POLISH TELEPHONES AND MICROWAVE CORPORATION
AND
AMERICAN STOCK TRANSFER & TRUST COMPANY
WARRANT AGREEMENT
THIS WARRANT AGREEMENT (the "Agreement") is dated as of August 17, 1994,
but made effective as of the 10th day of August, 1994, between Polish
Telephones and Microwave Corporation, a Texas corporation (the "Company"), and
American Stock Transfer & Trust Company (the "Warrant Agent").
WHEREAS, the Company has entered into an agreement (the "Underwriting
Agreement") with ▇▇▇▇▇▇▇▇▇ & Co. (the "Underwriter"), pursuant to which the
Underwriter has committed to purchase and offer to sell to the public 525,000
firm units and up to 78,750 over-allotment option units (the "Units"), each
Unit consisting of two shares of the Company's Common Stock ("Common Stock")
and one Redeemable Common Stock Purchase Warrant (individually, a "Warrant" and
collectively, the "Warrants");
WHEREAS, each Warrant entitles the holder to purchase one share of the
Company's Common Stock through August 10, 1998, subject to certain rights of
redemption granted to the Company which are triggered by the price of the
underlying Common Stock;
WHEREAS, the Company desires to provide for the form and provisions of the
Warrants, the terms upon which they shall be issued and exercised, and the
respective rights, limitation of rights and immunities of the Company, the
Warrant Agent, and the registered holders of the Warrants; and
WHEREAS, all acts and things necessary to make the Warrants, when executed
on behalf of the Company and countersigned by or on behalf of the Warrant Agent
as provided in this Agreement, the valid, binding and legal obligations of the
Company, and to authorize the execution and delivery of this Agreement, have
been done and performed;
NOW, THEREFORE, it is hereby agreed as follows:
ARTICLE 1
ISSUANCE OF WARRANTS
1.1 ISSUANCE OF DEFINITIVE WARRANTS. At the closing date under the
Underwriting Agreement (the "Warrant Date"), the Company will issue Warrant
Certificates representing the Warrants for the total number of Warrants
contained within the Units held by each Unit holder, substantially in the form
of EXHIBIT A attached hereto, each Warrant evidencing the right of the
registered holder thereof, subject to the terms and condition hereof, to
subscribe for one share of Common Stock of the Company.
1.2 EXECUTION AND DELIVERY OF WARRANTS. Each Warrant Certificate shall
be dated the Warrant Date and shall be signed on behalf of the Company by the
facsimile or manual signature of the President and Secretary. The Company may
adopt and use the facsimile or manual signature of any person who is such
officer of the Company at the time of the execution of any Warrant,
irrespective of the date as of which the same is executed, or of any person now
or hereafter holding such office, notwithstanding the fact that at the time the
Warrant is issued he has ceased to be such officer of the Company, and prior to
the delivery of any Warrant it shall be countersigned by or on behalf of the
Warrant Agent by an authorized officer (who may sign by facsimile or manual
signature). No Warrant shall be valid unless it shall have been countersigned
as herein provided.
ARTICLE 2
DURATION, EXERCISE AND REDEMPTION OF WARRANTS
2.1 DURATION OF WARRANTS AND TERMS OF EXERCISE. Each Warrant entitles
the holder to purchase one share of Common Stock at a price of $8.00 per share
of Common Stock subject to adjustment at any time through August 10, 1998
(respectively as the context indicates, the "Purchase Price" and "Exercise
Period"). If notice has been given as provided in Section 4.1 in connection
with the liquidation, dissolution or winding up of the Company, the right to
exercise the Warrant shall expire at the close of business on the third full
business day before the date specified in such notice as the record date for
determining registered holders entitled to receive any distribution upon such
liquidation, dissolution or winding up.
2.2 EXERCISE OF WARRANTS. Warrants may be exercised by surrendering, at
the principal corporate office of the Warrant Agent in New York, New York, the
Warrant Certificate evidencing such Warrants together with a subscription in
the form set forth on the reverse side of the Warrant Certificate, duly
executed, and accompanied by the tender, in U.S. dollars, of either federal
funds or a certified check or bank cashier's check, payable to the order of the
Warrant Agent for the applicable Purchase Price. The Warrants may be exercised
from time to time and at any time during the Exercise Period, in whole or in
part. As soon as practicable after any Warrants have been so exercised, the
Company shall cause to be issued and delivered to the holder, or upon the order
of the registered holder of such Warrant, such name or names as may be directed
by him, a certificate or certificates for the number of full shares of Common
Stock to which he is entitled, and if such Warrant Certificate shall not have
been exercised in full, a new Warrant Certificate for the number of Warrants as
to which such Warrant Certificate shall not have been exercised. All Warrant
Certificates so surrendered shall be delivered to and canceled by the Warrant
Agent. The Warrant Agent shall promptly forward to the Company all monies
received by the Warrant Agent for the purchase of shares of Common Stock
through the exercise of such Warrants.
2.3 COMMON STOCK ISSUED UPON EXERCISE OF WARRANTS. All shares of Common
Stock issued upon the exercise of Warrants shall be duly authorized, validly
issued and outstanding, fully-paid and nonassessable. Fractional shares of
Common Stock will not be issued upon exercise of a Warrant. With respect to
any fraction of a share called for upon any such exercise hereof, the Company
shall pay to the holder an amount in cash equal to such fraction multiplied by
the Current Market Price Per Share, determined in accordance with Section 3.8.
