EXHIBIT 10.18
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WARRANT AGREEMENT
Dated as of February 21, 1997
Between
UNIFI COMMUNICATIONS, INC.,
as Issuer
and
FLEET NATIONAL BANK,
as Warrant Agent
______________________
Warrants to Purchase Common Stock
Par Value $.01 Per Share
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TABLE OF CONTENTS
Page
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ARTICLE I
ISSUANCE, FORM, EXECUTION, DELIVERY AND
REGISTRATION OF WARRANT CERTIFICATES
SECTION 1.01. Issuance of Warrants.....................................
SECTION 1.02. Form of Warrant Certificates.............................
SECTION 1.03. Execution of Warrant Certificates........................
SECTION 1.04. Countersignature and Delivery............................
SECTION 1.05. Temporary Warrant Certificates...........................
SECTION 1.06. Separation of Initial Warrants
and Notes..............................................
SECTION 1.07. Registration; Registration of
Transfers and Exchanges................................
SECTION 1.08. Lost, Stolen, Destroyed, Defaced
or Mutilated Warrant Certificates......................
SECTION 1.09. Offices for Exercise, etc................................
ARTICLE II
DURATION, EXERCISE OF WARRANTS
AND EXERCISE PRICE
SECTION 2.01. Duration of Warrants.....................................
SECTION 2.02. Exercise, Exercise Price, Settlement
and Delivery...........................................
SECTION 2.03. Cancellation of Warrant Certificates.....................
ARTICLE III
OTHER PROVISIONS RELATING TO
RIGHTS OF HOLDERS OF WARRANTS
SECTION 3.01. Enforcement of Rights....................................
ARTICLE IV
CERTAIN COVENANTS OF THE COMPANY
SECTION 4.01. Payment of Taxes.........................................
SECTION 4.02. Compliance with the Warrant Shares
Registration Rights Agreement..........................
SECTION 4.03. Rules 144 and 144A.......................................
SECTION 4.04. Repurchase of Warrants and Warrant
Shares.................................................
SECTION 4.05. Reservation of Warrant Shares............................
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SECTION 4.06. Obtaining of Governmental Approvals......................
ARTICLE V
ADJUSTMENTS
SECTION 5.01. Adjustment of Exercise Rate; Notices.....................
SECTION 5.02. Fractional Warrant Shares................................
SECTION 5.03. Article Not Applicable to Issuance
of Contingent Warrants.................................
ARTICLE VI
CONCERNING THE WARRANT AGENT
SECTION 6.01. Warrant Agent Conditions of Warrant
Agent's Obligations Resignation and
Appointment of Successor...............................
SECTION 6.02. Conditions of Warrant Agent's Obligations................
SECTION 6.03. Resignation and Appointment of Successor.................
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Amendment................................................
SECTION 7.02. Notices and Demands to the Company
and Warrant Agent......................................
SECTION 7.03. Addresses for Notices to Parties
and for Transmission of Documents......................
SECTION 7.04. Notices to Holders.......................................
SECTION 7.05. Applicable Law...........................................
SECTION 7.06. Persons Having Rights Under Agreement....................
SECTION 7.07. Headings.................................................
SECTION 7.08. Counterparts.............................................
SECTION 7.09. Inspection of Agreements.................................
EXHIBIT A - Form of Warrant Certificate................................
EXHIBIT B - Certificate To Be Delivered upon Exchange or
Registration of Transfer of Warrants.....................
EXHIBIT C - Transferee Letter of Representation........................
EXHIBIT D - Form of Certificate of Election............................
ANNEX I - Warrant Shares Registration Rights Agreement..................
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WARRANT AGREEMENT
WARRANT AGREEMENT ("Agreement"), dated as of February 21, 1997 between
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UNIFI COMMUNICATIONS, INC., a Delaware corporation, as Issuer (together with any
successor thereto, the "Company"), and FLEET NATIONAL BANK, a national banking
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association, not in its individual capacity but solely as warrant agent
(together with any successor warrant agent, the "Warrant Agent").
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WHEREAS, the Company has entered into a purchase agreement dated
February 14, 1997 with ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. (the "Initial Purchaser") in which the
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Company has agreed to sell to the Initial Purchaser 175,000 units (the "Units")
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consisting in the aggregate of (i) $175,000,000 aggregate principal amount of
14% Senior Notes due 2004 (the "Notes") of the Company to be issued under an
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indenture dated as of February 21, 1997 (the "Indenture"), between the Company
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and Fleet National Bank, as trustee (in such capacity, the "Trustee"), and (ii)
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175,000 Warrants (the "Initial Warrants"), each representing the right to
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purchase initially 27.524674 shares of Common Stock, par value $.01 per share,
of the Company (the "Common Stock"), subject to adjustment in accordance with
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the terms hereof; and
WHEREAS, each Unit will consist of one Note in the principal amount of
$1,000 and one Initial Warrant and the Notes and the Initial Warrants comprising
part of the Units shall not be separately transferable until the Separability
Date (as defined below); and
WHEREAS, pursuant to section 10.08 of the Indenture, in certain
circumstances the Company will be obligated to issue additional warrants (the
"Contingent Warrants" and together with the Initial Warrants, the "Warrants";
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and the certificates evidencing the Warrants being herein referred to as the
"Warrant Certificates") exercisable for Common Stock of the Company; and
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WHEREAS, the holders of the Warrants will have the registration rights
with respect to the Warrant Shares (as defined) issuable upon exercise of the
Warrants as set forth in the Warrant Shares Registration Rights Agreement, dated
as of February 21, 1997 between the Company and the Initial Purchaser (the
"Warrant Shares Registration Rights Agreement") substantially in the form of
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Annex I hereto; and
WHEREAS, the Company desires the Warrant Agent as warrant agent to
assist the Company in connection with the issuance, exchange, cancellation,
replacement and exercise of the Warrants and the repurchase of the Warrants and
the Warrant Shares, and in this Agreement wishes to set forth, among other
things, the terms
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and conditions on which the Warrants may be issued, exchanged, cancelled,
replaced, exercised and repurchased;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
ISSUANCE, FORM, EXECUTION, DELIVERY AND
REGISTRATION OF WARRANT CERTIFICATES
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SECTION 1.01. Issuance of Warrants. Warrants comprising part of the
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Units shall be originally issued in connection with the issuance of the Units.
Each Warrant Certificate shall evidence the number of Warrants
specified therein, and each Warrant evidenced thereby shall represent the right,
subject to the provisions contained herein and therein, to purchase from the
Company (and the Company shall issue and sell to such holder of the Warrant)
fully paid and nonassessable shares of the Company's Common Stock, par value
$.01 per share (the shares purchasable upon exercise of a Warrant being
hereinafter referred to as the "Warrant Shares" and, where appropriate, such
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term shall also mean the other securities or property purchasable and
deliverable upon exercise of a Warrant as provided in Article V and such Common
Stock, being hereinafter referred to as the "Common Stock") at the price
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specified herein and therein, in each case subject to adjustment as provided
herein and therein.
SECTION 1.02. Form of Warrant Certificates. The Warrant Certificates
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will initially be issued either in global form (the "Global Warrants"),
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substantially in the form of Exhibit A hereto (including footnote 1 thereto) or
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in registered form as definitive Warrant certificates (the "Definitive
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Warrants"). The Warrant Certificates evidencing the Global Warrants or the
Definitive Warrants to be delivered pursuant to this Agreement shall be
substantially in the form set forth in Exhibit A attached hereto. Such Global
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Warrants shall represent such of the outstanding Warrants as shall be specified
therein, and each shall provide that it shall represent the aggregate amount of
outstanding Warrants from time to time endorsed thereon and that the aggregate
amount of outstanding Warrants represented thereby may from time to time be
reduced or increased, as appropriate. Any endorsement of a Global Warrant to
reflect the amount of any increase or decrease in the amount of outstanding
Warrants represented thereby shall be made by the Warrant Agent and Depositary
(as defined below) in accordance with instructions given by the holder thereof.
The Depository
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Trust Company shall act as the Depositary with respect to the Global Warrants
until a successor shall be appointed by the Company and the Warrant Agent. Upon
written request, a Warrant holder may receive from the Warrant Agent Definitive
Warrants as set forth in Section 1.07 hereof.
SECTION 1.03. Execution of Warrant Certificates. The Warrant
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Certificates shall be executed on behalf of the Company by the Chairman of its
Board of Directors, its president or any vice president and attested by its
secretary or assistant secretary, under its corporate seal, if any. Such
signatures may be the manual or facsimile signatures of the present or any
future such officers. The seal of the Company may be in the form of a facsimile
thereof and may be impressed, affixed, imprinted or otherwise reproduced on the
Warrant Certificates. Typographical and other minor errors or defects in any
such reproduction of the seal or any such signature shall not affect the
validity or enforceability of any Warrant Certificate that has been duly
countersigned and delivered by the Warrant Agent.
In case any officer of the Company who shall have signed any of the
Warrant Certificates shall cease to be such officer before the Warrant
Certificate so signed shall be countersigned and delivered by the Warrant Agent
or disposed of by the Company, such Warrant Certificate nevertheless may be
countersigned and delivered or disposed of as though the person who signed such
Warrant Certificate had not ceased to be such officer of the Company; and any
Warrant Certificate may be signed on behalf of the Company by such persons as,
at the actual date of the execution of such Warrant Certificate, shall be the
proper officers of the Company, although at the date of the execution and
delivery of this Agreement any such person was not such an officer.
SECTION 1.04. Countersignature and Delivery. Warrant Certificates
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shall be countersigned by manual signature and dated the date of
countersignature by the Warrant Agent and shall not be valid for any purpose
unless so countersigned and dated. The Warrant Certificates shall be numbered
and shall be registered in the Warrant Register (as defined in Section 1.06
hereof).
Upon the receipt by the Warrant Agent of a written order of the
Company, which order shall be signed by the Chairman of its Board of Directors,
its president or any vice president and attested by its secretary or assistant
secretary, and shall specify the amount of Warrants to be countersigned, whether
the Warrants are to be Global Warrants or Definitive Warrants, the date of such
Warrants and such other information as the Warrant Agent may
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reasonably request, without any further action by the Company, the Warrant Agent
is authorized, upon receipt from the Company at any time and from time to time
of the Warrant Certificates, duly executed as provided in Section 1.03 hereof,
to countersign the Warrant Certificates and deliver them. Such countersignature
shall be by a duly authorized signatory of the Warrant Agent (although it shall
not be necessary for the same signatory to sign all Warrant Certificates) and
shall be conclusive evidence that the Warrant Certificate so countersigned has
been delivered hereunder.
In case any authorized signatory of the Warrant Agent who shall have
countersigned any of the Warrant Certificates shall cease to be such authorized
signatory before the Warrant Certificate shall be disposed of by the Company,
such Warrant Certificate nevertheless may be delivered or disposed of as though
the person who countersigned such Warrant Certificate had not ceased to be such
authorized signatory of the Warrant Agent; and any Warrant Certificate may be
countersigned on behalf of the Warrant Agent by such persons as, at the actual
time of the countersignature of such Warrant Certificates, shall be the duly
authorized signatories of the Warrant Agent, although at the time of the
execution and delivery of this Agreement any such person is not such an
authorized signatory.
The Warrant Agent's countersignature on all Warrant Certificates shall
be in substantially the form set forth in Exhibit A hereto.
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SECTION 1.05. Temporary Warrant Certificates. Pending the
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preparation of definitive Warrant Certificates, the Company may execute, and the
Warrant Agent shall countersign and deliver, temporary Warrant Certificates,
which are printed, lithographed, typewritten or otherwise produced,
substantially of the tenor of the definitive Warrant Certificates in lieu of
which they are issued.
