as form time to time
adjusted in accordance with the terms hereof, being hereinafter called the
"Warrant Price"). 2'000 Warrants or more are required for any exercise.
Reference is hereby made to the further provisions of this Warrant set forth on
the reverse hereof and such further provisions shall for all purposes have the
same effect as though fully set forth at this place.
IN WITNESS WHEREOF, INTELLICALL, INC. has caused this Warrant to be signed
in its name by the facsimile signature of its Chief Executive Officer and
President or one of its Vice Presidents.
Dated: November 22, 1996
INTELLICALL, INC.
By: _____________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Chief Executive Officer
and President
ANNEX G
(to be typed on security paper)
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD OR DELIVERED,
DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO, OR FOR THE BENEFIT OF, ANY
U.S. PERSON (AS SUCH TERMS ARE DEFINED IN REGULATION S UNDER THE SECURITIES ACT)
EXCEPT TO AN EFFECTIVE REGISTRATION STATEMENT, OR AN EXEMPTION FROM REGISTRATION
UNDER SAID ACT.
GLOBAL WARRANT
INTELLICALL, INC.
Incorporated Under the Laws of the State of Delaware
This Global Warrant is a Global Warrant in respect of a duly authorized issue of
200'000 Warrants, each entitling the holder to subscribe for and purchase,
during the period specified in this Warrant, 200'000 shares (subject to
adjustment as hereinafter provided) of duly authorized, validly issued, fully
paid and non-assessable Common Stock, par value USD 0.01 per share ("Common
Stock") of INTELLICALL, INC., a Delaware corporation (the "Company"), at an
initial exercise per share as determined pursuant to Section 3 of the terms of
the Warrants, subject, however, to the provisions and upon the terms and
conditions hereinafter set forth (such exercise price, as from time to time
adjusted in accordance with the terms hereof, being hereinafter called the
"Warrant Price"). 2'000 Warrants or more are required for any exercise.
The Warrants are issued pursuant to the Note and Warrant Purchase, Paying and
Conversion/Exercise Agency Agreement dated as of November 15, 1996 between, the
Company as issuer of the Warrants and Banca del Gottardo (the "Agreement").
The Global Warrant may be exchanged, as a whole or in part, for appropriate
definitive Warrants, in bearer form, not earlier than 40 days after the later of
the date on which the Warrants are first offered or the Payment Date. Such
exchange shall be made upon certification that the beneficial owners of the
Warrants are not United States persons or U.S. persons or are financial
institutions (as defined in United States Treasury Regulation Section
1.165-12(c)(1)(v)) located outside the United States that are not United States
persons and that the beneficial owners have not purchased such Warrants for
resale during the Restricted Period and that the beneficial owners certify that
they have not acquired the Warrants for purposes of resale directly or
indirectly to a United States person or to a person within the United States. A
beneficial owner of Warrants must exchange its share of the Global Warrant for
definitive Warrants before such Warrants may be transferred or shares may be
delivered upon exercise of the Warrants in respect of
the Warrants will be made.
For purposes hereof, (i) the term "Restricted Period" means the period beginning
on the earlier of the first date that the Notes with Warrants are offered or the
date on which the Notes are issued (the "Payment Date") and ending on the date
forty (40) days after the later of the date upon which the Notes and Warrants
were first offered or the date of closing of this offering, (ii) the term
"United States" means the United States of America (including the States and the
District of Columbia), its possessions, its territories and other areas subject
to its jurisdiction, (iii) the term "United States person" means a citizen or
resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States or any political
subdivision thereof, or an estate or trust the income of which is subject to
United States federal income taxation regardless of its source and (iv) the term
"U.S. person" has the meaning set forth in Sections 230.901 through .904 of
Title 17 of the United States Code of Federal Regulations ("Regulation S").
Until so exchanged, this Global Warrant shall have the same rights and benefits
as the definitive Warrants.
The Terms of the Warrants set forth in Annex E of the Agreement are hereby
incorporated by reference herein mutatis mutandis and, except as otherwise
provided herein, shall be binding on the Company and the holder hereof as if
fully set forth herein. Except as otherwise provided herein, the Company shall
meet all its obligations hereunder as and when provided in the Terms of the
Warrants and shall be bound by all its covenants set forth herein.
This Global Warrant shall be governed by and construed in accordance with the
laws of Switzerland.
IN WITNESS WHEREOF, the Company has caused this Global Warrant to be duly
executed under its corporate seal as of November 22, 1996.
Dated: November 22, ▇▇▇▇
▇▇▇▇▇ Securty no.: 544'280
INTELLICALL, INC.
By: _____________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Chief Executive Officer
and President
This Global Warrant shall not become valid for any purpose until this Global
Warrant has been authenticated by any two officers of Banca del Gottardo.
By: _____________________________ By: _____________________________
Authorized Officer Authorized Officer
ANNEX H
CONVERSION AGENCY AGREEMENT
This agreement is entered into effective as of November 22, 1996, between
INTELLICALL, INC., a Delaware corporation with principal offices at ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ of America (the
"Company") of the first part and BANCA DEL GOTTARDO, a Swiss cor poration with
principal offices at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ("Banca
del Gottardo") of the second part.
As authorized by its Board of Directors on October 31, 1996 and pursuant to a
Note and Warrant Purchase, Paying and Conversion/Exercise Agency Agreement dated
November 15, 1996 (the "Agreement"), the Company proposes to make an offer on
the Swiss capital market for the sale of its convertible notes (the "Convertible
Notes") and Warrants. The Convertible Notes will be convertible into freely
transferable and non-restricted shares (the "Shares") of the Common Stock of the
Company (the "Common Stock"), on the terms and conditions provided hereafter.
The Board of Directors of the Company has approved this agreement as regards the
conversion of the Notes and has authorized the conversion of the Convertible
Notes into the Common Stock of the Company on the terms and conditions hereof.
Article 1 Conversion Agent
1.1. The Company hereby appoints Banca del Gottardo, acting through its
specified office in Switzerland, as sole Conversion Agent (the "Conversion
Agent") for the conversion of Notes or coupons into Shares in accordance with
the provisions for conversion set forth in Exhibit 1 hereto (the "Conversion
Provisions") which constitutes an integral part of this agreement.
1.2. So long as any Notes are outstanding, the Company shall maintain a
stock transfer agent (the "Stock Transfer Agent") or shall itself perform the
functions required of such agent under this agreement.
1.3. The appointment of the Conversion Agent hereunder shall continue in
effect until the conversion right in respect of the Convertible Notes shall have
terminated. So long as Banca del Gottardo satisfactorily performs its
obligations hereunder the Company shall not without the consent of Banca del
Gottardo appoint any other Conversion Agent or pay any other bank any commission
or remuneration for the conversion of the Convertible Notes or coupons.
Article 2 Commissions
2.1. In consideration for the services rendered by the Conversion Agent in
connection with the conversion of the Convertible Notes and coupons, the Company
undertakes to pay upon demand to the Conversion Agent in US Dollars a commission
of 0.25 per cent of the principal amount of each Note converted, however at
least USD 50.-- per conversion of a Convertible Note in a principal amount of
USD 5'000.-- together with reasonable out-of-pocket expenses (e.g., telex,
cable, postage, telephone, legal and insurance expenses, if any) incurred by the
Conversion Agent in connection with its services hereunder.