2.4 RECORD DATE OF SHARES. Irrespective of the date of issue and
delivery of certificates for any Common Stock issuable upon the exercise of
Warrants, each person in whose name any such certificate is issued shall be
deemed to have become the holder of record of the shares represented thereby on
the date on which the Warrant Certificate surrendered in connection with the
subscription therefor was surrendered and payment of the Purchase Price was
surrendered. No surrender of Warrant Certificates on any date when the stock
transfer books of the Company are closed, however, shall be effective to
constitute the person or persons entitled to receive shares upon such surrender
as the record holder of such shares on such date, but such person or persons
shall be constituted the record holder or holders of such shares at the close
of business on the next succeeding date on which the stock transfer books are
opened. Except as otherwise provided in Section 3.4, each person holding any
shares received upon exercise of Warrants shall be entitled to receive only
dividends or distributions payable to holders of record on or after the date on
which such person shall be deemed to have become the holder of record of such
shares.
2.5 REDEMPTION OF WARRANTS. On 30 days' written notice the Company may,
at its option, redeem the Warrants at $.20 per Warrant if the average closing
bid price or the closing sales price, as the case may be, of the Common Stock
on any interdealer quotation system or exchange on which the Common Stock is
quoted or listed has exceeded $10.125 per share for 20 consecutive trading days
(the "Target Price"). Any redemption shall also be subject to the following
conditions: (i) the Company must give, within three days after the end of the
particular 20 consecutive days upon which the redemption is based ("Redemption
Date"), a notice to each registered holder of Warrant stating the Company's
intention to redeem the Warrants; (ii) the Company must permit each registered
holder of any Warrant to exercise his Warrant for a period, which may be
extended by the Company in its discretion, of not less than 30 days following
the Notice Date as defined in this Section 2.5(a) below; (iii) within three
business days after the Redemption Date, the Company will deposit with the
Warrant Agent sufficient immediately available funds for the purpose of
redeeming the outstanding, unexercised Warrants being redeemed; and (iv)
following the Redemption Date, holders of unexercised Warrants may surrender
their Warrant at the corporate office of such Warrant Agent in New York, New
York, with the Form of Assignment of the Warrant on the reverse side duly
completed and signed with the signature guaranteed. As soon as practicable
after surrender of the Warrants by the holder, the Warrant Agent shall forward
payment of the redemption price for such Warrants to each said holder by first
class or certified mail, postage pre-paid.
(a) NOTICE OF REDEMPTION. Notice of any redemption pursuant to this
Section 2.5 shall be deemed given if mailed by first class or certified
mail on the date deposited (the "Notice Date") in the United States Mail,
postage prepaid, within three days after the Redemption Date addressed to
the registered holder of Warrants so to be redeemed at his address as it
appears on the books of the Warrant Agent. Neither failure to deliver
such notice nor defect therein or in the mailing thereof shall affect the
validity of the proceedings for the redemption of any Warrants so to be
redeemed.
(b) REDEMPTION OF PART OF WARRANTS. If less than all the Warrants
at the time outstanding will be redeemed, the selection of the Warrants to
be redeemed may be made pro rata, by lot or in any other equitable manner.
The Board of Directors of the Company shall have the power to prescribe
the manner in which the selection is to be made.
(c) REDEMPTION EQUALS CANCELLATION. After expiration of the 30-day
period following the Notice Date (as it may be extended by the Company in
accordance with this Section 2.5), each Warrant then noticed for
redemption shall automatically be converted into a right to receive the
redemption price and the Warrant Agent will no longer honor any purported
exercise of such Warrant.
ARTICLE 3
ADJUSTMENT OF PURCHASE PRICE,
NUMBER OF SHARES OR NUMBER OF WARRANTS
3.1 GENERAL. The Purchase Price and the number of shares covered by each
Warrant and the number of Warrants outstanding are subject to adjustment from
time to time upon the occurrence of the events enumerated in this Article 3.
3.2 ISSUANCE OF ADDITIONAL SHARES AND WARRANTS. If and whenever the
Company shall issue any shares of its Common Stock for consideration per share
which is less than the Current Market Price per share (as defined in Section
3.8) at the time of such issuance, under circumstances not specifically
enumerated in Sections 3.3 through 3.9 inclusive, the Purchase Price under the
Warrant shall be reduced to a price determined by dividing (i) the sum of (A)
the number of shares of Common Stock outstanding immediately prior to such
issue multiplied by the Purchase Price in effect immediately prior to such
issue, plus (B) the consideration, if any, received by the Company upon such
issue, by (ii) the number of shares of Common Stock outstanding immediately
after such issue. No such adjustment shall be made in an amount less than
$.01, but any such amount shall be carried forward and shall be given effect in
connection with the next subsequent adjustment. For purposes of this Section
3.2, the following shall also be applicable;
(a) PUBLIC OFFERINGS OF CONVERTIBLE SECURITIES, OPTIONS, RIGHTS OR
WARRANTS. Subject to Section 3.3, if the Company shall issue in a public
offering any stock, security, obligation, option or other right or warrant
which directly or indirectly may be converted into, exchanged for, or
satisfied in shares of Common Stock in an integrated transaction when 1%
or more of such securities or instruments are acquired by persons who,
immediately prior to such transaction, were not security holders of the
Company, the Common Stock issuable upon exercise of such rights,
securities or instruments shall thereupon be deemed to have been issued
and to be outstanding and the consideration received by the Company
therefor shall be deemed to include the sum of the consideration received
for the issue of such rights, securities or instruments and the minimum
additional consideration payable upon the exercise of such rights,
securities or instruments. No further adjustment shall be made for the
actual issuance of the Common Stock upon the exercise of any such rights,
securities or instruments. If the provision of any such rights,
securities or instruments with respect to purchase price or shares
purchasable shall change or expire, any adjustment previously made
hereunder with respect to such rights, securities or instruments shall be
readjusted to such as would have obtained on the basis of the rights as
modified by such change or expiration.