If temporary Warrant Certificates are issued, the Company will cause
definitive Warrant Certificates to be prepared without unreasonable delay.
After the preparation of definitive Warrant Certificates, the temporary Warrant
Certificates shall be exchangeable for definitive Warrant Certificates upon
surrender of the temporary Warrant Certificates at any office or agency
maintained by the Company for that purpose pursuant to Section 1.09 hereof.
Subject to the provisions of Section 4.01 hereof, such exchange shall be without
charge to the holder. Upon surrender for cancellation of any one or more
temporary Warrant Certificates, the Company shall execute, and the Warrant Agent
shall countersign and
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deliver in exchange therefor, one or more definitive Warrant Certificates
representing in the aggregate a like number of Warrants. Until so exchanged,
the holder of a temporary Warrant Certificate shall in all respects be entitled
to the same benefits under this Agreement as a holder of a definitive Warrant
Certificate.
SECTION 1.06. Separation of Initial Warrants and Notes. The Notes
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and Initial Warrants will not be separately transferable until the Separability
Date. "Separability Date" shall mean the earliest to occur of: (i) August 20,
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1997, (ii) the date a registration statement under the Securities Act of 1933,
as amended (the "Securities Act"), with respect to a registered exchange offer
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for the Notes or covering the sale by holders of the Notes is declared effective
under the Securities Act or (iii) such date as may be determined by ▇▇▇▇▇ ▇▇▇▇▇▇
Inc. and specified to the Company, the Trustee, the Warrant Agent and the Unit
Agent in writing. The separation of Warrant and Note certificates is herein
referred to as a "Separation" and the related Initial Warrants are referred to
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as "Separated".
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SECTION 1.07. Registration; Registration of Transfers and Exchanges.
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The Company will keep, at the office or agency maintained by the Company for
such purpose, a register or registers in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of, and registration of transfer and exchange of, Warrants and Warrant Shares as
provided in this Article I. Each person designated by the Company from time to
time as a person authorized to register the transfer and exchange of the
Warrants is hereinafter called, individually and collectively, the "Registrar".
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The Company hereby initially appoints the Warrant Agent as Registrar. Each
person designated by the Company from time to time as a person authorized to
register the transfer and exchange of the Warrant Shares is hereinafter called,
individually and collectively, the "Transfer Agent". The Company hereby
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initially appoints itself as Transfer Agent. Upon written notice to the Warrant
Agent and any acting Registrar, the Company may appoint a successor Registrar
for such purposes. Upon written notice to the Warrant Agent, the Company may
appoint a successor Transfer Agent for such purposes.
The Company will at all times designate one person (who may be the
Company and who need not be a Registrar) to act as repository of a master list
of names and addresses of the holders of Warrants (the "Warrant Register") and
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Warrant Shares. The Warrant Agent will act as such repository with respect to
the Warrants unless and until some other person is, by written notice
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from the Company to the Warrant Agent and the Registrar, designated by the
Company to act as such. The Company will act as such repository with respect to
the Warrant Shares unless and until some other person is designated by the
Company to act as such. The Company will provide notice to the Warrant Agent
and Registrar of any such designation. The Company shall cause each Registrar
to furnish to such repository with respect to the Warrants, on a current basis,
such information as to all registrations of transfer and exchanges effected by
such Registrar, as may be necessary to enable such repository to maintain the
Warrant Register on as current a basis as is practicable.
The Company shall cause each Transfer Agent to furnish to the Warrant
Agent, on a current basis and immediately upon the request of the Warrant Agent,
such information as to all registrations of transfer and exchanges effected by
such Transfer Agent, as may be necessary or desirable to enable the Warrant
Agent to perform its functions under Section 4.04 hereof.
Upon due presentation for registration of transfer of any Warrant
Certificate at any such office or agency to be maintained for the purpose as
provided in Section 1.09, the Company shall execute and the Warrant Agent shall
countersign and deliver (or cause to be delivered) in the name of the transferee
or transferees a new Warrant Certificate or Warrant Certificates for a like
aggregate number of Warrants bearing numbers or other distinguishing symbols not
contemporaneously outstanding.
Any Warrant Certificate or Warrant Certificates may be exchanged for a
Warrant Certificate or Warrant Certificates in other authorized denominations,
representing in the aggregate a like number of Warrants. A Warrant Certificate
or Warrant Certificates to be so exchanged shall be surrendered at any office or
agency to be maintained by the Company for the purpose as provided in Section
1.09, and the Company shall execute and the Warrant Agent shall countersign and
deliver (or cause to be delivered) in exchange therefor the Warrant Certificate
or Warrant Certificates bearing numbers or other distinguishing symbols not
contemporaneously outstanding.
The Company, the Warrant Agent, the Registrar and any agent of the
Company, the Warrant Agent or the Registrar may deem and treat the person in
whose name any Warrant Certificate shall be registered in the Warrant Register
as the absolute owner of such Warrant Certificate (notwithstanding any notation
of ownership or other writing thereon) for the purpose of any exercise thereof
or any distribution to the holder thereof and for all other purposes;
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and neither the Company nor the Warrant Agent nor the Registrar nor any agent of
the Company, the Warrant Agent or the Registrar shall be affected by any notice
to the contrary.
All Warrants presented for transfer or exchange shall be duly endorsed
by the registered holder or holders thereof or by the duly appointed legal
representative thereof or by a duly authorized attorney, and in the case of
transfer, such signature shall be guaranteed by an "eligible guarantor
institution" within the meaning of Rule 17Ad-15 under the Securities Exchange
Act of 1934, as amended (the "Exchange Act") (each an "Eligible Guarantor
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Institution"), and shall be accompanied by a written instrument or instruments
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of exchange or transfer, in form satisfactory to the Company, the Warrant Agent,
the Trustee and the Registrar.
Until the earlier to occur of (i) the consummation of a Public Equity
Offering resulting in gross proceeds to the Company of at least $35.0 million
and (ii) March 1, 2002, each Holder of Warrants or Warrant Shares shall, by
acceptance of such Warrants or Warrant Shares, agree that transfers of
beneficial interests in such Warrants or Warrant Shares may be effected only on
the books and records maintained by the Transfer Agent, and that ownership of
Warrants or Warrant Shares shall be required to be reflected in the books and
records of the Transfer Agent.
Upon issuance by the Company, the Warrant Shares shall be
appropriately legended to reflect such obligations upon transfer as well as the
repurchase obligations of the Company and the co-sale and co-investment rights
of such holders.
(a) Transfer and Exchange of Definitive Warrants. When Definitive
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Warrants are presented to the Warrant Agent with a request:
(i) to register the transfer of the Definitive Warrants; or
(ii) to exchange such Definitive Warrants for an equal number of
Definitive Warrants of other authorized denominations,
the Warrant Agent shall register the transfer or make the exchange as requested
if the requirements under this Warrant Agreement as set forth in this Section
1.07 hereof for such transactions are met; provided, however, that the
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Definitive Warrants presented or surrendered for registration of transfer or
exchange:
(x) shall be duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the
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Company and the Warrant Agent, duly executed by the holder thereof or
by his attorney, duly authorized in writing; and
(y) in the case of Warrants the offer and sale of which have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act") and are presented for transfer or exchange prior to
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(x) the date which is three years after the later of the date of
original issue and the last date on which the Company or any affiliate
of the Company was the owner of such Warrant, or any predecessor
thereto and (y) such later date, if any, as may be required by any
subsequent change in applicable law (the "Resale Restriction
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Termination Date"), such Warrants shall be accompanied, in the sole
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discretion of the Company, by the following additional information and
documents, as applicable, however, it being understood that the
Warrant Agent need not determine which clause (A) through (D) below is
applicable:
(A) if such Warrant is being delivered to the Warrant Agent by a
holder for registration in the name of such holder, without
transfer, a certification from such holder to that effect (in
substantially the form of Exhibit B hereto); or
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(B) if such Warrant is being transferred to a "qualified
institutional buyer" (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A under the Securities
Act or pursuant to an exemption from registration in accordance
with Rule 144 or Regulation S under the Securities Act or
pursuant to an effective registration statement under the
Securities Act, a certification to that effect (in substantially
the form of Exhibit B hereto) and an opinion of counsel and/or
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other information satisfactory to the Company to the effect that
such transfer is in compliance with the Securities Act; or
(C) if such Warrant is being transferred to an institutional
"accredited investor" within the meaning of subparagraphs (a)(1),
(a)(2), (a)(3) or (a)(7) of Rule 501 under the Securities Act,
delivery of a Certificate of Transfer in the form of Exhibit C
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hereto and an opinion of counsel and/or other information
satisfactory to the
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Company to the effect that such transfer is in compliance with
the Securities Act; or
(D) if such Warrant is being transferred in reliance on another
exemption from the registration requirements of the Securities
Act, a certification to that effect (in substantially the form of
Exhibit B hereto) and an opinion of counsel from the transferee
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or transferor reasonably acceptable to the Company to the effect
that such transfer is in compliance with the Securities Act.
(b) Restrictions on Transfer of a Definitive Warrant for a Beneficial
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Interest in a Global Warrant. A Definitive Warrant may not be exchanged for a
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beneficial interest in a Global Warrant except upon satisfaction of the
requirements set forth below. Upon receipt by the Warrant Agent of a Definitive
Warrant, duly endorsed or accompanied by appropriate instruments of transfer, in
form satisfactory to the Warrant Agent, together with:
(A) certification, substantially in the form of Exhibit B hereto,
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that such Definitive Warrant is being transferred to a "qualified
institutional buyer" (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A under the Securities
Act; and
(B) written instructions directing the Warrant Agent to make, or to
direct the Depositary to make, an endorsement on the Global
Warrant to reflect an increase in the aggregate amount of the
Warrants represented by the Global Warrant,
then the Warrant Agent shall cancel such Definitive Warrant and cause, or direct
the Depositary to cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Warrant Agent, the aggregate
amount of the Global Warrant to be increased accordingly. If no Global Warrant
is then outstanding, the Company shall issue and the Warrant Agent shall
countersign a new Global Warrant in the appropriate amount.
(c) Transfer and Exchange of Global Warrants. The transfer and
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exchange of Global Warrants or beneficial interests therein shall be effected
through the Depositary, in accordance with this Warrant Agreement (including the
restrictions on transfer set forth herein) and the procedures of the Depositary
therefor.
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(d) Transfer of a Beneficial Interest in a Global Warrant for a
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Definitive Warrant.
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(i) Any person having a beneficial interest in a Global Warrant may upon
request exchange such beneficial interest for a Definitive Warrant.