2.2. Neither Banca del Gottardo nor the Noteholders shall have any
obligation to pay to the Stock Transfer Agent any commission, fees, costs or
charges in connection with the conversion of Convertible Notes or coupons and
the making available of the respective Shares as provided hereafter.
Article 3 Indemnification
The Company will indemnify and hold harmless the Conversion Agent against
any losses, liabilities, costs, claims, actions or demands which it may incur or
which may be made against it as a result of or in connection with its
appointment or the exercise of its powers and duties under this Agreement other
than those based upon or arising out of the negligence of willful misconduct on
the part of the Conversion Agent or any of its employees.
Article 4 Conversion of Convertible Notes and Coupons
Each Convertible Note and all unmatured coupons attached thereto, submitted
for conversion to the Conversion Agent (a "Converted Note") shall be imprinted
or stamped by the Conversion Agent with a legend to the effect that such
Convertible Note or coupon has been converted. All Converted Notes and coupons
shall be held by Banca del Gottardo for the account of the Company. Banca del
Gottardo shall maintain a record of Convertible Notes and coupons converted.
Article 5 Notices
All notices required under this Agreement shall be deemed to have been duly
given if sent by cable, telex or facsimile transmission (confirmed in writing,
sent by registered airmail) to the following addresses:
If to the Company:
INTELLICALL, INC.
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Conversion Agent:
BANCA DEL GOTTARDO
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
Attention: New Issue Department
Telex: 841 052
Facsimile: 0114191 808 18 43
or to such other address as at the party receiving the notice shall have
notified to the other party in writing. Such cable, telex or facsimile
transmission notice shall be deemed to have been duly given at the time of
dispatch. Any party receiving a notice by cable, telex or facsimile transmission
will be protected by relying upon the cabled, telexed or transmitted notice even
though such notice is not subsequently confirmed in writing.
Article 6 Governing Law
6.1. This agreement shall be governed by and construed in accordance with
Swiss law, except as to matters regarding conversion of the Notes into Common
Stock of the Company, which shall be governed by and construed in accordance
with the laws of Delaware. Any action or proceedings against the Company
relating to this agreement or the Convertible Notes or coupons may be brought
and enforced in the ordinary courts of the Canton of Ticino, venue being in the
City of Lugano, and the Company hereby irrevocably submits to such courts in
respect of any such action or proceeding with the right to appeal, as provided
by law, to the Swiss Federal Court in Lausanne, the judgment of which shall be
final. Solely for that purpose and for the purpose of execution in Switzerland,
the Company hereby elects legal and special domicile at the office of Banca del
Gottardo, ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇. Banca del
Gottardo shall notify the Company promptly upon receipt of any notice by it in
its capacity as the Company's agent for service of process.
6.2. The Conversion Agent shall also have the right to bring any legal
action or proceeding hereunder against the Company in any state or federal court
in the United States of America which may have jurisdiction.
Article 7 Counterparts
This agreement may be executed in any number of counterparts, each of which
shall be an original; but such counterparts shall together constitute but one
and the same instrument.
IN WITNESS WHEREOF, the Company and Banca del Gottardo have caused this
agreement to be signed and acknowledged by their officers authorized to do so,
as of November 22, 1996.
INTELLICALL, INC.
By: _______________________________
BANCA DEL GOTTARDO
By: _______________________________
Exhibit 1 to ANNEX H
CONVERSION PROVISIONS
The following are the provisions for the conversion (the "Conversion
Provisions") of the USD 5'000'000.-- 8% Convertible Notes due November 22, 2001
of Intellicall, Inc., Carrollton, Texas (the "Company") into freely transferable
and non-restricted shares of the common stock of the Company. Unless otherwise
defined herein, the terms used herein have the meanings ascribed to them in the
Note and Warrant Purchase, Paying and Conversion/Exercise Agency Agreement and
the Conversion Agency Agreement (the "Agency Agreement") dated as of November
15, 1996 and November 22, 1996 respectively, between the Company and Banca del
Gottardo.
Article 1
Conversion Right
1.1. Subject to and upon compliance with these Conversion Provisions, the
holder of any Note (a "Noteholder") will have the right at any time on
and after February 3, 1997 up to the close of business of banks in Lugano
on November 22, 2001, or, in case the Notes are called for redemption in
accordance with Section 4 of the Terms of the Notes, then prior to the
close of business of banks in Lugano on the earlier of November 22, 2001
and the fifth business day preceding the date fixed for redemption, but
in no event thereafter, to convert ten Notes or more Notes into freely
transferable and non-restricted (such non-restriction being subject to
the effectiveness of a registration statement under the U.S. securities
laws covering such common stock) shares of common stock which are duly
registered under the 1933 Securities Act, with par value USD 0.01 per
share (such presently authorized capital stock and any other stock into
which such presently authorized common stock may hereafter be changed,
the "Common Stock"), of the Company, calculated as to each conversion to
the greatest number of full Shares, disregarding fractions, at the price
of initially as determined pursuant to Section 3 of the terms of the
Notes for each Share, such price being subject to adjustment in certain
instances as provided in Article 2 hereafter (as so adjusted from time to
time, the "Conversion Price"). Fractions of a share will not be issued on
conversion; provided, however, that if a Noteholder at any one time
delivers more than one Note for conversion, the number of Shares issued
shall be calculated on the basis of the aggregate principal amount of the
Notes so delivered. A cash adjustment shall be paid in respect of any
frac tional Share which would otherwise be issuable upon conversion of
any Note in an amount in U.S. Dollars based upon the market price of the
Common Stock on the last trading day prior to the date of conversion.
Cash adjustments for fractional shares will not be made for amounts less
than one U.S. Dollar.
1.2. In order to exercise the right of conversion, a Noteholder shall (a)
deliver the Note or Notes to be converted during normal business hours,
accompanied by the conversion notice in the form obtainable from the
Conversion Agent (the "Conversion Notice") to any Conversion Agent and
(b) pay to the Conversion Agent any stamp or other taxes that may be
payable in Switzerland on such conversion. Each Note delivered for
conversion must be delivered with all unmatured coupons attached and/or
with an amount equal to the face value of any missing, unmatured coupons.
Such missing, un matured coupons shall be paid by Banca del Gottardo upon
subsequent presentation thereof, provided they shall not have become
barred pursuant to Section 11 of the Terms of the Notes.
1.3. The Conversion Agent undertakes to:
(a) make available to Noteholders the Conversion Notice in such form
as may from time to time be agreed by the Company and the
Conversion Agent;
(b) upon receipt of a Conversion Notice from a Noteholder:
(i) verify that (A) the Conversion Notice has been duly
completed and signed by or on behalf of the Note-
holder named therein, (B) the Conversion Notice is
accompanied by all Notes to which it relates and all
unmatured coupons appertaining to such Notes and/or
an amount equal to the face value of any missing
unmatured coupons and (C) the amount of any stamp
or other taxes payable by the Noteholder has been
paid; and
(ii) endorse the Conversion Notice;
(c) imprint or stamp all Notes submitted to it for conversion, and all
unmatured coupons attached thereto, in accordance with Article 4
of the Agency Agreement promptly upon satisfaction by the
Noteholder of all conditions precedent to the conversion; and
(d) dispatch within two business days after satisfaction by the
Noteholder of all conditions precedent to the conversion to the
relevant tax authorities, payment in respect of any stamp or other
taxes payable on the conversion, in accordance with the laws of
Switzerland.