(b) CONSIDERATION. In case the Company shall issue shares of its
Common Stock for a consideration wholly or partly other than cash, the
amount of the consideration other than cash received by the Company shall
be deemed to be the lesser of (i) the Current Market Price Per Share (as
defined in Section 3.8) on the issue date of the Common Stock so issued by
the Company multiplied by the number of shares so issued or (ii) the fair
market value of such consideration as determined by the Board of Directors
of the Company. In case Common Stock shall be deemed (under Section
3.2(a) or otherwise) to have been issued upon the issuance by the Company
of any right to acquire such Common Stock, in connection with the issue or
sale of other securities of the Company, together comprising one
integrated transaction in which no specific consideration is allocated to
rights, such rights shall be deemed to have been issued without
consideration. Consideration received by the Company for issuance of its
Common Stock shall be determined in all cases without deduction therefrom
of any expenses, underwriting commission or concessions incurred in
connection therewith.
(c) TREASURY STOCK. The number of shares of Common Stock
outstanding for purposes of this Article 3 at any given time shall include
shares owned or held by or for the account of the Company in its treasury,
and the disposition of any such shares so owned or held shall not be
considered an issue of Common Stock.
3.3 WHEN NO ADJUSTMENT REQUIRED. Notwithstanding any other provision of
this Article 3, no change in the Purchase Price or the number of shares of
Common Stock issuable upon exercise of the Warrant shall be required by reason
of any issue or sale by the Company of shares of Common Stock, options,
warrants, rights or securities convertible into shares of Common Stock (i) for
cash in an amount equal to or in excess of the Current Market Price Per Share,
or (ii) pursuant to any Warrants presented to the initial purchasers of Units
issued pursuant to this offering or pursuant to any warrant entered into with
any underwriter or professional consultant in connection with the public or
private offering of any securities of the Company or with any lender in
connection with any loan heretofore or hereafter made by the Company, or (iii)
pursuant to options and stock purchase agreements heretofore or hereafter
granted to or entered into with officers of employees of the Company or of any
subsidiary in connection with their employment, whether granted or entered into
at the beginning of the employment or at any time thereafter, or as a result of
or in connection with the granting of such options or the making of such stock
purchase agreements, or (iv) as consideration, in whole or in part for any
acquisition of another corporation or business whether by means of
consolidation, merger or sale to the Company of assets or securities, and
whether such shares of Common Stock are issued directly or upon exchange or
exercise of convertible securities or rights or options to subscribe to or
purchase the same; provided, however, that this Section shall not apply to, and
an adjustment shall be required with respect to, the issue or sale by the
Company of shares of Common Stock pursuant to options or stock purchase
agreements hereafter granted to or entered into with officers or employees of
the Company if and to the extent the aggregate number of shares of Common Stock
so issued during the Exercise Period shall exceed fifteen percent (15%) of the
fully diluted number of shares of Common Stock as of the Warrant Date; and
provided further, that this Section shall not apply to, and an adjustment shall
be required with respect to any merger, consolidation or reorganization in
which the Common Stock of the Company shall be reclassified or in which the
Company shall be the disappearing corporation.
3.4 STOCK DIVIDENDS, STOCK SPLITS, COMBINATION, RECLASSIFICATION, ETC.
In case the Company shall at any time after the date of this Agreement (i)
declare a dividend on the Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock into a larger number of shares, (iii)
combine the outstanding Common Stock into a smaller number of shares, or (iv)
issue any shares of its capital stock in connection with a reclassification of
the Common Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing corporation),
the Purchase Price in effect at the time of the record date for such dividend
or the effective date of such subdivision, combination or reclassification,
and/or the number and kind of shares of stock issuable on such date shall be
proportionately adjusted so that the holder of any Warrant exercised after such
time shall be entitled, at no additional expense, to receive the aggregate
number and kind of shares of stock which, if such Warrant had been exercised
immediately prior to such date, he would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision, combination or
reclassification. Such adjustment shall be made successively whenever any
event listed above shall occur.