Upon receipt by the Warrant Agent of written instructions or such
other form of instructions as is customary for the Depositary from the
Depositary or its nominee on behalf of any person having a beneficial
interest in a Global Warrant and upon receipt by the Warrant Agent of
a written order or such other form of instructions as is customary for
the Depositary or the person designated by the Depositary as having
such a beneficial interest containing registration instructions and,
in the case of any such transfer or exchange prior to the Resale
Restriction Termination Date, the following additional information and
documents, however, it being understood that the Warrant Agent need
not determine which clause (A) through (D) below is applicable:
(A) if such beneficial interest is being transferred to the person
designated by the Depositary as being the beneficial owner, a
certification from such person to that effect (in substantially
the form of Exhibit B hereto); or
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(B) if such beneficial interest is being transferred to a "qualified
institutional buyer" (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A under the Securities
Act or pursuant to an exemption from registration in accordance
with Rule 144 or Regulation S under the Securities Act or
pursuant to an effective registration statement under the
Securities Act, a certification to that effect from the
transferee or transferor (in substantially the form of Exhibit B
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hereto) and an opinion of counsel and/or other information
satisfactory to the Company to the effect that such transfer is
in compliance with the Securities Act; or
(C) if such beneficial interest is being transferred to an
institutional "accredited investor" within the meaning of
subparagraphs (a)(1), (a)(2), (a)(3) or (a)(7) of Rule 501 under
the Securities Act, delivery of a Certificate of Transfer in the
form
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of Exhibit C hereto and an opinion of counsel and/or other
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information satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act; or
(D) if such beneficial interest is being transferred in reliance on
another exemption from the registration requirements of the
Securities Act, a certification to that effect (in substantially
the form of Exhibit B hereto) and an opinion of counsel from the
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transferee or transferor reasonably acceptable to the Company to
the effect that such transfer is in compliance with the
Securities Act,
then the Warrant Agent will cause, in accordance with the standing
instructions and procedures existing between the Depositary and the
Warrant Agent, the aggregate amount of the Global Warrant to be
reduced accordingly and, following such reduction, the Company will
execute and, upon receipt of an order for countersignature in the form
of an Officers' Certificate (as defined), the Warrant Agent will
countersign and deliver to the transferee a Definitive Warrant.
(ii) Definitive Warrants issued in exchange for a beneficial interest in
a Global Warrant pursuant to this Section 1.06(d) shall be registered
in such names and in such authorized denominations as the Depositary,
pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Warrant Agent in writing. The Warrant
Agent shall deliver such Definitive Warrants to the persons in whose
names such Definitive Warrants are so registered.
(e) Restrictions on Transfer and Exchange of Global Warrants.
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Notwithstanding any other provisions of this Warrant Agreement (other than the
provisions set forth in subsection (f) of this Section 1.07), a Global Warrant
may not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(f) Authentication of Definitive Warrants in Absence of Depositary.
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If at any time:
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(i) the Depositary for the Warrants notifies the Company that the
Depositary is unwilling or unable to continue as Depositary for the
Global Warrant and a successor Depositary for the Global Warrant is
not appointed by the Company within 90 days after delivery of such
notice; or
(ii)the Company, at its sole discretion, notifies the Warrant Agent in
writing that it elects to cause the issuance of Definitive Warrants
under this Warrant Agreement,
then the Company will execute, and the Warrant Agent, upon receipt of an
officers' certificate signed by two officers of the Company (one of whom must be
the principal executive officer, principal financial officer or principal
accounting officer) (an "Officers' Certificate") requesting the countersignature
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and delivery of Definitive Warrants, will countersign and deliver Definitive
Warrants, in an aggregate number equal to the aggregate number of warrants
represented by the Global Warrant, in exchange for such Global Warrant.
(g) Legends.
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(i) Except as permitted by the following paragraph (ii), each Warrant
Certificate evidencing the Global Warrants and the Definitive Warrants
(and all Warrants issued in exchange therefor or substitution thereof)
shall bear a legend substantially to the following effect:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE
HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A PROMULGATED UNDER THE SECURITIES ACT) OR (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3)
OR (7) PROMULGATED UNDER THE SECURITIES ACT) (AN INSTITUTIONAL "ACCREDITED
INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN
AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES
ACT, (2) AGREES THAT IT WILL NOT WITHIN THREE YEARS (OR SUCH SHORTER PERIOD
AS MAY THEN BE REQUIRED BY RULE 144(k) UNDER THE SECURITIES ACT) AFTER THE
ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THIS
SECURITY, EXCEPT (A) TO THE ISSUER THEREOF, OR ANY SUBSIDIARY THEREOF, (B)
TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A PROMULGATED
UNDER THE
-13-
SECURITIES ACT, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO
SUCH TRANSFER, FURNISHED (OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-
DEALER) TO THE WARRANT AGENT A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF
THIS SECURITY, (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 PROMULGATED UNDER THE SECURITIES ACT, (E) PURSUANT
TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 PROMULGATED UNDER
THE SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER
OF THIS SECURITY WITHIN THREE YEARS (OR SUCH SHORTER PERIOD AS MAY THEN BE
REQUIRED BY RULE 144(k) UNDER THE SECURITIES ACT) AFTER THE ORIGINAL
ISSUANCE OF THIS SECURITY, IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL
ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO
THE WARRANT AGENT AND THE ISSUER SUCH CERTIFICATIONS, WRITTEN LEGAL
OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR
IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S
UNDER THE SECURITIES ACT.
(ii) Upon any sale or transfer of a Warrant pursuant to Rule 144 under
the Securities Act in accordance with Section 1.07 hereof or under an
effective registration statement under the Securities Act:
(A) in the case of any Warrant that is a Definitive Warrant, the
Warrant Agent shall permit the holder thereof to exchange such
Warrant for a Definitive Warrant that does not bear the legends
set forth above and rescind any related restriction on the
transfer of such Warrant; and
(B) any such Warrant represented by a Global Warrant shall not be
subject to the provisions set forth in (i) above (such sales or
transfers being subject only to the provisions of Section 1.06(c)
hereof);
-14-
provided, however, that with respect to any request for an
-------- -------
exchange of a Warrant that is represented by a Global Warrant for
a Definitive Warrant that does not bear the legend set forth
above, which request is made in reliance upon Rule 144 under the
Securities Act, the holder thereof shall certify in writing to
the Warrant Agent that such request is being made pursuant to
Rule 144 under the Securities Act (such certification to be
substantially in the form of Exhibit B hereto).
---------
(h) Cancellation and/or Adjustment of a Global Warrant. At such time
--------------------------------------------------
as all beneficial interests in a Global Warrant have either been exchanged for
Definitive Warrants, redeemed, repurchased or cancelled, such Global Warrant
shall be returned to or retained and cancelled by the Warrant Agent. At any
time prior to such cancellation, if any beneficial interest in a Global Warrant
is exchanged for Definitive Warrants, redeemed, repurchased or cancelled, the
number of Warrants represented by such Global Warrant shall be reduced and an
endorsement shall be made on such Global Warrant, by the Warrant Agent to
reflect such reduction.
(i) Obligations with Respect to Transfers and Exchanges of Definitive
-----------------------------------------------------------------
Warrants.
--------
(i) To permit registrations of transfers and exchanges, the Company
shall execute, at the Warrant Agent's request, and the Warrant
Agent shall countersign Definitive Warrants and Global Warrants.
(ii) All Definitive Warrants and Global Warrants issued upon any
registration, transfer or exchange of Definitive Warrants or Global
Warrants shall be the valid obligations of the Company, entitled to
the same benefits under this Warrant Agreement as the Definitive
Warrants or Global Warrants surrendered upon the registration of
transfer or exchange.
(iii) Prior to due presentment for registration of transfer of any
Warrant, the Warrant Agent and the Company may deem and treat the
person in whose name any Warrant is registered as the absolute
owner of such Warrant, and neither the Warrant Agent nor the
Company shall be affected by notice to the contrary.
-15-
(j) Payment of Taxes. The Company will pay all documentary stamp
----------------
taxes attributable to the initial issuance of the Warrant Shares upon the
exercise of Warrants; provided, however, that the Company shall not be required
-------- -------
to pay any tax or taxes which may be payable in respect of any transfer involved
in the issue of any Warrant Certificates or any certificates for the Warrant
Shares in a name other than that of the registered holder of a Warrant
Certificate surrendered upon the exercise of a Warrant, and the Company shall
not be required to issue or deliver such Warrant Certificates unless or until
the person or persons requesting the issuance thereof shall have paid to the
Company the amount of such tax or shall have established to the satisfaction of
the Company that such tax has been paid.
SECTION 1.08. Lost, Stolen, Destroyed, Defaced or Mutilated Warrant
-----------------------------------------------------
Certificates. Upon receipt by the Company and the Warrant Agent (or any agent
------------
of the Company or the Warrant Agent, if requested by the Company) of evidence
satisfactory to them of the loss, theft, destruction, defacement, or mutilation
of any Warrant Certificate and of indemnity satisfactory to them and, in the
case of mutilation or defacement, upon surrender thereof to the Warrant Agent
for cancellation, then, in the absence of notice to the Company or the Warrant
Agent that such Warrant Certificate has been acquired by a bona fide purchaser
---- ----
or holder in due course, the Company shall execute, and an authorized signatory
of the Warrant Agent shall manually countersign and deliver, in exchange for or
in lieu of the lost, stolen, destroyed, defaced or mutilated Warrant
Certificate, a new Warrant Certificate representing a like number of Warrants,
bearing a number or other distinguishing symbol not contemporaneously
outstanding. Upon the issuance of any new Warrant Certificate under this
Section, the Company may require the payment from the holder of such Warrant
Certificate of a sum sufficient to cover any tax, stamp tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Warrant Agent and the
Registrar) in connection therewith. Every substitute Warrant Certificate
executed and delivered pursuant to this Section in lieu of any lost, stolen or
destroyed Warrant Certificate shall constitute an additional contractual
obligation of the Company, whether or not the lost, stolen or destroyed Warrant
Certificate shall be at any time enforceable by anyone, and shall be entitled to
the benefits of (but shall be subject to all the limitations of rights set forth
in) this Agreement equally and proportionately with any and all other Warrant
Certificates duly executed and delivered hereunder. The provisions of this
Section 1.08 are exclusive with respect to the replacement of lost, stolen,
destroyed, defaced or mutilated Warrant Certificates and shall
-16-
preclude (to the extent lawful) any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted to the contrary
with respect to the replacement of lost, stolen, destroyed, defaced or mutilated
Warrant Certificates.
The Warrant Agent is hereby authorized to countersign in accordance
with the provisions of this Agreement, and deliver the new Warrant Certificates
required pursuant to the provisions of this Section.
SECTION 1.09. Offices for Exercise, etc. So long as any of the
-------------------------
Warrants remain outstanding, the Company will designate and maintain in the
Borough of Manhattan, The City of New York: (a) an office or agency where the
Warrant Certificates may be presented for exercise, (b) an office or agency
where the Warrant Certificates may be presented for registration of transfer and
for exchange (including the exchange of temporary Warrant Certificates for
definitive Warrant Certificates pursuant to Section 1.05 hereof), and (c) an
office or agency where notices and demands to or upon the Company in respect of
the Warrants or of this Agreement may be served. The Company may from time to
time change or rescind such designation, as it may deem desirable or expedient;
provided, however, that an office or agency shall at all times be maintained in
-------- -------
the Borough of Manhattan, The City of New York, as provided in the first
sentence of this Section. The Company hereby designates the Warrant Agent at ▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, Window #2 in the Borough of Manhattan, The City of New
York (the "Warrant Agent Office"), as the initial agency maintained for each
--------------------
such purpose. In case the Company shall fail to maintain any such office or
agency or shall fail to give such notice of the location or of any change in the
location thereof, presentations and demands may be made and notice may be served
at the Warrant Agent Office and the Company appoints the Warrant Agent as its
agent to receive all such presentations, surrenders, notices and demands.
ARTICLE II
DURATION, EXERCISE OF WARRANTS AND EXERCISE PRICE
-------------------------------------------------
SECTION 2.01. Duration of Warrants. Subject to the terms and
--------------------
conditions established herein, the Warrants shall expire at 5:00 p.m., New York
City time, March 1, 2007 (the "Expiration Date"). Each Warrant may be exercised
---------------
on any Business Day (as defined below) on or after the Exercise Commencement
Date (as defined below) and on or prior to the close of business on the
Expiration Date.