1.4. The Conversion Agent shall promptly, upon the later of the date of
receipt of the Conversion Notice and the satisfaction of all other
conditions precedent to the conversion stated above, endorse the
Conversion Notice and notify the Company and the Stock Transfer Agent of
the Company (at present ▇▇▇▇▇ ▇▇▇▇▇▇ Shareholder Services, LLC, ▇▇▇▇
▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇-▇▇▇▇), by facsimile, telex or
cable of (a) the principal amount and serial numbers of the Notes
deposited for conversion, (b) the number of Shares issuable upon
conversion of such Notes and (c)
the name and address of each person (the "Shareholder") to whom such Shares
are to be issued. Such conversion shall become effective at the close of
business on the date (the "Conversion Date") on which the Company shall
have received at its principal executive offices, during normal business
hours, from the Conversion Agent a telex or cable notification. If such
facsimile, telex or cable notification is received after the close of
business on such date, the Conversion Date will be the immediately
following business day. At such Conversion Date the rights of the holder
(other than the Company) of a Note shall cease and the Shareholder shall be
deemed to have become the holder of such Shares.
1.5. As soon as practicable on or after the Conversion Date, but in no event
later than seven business days thereafter, the Company shall (a) cause
the Shareholder to be registered as the owner of the Shares issued upon
conversion of such Shareholder's Notes in the register of Shareholders of
the Company, (b) make available, or cause the Stock Transfer Agent to
issue, a certificate or certificates for such Shares registered in the
name of the Shareholder (together with any other securities, properties
or cash deliverable at the Conversion Date) and (c) at the request of the
Shareholder, cause the Stock Transfer Agent to forward, at the risk and
expense and for account of such Shareholder, such certificate or
certificates (together with any other securities, properties or cash
deliverable upon conversion) to such person or persons at the address
specified in the Conversion Notice, together with such assignments and
other documents, if any, as may be required by law to effect the transfer
thereof with full benefits under the laws of the applicable jurisdiction
of the United States of America.
1.6. The Company covenants that:
(a) so long as any Notes are outstanding, it shall keep available
authorized shares of Common Stock sufficient to permit all Notes
outstanding and unconverted to be converted in accordance with
these Conversion Provisions;
(b) all shares of Common Stock delivered upon conversion of Notes
as provided herein will be validly issued, fully-paid and non-
assessable;
(c) it shall file, on or before February 3, 1997, if required, any
registration under the United States securities laws that may be
required before the Shares can be delivered upon conversion of the
Notes and freely marketed in the United States.
1.7. Shares issued upon conversion and registered in the name of the
Shareholder shall be freely transferable and non-restricted and shall be
entitled to receive all dividends paid on such Common Stock on or after
the Conversion Date, except for dividends payable to Shareholders
registered as such as of a record date occurring prior to the Conversion
Date. No payments shall be made upon
conversion for interest accrued since the Coupon Due Date next
preceding the Conversion Date.
1.8 Notes may be presented for conversion only to an office of the
Conversion Agent outside the United States. The Company and the
Conversion Agent will deliver Common Stock or other consideration
received upon conversion only to an account or address outside the
United States.
Article 2
The Conversion Price shall be subject to adjustments in the following
circumstances occurring after November 22, 1996:
2.1. In case the Company shall hereafter (i) pay a dividend on its Common
Stock in shares of its Common Stock or make a distribution in shares of
its Common Stock with respect to its outstanding Common Stock, (ii)
subdivide its outstanding shares of Common Stock into a greater number of
shares of Common Stock or (iii) combine its outstanding shares of Common
Stock into a smaller number of shares of Common Stock, the Conversion
Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision or combination shall be determined
by multiplying the Conversion Price in effect immediately prior to such
record date or effective date by a fraction, the numerator of which shall
be the total number of outstanding shares of Common Stock immediately
prior to such record date or effective date, and the denominator of which
shall be the total number of outstanding Common Stock immediately
following such record date or effective date. Such adjustments made
pursuant to this Section 2.1 shall be made successively whenever any
event listed above shall occur.
2.2. In case the Company shall fix a record date for the issuance of rights,
options or warrants to all (but not less than all) holders of its
outstanding Common Stock entitling them to subscribe for or purchase
shares of Common Stock (or securities convertible into shares of Common
Stock) at a price per share (or having a Conversion Price per share, if a
security convertible into Common Stock) less than the Current Market
Price per share of Common Stock (as defined in Section 2.4) on such
record date, the Conversion Price to be in effect after such record date
shall be determined by multiplying the Conversion Price in effect
immediately prior to such record date by a fraction, of which the
numerator shall be the number of shares of Common Stock outstanding on
such record date plus the number of shares of Common Stock which the
aggregate offering price of the total number of shares of Common Stock so
to be offered (or the aggregate initial Conversion Price of the
convertible securities so to be offered) would purchase at such Current
Market Price and of which the denominator shall be the number of shares
of Common Stock outstanding on such record date plus the number of
additional shares of Common Stock to be offered for subscription or
purchase (or into which the convertible security so to be offered are
initially convertible). In case such subscription or exercise price may
be paid in a consideration part or all of which shall be in a form
other than cash, the value of such consideration shall be as
determined by the Board of Directors of the Company. Shares of Common
Stock owned by or held for the account of the Company or any
majority-owned subsidiary shall not be deemed outstanding for the
purpose of any such computation. Such adjustment shall be made
successively whenever such a record date is fixed; and in the event
that such rights or warrants are not so issued, the Conversion Price
shall again be adjusted to be the Conversion Price which would then be
in effect if such record date had not been fixed.
2.3. In case the Company shall fix a record date for the making of a
distribution to all (but not less than all) holders of shares of Common
Stock of evidences of its indebtedness or assets (other than cash
dividends or cash distributions payable out of surplus legally available
for dividends under the laws of the jurisdiction of incorporation of the
Company, dividends or distributions payable in shares of Common Stock as
described in Section 2.1, or rights, options or warrants or convertible
securities containing the right to subscribe for or purchase shares of
Common Stock (ex cluding those referred to in Section 2.2)), the
Conversion Price to be in effect after such record date shall be
determined by multiplying the Conversion Price in effect immediately
prior to such record date by a fraction, of which the numerator shall be
the Current Market Price per share of Common Stock (as defined in Section
2.4) on such record date, less the fair market value per share (as
determined by the Board of Directors of the Company, whose determination
shall be conclusive, and described in a statement filed with Banca del
Gottardo) of the portion of the assets or evidences of indebtedness so to
be distributed, or of such rights, options, or warrants or convertible
securities, applicable to one share of Common Stock, and of which the
denominator shall be such Current Market Price per share of Common Stock.
Such adjustment shall be made successively whenever such a record date is
fixed; and in the event that such distribution is not so made, the
Conversion Price shall again be adjusted to be the Conversion Price which
would then be in effect if such record date had not been fixed. If any
such rights, options, or warrants or convertible securities shall by
their terms provide for an increase or increases, with the passage of
time, in the amount of additional consideration per share of Common Stock
payable to the Company upon the exercise or conversion thereof, the
Conversion Price then in effect shall, forthwith upon any such increase
becoming effective, be readjusted to reflect such increase.