3.5 DISTRIBUTION OF ASSETS. If at any time after the date hereof the
Company shall make any distribution of its assets upon or with respect to its
Common Stock, as a liquidating or partial liquidating dividend (other than upon
a liquidation, dissolution or winding up of the Company as provided for in
Section 4.1, or other than as permitted under the laws of the State of Texas),
each registered holder of any Warrant then outstanding shall, upon the exercise
of such Warrant after the record date for such distribution or, in the absence
of a record date, after the date of such distribution, receive in addition to
the shares of Common Stock to which he would otherwise be entitled hereunder,
such assets (or, at the option of the Company, a sum equal to the value thereof
at the time of the distribution as determined by its Board in its sole
discretion) which would have been distributed to such registered holder if he
had exercised his Warrant immediately prior to the record date for such
distribution, or, in the Absence of a record date, immediately prior to the
date of such distribution.
3.6 CONSOLIDATION, MERGER AND SALE OF ASSETS. If, prior to the end of
the Exercise Period, the Company shall at any time consolidate with or merge
into another corporation, the holder of any Warrant will thereafter receive,
upon exercise thereof, in lieu of the shares of Common Stock of the Company
immediately theretofore issuable upon exercise of the rights then represented
by the Warrant, such shares of stock, securities or assets as may be issued or
payable with respect to or in exchange for a number of outstanding shares of
the Common Stock of the Company equal to the number of shares of such Common
Stock immediately theretofore issuable upon exercise of the Warrant, had such
consolidation or merger not taken place. The Company shall take such steps in
connection with such consolidation or merger as may be necessary to assure that
the provisions hereof shall thereafter be applicable, as nearly as reasonably
may be, in relation to any securities or property thereafter deliverable upon
the exercise of the Warrants. The Company or the successor corporation, as the
case may be, shall execute and deliver to the Warrant Agent a supplemental
agreement so providing. The provisions of this Section 3.6 shall similarly
apply to successive mergers or consolidations. A sale of all or substantially
all of the assets of the Company for a consideration (apart from the assumption
of obligations) consisting primarily of securities, shall be deemed a
consolidation or merger for the foregoing purposes.
3.7 DIVIDENDS IN CONVERTIBLE SECURITIES, OPTIONS, RIGHTS OR WARRANTS. In
case the Company shall issue stock, securities, rights, options or warrants to
all holders of the Common Stock, or in an integrated transaction where more
than 99% of such instruments or securities are acquired by persons who, prior
to such transaction, were security holders of the Company, entitling them to
subscribe for or purchase Common Stock or securities convertible into Common
Stock at a price per share less than the Current Market Price Per Share (as
defined in Section 3.8) on the record date for the issuance of such securities,
instruments or rights or the granting of such securities, options or warrant,
as the case may be, the Purchase Price to be in effect after the record date
for the issuance of such rights or the date of grant of such options or
warrants shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the sum of (a) the number of shares of Common Stock outstanding
immediately prior to such sale and (b) the number of shares of Common Stock
which could be purchased at the Current Market Price Per Share (as defined in
Section 3.8) with the consideration received by the Company upon such sale, and
the denominator of which shall be the total number of shares of Common Stock
that would be outstanding immediately after such sale if the full amount of
convertible securities, options, rights or warrants were exercised immediately
after the sale. In the event the consideration for such securities, rights,
options or warrants is paid in a form other than cash, the value of such
consideration shall be determined as provided in Section 3.2(b). In the event
such securities, instruments or rights shall change or expire, or such
convertible securities shall not be converted, any adjustment previously made
hereunder shall be readjusted to such as would have obtained on the basis of
the rights as modified by such change or expiration.
3.8 CURRENT MARKET PRICE PER SHARE. For the purpose of this Agreement,
the "Current Market Price Per Share" of Common Stock on any date shall be
determined as follows:
(a) If the Common Stock is listed on a national securities exchange
or admitted to unlisted trading privileges on any such exchange, the
Current Market Price Per Share shall be the average of the daily closing
prices for the 20 consecutive trading days commencing 23 trading days
before such date. If no sale is made on any trading day, the closing
price shall be deemed to be average of the closing bid and asked prices
for such day on such exchange; or
(b) If the Common Stock is not listed or admitted to unlisted
trading privileges on any exchange, the Current Market Price Per Share
shall be the average of the last reported sale price (or prices, if
applicable) or the mean of the last reported bid and asked prices reported
by the National Association of Securities Dealers Automated Quotation
System ("NASDAQ") (or, if not so quoted on NASDAQ, as quoted by the
National Quotations Bureau, Inc.) for the 20 consecutive trading days
commencing 23 trading days before such date; or
(c) If the Common Stock is not so listed or admitted to unlisted
trading privileges and prices are not reported on NASDAQ or the National
Quotations Bureau, Inc., the Current Market Price Per Share shall be the
fair market value of the Common Stock as determined by the Board of
Directors of the Company in good faith, whose determination shall be
conclusive.