-17-
Any Warrant not exercised before the close of business on the Expiration
Date shall become void, and all rights of the holder under the Warrant
Certificate evidencing such Warrant and under this Agreement shall cease.
"Business Day" shall mean any day on which (i) banks in New York City, (ii)
------------
the principal national securities exchange or market, if any, on which the
Common Stock is listed or admitted to trading and (iii) the principal national
securities exchange or market, if any, on which the Warrants are listed or
admitted to trading are open for business.
SECTION 2.02. Exercise, Exercise Price, Settlement and Delivery. (a)
-------------------------------------------------
Subject to the provisions of this Agreement, a holder of each Warrant shall have
the right to purchase from the Company on or after the occurrence of an Exercise
Event (the date of the occurrence of an Exercise Event, the "Exercise
--------
Commencement Date") and on or prior to the close of business on the Expiration
-----------------
Date fully paid, registered and nonassessable Warrant Shares, subject to
adjustment in accordance with Article V hereof, (x) in the case of the Initial
Warrants, 27.524674 and (y) in the case of the Contingent Warrants, according
to the following formula:
S x .08
----
A = .92
----------
N
where:
A = the number of shares each Contingent Warrant shall have the right to
purchase
S = the number of shares of Common Stock of the Company on a fully-diluted
basis on August 15, 1999 (such number will not include shares issuable upon
exercise of the Contingent Warrants)
N = the aggregate principal amount of Notes outstanding on August 15, 1999
divided by 1000
in each case at the purchase price of $.25 for each Warrant exercised (the
"Exercise Price"). The number of Warrant Shares for which a Warrant may be
---------------
exercised (the "Exercise Rate") shall be subject to adjustment from time to
-------------
time as set forth in Article V hereof.
-18-
"Change of Control" means the occurrence of one or more of the following
-----------------
events:
(i) any sale, lease, exchange, transfer or other disposition (in one
transaction or a series of related transactions) of all or substantially all of
the assets of the Company and the Restricted Subsidiaries, taken as a whole, to
any Person or group of related Persons for purposes of Section 13(d) of the
Exchange Act (a "Group") (whether or not otherwise in compliance with the
provisions of the Indenture) other than a Permitted Holder, in any such event
pursuant to a transaction in which, immediately after the consummation thereof
the Person or Persons owning a majority of the voting power of the Voting Stock
of the Company immediately prior to the consummation of such transaction, shall
not own directly or indirectly, a majority of the voting power of the Voting
Stock of the Person to whom such sale, lease, exchange, transfer or other
disposition has been made; or
(ii) during any consecutive two-year period, individuals who at the beginning
of such period constituted the Board of Directors of the Company (together with
any new directors who were nominated by a Permitted Holder or whose election to
such Board of Directors or whose nomination for election by the stockholders of
the Company was approved by a vote of a majority of the directors of the Company
then still in office who were either directors at the beginning of such period
of whose election or nomination for election was previously so approved) cease
for any reason to constitute a majority of the Board of Directors of the Company
then in office; or
(iii) any Person or Group (other than a Permitted Holder) is or becomes, by
purchase, tender offer, exchange offer, open market purchases, privately
negotiated purchases or otherwise, the "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, whether or not applicable, except that a
Person shall be deemed to have "beneficial ownership" of all securities that
such Person has the right to acquire, whether such right is exercisable
immediately or after the passage of time only), directly or indirectly, of more
than 50% of the total then outstanding voting power of the Voting Stock of the
Company (for the purpose of this clause (iii), such Person or Group will be
deemed to "beneficially own" (determined as aforesaid) the voting power of the
Voting Stock of a corporation (the "specified corporation") held by any other
corporation (the "parent corporation") if such Person or Group "beneficially
owns," directly or indirectly, a majority of the
-19-
voting power of the Voting Stock of such parent corporation); or
(iv) the Company consolidates with or merges into another Person and the
stockholders immediately prior to such merger or consolidation hold less than a
majority of the voting power of the Voting Stock of the resulting entity.
"Exercise Event" means, with respect to each Warrant, the date of the
--------------
earliest of: (1) March 1, 1998; (2) 30 days after the occurrence of a Change of
Control and (3) the date that is 180 days after the consummation of an initial
public offering of the Company's Common Stock.
"Permitted Holder" means any of (i) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, any spouse or
----------------
lineal descendant thereof, any trust the beneficiaries of which are any of the
foregoing or any affiliate of the foregoing, and (ii) SingTel and its
affiliates.
"Public Equity Offering" means a primary underwritten public offering
----------------------
(excluding any offering pursuant to Form S-8 under the Securities Act or any
other publicly registered offering pursuant to the Securities Act pertaining to
an issuance of shares of Common Stock or securities exercisable therefor under
any benefit plan, employee compensation plan, or employee or director stock
purchase plan) of Common Stock of the Company pursuant to an effective
registration statement under the Securities Act.
"Restricted Subsidiaries" means any present or future Subsidiary of the
-----------------------
Company which, as of the determination date, is not an Unrestricted Subsidiary.
"SingTel" means Singapore Telecommunications Limited, its successors and
-------
assigns.
"Subsidiary," with respect to any Person, means (i) any corporation of
----------
which at least a majority of the outstanding Voting Stock shall at the time be
owned, directly or indirectly, by such Person or (ii) any other Person of which
at least a majority of the outstanding Voting Stock is at the time, directly or
indirectly, owned by such Person.
"Person" means an individual, partnership, corporation, limited liability
------
company, unincorporated organization, trust or joint venture, or a governmental
agency or political subdivision thereof.
-20-
"Unrestricted Subsidiary" means a Subsidiary of the Company so designated
-----------------------
by a resolution adopted by the Board of Directors of the Company in accordance
with Section 4.15 of the Indenture.
"Voting Stock" means, with respect to any Person, securities of any class
------------
or classes of Capital Stock of such Person entitling the holders thereof
(whether at all times or only so long as no senior class of stock has voting
power by reason of any contingency) to vote in the election of members of the
Board of Directors of such Person.
(b) Warrants may be exercised on or after the Exercise Commencement Date by
(i) surrendering at any office or agency maintained for that purpose by the
Company pursuant to Section 1.09 (each a "Warrant Exercise Office") the Warrant
-----------------------
Certificate evidencing such Warrants with the form of election to purchase
Warrant Shares set forth on the reverse side of the Warrant Certificate (the
"Election to Exercise") duly completed and signed by the registered holder or
---------------------
holders thereof or by the duly appointed legal representative thereof or by a
duly authorized attorney, and in the case of a transfer, such signature shall be
guaranteed by an Eligible Guarantor Institution, and (ii) paying in full the
Exercise Price for each such Warrant exercised and any other amounts required to
be paid pursuant to Section 1.07(j) hereof. Each Warrant may be exercised only
in whole.
(c) Simultaneously with the exercise of each Warrant, payment in full of
the Exercise Price shall be made in cash or by certified or official bank check
to be delivered to the office or agency where the Warrant Certificate is being
surrendered. No payment or adjustment shall be made on account of any dividends
on the Warrant Shares issued upon exercise of a Warrant.
(d) Upon such surrender of a Warrant Certificate and payment and collection
of the Exercise Price at any Warrant Exercise Office (other than any Warrant
Exercise Office that also is an office of the Warrant Agent), such Warrant
Certificate and payment shall be promptly delivered to the Warrant Agent. The
"Exercise Date" for a Warrant shall be the date when all of the items referred
--------------
to in the first sentence of paragraphs (b) and (c) of this Section 2.02 are
received by the Warrant Agent at or prior to 11:00 a.m., New York City time, on
a Business Day and the exercise of the Warrants will be effective as of such
Exercise Date. If any items referred to in the first sentence of paragraphs (b)
and (c) are received after 11:00 a.m., New York City time, on a Business Day,
the exercise of the Warrants to which such item
-21-
relates will be effective on the next succeeding Business Day. Notwithstanding
the foregoing, in the case of an exercise of Warrants on the Expiration Date (as
defined in Section 2.01), if all of the items referred to in the first sentence
of paragraphs (b) and (c) are received by the Warrant Agent at or prior to 5:00
p.m., New York City time, on such Expiration Date, the exercise of the Warrants
to which such items relate will be effective on the Expiration Date.
(e) Upon the exercise of a Warrant in accordance with the terms hereof, the
receipt of a Warrant Certificate and payment of the Exercise Price, the Warrant
Agent shall: (i) cause an amount equal to the Exercise Price to be paid to the
Company by crediting the same to the account designated by the Company in
writing to the Warrant Agent for that purpose; (ii) advise the Company
immediately by telephone of the amount so deposited to the Company's account and
promptly confirm such telephonic advice in writing; and (iii) as soon as
practicable, advise the Company in writing of the number of Warrants exercised
in accordance with the terms and conditions of this Agreement and the Warrant
Certificates, the instructions of each exercising holder of the Warrant
Certificates with respect to delivery of the Warrant Shares to which such holder
is entitled upon such exercise, and such other information as the Company shall
reasonably request.
(f) Subject to Section 5.02 hereof and the terms and provisions of the
Warrant Shares Registration Rights Agreement, as soon as practicable after the
exercise of any Warrant or Warrants in accordance with the terms hereof, the
Company shall issue or cause to be issued to or upon the written order of the
registered holder of the Warrant Certificate evidencing such exercised Warrant
or Warrants, a certificate or certificates evidencing the Warrant Shares to
which such holder is entitled, in fully registered form, registered in such name
or names as may be directed by such holder pursuant to the Election to Exercise,
as set forth on the reverse of the Warrant Certificate. Such certificate or
certificates evidencing the Warrant Shares shall be deemed to have been issued
and any persons who are designated to be named therein shall be deemed to have
become the holder of record of such Warrant Shares as of the close of business
on the Exercise Date.
SECTION 2.03. Cancellation of Warrant Certificates. In the event the
------------------------------------
Company shall purchase or otherwise acquire Warrants, the Warrant Certificates
evidencing such Warrants may thereupon be delivered to the Warrant Agent, and if
so delivered, shall at the Company's written instruction be canceled by it and
retired. The Warrant Agent shall cancel all Warrant Certificates properly
-22-
surrendered for exchange, substitution, transfer or exercise. The Warrant Agent
shall deliver such canceled Warrant Certificates to the Company.
ARTICLE III
OTHER PROVISIONS RELATING TO
RIGHTS OF HOLDERS OF WARRANTS
-----------------------------
SECTION 3.01. Enforcement of Rights. (a) Notwithstanding any of the
---------------------
provisions of this Agreement, any holder of any Warrant Certificate, without the
consent of the Warrant Agent, the holder of any Warrant Shares or the holder of
any other Warrant Certificate, may, in and for his own behalf, enforce, and may
institute and maintain any suit, action or proceeding against the Company
suitable to enforce, his right to exercise the Warrant or Warrants evidenced by
his Warrant Certificate in the manner provided in such Warrant Certificate and
in this Agreement.
(b) Neither the Warrants nor any Warrant Certificate shall entitle the
holders thereof to any of the rights of a holder of Warrant Shares, including,
without limitation, the right to vote or to receive any dividends or other
payments or to consent or to receive notice as stockholders in respect of the
meetings of stockholders or for the election of directors of the Company or any
other matter, or any rights whatsoever as stockholders of the Company.
ARTICLE IV
CERTAIN COVENANTS OF THE COMPANY
--------------------------------
SECTION 4.01. Payment of Taxes. The Company will pay all documentary
----------------
stamp taxes attributable to the initial issuance of Warrants and of the Warrant
Shares upon the exercise of Warrants; provided, however, that the Company shall
-------- -------
not be required to pay any tax or other governmental charge which may be payable
in respect of any transfer or exchange of any Warrant Certificates or any
certificates for Warrant Shares in a name other than the registered holder of a
Warrant Certificate surrendered upon the exercise of a Warrant. In any such
case, no transfer or exchange shall be made unless or until the person or
persons requesting issuance thereof shall have paid to the Company the amount of
such tax or other governmental charge or shall have established to the
satisfaction of the Company that such tax or other governmental charge has been
paid or an exemption is available therefrom.