2.4. For the purpose of any computation under Sections 2.2 and 2.3, the
"Current Market Price" means with respect to any Trading Day the last
sale price (regular way) of the Common on such day as reported on the New
York Stock Exchange Consolidated Tape (as published in the Wall Street
Journal), or, if such Common Stock is not listed on the New York Stock
Exchange, Inc. or reported on such Consolidated Tape, then the last sale
price on such day on the principal domestic stock exchange on which such
stock is then listed or admitted to trading, or, if no sale takes place
on such day on such exchange, the average of the closing bid and asked
prices on such day as officially quoted on such exchange, or, if such
Common Stock is not then listed or admitted to trading on any domestic
stock exchange but is quoted in the National Market System ("NMS/NASDAQ")
of the
National Association of Securities Dealers, Inc. Automated Quotation
System ("NASDAQ"), then the Current Market Price for each such Trading
Day shall be the last sale price on such day as quoted by NMS/NASDAQ,
or, if no sale takes place on such day or if such Common Stock is
neither listed or admitted to trading on any domestic stock exchange
nor quoted on such National Market System, then the Current Market
Price for each such Trading Day shall be the average of the reported
closing bid and asked price quotations on such day in the
over-the-counter market, as reported by NASDAQ, or, if not so
reported, as furnished by the National Quotation Bureau, Inc., or, if
such firm at the time is not engaged in the business of reporting such
prices, as furnished by any similar firm then engaged in such business
as selected by the Company, or if there is no such firm, as furnished
by any member of the National Association of Securities Dealers, Inc.
selected by the Company with the written approval of the Holders of
Warrants exercisable for a majority of the shares of Warrant Stock
issuable under then outstanding Warrants. If at any time such Common
Stock is not listed on any domestic exchange or quoted in the domestic
over-the-counter market, the Current Market Price shall be deemed to
be an amount mutually agreed upon in writing between the Company and
the Holder of this Warrant within fifteen days immediately following
the date on which the Current Market Price is to be determined. If no
agreement as to Current Market Price is determined as stated herein,
(i) the Holder of this Warrant shall select an independent appraiser
who shall determine the fair market value per share of the Common
Stock which shall be the Current Market Price, provided the Company
shall agree to such Current Market Price. If the Company shall not
agree to the Current Market Price as determined in the preceding
sentence then (ii) the Company and Banca del Gottardo shall each
select an independent appraiser who shall, independently of the other
appraiser, determine the fair market value of the Common Stock of the
Company. If the value determined by the appraiser whose determination
is the higher of the two appraisals does not exceed by more than ten
percent (10%) the average of the values determined by each appraiser,
then the Current Market Price shall be the average of the values
determined by the two appraisers. If the value determined by the
appraiser whose determination is the higher of the two appraisals does
exceed by more than ten percent (10%) the average of the value
determined by each appraiser, then the two appraisers shall select a
third independent appraiser who shall, independently of the other
appraisals, determine the fair market value of the Common Stock. The
value determined by the appraiser whose determination is the most
discrepant from the average of the three appraisals shall be
discarded, and the Current Market Price shall equal the average of the
remaining two appraisals; except that in the event that the highest
and lowest appraisals are equally discrepant from the average of the
three appraisals, the Current Market Price shall be such average. The
Company shall bear the expenses of all appraisals.
For the purpose of this Section 2.4, "trading day" shall mean a day on
which the securities exchange or on NASDAQ specified for purposes of
this Section 2.4 shall be open for business or, if the shares of
Common Stock shall not be listed on such exchange for such period, a
day with respect to which quotations of the character referred to in
the next preceding sentence shall be reported.
2.5. In computing an adjustment in the Conversion Price pursuant to Sections
2.1 to 2.3 above, shares of Common Stock not outstanding at the time of
such computation shall be deemed outstanding to the extent that the
Conversion Price has been previously adjusted to reflect the issuance of
such shares of Common Stock or rights, options or warrants to subscribe
for or purchase such shares of Common Stock.
2.6. Except as stated in Sections 2.1, 2.2 and 2.3 above, the Conversion Price
(except at the Company's option) shall not be adjusted for the issuance
of shares of Common Stock of the Company whether or not at less than the
Current Market Price or the current Conversion Price, whether for cash or
property.
2.7. No adjustment shall be made to the Conversion Price unless such
adjustment would result in any increase or decrease of at least USD 0.05
in the Conversion Price then in effect; provided, however, that any
adjustments which by reason of this Section 2.7 are not required to be
made will by carried forward and taken into account in any subsequent
adjustment.
2.8. All calculations under these Conversion Provisions shall be made to the
nearest one U.S. cent, with 0.5 U.S. cent or more to be considered a full
U.S. cent,or to the nearest one-hundredth of a share, as the case may be.
2.9. Whenever the Conversion Price is adjusted as herein provided, the Company
shall promptly send to Banca del Gottardo a certificate of the Company
setting forth the Conversion Price after such adjustment and setting
forth a brief statement of the facts requiring such adjustment and the
date on which it becomes effective. The contents of any certificate
required by this Section 2.9 may be transmitted by telex or cable, but
shall be confirmed in writing as hereinbefore provided. Banca del
Gottardo may rely upon such certificate (or such transmission by cable or
telex, whether or not so confirmed) as conclusive evidence of the
correctness of the adjustment referred to therein.
2.10. Notwithstanding the foregoing, no adjustment shall be made to the extent
that it would reduce the Conversion Price to less than the par value
of the shares of Common Stock (USD .01 at the date hereof).
2.11. Anything in this Article 2 to the contrary notwithstanding, the Company
shall be entitled, but shall not be required, to make such reductions
in the Conversion Price in addition to those required by this Article
as it, in its discretion, shall determine to be advisable.
2.12. In any case in which this Article shall require that an adjustment be
made retroactively immediately following a record date, the Company shall
as promptly as practicable issue to the holder of any
Note converted
after such record date the shares of Common Stock and other common stock
of the Company issuable on such conversion in excess of the shares of
Common Stock and other common stock of the Company issuable on such
conversion on the basis of the Conversion Price prior to such adjustment.
Article 3
3.1. In the event that:
(a) the Company shall authorize the issuance to all holders of shares
of Common Stock of rights, options or warrants to subscribe for or
purchase any shares of Common Stock or any securities convertible
into shares of Common Stock, or of any other subscription rights
or warrants;
(b) the Company shall authorize the distribution to all holders of
shares of Common Stock of evidences of its indebtedness or assets
(other than cash dividends or cash distributions payable out of
consolidated earnings or earned surplus or dividends payable in
Common Stock);
(c) there shall be any consolidation or merger to which the Company is
a party and for which approval of any shareholders of the Company
is required, or there shall be the conveyance or transfer of all
or substantially all of the properties and assets of the Company,
or there shall be any reorganization or reclassification or change
of outstanding Common Stock issuable upon the exercise of
conversion rights hereunder (other than a change in par value, or
from par value to no par value, or from no par value to par value,
or as a result of a subdivision or combination);
(d) there shall be voluntary or involuntary dissolution, liquidation
or winding-up of the Company; or
(e) the Company proposes to take any action (other than the actions
of the type described in Section 2.1) which would require and
adjustment of the Conversion Price pursuant to Article 2;
then the Company shall, at least 10 days prior to the applicable
record date, provide written notice of such event to Banca del
Gottardo stating (x) the record date in the United States of
America as of which the holders of
record of shares of Common Stock to be entitled to receive any
such rights, warrants, or distributions are to be determined, or
(y) the date in the United States of America on which such
reorganization, consolidation, merger, conveyance, transfer,
dissolution, liquidation or winding-up is expected to become
effective, and the date as of which it is expected that holders
of record of the shares of Common Stock shall be entitled to vote
upon, and, if approved, to exchange their shares of Common Stock
for securities or other property, if any, deliverable upon such
reorganization, reclassification, consolidation, merger,
conveyance, transfer, dissolution, liquidation or winding-up.