3.9 DIVIDEND IN OPTIONS, WARRANTS, RIGHTS OR CONVERTIBLE SECURITIES
CAUSING SUBSTANTIAL DILUTION. In case the Company shall issue nights, options,
warrants or convertible securities to all holders of Common Stock entitling
them to subscribe for or purchase Common Stock or securities convertible into
Common Stock at a price less than the Current Market Price Per Share (as
defined in Section 3.8) and where the number of shares of Common Stock issuable
upon exercise of all rights, options, warrants or convertible securities so
issued by the Company in the preceding 12 months exceeds 10% of the then
outstanding Common Stock of the Company (excluding Common Stock issuable upon
exercise of such options, rights or warrants or conversion of such convertible
securities), and where an adjustment to the Purchase Price is made under
Section 3.7, each Warrant outstanding immediately prior to the making of such
adjustment shall thereunder evidence the right to purchase, at the adjusted
Purchase Price, that number of shares obtained by (i) multiplying the number of
shares covered by the Warrant immediately prior to such adjustment by the
Purchase Price in effect immediately prior to such adjustment and (ii) by
dividing the product so obtained by the Purchase Price in effect immediately
after the adjustment made under Section 3.7.
3.10 FORM OF WARRANT. The Form of Warrant need not be changed because of
any change in the Purchase Price or the number of shares of Common Stock
issuable upon exercise of the Warrant pursuant to this Article 3, and Warrants
issued after such change may state the same terms with respect to the Purchase
Price and number of shares of Common Stock and Warrants issuable thereunder as
stated in the Warrants initially issued pursuant to this Agreement. The
Company may at any time, in its sole discretion, make any charge in the form of
Warrant that the Company may deem appropriate that does not affect the
substance thereof in a manner inconsistent with this Agreement; any Warrant
thereafter issued or countersigned, whether in exchange or substitution for an
outstanding Warrant or otherwise, may be in the form so changed.
3.11 DIVIDENDS. Other than as specified in Section 3.5, no registered
holder of any Warrant shall, upon the exercise thereof, be entitled to any
dividend that may have accrued or which may previously have been paid with
respect to shares of stock issuable upon exercise of the Warrants.
3.12 REDUCTION OF PURCHASE PRICE BELOW PAR VALUE. Before taking any
action which would cause an adjustment reducing the Purchase Price below the
then par value, if any, of the shares of Common Stock of the Company issuable
upon exercise of the Warrant, the Company shall take any corporate action which
may, in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable shares of such Common
Stock at such adjusted Purchase Price.
3.13 CERTIFICATION OF ADJUSTED PURCHASE PRICE AND NUMBER OF SHARES AND
WARRANTS ISSUABLE. Whenever the Purchase Price and the number of shares of
Common Stock issuable upon the exercise of each Warrant are adjusted as
provided in the Article 3, the Company shall (a) promptly prepare a certificate
signed by the Chairman of the Board, President or any Vice President of the
Company and by the Treasurer or Assistant Treasurer or the Secretary or
Assistant Secretary setting forth the Purchase Price as so adjusted, the number
of shares of Common Stock issuable upon the exercise of each Warrant as so
adjusted and/or the number of Warrants as so adjusted and a brief statement of
the facts accounting for such adjustment, (b) promptly file with the Warrant
Agent and with each transfer agent for the Common Stock a copy of such
certificate, and (c) mail a brief summary thereof to each registered holder of
Warrants in accordance with Section 7.1.
3.14 CERTIFICATES AND OPINIONS. The Company may obtain and rely upon the
certificate of any independent firm of public accountants of recognized
standing, selected by the Board of Directors of the Company, as to the
correctness of any adjustment required under this Article 3, and any such
certificate signed by such firm shall be conclusive evidence of the correctness
of any computation made under this Article 3.
ARTICLE 4
OTHER PROVISIONS FOR PROTECTION OF WARRANT HOLDERS
4.1 LIQUIDATION OF THE COMPANY. In the event of the liquidation,
dissolution or winding up of the Company, a notice thereof shall be filed by
the Company with the Warrant Agent and each transfer agent for the Common Stock
at least 30 days before the record date (which date shall be specified in such
notice) for determining holders of the Common Stock entitled to receive any
distribution upon such liquidation, dissolution or winding up. Such notice
shall also specify the date on which the right to exercise Warrants shall
expire, as provided in Section 2.1. A copy of such notice shall be published
once in an Authorized Newspaper (as defined in Section 7.3) in Dallas, Texas,
no more than 30 days prior to such record date. Failure to give such notice,
or any defect therein, shall not affect the legality or validity of the
liquidation, dissolution or winding up, or of any distribution in connection
therewith.
4.2 RESERVATION OF SHARES. The Company shall reserve and keep available
out of its authorized but unissued Common Stock, such number thereof as shall
from time to time be sufficient to permit the exercise of all outstanding
Warrants. If at any time the number of authorized but unissued shares of
Common Stock shall not be sufficient for such purposes, the Company will take
such corporate action as may, in the opinion of its counsel, be necessary to
increase its authorized but unissued shares of Common Stock to such number of
shares as shall be sufficient for such purpose.
4.3 NO RIGHTS AS STOCKHOLDER CONFERRED BY WARRANTS. The Warrants shall
not entitle the registered holders thereof to any of the rights, either at law
or in equity, of a stockholder of the Company.
4.4 LOST, STOLEN, MUTILATED OR DESTROYED WARRANTS. If any Warrant
becomes lost, stolen, mutilated or destroyed, the Company and the Warrant Agent
may, on such terms as to indemnity or otherwise as they may in their discretion
impose, respectively, issue and countersign a new Warrant of like denomination,
tenor and date as the Warrant so lost, stolen, mutilated or destroyed. Any
such new Warrant shall constitute an original contractual obligation of the
Company, whether or not the allegedly lost, stolen, mutilated or destroyed
Warrant shall be at any time enforceable by anyone.