-23-
SECTION 4.02. Compliance with the Warrant Shares Registration Rights
------------------------------------------------------
Agreement. Prior to the occurrence of an Exercise Event the Company will take
---------
all such action as is necessary to cause the offer and sale by the Company of
the Warrant Shares issuable upon exercise of the Warrants to be registered or
otherwise qualified under the provisions of the Securities Act and pursuant to
all applicable state securities laws and to provide for the issuance of all
Warrant Shares delivered upon exercise of the Warrants pursuant to an effective
registration statement under the Securities Act, as provided in the Warrant
Shares Registration Rights Agreement. The Warrant Agent shall have no duty to
monitor when such registration or qualification is necessary nor shall the
Warrant Agent be responsible for the Company's failure to comply with this
Section 4.02.
SECTION 4.03. Rules 144 and 144A. The Company covenants that it will
------------------
file the reports required to be filed by it under the Securities Act and the
Exchange Act and the rules and regulations adopted by the Securities and
Exchange Commission thereunder in a timely manner in accordance with the
requirements of the Securities Act and the Exchange Act and, if at any time the
Company is not required to file such reports, it will, upon the request of any
holder or beneficial owner of Warrants, make available such information
necessary to permit sales pursuant to Rule 144A under the Securities Act. The
Company further covenants that it will take such further action as any holder or
beneficial owner of Warrants may reasonably request, all to the extent required
from time to time to enable such holder or beneficial owner to sell Warrants
without registration under the Securities Act within the limitation of the
exemptions provided by (a) Rule 144(k) and Rule 144A under the Securities Act,
as such Rules may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the Securities and Exchange Commission.
SECTION 4.04. Repurchase of Warrants and Warrant Shares. (i) (a) In
-----------------------------------------
the event that a Public Equity Offering shall not have occurred on or prior to
March 1, 2002 resulting in gross proceeds to the Company of at least $35.0
million, the Company shall give written notice (the "Notice of Election Right")
------------------------
to the holders of Warrants or Warrant
-24-
Shares within 60 days after March 1, 2002 of the holders' right to the election
described herein, together with a certificate of election (the "Certificate of
--------------
Election") substantially in the form of Exhibit D to this Agreement, which
--------- ---------
notice shall describe with reasonable detail the holders' right to election.
Within 60 days after receipt of such Notice of Election Right, the election (as
evidenced by the choice elected in the Notice of Election Right) of the holders
of Warrants or Warrant Shares who complete and return their Certificates of
Election to the Warrant Agent (the "Electing Holders") shall be deemed to be
----------------
notice (which notice shall be irrevocable) (such notice, the "Election Notice"
---------------
and the date the Election Notice is given, the "Notice Date") to the Company of
------------
the holders' election to require the Company to offer to purchase all of such
Electing Holders' Warrants or Warrant Shares at a price per Warrant or Warrant
Share, as applicable (the "Warrant Purchase Price" and "Warrant Share Purchase
---------------------- ----------------------
Price", respectively), equal to the fair market value thereof as determined in
------
accordance with the procedures described below, on the Warrant Purchase Date (as
defined below).
(b) The Company shall, in connection with sending the Notice of Election
Right, select an independent investment banking or appraisal firm of national
standing (an "Independent Financial Expert") and cause such Independent
----------------------------
Financial Expert to deliver to the Company a written report (the "First
-----
Valuation Report") stating the methods of valuation considered or used and the
----------------
fair market value of each of the Warrants and Warrant Shares, as applicable, as
of December 31, 2001 (the "Valuation Date") and containing a statement as to the
--------------
nature and scope of the examination or investigation upon which the
determination of fair market value was made and the factors and bases underlying
such determination.
(c) In the Election Notice the Electing Holders holding not less than 66-
2/3% of the Warrants or Warrant Shares held by the Electing Holders may elect to
appoint a second Independent Financial Expert to make a determination of the
fair market value of the Warrants and Warrant Shares as of the Valuation Date.
If they so elect, the Electing Holders who hold a majority of the Warrants and
Warrant Shares held by the Electing Holders shall cause such Independent
Financial Expert, within 45 days of such election, to deliver to the Company
(with a copy to the Warrant Agent) a written report (the "Second Valuation
----------------
Report") of the fair market value of each of the Warrants and Warrant Shares as
------
of the Valuation Date substantially similar in content as to methods, nature and
scope of examination and factors and bases underlying valuation and disclosure
thereof to the First Valuation Report.
(d) The Company shall have ten Business Days after receipt of the Second
Valuation Report to object to the fair market value of the Warrants and Warrant
Shares as set forth in the Second Valuation Report. If the Company does not
object, such fair market value shall be the Warrant Purchase Price or Warrant
Shares Purchase Price, as applicable. If the Company does object, it shall give
written notice thereof to the holders of the Warrants, the Warrant Shares and
the Warrant Agent. The Electing Holders who
-25-
hold a majority of the Warrants held by the Electing Holders and the Company
shall, within 20 Business Days after the Company so objects, select a third
Independent Financial Expert mutually acceptable to both parties to prepare a
written report (the "Third Valuation Report") of its determination of the fair
----------------------
market value of the Warrants and Warrant Shares as of the Valuation Date, which
report shall be delivered to the Company and the holders of the Warrants and
Warrant Shares (with a copy to the Warrant Agent) within 30 days after the
selection of such Independent Financial Expert. Such valuation shall contain a
statement as to the nature and scope of the examination or investigation upon
which the determination of fair market value was made and the factors and bases
underlying such determination. If the holders and the Company cannot agree to
the selection of an Independent Financial Expert, the New York office of the
following firms (or their successor firms) shall serve as the Independent
Financial Expert in the following order of priority; provided, however, that
-------- -------
such firm has not, for the prior three years, rendered professional services to
the Company or its Affiliates:
(1) Price Waterhouse & Co.
(2) Deloitte & Touche
(3) Ernst & Young
(4) Coopers & ▇▇▇▇▇▇▇
(e) The fair market value determined in the Third Valuation Report shall
constitute the Warrant Purchase Price or Warrant Shares Purchase Price, as
applicable; provided, however, that if the Warrant Purchase Price or Warrant
-------- -------
Shares Purchase Price, as applicable, contained in the Third Valuation Report is
more than the higher of the first two valuations, the higher of the first two
valuations shall constitute the Warrant Purchase Price or Warrant Shares
Purchase Price, as applicable; provided, further, however, that if the Warrant
-------- ------- -------
Purchase Price or Warrant Shares Purchase Price, as applicable, contained in the
Third Valuation Report is less than the lower of the first two valuations, the
lower of the first two valuations shall constitute the Warrant Purchase Price or
Warrant Shares Purchase Price, as applicable. If any Independent Financial
Expert becomes aware of any material changes since the Valuation Date, after
reasonable inquiry with respect thereto, in the business or financial condition
or prospects of the Company and its Subsidiaries, such Independent Financial
Expert shall specify such material changes in its written report and shall
revise its valuation as it deems appropriate. The fees and other costs of each
of the first two Independent Financial Experts shall be borne by the party
appointing such Independent Financial Expert, and the fees and other costs of
the third
-26-
Independent Financial Expert shall be shared equally by the Company and the
holders of Warrants and Warrant Shares; provided, however, that all indemnities
-------- -------
in respect of any Independent Financial Expert shall be for the account of the
Company.
(f) The Company shall be obligated to purchase for cash the Warrants or
Warrant Shares at the Warrant Purchase Price or Warrant Shares Purchase Price,
respectively.
(ii) Within 20 Business Days after the Warrant Purchase Price or Warrant
Shares Purchase Price, as applicable, has been determined in accordance with any
required offer to purchase Warrants and Warrant Shares, the Company shall
provide notice of its offer to purchase (the "Purchase Offer") to the holders of
--------------
Warrants and Warrant Shares by mailing by first class mail a notice of such
offer (the "Purchase Notice") to their addresses as set forth in the Warrant
---------------
Register with a copy to the Warrant Agent. The date of the mailing of the
Purchase Notice is hereafter called the "Purchase Notice Date." The Purchase
--------------------
Offer must remain open for 20 Business Days after the Purchase Notice Date (or
such longer period as may be required by law) and the date set for the purchase
of the Warrants and Warrant Shares shall be the "Warrant Purchase Date." The
---------------------
notice, which shall govern the terms of the Purchase Offer, shall include such
disclosures as are required by law and shall state:
(a) that the Warrant Purchase Date has been determined, which shall be a
Business Day, specified in such notice, that is not earlier than 30 days or
later than 60 days from the date such notice is mailed;
(b) that Holders electing to have Warrants or Warrant Shares, as applicable,
purchased pursuant to a Purchase Offer will be required to surrender their
Warrants or Warrant Shares to the Warrant Agent at the address specified in the
notice prior to 5:00 p.m., New York City time, on the Warrant Purchase Date
with, in the case of the Warrants, the "Option of Holder to Elect Purchase" on
the reverse thereof completed and must complete any form letter of transmittal
proposed by the Company and be completed correctly by such Holder and be
acceptable to the Warrant Agent;
(c) that Holders of Warrants or Warrant Shares will be entitled to withdraw
their election if the Paying Agent receives, not later than 5:00 p.m., New York
City time, on the Business Day prior to the Warrant or Warrant Shares Purchase
Date, a telegram, telex, facsimile transmission or letter
-27-
setting forth the name of the Holder, the number of Warrants or Warrant Shares
the Holders delivered for purchase, the Warrant Certificate number (if any), in
the case of the Warrants, or Warrant Share certificate number, if any, in the
case of the Warrant Shares, and a statement that such Holder is withdrawing its
election to have such Warrants or Warrant Shares, as applicable, purchased;
(d) that Holders whose Warrants or Warrant Shares are purchased only in part
will be issued Warrant Certificates or Warrant Share Certificates, as applicable
representing the number of unpurchased Warrants or Warrant Shares;
(e) the instructions that Holders must follow in order to tender their
Warrants or Warrant Shares; and
(f) information concerning the business of the Company, the most recent
annual and quarterly reports of the Company filed with the SEC pursuant to the
Exchange Act (or, if the Company is not then required to file any such reports
with the SEC, the comparable reports prepared pursuant to Section 10.08 of the
Indenture as in effect on the date hereof), a description of material
developments in the Company's business, information with respect to pro forma
---------
historical financial information after giving effect to such Purchase Offer and
such other information concerning the circumstances and relevant facts regarding
such Purchase Offer as would be material to a Holder of Warrants or Warrant
Shares in connection with the decision of such Holder as to whether or not it
should tender Warrants pursuant to the Purchase Offer.