3.2 If the event described in the notice given pursuant to Section
3.1. will result in an adjustment of the Conversion Price
pursuant to Article 2, such notice shall also state the new
Conversion Price unless the Conversion Price cannot be calculated
at the time such notice is given.
3.3 The failure to give or publish the notice required by this
Article 3 or any defect therein shall not affect the legality or
validity of the proceedings referred to in Section 3.1.
Article 4
So long as any of the Convertible Notes remain convertible, the Company shall
not take any action which would result in an adjustment of the Conversion Price
pursuant to Article 2 if, after giving effect thereto, the Conversion Price
would be decreased to such an extent that the Shares could not be legally
issued, under applicable law of the jurisdiction of incorporation of the Company
then in effect, at such decreased Conversion Price as fully-paid and
non-assessable Shares.
Article 5
The Conversion Agent shall not at any time be responsible to any Noteholder for
determining whether any facts exist (a) which may require any adjustment of the
Conversion Price, (b) with respect to the nature or extent of any such
adjustment when made, (c) with respect to the method employed, or herein or in
any supplemental agreement (if any) provided to be employed in making any such
adjustment. The Conversion Agent makes no representation as to the validity or
value (or the kind or amount) of any shares of Common Stock, or of any
securities, property or cash, which may at any time be issued or delivered upon
the conversion of any Convertible Note. The Conversion Agent shall not be
responsible for any failure of the Company to make any cash payment or to issue,
transfer or deliver any shares of stock or stock certificates or other
securities or property upon the surrender of any Note for the purpose of
conversion or to comply with any of the covenants of the Company contained in
these Conversion Provisions.
Article 6
6.1. In case of any consolidation of the Company with, or merger of the
Company into, any other corporation (other than a consolidation or merger
in which the Company is the continuing corporation), or in the case of
any sale or transfer of all of the assets of the Company as an entirety
or substantially as an entirety, the corporation formed by such
consolidation or the corporation into
which the Company shall have been merged or the corporation which
shall have acquired such assets, as the case may be, shall execute
with Banca del Gottardo a supplemental agreement which shall (a)
provide that the holder of each Convertible Note then outstanding
shall have the right to receive thereafter, during the period such
Convertible Note shall be convertible as specified in Article 2, upon
conversion of such Convertible Note, in lieu of each share of Common
Stock deliverable on such conversion immediately prior to such event,
only the kind and amount of shares and/or other securities and/or
property and/or cash which are receivable, or which, but for the
failure to distribute to holders of Common Stock all or substantially
all of the consideration receivable on such sale or transfer of
assets, would be receivable upon such consolidation, merger, sale or
transfer by a holder of one share of Common Stock of the Company and
(b) set forth the Conversion Price for the shares and/or other
securities and/or property and/or cash so issuable, which shall be an
amount equal to the Conversion Price per share of Common Stock of the
Company immediately prior to such event.
6.2. In case of any reclassification or change of the shares of Common Stock
issuable upon conversion of the Notes (other than a change in par value,
or from par value to no par value, or as a result of a subdivision or
combination) or in case of any consolidation or merger of another
corporation into the Company in which the Company is the continuing
corporation and in which the holders of the shares of Common Stock
thereafter receive shares, other securities, property, cash or any
combination thereof for such shares of Common Stock (including for this
purpose shares reflecting a change in par value or from par value to no
par value or as a result of a subdivision or combination of the shares of
Common Stock), the Company shall execute with Banca del Gottardo a
supplemental agreement which shall (a) provide that the holder of each
Convertible Note then outstanding shall receive, upon conversion thereof,
in lieu of each share of Common Stock of the Company deliverable upon
such conversion immediately prior to such event, the kind and amount of
shares and/or other securities and/or property and/or cash receivable
upon such reclassification, change, consolidation or merger by a holder
of one share of Common Stock, and (b) set forth the Conversion Price for
the shares and/or other securities and/or property and/or cash so
issuable, which shall be an amount equal to the Conversion Price per
share of Common Stock immediately prior to such event.
6.3. If, as a result of Section 6.1 or Section 6.2, the holder of any
Convertible Note thereafter surrendered for conversion shall become
entitled to receive shares of two or more classes of common stock of the
Company, the Board of Directors (whose determination shall be conclusive)
shall determine the allocation of the Conversion Price between or among
shares of such classes of capital stock. Any supplemental agreement
executed pursuant to Sections 6.1 and 6.2 shall provide for adjustments
which shall be as nearly equivalent as practicable to the adjustments
provided for herein, and, where appropriate, state the Conversion Price
in terms of one full share of Common Stock or one full share of common
stock of any successor or purchasing corporation. The terms of this
Article 6 also shall apply to successive consolidations, merger, sales or
transfers. In the event that at any time as a result of an adjustment
made pursuant to this Article 6 the holder of any Note thereafter
surrendered for
conversion shall become entitled to receive any shares or securities
other than shares of Common Stock, thereafter the prices or price of
such other shares or other securities so receivable on conversion of
any Convertible Note shall be subject to adjustment from time to time
in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to Common Stock contained in Article 2, and
the provisions of Article 2 with respect to the Common Stock shall
apply on like terms to any such other shares.
6.4. The Conversion Agent shall have no responsibility for any consolidation,
merger, sale or transfer, the form or substance or any plan relating
thereto or the consequences thereof to any Noteholder.
The Conversion Agent shall have no responsibility to determine the
correctness of any provision contained in any supplemental agreement
relating either to the kind or amount of shares of stock or securities or
property receivable by Noteholders upon the conversion of their
Convertible Notes after any such consolidation, merger, sale or transfer,
or to any adjustment made with respect thereto. The Conversion Agent may,
at its option, receive an opinion of counsel for the Company as
conclusive evidence that any such supplemental agreement complies with
the provisions of this Article.
Article 7
Conversion Agent:
BANCA DEL GOTTARDO
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇▇▇
ANNEX I
WARRANT AGENCY AGREEMENT
Dated as of November 22, 1996
INTELLICALL, INC.
AND
BANCA DEL GOTTARDO
as Standing Agent
WARRANT AGENCY AGREEMENT dated as of November 22, 1996 between INTELLICALL,
INC., a Delaware corporation (the "Company"), and Banca del Gottardo of Lugano,
Switzerland, as Warrant Agent (the "Warrant Agent") and as Standing Agent (the
"Standing Agent").