4.5 ENFORCEMENT OF WARRANT RIGHTS. All rights of action in respect of
this Agreement are vested in the respective registered holders of the Warrants;
and any registered holder of any Warrant may in his own behalf and for his own
benefit enforce, and may institute and maintain any suit, action or proceeding
against the Company suitable to enforce, or otherwise in respect of, his right
to exercise his Warrant for the purchase of Common Stock in the manner provided
in the Warrant and in this Agreement.
4.6 REGISTRATION; SHAREHOLDER INFORMATION. For so long as any unexpired
Warrants are outstanding, the Company shall use its best efforts to cause
post-effective amendments to the registration statement covering the Warrants
(Form SB-2, Registration No. 33-80542-D) (the "Registration Statement") to
become effective in compliance with the Act and to prepare all supplements to
the prospectus forming a part of the Registration Statement as shall be
necessary to enable the sale of the Common Stock underlying the Warrants in
compliance with applicable securities laws and shall cause a copy of each such
prospectus, as then amended and supplemented, to be delivered to each holder of
record of a Warrant as they request and as otherwise required by law. The
Company will use its beat efforts to qualify such underlying shares under the
Blue Sky or securities laws of such of the jurisdictions in which holders of
Warrants reside as may be required for such holders to exercise their Warrants;
provided that the Company shall not be obligated to qualify to do business in
any jurisdiction where the nature of its business or ownership of assets does
not require it to be no qualified. No Warrant will be exercisable unless at
the time of exercise a current registration statement is in effect with respect
to such shares of Common Stock and such shares have been registered or
qualified or deemed to be exempt under the securities laws of the state of
residence of the holder of such Warrant. The Company shall cause copies of all
financial statements and reports, proxy statements and other documents that are
sent to its shareholders to be sent by first class mail, postage prepaid, on
the date of mailing to such shareholders, to each registered holder of Warrants
at his address appearing in the Warrant register as of the record date for the
determination of the shareholders entitled to such documents.
ARTICLE 6
TRANSFER AND OWNERSHIP OF WARRANTS
5.1 NEGOTIABILITY AND OWNERSHIP. Warrants issued hereunder shall be
fully registered and shall be transferable only by transfer on the books of the
Warrant Agent. Presentations may be made and notices and demands may be served
at the principal corporate office of the Warrant Agent in New York, New York.
5.2 REGISTER. The Company shall, by and through the Warrant Agent, cause
to be kept a register or registers in which, subject to such reasonable
regulations as the Company or the Warrant Agent may prescribe, the Warrant
Agent shall transfer Warrants as herein provided. Upon surrender for transfer
of any Warrant, the Warrant Agent shall countersign, authenticate and deliver
in the name of the transferee or transferees a new Warrant for a like amount of
Warrants.
5.3 WARRANT SURRENDER. All Warrants presented or surrendered for
exchange, transfer or registration as provided in this Section shall be
accompanied (if so required by the Company or the Warrant Agent) by a written
instrument or instruments of transfer, in form satisfactory to the Company and
the Warrant Agent, duly executed by the registered holder or by his duly
authorized attorney.
5.4 EXCHANGE OF WARRANTS. On and after the Warrant Date and prior to the
end of the Exercise Period, one or more Warrants may be surrendered at the
office of the Warrant Agent for exchange and, upon cancellation thereof, there
shall be issued and delivered in exchange therefor one or more new Warrants, as
requested by the registered holder of the canceled Warrant or Warrants, for the
same aggregate number of shares of Common Stock as were evidenced by the
Warrant or Warrants so canceled. In case of any exchange of a Warrant pursuant
to this Article 5 or of any transfer of a Warrant, the Company may impose a
charge sufficient to reimburse it for any stamp or other tax or governmental
charge required to be paid in connection therewith but no other charge shall be
made to the Warrant holder for any transfer or issue of new Warrants in case of
any such exchange.
5.5 AGREEMENT OF WARRANT HOLDERS. Every holder of a Warrant Certificate,
by accepting the same, consents and agrees with the Company and the Warrant
Agent and with all other Warrant holders that: (a) the Warrant is transferable
only on the registry books of the Warrant Agent as herein provided and (b) the
Company and the Warrant Agent may deem and treat the person in whose name of
Warrant Certificate is registered as the absolute owner thereof and of the
Warrants evidenced thereby for all purposes whatsoever, and neither the Company
nor the Warrant Agent shall be affected by any notice to the contrary, whether
such notice be in the form of notations on the Warrant Certificates or
otherwise.
ARTICLE 6
CONCERNING THE WARRANT AGENT
6.1 APPOINTMENT OF WARRANT AGENT. The Company hereby appoints American
Stock Transfer & Trust Company to act as agent for the Company in accordance
with the terms and conditions herein set forth in this Agreement, and American
Stock Transfer & Trust Company hereby accepts such appointment. The Company
may, from time to time, appoint such co-Warrant Agents as it may deem necessary
or desirable. The Company may terminate the appointment of American Stock
Transfer & Trust Company as agent upon 30 days' notice in writing to American
Stock Transfer & Trust Company.