On the Warrant Purchase Date, the Company will (i) accept for payment all
Warrants or Warrant Shares or portions thereof tendered pursuant to the Purchase
Offer, subject to the limitations set forth herein, (ii) deposit with the
Warrant Agent cash in an amount equal to the Warrant Purchase Price and Warrant
Shares Purchase Price for all Warrants or Warrant Shares or portions thereof
accepted for payment, and (iii) deliver or cause to be delivered to the Warrant
Agent all Warrants tendered pursuant to the Purchase Offer. If less than all
Warrants tendered pursuant to the Purchase Offer are accepted for payment with
cash by the Company for any reason consistent with this Warrant Agreement,
selection of the Warrants or Warrant Shares to be purchased by the Company shall
be on a pro rata basis. The Warrant Agent shall promptly mail to each Holder of
--------
Warrants or Warrant Shares or portions thereof accepted for payment the Warrant
Purchase Price or Warrant Shares Purchase Price. The Warrant Agent shall
promptly
-28-
countersign and mail to such Holder of Warrants accepted for payment in part a
new Warrant Certificate representing the number of any unpurchased Warrants, and
any Warrants not accepted for payment shall be promptly returned to the Holder
of such Warrants. The Company shall promptly issue and mail to such Holder of
Warrant Shares accepted for payment in part a new Warrant Share Certificate
representing the number of any unpurchased Warrant Shares, and any Warrant
Shares not accepted for payment shall be promptly returned to the Holder of such
Warrant Shares.
The Company will comply with the applicable tender offer rules, including
the requirements of Rule 14e-1 under the Exchange Act, and all other applicable
securities laws and regulations in connection with any Purchase Offer and will
be deemed not to be in violation of any of its covenants herein to the extent
such compliance is in conflict with such covenants.
SECTION 4.05. Reservation of Warrant Shares. The Company will at all
-----------------------------
times reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued Common Stock, for the purpose of
enabling it to satisfy any obligation to issue Warrant Shares upon exercise of
Warrants, the maximum number of shares of Common Stock which may then be
deliverable upon the exercise of all outstanding Warrants.
Before taking any action which would cause an adjustment pursuant to
Section 5.01 reducing the Exercise Price below the then par value of the Warrant
Shares, the Company will take any and all corporate action which may be
necessary in order that the Company may validly and legally issue fully paid and
nonassessable Warrant Shares at the Exercise Price as so adjusted.
SECTION 4.06. Obtaining of Governmental Approvals. The Company will from
-----------------------------------
time to time take all action required to be taken by it which may be necessary
to obtain and keep effective any and all permits, consents and approvals of
governmental agencies and authorities and securities acts filings under United
States Federal and State laws, and the rules and regulations of all stock
exchanges on which the Warrants are listed, if any, which may be or become
requisite in connection with the issuance, sale, transfer, and delivery of the
Warrant Certificates, the exercise of the Warrants or the issuance, sale,
transfer and delivery of the Warrant Shares issued upon exercise of the
Warrants.
ARTICLE V
ADJUSTMENTS
-----------
-29-
SECTION 5.01. Adjustment of Exercise Rate; Notices. The Exercise Rate is
------------------------------------
subject to adjustment from time to time as provided in this Section.
(a) Adjustment for Change in Capital Stock. If, after the date hereof, the
--------------------------------------
Company:
(i) pays a dividend or makes a distribution on its Common Stock in shares of
its Common Stock;
(ii) subdivides its outstanding shares of Common Stock into a greater number
of shares;
(iii) combines its outstanding shares of Common Stock into a smaller number
of shares;
(iv) pays a dividend or makes a distribution on its Common Stock in shares of
its Capital Stock (as defined below) (other than Common Stock or rights,
warrants, or options for its Common Stock to the extent such issuance or
distribution is covered by Section 5.03); or
(v) issues by reclassification of its Common Stock any shares of its Capital
Stock (other than rights, warrants or options for its Common Stock);
then the Exercise Rate in effect immediately prior to such action shall be
adjusted so that the holder of a Warrant thereafter exercised may receive the
number of shares of Capital Stock of the Company which such holder would have
owned immediately following such action if such holder had exercised the Warrant
immediately prior to such action or immediately prior to the record date
applicable thereto, if any.
The adjustment shall become effective immediately after the record date in
the case of a dividend or distribution and immediately after the effective date
in the case of a subdivision, combination or reclassification. In the event
that such dividend or distribution is not so paid or made or such subdivision,
combination or reclassification is not effected, the Exercise Rate
-30-
shall again be adjusted to be the Exercise Rate which would then be in effect if
such record date or effective date had not been so fixed.
If after an adjustment a holder of a Warrant upon exercise of such Warrant
may receive shares of two or more classes of Capital Stock of the Company, the
Exercise Rate shall thereafter be subject to adjustment upon the occurrence of
an action taken with respect to any such class of Capital Stock as is
contemplated by this Article V with respect to the Common Stock, on terms
comparable to those applicable to Common Stock in this Article V.
(b) Adjustment for Rights Issue or Sale of Common Stock Below Current
-----------------------------------------------------------------
Market Value. If, at any time or from time to time, after the date hereof, the
------------
Company (i) distributes any rights, warrants or options to holders of its Common
Stock entitling them to purchase shares of Common Stock (other than securities
of the Company pursuant to "poison pills" to the extent such issuance or
distribution is covered by paragraph (h) below) at a price per share less than
the Current Market Value as of the Time of Determination (as defined in
paragraph (q) of this Section 5.01) or (ii) sells any Common Stock or any
securities convertible into or exchangeable or exercisable for the Common Stock
(other than pursuant to (1) the exercise of the Warrants, (2) any options,
warrants or rights outstanding as of the date of this Agreement, (3) without
limiting any options, warrants or rights outstanding pursuant to the immediately
preceding clause (2), any directors' plans and employee stock option or purchase
plans approved by the Company's Board of Directors, (4) the issuance of Common
Stock or options, warrants or rights to persons or entities providing financing
to the Company or any of its subsidiaries as a condition to the provision of
such financing, (5) any registered public offering, or (6) any security
convertible into, or exchangeable or exercisable for, the Common Stock as to
which the issuance thereof has previously been the subject of any required
adjustment pursuant to this Article V) at a price per share less than the
Current Market Value immediately prior to any adjustment required pursuant to
this Article V, the Exercise Rate shall be adjusted in accordance with the
formula:
E' = E x (O + N)
----------------------------
(O + (N x P/M))
where:
E' = the adjusted Exercise Rate;
E = the current Exercise Rate;
O = the number of shares of Common Stock outstanding on the record date for
the distribution to which this paragraph (b) is being applied or on the
date of sale of Common Stock at a price per share less than (i) the
Current
-31-
Market Value immediately prior to any adjustment to which this paragraph
(b) applies, as the case may be;
N = the number of additional shares of Common Stock issuable upon exercise of
all rights, warrants and options so distributed or the number of shares of
Common Stock so sold or the maximum stated number of shares of Common
Stock issuable upon the conversion, exchange, or exercise of any such
convertible, exchangeable or exercisable securities, as the case may be;
P = the price per share of the additional shares of Common Stock upon the
exercise of any such rights, options or warrants so distributed or
pursuant to any such convertible, exchangeable or exercisable securities
so sold or the sale price of the shares so sold, as the case may be; and
M = the Current Market Value as of the Time of Determination or at the time of
sale, as the case may be, minus, with respect to a distribution of rights,
-----
warrants or options, in case (i) any other distribution has occurred to
which paragraph (a)(iv) applies or (ii) any other distribution has
occurred to which paragraph (c) applies, and with respect to which, in
either case, (x) the record date shall occur on or before the record date
for the distribution to which this paragraph (b) applies and (y) the Ex-
Dividend Time shall occur on or after the date of the Time of
Determination for the distribution to which this paragraph (b) applies,
the fair market value (on the record date for the distribution to which
this paragraph (b) applies) of (1) the Capital Stock of the Company
distributed in respect of each share of Common Stock in such paragraph
(a)(iv) distribution and (2) the assets of the Company or debt securities
or any rights, warrants or options to purchase securities of the Company
distributed in respect of each share of Common Stock in such paragraph (c)
distribution.
The Board of Directors of the Company shall reasonably and in good faith
determine fair market values for the purposes of this paragraph (b), which
determination shall be conclusive absent manifest error.
The adjustment shall become effective immediately after the record date for
the determination of stockholders entitled to receive the rights, warrants or
options to which this paragraph (b)
-32-
applies or upon consummation of the sale of Common Stock, as the case may be. To
the extent that shares of Common Stock are not delivered after the expiration of
such rights or warrants, the Exercise Rate shall be readjusted to the Exercise
Rate which would otherwise be in effect had the adjustment made upon the
issuance of such rights or warrants been made on the basis of delivery of only
the number of shares of Common Stock actually delivered. In the event that such
rights or warrants are not so issued, the Exercise Rate shall again be adjusted
to be the Exercise Rate which would then be in effect if such date fixed for
determination of stockholders entitled to receive such rights or warrants had
not been so fixed.
No adjustment shall be made under this paragraph (b) if the application of
the formula stated above in this paragraph (b) would result in a value of E'
that is lower than the value of E.
(c) Adjustment for Other Distributions. If, after the date hereof, the
----------------------------------
Company distributes to holders of its Common Stock any of its assets or debt
securities or any rights, warrants or options to purchase Common Stock of the
Company (including securities or cash, but excluding (i) distributions that
would be permitted by the Company's debt agreements (including the Indenture)
and (ii) distributions of Capital Stock referred to in paragraph (a) and
distributions of rights, warrants or options referred to in paragraph (b), the
Exercise Rate shall be adjusted in accordance with the formula:
E' = E x M
---
M-F
where:
E' = the adjusted Exercise Rate;
E = the current Exercise Rate;
M = the Current Market Value, minus, in case any other distribution has
-----
occurred to which paragraph (a)(iv) applies, with respect to which (i) the
record date shall occur on or before the record date for the distribution
to which this paragraph (c) applies and (ii) the Ex-Dividend Time shall
occur on or after the date of the Time of Determination for the
distribution to which this paragraph (c) applies, the fair market value (on
the record date for the distribution to which this paragraph (c) applies)
of any Capital Stock of the Company
-33-
distributed in respect of each share of Common Stock in such paragraph
(a)(iv) distribution; and
F = the fair market value (on the record date for the distribution to which
this paragraph (c) applies) of the assets, securities, rights, warrants or
options to be distributed in respect of each share of Common Stock in the
distribution to which this paragraph (c) is being applied (including, in
the case of cash dividends or other cash distributions giving rise to an
adjustment, all such cash distributed concurrently).
The Board of Directors of the Company shall reasonably and in good faith
determine by a board resolution, the fair market value of all property (other
than cash) distributed for the purposes of this paragraph (c).
The adjustment shall become effective immediately after the record date for
the determination of stockholders entitled to receive the distributions to which
this paragraph (c) applies. In the event that such distribution is not so made,
the Exercise Rate shall again be adjusted to be the Exercise Rate which would
then be in effect if such record date had not been so fixed.
For purposes of this paragraph (c), the term "Extraordinary Cash Dividend"
---------------------------
shall mean any cash dividend with respect to the Common Stock the amount of
which, together with the aggregate amount of cash dividends on the Common Stock
to be aggregated with such cash dividend in accordance with the provisions of
this paragraph, equals or exceeds the threshold percentages set forth in item
(i) or (ii) below:
(i) If, upon the date prior to the Ex-Dividend Time with respect to a cash
dividend on the Common Stock, the aggregate amount of such cash dividend
together with the amounts of all cash dividends on the Common Stock with Ex-
Dividend Times occurring in the 85 consecutive day period ending on the date
prior to the Ex-Dividend Time with respect to the cash dividend to which this
provision is being applied, equals or exceeds 6.0% on a per share basis of the
average of the Current Market Values during the period beginning on the date
after the first such Ex-Dividend Time in such period and ending on the date
immediately prior to the Ex-Dividend Time with respect to the cash dividend to
which this provision is being applied (except that if no other cash dividend has
had an Ex-Dividend Time occurring in such period, the period for calculating the
average of the Current Market Values shall be
-34-
the period commencing 85 days prior to the date immediately prior to the Ex-
Dividend Time with respect to the cash dividend to which this provision is being
applied), such cash dividend together with each other cash dividend with an Ex-
Dividend Time occurring in such 85 day period shall be deemed to be an
Extraordinary Cash Dividend and for the purposes of applying the formula set
forth above in this paragraph (c), the value of "F" shall be equal to (w) the
aggregate amount of such cash dividend which constitutes an Extraordinary Cash
Dividend minus (x) the aggregate amount of such other cash dividends with Ex-
-----
Dividend Times occurring in such period for which a prior adjustment in the
Exercise Rate was previously made under this paragraph (c).