WITNESSETH:
WHEREAS, the Company proposed to issue Warrants, as hereinafter described (the
"Warrants") (the certificate representing the Warrants being referred to herein
as the "Warrant Certificate"), in connection with the sale by the Company to
issue USD 5'000'000.-- principal amount of 8% subordinated Convertible Notes due
November 22, 2001 (the "Notes"), one warrant entitling to acquire against
consideration initially one share of Common Stock par value of USD 0.01 per
Share of the Company (the "Common Stock").
WHEREAS, the Board of Directors of the Company has duly authorized the issuance
of the Warrants and the shares issuable upon exercise thereof;
WHEREAS, the Company desires to provide for the issuance of the Warrants and to
provide herein for certain terms and provisions of the Warrants more fully then
is set forth in the Warrants Certificate; and
WHEREAS, the Company desires the Standing Agent and the Warrants Agent to act on
behalf of the Company, and the Standing Agent and the Warrant Agent are willing
so to act, in connection with the issuance of Warrants and other matters as
provided herein;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
hereinafter set forth and
for the purpose of defining the terms and provisions of the Warrants and
the Warrant Certificate and the respective rights and obligations thereunder of
the Company, the holders of the Warrants and the Standing Agent and Warrant
Agent, the parties hereto agree as follows:
SECTION 1
Definitions
In addition to the definitions set forth elsewhere herein, as used herein:
"Deposit Date" shall have the meaning assigned to it in the Terms of Warrants,
as appropriate.
"Holder" shall mean the person depositing the Warrant Certificate with the
Warrant Certificate with the Warrant Agent or Sub-Warrant Agent pursuant to
Section 4.
"Termination Date" shall mean 12.00 Noon, Lugano Time, November 22, 2001.
"Terms of Warrants" shall refer to Annex E of the Note and Warrant Purchase,
Paying and Conversion/Exercise Agency Agreement dated November 15, 1996 made by
and between the Company and Banca del Gottardo.
SECTION 2
Appointment of Standing Agent and Warrant Agent
The Company hereby appoints the Standing Agent and the Warrant Agent to act as
agents for the Company in accordance with the instructions set forth hereinafter
in this Agreement, and the Standing Agent and Warrants Agent hereby accept such
appointments, upon the terms and conditions hereinafter set forth.
SECTION 3
Number, Form and Execution of Warrant Certificates
The number of Warrant Certificates is limited in each case to 200'000. The
Warrant Certificate shall be in bearer form substantially in the forms annexed
hereto as Exhibit 1 (the provisions of which are hereby incorporated herein) and
may have such letters, numbers or other marks of identification or designation,
and such legends, summaries or endorsements, printed, lithographed or engraved
thereon as the Company may deem appropriate and as are not inconsistent with the
provisions of this Agreement, or as may be
required to comply with any law or with any rule or regulation made pursuant
thereto.
The Warrant Certificate shall be signed on behalf of the Company by its
President or a Vice President and by its Secretary or an Assistant Secretary.
Each such signature upon the Warrant Certificate may be in the form of a
facsimile signature of the President, Vice President, Secretary or Assistant
Secretary and may be imprinted or otherwise reproduced on the Warrant
Certificate. The Company, the Standing Agent and the Warrant Agent may deem and
treat the Holder(s) of the Warrants as the absolute owner(s) thereof
(notwithstanding any notation of ownership or other writing thereon made by
anyone), for the purpose of any exercise thereof, any distribution to the
Holder(s) thereof, and for all other purpose, and neither the Company, the
Standing Agent nor the Warrant Agent shall be affected by any notice to the
contrary.
SECTION 4
Exercise; No Fractional Shares
(a) The provisions of Sections 5 and 7 of the Terms of the Warrants are
incorporated herein.
(b) On the Deposit Date, the Warrant Agent shall give notice of the individual
exercise of the Warrants (the "Exercise Notice") to the Standing Agent.
(c) Upon surrender of a Warrant Certificate, and payment of the Exercise
Price, the Standing Agent shall thereupon (i) promptly requisition, from
the transfer agent of the Common Stock of the Company, one or more
certificates for the number of shares to be purchased, and (ii) promptly
after receipt of such certificate or certificates for shares, cause the
same to be delivered in accordance with the instructions of the Holder of
such Warrant Certificate together with a check in payment for any
fraction of a share. The Company irrevocably authorizes the Standing
Agent to make all such requests for shares and the transfer agent or
transfer agents for the Common Stock of the Company to comply with all
such requests.
SECTION 5
Authorization; Reservation of Shares; Listing; Reports to Warrantholders, etc.
The provisions of Section 4 of the Terms of Warrants are incorporated herein.
SECTION 6
Loss or Mutilation
The provisions of Section 11 of the Terms of Warrants are incorporated herein.
SECTION 7
Adjustment of Exercise Price and Number of Share Deliverable
The provisions of Section 5 of the Terms of Warrants are incorporated herein.
SECTION 8
Concerning the Standing Agent and the Warrant Agent
1. The Standing Agent and the Warrant Agent act hereunder solely as agents
for the Company and each of its shall be determined solely by the
provisions hereof. The Standing Agent and the Warrant Agent shall not, by
delivering the Warrant Certificate or by any other act hereunder, be
deemed to make any representations as to the validity of this Warrant
Agency Agreement (except its valid execution) or the validity or value or
authorization of the Warrant Certificate or Warrants represented thereby
or of any shares or other property delivered upon exercise of any
Warrants or whether any such shares or other shares are fully paid and
non-assessable. The Standing Agent and the Warrant Agent shall not at any
time be under any duty or responsibility to any Holder of the Warrants to
make or cause to be made any adjustment of the Exercise Price or any
adjustment to the number of shares of Common Stock issuable upon exercise
of the Warrants provided in this Agreement, or to determine whether any
fact exists which may require any such adjustment, or with respect to the
nature or extent of any such adjustment, when made, or with respect to
the method employed in making the same. Each shall not (i) be liable for
the correctness of any recital or statement of fact contained herein or
in the Warrant Certificate or for any action taken, suffered, or omitted
by them in reliance on any Warrant Certificate or other document or
instrument believed by them in good faith to be genuine and to have been
signed, sent or presented by the proper party or parties, (ii) be
responsible for any failure on the part of the Company to comply with any
of its covenants and obligations contained in this Agreement or in the
Warrant Certificate, or (iii) be liable for any act or omission in
connection with this Agreement except for their own negligence or willful
misconduct.
2. The Standing Agent or the Warrant Agent may at any time consult with
counsel satisfactory to them (who may be counsel to the Company) and
shall incur no liability or responsibility to the Company
or to any Holder of any Warrant or any other person or corporation for
any action taken, suffered or omitted by them in good faith in
accordance with the opinion or advice of such counsel.
3. Any notice, statement, instruction, request, direction, order, election
or demand of the Company shall be sufficiently evidenced by an instrument
signed by its President, any of its Vice Presidents, its Secretary, any
of its Assistant Secretaries or its Treasurer (unless other evidence in
respect thereof is herein specifically prescribed). The Standing Agent or
the Warrant Agent shall not be liable for any action taken, suffered or
omitted by them in accordance with such notice, statement, instruction,
request, direction, order or demand believed b the Standing Agent or
Warrant Agent to be genuine and to have been signed, sent or presented by
the proper party or parties.