6.2 PAYMENT OF TAXES. The Company will from time to time promptly pay or
make provision for the payment of any and all taxes and charges which may
hereafter be imposed by the laws of the United States or of any state or any
local governmental unit thereof which shall be payable with respect to the
issuance or delivery to or upon the order of the registered holders of the
Warrant (upon the exercise of the right to subscribe) of Common Stock of the
Company pursuant to the terms of such Warrant and of this Agreement, but the
Company shall not be obligated to pay any transfer taxes in respect of the
Warrants or such shares.
6.3 RESIGNATION OF WARRANT AGENT. The Warrant Agent may resign its
duties and be discharged from all further duties and liabilities hereunder
after giving 30 days' notice in writing to the Company; provided that such
shorter notice may be given as the Company shall accept as sufficient. In the
event the office of the Warrant Agent shall become vacant by resignation or
incapacity to act or otherwise, the Company shall appoint in writing a new
Warrant Agent hereunder in place of the Warrant Agent vacating the office. If
the Company fails for a period of 10 days in making such appointment, then the
registered holder of any of the Warrants may petition any court of competent
Jurisdiction for the appointment of a new Warrant Agent. On any new
appointment, the new Warrant Agent shall be vested with the same powers,
rights, duties, responsibilities and immunities as if it had been originally
named as Warrant Agent without any further assurance, conveyance, act or deed;
but if for any reason it becomes necessary or expedient to execute any further
assurance, conveyance, act or deed, the same shall be done at the expense of
the Company and may and shall be legally and validly executed by the former
Warrant Agent.
Subject to the foregoing provision, any corporation into which any Warrant
Agent or any new Warrant Agent may be merged or with which it may be
consolidated or any corporation resulting from any merger or consolidation to
which any Warrant Agent shall be a party shall be the successor Warrant Agent
under this Agreement without any further act.
6.4 FEES AND EXPENSES OF WARRANT AGENT. The Company covenants and
agrees:
(a) that it will pay the Warrant Agent reasonable remuneration for
its services as such hereunder and will repay to the Warrant Agent on
demand the amount of all expenditures whatsoever which the Warrant Agent
may reasonably incur in and about the execution of the duties hereby
created; and
(b) that it will do, execute, acknowledge and delivery or cause to
be done executed, acknowledged or delivered, all and every such other
acts, deeds and assurances in law as the Warrant Agent may reasonably
require for the better accomplishing and effectuating of the intentions
and provisions of this Agreement
6.5 ACTIONS BY WARRANT AGENT. The Warrant Agent may, for the execution
of the duties and in the execution of the powers conferred upon it, appoint or
employ as agents or representatives or otherwise any solicitors, counsel,
bankers, brokers, accountants, clerks or inspectors or other agents, and all
reasonable expenses and disbursements made and incurred by the Warrant Agent in
connection with the execution of its duties hereunder shall be promptly paid by
the Company.
6.6 EXCULPATORY PROVISIONS. In order to induce the Warrant Agent to act
hereunder, the Company agrees, and each registered holder of a Warrant by
acceptance thereof, also agrees that:
(a) The Warrant Agent shall be entitled to obtain legal or other
advice and employ such assistance as it may deem necessary to the proper
discharge of its duties hereunder and to pay proper and reasonable
compensation therefor and may in connection with any matter relating to
this Agreement, act on the opinion or advice or information obtained from
any lawyer, including company counsel, auditor, valuer or other expert
whether obtained by such Warrant Agent or by the Company or otherwise and
shall not be responsible for any loss occasioned by acting thereon;
(b) Whenever, in the administration of its duties under this
Agreement, the Warrant Agent shall deem it necessary or desirable that any
matter be provided or established by the Company prior to taking or
suffering any action hereunder, such matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by an Officer's Certificate (as
hereinafter defined) delivered to the Warrant Agent and such certificate
shall be full justification and cause to the Warrant Agent for any action
taken or suffered in good faith by it under the provisions of this
Agreement on the faith thereof; but in its discretion of the Warrant Agent
may in lieu thereof accept other evidence of such fact or matter or may
require such further or additional evidence as it may deem reasonable;
(c) Warrant Agent shall be liable hereunder only for its own
negligence or willful misconduct; the Company agrees to indemnify the
Warrant Agent and save it harmless against any and all liabilities,
include judgments, costs and reasonable counsel fees, for anything done or
omitted by the Warrant Agent in the execution of this Agreement except as
a result of the Warrant Agent's negligence, willful misconduct, or bad
faith;
(d) Warrant Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the
Warrants or be required to verify the same but all such statements and
recitals are and shall be deemed to have been made by the Company only;
(e) The Warrant Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
thereof or in respect of the validity of the execution of any Warrant
issued hereunder; nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
such Warrant; nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
shares to be issued upon the right to purchase provided for in this
Agreement or in any Warrant or as to whether any shares will when issued
be duly authorized or be validly issued and fully paid and nonassessable,
it being hereby agreed and declared that as to all the matters and things
referred to in this subparagraph the duty and responsibility shall rest
upon the Company and not upon the Warrant Agent, and the failure of the
Company to discharge any such duty and responsibility shall not in any way
render the Warrant Agent liable or place upon it any duty or
responsibility for breach of which it would be liable;
(f) The Warrant Agent shall not at any time be under any duty or
responsibility to determine whether any facts exist which may require any
change m Warrants pursuant to any of the provisions in Article 3, or with
respect to the nature or extent of any such change, or with respect to any
other adjustment provided for herein, or with respect to the method
provided herein (or which may be provided in any supplemental agreement)
to be employed in making any such change or adjustment; and
(g) Except as in the Agreement expressly provided, the Warrant Agent
acts hereunder solely as agent of the Company and does not assume any
fiduciary or other relationship or agency or trust for or with any
registered holder of any of the Warrants. The duties and obligations of
the Warrant Agent under this Agreement shall be determined solely by the
provisions hereof, and no implied covenants or obligations shall be read
into this Agreement against the Warrant Agent.