(ii) If, upon the date prior to the Ex-Dividend Time with respect to a cash
dividend on the Common Stock, the aggregate amount of such cash dividend
together with the amounts of all cash dividends on the Common Stock with Ex-
Dividend Times occurring in the 365 consecutive day period ending on the date
immediately prior to the Ex-Dividend Time with respect to the cash dividend to
which this provision is being applied equals or exceeds on a per share basis 20%
of the average of the Current Market Values during the period beginning on the
date after the first such Ex-Dividend Time in such period and ending on the date
immediately prior to the Ex-Dividend Time with respect to the cash dividend to
which this provision is being applied (except that if no other cash dividend has
had an Ex-Dividend Time occurring in such period, the period for calculating the
average of the Current Market Values shall be the period commencing 365 days
prior to the date immediately prior to the Ex-Dividend Time with respect to the
cash dividend to which this provision is being applied), such cash dividend
together with each other cash dividend with an Ex-Dividend Time occurring in
such 365 day period shall be deemed to be an Extraordinary Cash Dividend and for
purposes of applying the formula set forth above in this paragraph (c), the
value of "F" shall be equal to (y) the aggregate amount of such cash dividend
together with amounts of the other cash dividends with Ex-Dividend Times
occurring in such period minus (z) the aggregate amount of such other cash
-----
dividends with Ex-Dividend Times occurring in such period for which a prior
adjustment in the Exercise Rate was previously made under this paragraph (c).
In making the determination required by items (i) and (ii) above, the
amount of cash dividends paid on a per share basis and the average of the
Current Market Value, in each case during
-35-
the period specified in item (i) or (ii) above, as applicable, shall be
appropriately adjusted to reflect the occurrence during such period of any event
described in paragraph (a).
In the event that, with respect to any distribution to which this paragraph
(c) would otherwise apply, "F" is equal to or greater than "M", then the
adjustment provided by this paragraph (c) shall not be made and in lieu thereof
the provisions of paragraph (h) shall apply to such distribution.
(d) When Adjustment May Be Deferred. No adjustment in the Exercise Rate
-------------------------------
need be made unless the adjustment would require a change of at least 1.0% in
the Exercise Rate. Any adjustments that are not made shall be carried forward
and taken into account in any subsequent adjustment. However, with respect to a
dividend of the Company's Capital Stock (or rights to acquire such Capital
Stock) adjustments can be deferred only until, and must be made by, the earlier
of (i) three years from the date of such stock dividend and (ii) the date as of
which the aggregate stock dividends for which adjustments have not been made
total at least 1.0% of the then issued and outstanding Common Stock with respect
to which such stock dividends were distributed.
All calculations under this Article V shall be made to the nearest
1/1,000th of a share.
(e) When No Adjustment Required. No adjustment need be made for rights to
---------------------------
purchase Common Stock pursuant to a Company plan for reinvestment of dividends
or interest.
No adjustment need be made for a change in the par value or no par value of
the Common Stock.
(f) Notice of Adjustment. Whenever the Exercise Rate is adjusted, the
--------------------
Company shall promptly mail to holders of Warrants at the addresses appearing on
the Warrant Register a notice of the adjustment. The Company shall file with
the Warrant Agent and any other Registrar such notice and a certificate from the
Company's independent public accountants briefly stating the facts requiring the
adjustment and the manner of computing it. The certificate shall be conclusive
evidence that the adjustment is correct. Neither the Warrant Agent nor any such
Registrar shall be under any duty or responsibility with respect to any such
certificate except to exhibit the same during normal business hours to any
holder desiring inspection thereof.
(g) Notice of Certain Transactions. If:
------------------------------
-36-
(i) the Company takes any action that would require an adjustment in the
Exercise Rate pursuant to paragraphs (a), (b) or (c) (unless no adjustment is to
occur pursuant to paragraph (e)); or
(ii) the Company takes any action that would require a supplement to the
Warrant Agreement pursuant to paragraph (h); or
(iii) there is a liquidation or dissolution of the Company;
then the Company shall mail to holders of Warrants at the addresses appearing on
the Warrant Register and file with the Warrant Agent and any other Registrar a
notice stating the proposed record date for a dividend or distribution or the
proposed effective date of a subdivision, combination, reclassification,
consolidation, sale, merger, binding share exchange, transfer, liquidation or
dissolution, as the case may be. The Company shall file and give the notice at
least 15 days before such date. Failure to file or give the notice or any
defect in it shall not affect the validity of the transaction.
(h) Reorganization of Company; Special Distributions. If the Company, in a
------------------------------------------------
single transaction or through a series of related transactions, consolidates
with or merges with or into any other person or transfers (by lease, assignment,
sale or otherwise) all or substantially all of its properties and assets to
another person or group of affiliated persons (other than a sale of all or
substantially all of the assets of the Company in a transaction in which the
holders of Common Stock immediately prior to such transaction do not receive
securities, cash, or other assets of the Company or any other person) or is a
party to a merger or binding share exchange which reclassifies or changes its
outstanding Common Stock, the Company covenants that prior to entering into such
transaction, the person obligated to deliver securities, cash or other assets
upon exercise of Warrants will enter into a supplemental warrant agreement. If
the issuer of securities deliverable upon exercise of Warrants is an affiliate
of the successor Company, that issuer shall join in the supplemental warrant
agreement.
The supplemental warrant agreement shall provide that the holder of a
Warrant may exercise it for the kind and amount of securities, cash or other
assets which such holder would have received immediately after the
consolidation, merger, binding share exchange or transfer if such holder had
exercised the Warrant
-37-
immediately before the effective date of the transaction, assuming (to the
extent applicable) that such holder (i) was not a constituent person or an
affiliate of a constituent person to such transaction; (ii) made no election
with respect thereto; and (iii) was treated alike with the plurality of non-
electing holders. The supplemental warrant agreement shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article V. The successor Company shall mail to
holders of Warrants at the addresses appearing on the Warrant Register a notice
briefly describing the supplemental warrant agreement.
If the Company makes a distribution to all holders of its Common Stock of
any of its assets, or debt securities or any rights, warrants or options to
purchase securities of the Company that, but for the provisions of the last
paragraph of paragraph (c), would result in an adjustment in the Exercise Rate
pursuant to the provisions of paragraph (c), then, from and after the record
date for determining the holders of Common Stock entitled to receive the
distribution, a holder of a Warrant that exercises such Warrant in accordance
with the provisions of this Warrant Agreement will upon such exercise be
entitled to receive, in addition to the Warrant Shares into which the Warrant is
exercisable, the kind and amount of securities, cash or other assets comprising
the distribution that such holder would have received if such holder had
exercised the Warrant immediately prior to the record date for determining the
holders of Common Stock entitled to receive the distribution (whether or not the
Warrants were then exercisable hereunder).
If this paragraph (h) applies, neither paragraph (a), (b), (c) nor (d)
shall apply.
(i) Warrant Agent's Adjustment Disclaimer. The Warrant Agent has no duty
-------------------------------------
to determine when an adjustment under this Article V should be made, how it
should be made or what it should be. The Warrant Agent has no duty to determine
whether a supplemental warrant agreement under paragraph (h) need be entered
into or whether any provisions of any supplemental warrant agreement are
correct. The Warrant Agent shall not be accountable for and makes no
representation as to the validity or value of any securities or assets issued
upon exercise of Warrants. The Warrant Agent shall not be responsible for the
Company's failure to comply with this Article V.
(j) Adjustment for Tax Purposes. The Company may make such increases
---------------------------
in the Exercise Rate, in addition to those otherwise
-38-
required by this Section, as it considers to be advisable in order that any
event treated for Federal income tax purposes as a dividend of stock or stock
rights shall not be taxable to the recipients.
(k) Specificity of Adjustment. Irrespective of any adjustments in the
-------------------------
number or kind of shares purchasable upon the exercise of the Warrants, Warrant
Certificates theretofore or thereafter issued may continue to express the same
number and kind of Warrant Shares per Warrant as are stated on the Warrant
Certificates initially issuable pursuant to this Agreement.
(l) Adjustments to Par Value. Subject to receiving shareholder approval,
------------------------
the Company shall make such adjustments to the par value of the Common Stock in
order that, upon exercise of the Warrants, the Warrant Shares will be fully paid
and non-assessable.
(m) Voluntary Adjustment. The Company from time to time may increase the
--------------------
Exercise Rate by any number and for any period of time (provided that such
--------
period is not less than 20 Business Days). Whenever the Exercise Rate is so
increased, the Company shall mail to holders at the addresses appearing on the
Warrant Register and file with the Warrant Agent a notice of the increase. The
Company shall give the notice at least 15 days before the date the increased
Exercise Rate takes effect. The notice shall state the increased Exercise Rate
and the period it will be in effect. A voluntary increase in the Exercise Rate
does not change or adjust the Exercise Rate otherwise in effect as determined by
this Section 5.01.
(n) No Other Adjustment For Dividends. Except as provided in this Article
---------------------------------
V, no payment or adjustment will be made for dividends on any Common Stock.
(o) Priority of Adjustments. If this Article V requires adjustments to the
-----------------------
Exercise Rate under more than one of paragraphs (a)(iv), (b) or (c), and the
record dates for the distributions giving rise to such adjustments shall occur
on the same date, then such adjustments shall be made by applying, first, the
provisions of paragraph (a), second, the provisions of paragraph (c) and, third,
the provisions of paragraph (b).
(p) Multiple Adjustments. After an adjustment to the Exercise Rate under
--------------------
this Article V, any subsequent event requiring an adjustment under this Article
V shall cause an adjustment to the Exercise Rate as so adjusted.
-39-
(q) Definitions. "Capital Stock" means, with respect to any corporation,
----------- -------------
any and all shares, interests, rights to purchase, warrants, options,
participations or other equivalents of or interests (however designated) in
stock issued by that corporation.
"Current Market Value" per share of Common Stock or of any other security
--------------------
at any date shall be (1) if the security is not registered under the Exchange
Act, the value of the security determined in good faith by the Company's Board
of Directors, based on the most recently completed arm's-length transaction
between the Company and a person other than an affiliate of the Company or (2)
if the security is registered under the Exchange Act, the average of the daily
closing bid prices for each Business Day during the period commencing 15
Business Days before such date and ending on the date one day prior to such date
or, if the security has been registered under the Exchange Act for less than 15
consecutive Business Days before such date, then the average of the daily
closing bid prices for all of the Business Days before such date for which daily
closing bid prices are available. If the market price is not determinable for
at least 10 Business Days in such period, the Current Market Value of the
security shall be determined as if the security was not registered under the
Exchange Act.
"Time of Determination" means the time and date of the earlier of (i) the
---------------------
determination of stockholders entitled to receive rights, warrants, or options
or a distribution, in each case, to which paragraphs (b) and (c) apply and (ii)
the time ("Ex-Dividend Time") immediately prior to the commencement of "ex-
----------------
dividend" trading for such rights, warrants or distribution on such national or
regional exchange or market on which the Common Stock is then listed or quoted.