4. The Company agrees to pay the Standing Agent and the Warrant Agent
reasonable compensation for each of its services hereunder and to
reimburse it for all expenses (e.g. telex, cable, postage, telephone,
etc.), including counsel fees, taxes and governmental charges and other
charges of any kind and nature, incurred by the Standing Agent and the
Warrant Agent. In consideration for the services rendered by the Warrant
Agent, the Company undertakes to pay upon demand to the Warrant Agent in
USD a commission which is USD -.10 for each Common Stock Warrant
exercised.
5. The Company further agrees to indemnify the Standing Agent or the Warrant
Agent and save each of them harmless against any and all losses, expenses
and liabilities, including judgments, costs and counsel fees, for any
thing done or omitted by the Standing Agent or Warrant Agent in the
execution of their duties and powers hereunder, except losses, expenses
and liabilities arising as a result of the Standing Agent's or the
Warrant Agent's negligence or willful misconduct. The Company will not be
liable for any Swiss taxes that may be payable for or in respect of the
deposit or surrender of the Warrants, or the issue and delivery of shares
or the surrender of the Warrants.
6. Neither Banca del Gottardo nor the Warrantholders shall have any
obligation to pay to the Standing Agent and Stock Transfer Agent any
commission, fees, costs or charges in connection with the exercise of
Warrants and the making available of the respective Shares as provided
hereafter.
7. The Standing Agent or the Warrant Agent may resign its duties and be
discharged from all further duties and liabilities hereunder (except
liabilities arising as a result of the Standing Agent's own negligence or
willful misconduct), after giving thirty days' prior written notice to
the Company. At least fifteen days prior to the date such resignation is
to become effective, the Standing Agent or the Warrant Agent shall cause
a copy of such notice of resignation to be published in the manner set
forth in Section 10. Upon such resignation, the Company shall appoint in
writing a new Standing Agent or Warrant Agent and if the Company shall
fail to make such appointment within a period of thirty days after it has
notified in writing of such resignation by the resigning Standing Agent
or Warrant Agent, then the Holders of any Warrant may apply to any court
of competent jurisdiction
for the appointment of such successor Standing Agent or Warrant Agent and
if such successor Standing Agent or the Warrant Agent shall be carried out
by the Company pending such appointment.
After acceptance in writing of such appointment by the successor Standing
Agent or Warrant Agent is received by the Company, such successor Standing
Agent or Warrant Agent shall be vested with the same powers, rights, duties
and responsibilities as if it had been originally named herein as the
Standing Agent or the Warrant Agent, without any further assurance,
conveyance, act or deed. Not later than the effective date of any such
appointment the Company shall file notice thereof with the resigning
Standing Agent or Warrant Agent and shall cause a copy of such notice to be
published in the manner set forth in Section 10. Any corporation into which
the Standing Agent or the Warrant Agent or any successor Standing Agent or
Warrant Agent may be converted or merged or any corporation resulting from
any consolidation succeeding to the corporate trust business of the
Standing Agent or the Warrant Agent, shall be a successor Standing Agent or
Warrant Agent under this Agreement without any further act. Any such
successor Standing Agent or Warrant Agent shall promptly cause notice of
its succession as Standing Agent or Warrant Agent to be mailed to the
Company and notice published in the manner set forth in Section 10.
The Warrant Agent, its subsidiaries and affiliates, and any of its
officers, directors, stockholders, or employees may buy and hold or sell
Warrants or other securities of the Company and otherwise deal with the
Company in the same manner and to the same extent and with like effect as
though it were not Warrant Agent. Nothing herein shall preclude the
Standing Agent or the Warrant Agent from acting in any other capacity for
the Company or for any other legal entity.
SECTION 9
Modification of Agreement
The Standing Agent, the Warrant Agent and the Company may, by supplemental
agreement, make any changes or corrections in this Agreement that they shall
deem appropriate to cure any ambiguity or to correct any defective or
inconsistent provisions or manifest mistake or error herein contained.
SECTION 10
Notices
The provisions of Section 12 of the Terms of Warrants are incorporated herein.
SECTION 11
Governing Law
The provisions of Section 13 of the Terms of Warrants are incorporated herein.
SECTION 12
Persons Benefiting
This Agreement shall be binding upon and inure to the benefit of the Company,
the Standing Agent, the Warrant Agent and their respective successor and
assigns, and, to the extent that the provisions hereof are incorporated in the
Warrants by the terms thereof, shall be binding upon and shall inure to the
benefit of the Holders form time to time of the Warrants, and their respective
successor and assigns. Nothing in this Agreement is intended or shall be
construed to confer upon any other person or corporation any legal or equitable,
remedy, or claim or to impose upon any other persons any duty, liability or
obligation.
SECTION 13
Notices
All notices required under this Agreement shall be deemed to have been duly
given if sent by cable, telex or facsimile transmission (confirmed in writing,
sent by registered airmail) to the following addresses:
If to the Company:
INTELLICALL, INC.
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, ▇.▇.▇.
Attention: Chief Financial Officer
Facsimile: (▇▇▇) ▇▇▇ ▇▇▇▇
If to the Warrant Agent and to the Standing Agent:
BANCA DEL GOTTARDO
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
Attention: New Issue Department
Telex: 841 052
Facsimile: 0114191 808 18 43
or to such other address as at the party receiving the notice shall ▇▇▇▇
notified to the other party in writing. Such cable, telex or facsimile
transmission notice shall be deemed to have been duly given at the time of
dispatch. Any party receiving a notice by cable, telex or facsimile transmission
will be protected by relying upon the cabled, telexed or transmitted notice even
though such notice is not subsequently confirmed in writing.
SECTION 14
Descriptive Headings
The descriptive headings of the several Sections of this Agreement are inserted
for convenience only and shall not control or affect the meaning or construction
of any of the provisions hereof.
SECTION 15
Termination
This Agreement shall terminate on the Termination Date of Warrants, subject to
completion of actions taken on or prior thereto pursuant to this Agreement, or
on any earlier date if all the Warrants have been exercised.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
INTELLICALL, INC.
By: _____________________________
Its: _____________________________
BANCA DEL GOTTARDO
As Warrant Agent and Standing Agent
By: _____________________________
Its: _____________________________
Exhibit 1 to ANNEX I
COMMON STOCK WARRANT EXERCISE FORM FOR THE
EXERCISE OF WARRANTS ISSUED BY INTELLICALL, INC.
EXPIRING NOVEMBER 22, 2001
To: _____________
(Warrant Agent)
The undersigned, the holder of Warrants
(please list serial numbers):
(A) hereby irrevocably elects to exercise the above-mentioned Warrant(s) in
accordance with the terms thereof and agrees to accept shares of common
stock of the Company on the terms of the Warrant Agency Agreement dated as
of November 22, 1996 (the "Warrant Agreement") duly executed and delivered
by the Company, and Banca del Gottardo, as Warrant Agent (the "Warrant
Agent") and as Standing Agent (the "Standing Agent");
(B) requests that a certificate or certificates for shares be issued in the
name(s) of _______________________ and sent to the following address:
Address _____________________________________________
________________, 19___
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Name:
Title:
Exhibit 2 to ANNEX I
BANCA DEL GOTTARDO
Facsimile Transmission
To: [ ]
Attn:
Exercise of INTELLICALL, INC. Common Stock Warrants
Ladies and Gentlemen:
We kindly ask you to take note and to execute the following exercise of Common
Stock Warrants:
Exercise number
a) number of Common Stock Warrants:
b) equal number of shares:
c) shares to be registered in the name of:
d) shares to be sent to:
e) amounts, if any, to be sent to:
The transfer of USD [ ] will be effected according to your standing
instructions. Please confirm receipt of this fax by return fax.