6.7 MODIFICATION OF AGREEMENT. The Warrant Agent may without the consent
or concurrence of the registered holders of the Warrants enter into such
supplemental agreements or otherwise concur with the Company in making any
changes or corrections in this Agreement as to which it shall have been advised
by counsel (who may but need not also be counsel for the Company) that are not
prejudicial to the rights of the Warrant holders as indicated by the general
sense or intent of the original language and are required by the purpose of
curing or correcting any ambiguity or defective or inconsistent provision or
clerical omission or mistake or manifest error herein contained.
ARTICLE 7
CERTAIN DEFINITIONS AND OTHER MATTERS
7.1 NOTICE OF PROPOSED ACTIONS. In case the Company shall propose (a) to
pay any dividend in stock of any class or to make any other distribution to the
holders of its Common Stock (other than a cash dividend), or (b) to offer to
the holders of its Common Stock rights or warrants to subscribe for or to
purchase any additional shares of Common Stock, or (c) to effect any stock
dividend, stock split, combination or reclassification of its Common Stock, or
(d) to effect any distribution of assets or capital reorganization, merger,
consolidation or sale transfer or other disposition of all or substantially all
of its assets or business, or (e) to effect the liquidation, dissolution or
winding-up of the Company, or (f) to effect any other transaction which would,
upon consummation, result in a change in the Purchase Price of the Warrants or
the number of shares of Common Stock issuable upon exercise of the Warrants
pursuant to Articles 3 and 4 hereof, the Company shall give notice to each
holder of a Warrant in accordance with Section 7.2 of such proposed action,
which shall specify that date on which a record is to be taken for purposes of
such proposed transaction. Such notice shall be given not later than 15 days
prior to the record date for determining the holders of Common Stock for
purposes of such action or, if no record date is required, not later than 15
days prior to the date of the taking of such proposed action.
7.2 NOTICES. Notices or demands authorized by this Agreement to be given
or made by the Warrant Agent or by the holder of any Warrant Certificate to or
upon the Company shall be sent by first class mail, postage prepaid, addressed
(until another address is filed in writing by the Company with the Warrant
Agent) as follows:
Polish Telephones and Microwave Corporation
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Any notice or demand authorized by this Agreement to be given or made by the
Company or by the holder of any Warrant Certificate to or on the Warrant Agent
shall be deemed given or made if sent by first class mail, postage prepaid,
addressed (until another address is filed in writing by the Warrant Agent with
the Company) as follows:
American Stock Transfer & Trust Company
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Notices or demands authorized by this Agreement to be given or made by the
Company or the Warrant Agent to the holder of any Warrant Certificate shall be
deemed given or made if sent first class mail, postage prepaid, addressed to
such holder at the address of such holder as shown on the registry books of the
Company.
7.3 AUTHORIZED NEWSPAPER. The term "Authorized Newspaper" when used with
reference to the publication of a notice provided for in the Agreement shall
mean a newspaper printed in the English language and customarily published on
Saturdays, Sundays or legal holidays and of general circulation.
7.4 OFFICER'S CERTIFICATE. The term "Officer's Certificate" in this
Agreement shall mean a certificate or instrument signed by one of the
following: the President, a Vice President, the Treasurer or the Secretary of
the Company.
7.5 APPLICABLE LAW. The validity, interpretation and performance of this
Agreement and validity and interpretation of the Warrants shall be governed by
the laws of the State of New York.
7.6 EXAMINATION OF AGREEMENT. A copy of this Agreement shall be
available at all reasonable times at the office of the Warrant Agent for
examination by the registered holder of any Warrant. Any such registered
holder may be required to submit his Warrant for inspection before being
entitled to make such examination.
7.7 BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company, the
Warrant Agent and the registered holders of the Warrants any legal or equitable
right, remedy or claim under this Agreement; but this Agreement shall be for
the sole and exclusive benefit of the Company, the Warrant Agent and the
registered holders of the Warrants.
7.8 SUCCESSORS. All of the covenants and provisions of this Agreement by
or for the benefit of the parties hereto shall bind and inure to the benefit of
their respective successors and assigns.
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto under their respective corporate seals as of the date first above
written.
AMERICAN STOCK TRANSFER & TRUST COMPANY
By:
Name:
Its:
VICE PRESIDENT
POLISH TELEPHONES AND
MICROWAVE CORPORATION
By:
Name: W. ▇▇▇ ▇▇▇▇▇
Its: President and Chief Executive Officer