Thanks and regards,
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇-▇
CERTIFICATION OF NON-U.S. BENEFICIAL OWNERSHIP
INTELLICALL, INC.
8% CONVERTIBLE NOTES DUE NOVEMBER 22, 2001
The undersigned certifies that as to the portion of the Global Note (i) hereby
presented for exchange into definitive Notes, or (ii) hereby presented for
conversion into Common Stock the beneficial owners of the Notes (a) are not
either United States persons or U.S. persons or (b) are financial institutions
(within the meaning of United States Treasury Regulation Section
1.165-12(c)(1)(v)) located outside the United States that are not United States
persons and that have purchased such Notes for purposes of resale during the
Restricted Period. Financial institutions that have purchased the Notes for
purposes of resale during the Restricted Period also hereby certify that they
have not acquired the Notes for purposes of resale directly or indirectly to a
United States person or U.S. person or to a person within the United States. The
undersigned certifies further that it is (i) the beneficial owner of the portion
of the Global Note tendered for exchange or (ii) a financial institution (within
the meaning of United States Treasury Regulation Section 1.165-12(c)(1)(v))
through which the beneficial owner directly or indirectly holds the portion of
the Global Note tendered.
For purposes of this certification, (i) the term "Restricted Period" means the
period beginning on the earlier of the first date that the Notes are offered or
the date on which the Notes are issued (the "Payment Date") and ending forty
(40) days after the later of the date upon which the Notes were first offered or
the date of closing of the offering, (ii) the term "United States" means the
United States of America (including the States and the District of Columbia),
its possessions, its territories and other areas subject to its jurisdiction,
(iii) the term "United States person" means a citizen or resident of the United
States, a corporation, partnership or other entity created or organized in or
under the laws of the United States or any political subdivision thereof, or an
estate or trust the income of which is subject to United States federal income
taxation regardless of its source and (iv) the term "U.S. person" has the
meaning set forth in Sections 230.901 through .904 of Title 17 of the United
States Code of Federal Regulations ("Regulation S").
-----------------------------
Beneficial Owner or
Financial Institution
Name:
Address:
ANNEX J-2
CERTIFICATION OF NON-U.S. BENEFICIAL OWNERSHIP
INTELLICALL, INC.
WARRANTS EXPIRING NOVEMBER 22, 2001
The undersigned certifies that as to the portion of the Global Warrant (i)
hereby presented for exchange into definitive Warrants, or (ii) presented for
exercise into Common Stock the beneficial owners of the Warrants (a) are not
either United States persons or U.S. persons or (b) are financial institutions
(within the meaning of United States Treasury Regulation Section
1.165-12(c)(1)(v)) located outside the United States that are not United States
persons and that have purchased such Warrants for purposes of resale during the
Restricted Period. Financial institutions that have purchased the Warrants for
purposes of resale during the Restricted Period also hereby certify that they
have not acquired the Warrants for purposes of resale directly or indirectly to
a United States person or U.S. person or to a person within the United States.
The undersigned certifies further that it is (i) the beneficial owner of the
portion of the Global Warrant tendered for exchange or (ii) a financial
institution (within the meaning of United States Treasury Regulation Section
1.165-12(c)(1)(v)) through which the beneficial owner directly or indirectly
holds the portion of the Global Warrant tendered.
For purposes of this certification, (i) the term "Restricted Period" means the
period beginning on the earlier of the first date that the Warrants are offered
or the date on which the Warrants are issued (the "Payment Date") and ending
forty (40) days after the later of the date upon which the Notes were first
offered or the date of closing of the offering, (ii) the term "United States"
means the United States of America (including the States and the District of
Columbia), its possessions, its territories and other areas subject to its
jurisdiction, (iii) the term "United States person" means a citizen or resident
of the United States, a corporation, partnership or other entity created or
organized in or under the laws of the United States or any political subdivision
thereof, or an estate or trust the income of which is subject to United States
federal income taxation regardless of its source and (iv) the term "U.S. person"
has the meaning set forth in Sections 230.901 through .904 of Title 17 of the
United States Code of Federal Regulations ("Regulation S").
-----------------------------
Beneficial Owner or
Financial Institution
Name:
Address:
ANNEX K
Dated: November 22, 1996
To: Banca del Gottardo
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇
▇▇-▇▇▇▇ ▇▇▇▇▇▇/▇▇▇▇▇▇▇▇▇▇▇
Re: Intellicall, Inc. (the "Company")
USD 5'000'000.-- 8% Convertible Notes of 1996
Due November 22, 2001 (the "Notes")
and Warrants of 1996 expiring November 22, 2001
(the "Warrants")
"Certificate of No Material Adverse Change"
Pursuant to the Note and Warrant Purchase, Paying and Conversion/Exercise Agency
Agreement dated November 15, 1996 (the "Agreement") between the Company and
Banca del Gottardo covering the issue of the Notes and Warrants by the Company.
I, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, being President of the Company HEREBY CERTIFY on behalf of
the Company that except as set forth in the Information Memorandum as to the
date hereof:
a) there has been no material adverse change in the financial condition of
the Company and its consolidated affiliates taken as a whole since
September 30, 1996, and
b) no event has occurred rendering untrue or incorrect any of the
warranties set forth in Article V of the Agreement to a material extent,
and
c) no event has occurred which constitutes or which with the giving of
notice or lapse of time would constitute one of the events referred to
in Section 10 of the Terms of the Notes.
Yours truly,
Intellicall, Inc.
----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
President
ANNEX L
(Specimen Signature Form)
INTELLICALL, INC.
Carrollton, Texas, U.S.A.
US Dollars 5'000'000.-- 8 per cent US Dollars
Convertible Notes
Due November 22, 2001
and
Warrants
expiring November 22, 2001
The specimen signature of ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, the President to be used for the
printing of the above-captioned Notes and coupons and Warrants is as follows:
----------------------------------
----------------------------------
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November 22, 1996
ANNEX M
CERTIFICATE OF COMPLETION OF DISTRIBUTION
The undersigned, being the duly authorized officer of Banca del Gottardo, a
corporation duly organized with limited liability and existing under the laws of
Switzerland ("Gottardo"), does hereby certify for and on behalf of Gottardo that
the offering of those certain 8% Subordinated Convertible Notes due 2001 of
Intellicall, Inc., a Delaware corporation ("Intellicall"), and those certain
Warrants to Purchase Common Stock of Intellicall, each as described in that
certain Note and Warrant Purchase, Paying and Conversion/Exercise Agency
Agreement, effective November 15, 1996 (the "Note and Warrant Purchase
Agreement"), between the Gottardo and Intellicall, has closed and the 40-day
restricted period described in the Note and Warrant Purchase Agreement has
commenced.
IN WITNESS WHEREOF, the undersigned has executed this document as of the date
set forth below.
BANCA DEL GOTTARDO
By: _______________________________
Its: _______________________________