SECTION 5.02. Fractional Warrant Shares. The Company will not be
-------------------------
required to issue fractional Warrant Shares upon exercise of the Warrants or
distribute Share certificates that evidence fractional Warrant Shares. In lieu
of fractional Warrant Shares, there may be paid to the registered holders of
Warrant Certificates at the time Warrants evidenced thereby are exercised as
herein provided an amount in cash equal to the same fraction of the Current
Market Value, as defined in paragraph (s) of Section 5.01, per Warrant Share on
the Business Day preceding the date the Warrant Certificates evidencing such
Warrants are surrendered for exercise. Such payments will be made by check or by
transfer to an account maintained by such registered holder with a bank in the
City of New York. If any holder surrenders for exercise more than one Warrant
Certificate, the number of Warrant Shares deliverable
-40-
to such holder may, at the option of the Company, be computed on the basis of
the aggregate amount of all the Warrants exercised by such holder.
SECTION 5.03. Article Not Applicable To Issuance Of Contingent Warrants.
---------------------------------------------------------
Notwithstanding anything in this Article to the contrary, this Article shall not
apply to the issuance of the Contingent Warrants.
ARTICLE VII.
CONCERNING THE WARRANT AGENT
----------------------------
SECTION 7.01. Warrant Agent. The Company hereby appoints Fleet National
-------------
Bank as Warrant Agent of the Company in respect of the Warrants and the Warrant
Certificates upon the terms and subject to the conditions herein and in the
Warrant Certi ficates set forth; and Fleet National Bank hereby accepts such
appointment. The Warrant Agent shall have the powers and authority specifically
granted to and conferred upon it in the Warrant Certificates and hereby and such
further powers and authority to act on behalf of the Company as the Company may
hereafter grant to or confer upon it and it shall accept in writing. All of the
terms and provisions with respect to such powers and authority contained in the
Warrant Certificates are subject to and governed by the terms and provisions
hereof.
SECTION 7.02. Conditions of Warrant Agent's Obligations. The Warrant
-----------------------------------------
Agent accepts its obligations herein set forth upon the terms and conditions
hereof and in the Warrant Certificates, including the following, to all of which
the Company agrees and to all of which the rights hereunder of the holders from
time to time of the Warrant Certificates shall be subject:
(a) The Warrant Agent shall be entitled to compensation to be agreed upon
with the Company in writing for all services rendered by it and the Company
agrees promptly to pay such compensation and to reimburse the Warrant Agent for
its reasonable out-of-pocket expenses (including reasonable fees and expenses of
counsel) incurred without gross negligence or willful misconduct on its part in
connection with the services rendered by it hereunder. The Company also agrees
to indemnify the Warrant Agent, its directors, officers, affiliates, agents and
employees for, and to hold it and its directors, officers, affiliates, agents
and employees harmless against, any loss, liability or expense of any nature
whatsoever (including, without limitation, fees and expenses
-41-
of counsel) incurred without gross negligence or willful misconduct on the part
of the Warrant Agent, arising out of or in connection with its acting as such
Warrant Agent hereunder and its exercise of its rights and performance of its
obligations hereunder. The obligations of the Company under this Section 6.02
shall survive the exercise and the expiration of the Warrant Certificates and
the resignation and removal of the Warrant Agent.
(b) In acting under this Agreement and in connection with the Warrant
Certificates, the Warrant Agent is acting solely as agent of the Company and
does not assume any obligation or relationship of agency or trust for or with
any of the owners or holders of the Warrant Certificates.
(c) The Warrant Agent may consult with counsel of its selection and any
advice or written opinion of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in accordance with such advice or opinion.
(d) The Warrant Agent shall be fully protected and shall incur no liability
for or in respect of any action taken or omitted to be taken or thing suffered
by it in reliance upon any Warrant Certificate, notice, direction, consent,
certificate, affidavit, opinion of counsel, instruction, statement or other
paper or document reasonably believed by it to be genuine and to have been
presented or signed by the proper parties.
(e) The Warrant Agent, and its officers, directors, affiliates and
employees ("Related Parties"), may become the owners of, or acquire any interest
---------------
in, Warrant Certificates, shares or other obligations of the Company with the
same rights that it or they would have it if were not the Warrant Agent
hereunder and, to the extent permitted by applicable law, it or they may engage
or be interested in any financial or other transaction with the Company and may
act on, or as depositary, trustee or agent for, any committee or body of holders
of shares or other obligations of the Company as freely as if it were not the
Warrant Agent hereunder. Nothing in this Agreement shall be deemed to prevent
the Warrant Agent or such Related Parties from acting in any other capacity for
the Company.
(f) The Warrant Agent shall not be under any liability for interest on, and
shall not be required to invest, any monies at any time received by it pursuant
to any of the provisions of this Agreement or of the Warrant Certificates.
-42-
(g) The Warrant Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except the
due execution and delivery hereof by the Warrant Agent) or in respect of the
validity or execution of any Warrant Certificate (except its countersignature
thereon).
(h) The recitals and other statements contained herein and in the Warrant
Certificates (except as to the Warrant Agent's countersignature thereon) shall
be taken as the statements of the Company and the Warrant Agent assumes no
responsibility for the correctness of the same. The Warrant Agent does not make
any representation as to the validity or sufficiency of this Agreement or the
Warrant Certificates, except for its due execution and delivery of this
Agreement; provided, however, that the Warrant Agent shall not be relieved of
-------- -------
its duty to countersign the Warrant Certificates as authorized by this
Agreement. The Warrant Agent shall not be accountable for the use or
application by the Company of the proceeds of the exercise of any Warrant.
(i) The Warrant Agent shall be obligated to perform such duties as are
herein and in the Warrant Certificates specifically set forth and no implied
duties or obligations shall be read into this Agreement or the Warrant
Certificates against the Warrant Agent. The Warrant Agent shall be under no
obligation to institute any action, suit or legal proceeding or to take any
other action likely to involve expense unless the Company shall furnish the
Warrant Agent with reasonable security and indemnity for any costs or expenses
which may be incurred. The Warrant Agent shall not be accountable or under any
duty or responsibility for the use by the Company of any of the Warrant
Certificates countersigned by the Warrant Agent and delivered by it to the
Company pursuant to this Agreement. The Warrant Agent shall have no duty or
responsibility in case of any default by the Company in the performance of its
covenants or agreements contained in the Warrant Certificates or in the case of
the receipt of any written demand from a holder of a Warrant Certificate with
respect to such default, including, without limiting the generality of the
foregoing, any duty or responsibility to initiate or attempt to initiate any
proceedings at law or otherwise or, except as provided in Section 7.02 hereof,
to make any demand upon the Company.
(j) Unless otherwise specifically provided herein, any order, certificate,
notice, request, direction or other communication from the Company made or given
under any provision of this Agreement shall be sufficient if signed by its
chairman of the
-43-
Board of Directors, its president, its treasurer, its controller or any vice
president or its secretary or any assistant secretary.
(k) The Warrant Agent shall have no responsibility in respect of any
adjustment pursuant to Article V hereof.
(l) The Company agrees that it will perform, execute, acknowledge and
deliver, or cause to be performed, executed, acknowledged and delivered, all
such further and other acts, instruments and assurances as may reasonably be
required by the Warrant Agent for the carrying out or performing by the Warrant
Agent of the provisions of this Agreement.
(m) The Warrant Agent is hereby authorized and directed to accept written
instructions with respect to the performance of its duties hereunder from any
one of the chairman of the Board of Directors, the president, the treasurer, the
controller, any vice president or the secretary of the Company or any other
officer or official of the Company reasonably believed to be authorized to give
such instructions and to apply to such officers or officials for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken or suffered to be taken by it in good faith in accordance with
instructions with respect to any matter arising in connection with the Warrant
Agent's duties and obligations arising under this Agreement. Such application
by the Warrant Agent for written instructions from the Company may, at the
option of the Warrant Agent, set forth in writing any action proposed to be
taken or omitted by the Warrant Agent with respect to its duties or obligations
under this Agreement and the date on or after which such action shall be taken
and the Warrant Agent shall not be liable for any action taken or omitted in
accordance with a proposal included in any such application on or after the date
specified therein (which date shall be not less than 10 Business Days after the
Company receives such application unless the Company consents to a shorter
period), provided that (i) such application includes a statement to the effect
--------
that it is being made pursuant to this paragraph (m) and that unless objected to
prior to such date specified in the application, the Warrant Agent will not be
liable for any such action or omission to the extent set forth in such paragraph
(m) and (ii) prior to taking or omitting any such action, the Warrant Agent has
not received written instructions objecting to such proposed action or omission.
(n) Whenever in the performance of its duties under this Agreement the
Warrant Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or
-44-
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed on behalf of the Company by any one of the chairman of the
Board of Directors, the president, the treasurer, the controller, any vice
president or the secretary of the Company or any other officer or official of
the Company reasonably believed to be authorized to give such instructions and
delivered to the Warrant Agent; and such certificate shall be full authorization
to the Warrant Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
(o) The Warrant Agent shall not be required to risk or expend its own funds
in the performance of its obligations and duties hereunder.
SECTION 7.03. Resignation and Appointment of Successor.
----------------------------------------
(a) The Company agrees, for the benefit of the holders from time to time of
the Warrant Certificates, that there shall at all times be a Warrant Agent
hereunder.
(b) The Warrant Agent may at any time resign as Warrant Agent by giving
written notice to the Company of such intention on its part, specifying the date
on which its desired resignation shall become effective; provided, however, that
-------- -------
such date shall be at least 60 days after the date on which such notice is given
unless the Company agrees to accept less notice. Upon receiving such notice of
resignation, the Company shall promptly appoint a successor Warrant Agent,
qualified as provided in Section 6.03(d) hereof, by written instrument in
duplicate signed on behalf of the Company, one copy of which shall be delivered
to the resigning Warrant Agent and one copy to the successor Warrant Agent. As
provided in Section 6.03(d) hereof, such resignation shall become effective upon
the earlier of (x) the acceptance of the appointment by the successor Warrant
Agent or (y) 60 days after receipt by the Company of notice of such resignation.
The Company may, at any time and for any reason, and shall, upon any event set
forth in the next succeeding sentence, remove the Warrant Agent and appoint a
successor Warrant Agent by written instrument in duplicate, specifying such
removal and the date on which it is intended to become effective, signed on
behalf of the Company, one copy of which shall be delivered to the Warrant Agent
being removed and one copy to the successor Warrant Agent. The Warrant Agent
shall be removed as aforesaid if it shall become incapable of acting, or shall
be adjudged a bankrupt or insolvent, or a receiver of the Warrant Agent or of
its property shall be appointed, or any public
-45-
officer shall take charge or control of it or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation. Any removal of the
Warrant Agent and any appointment of a successor Warrant Agent shall become
effective upon acceptance of appointment by the successor Warrant Agent as
provided in Section 6.03(d). As soon as practicable after appointment of the
successor Warrant Agent, the Company shall cause written notice of the change in
the Warrant Agent to be given to each of the registered holders of the Warrants
in the manner provided for in Section 7.04 hereof.
(c) Upon resignation or removal of the Warrant Agent, if the Company shall
fail to appoint a successor Warrant Agent within a period of 60 days after
receipt of such notice of resignation or removal, then the holder of any Warrant
Certificate or the retiring Warrant Agent may apply to a court of competent
jurisdiction for the appointment of a successor to the Warrant Agent. Pending
appointment of a successor to the Warrant Agent, either by the Company or by
such a court, the duties of the Warrant Agent shall be carried out by the
Company.
(d) Any successor Warrant Agent, whether appointed by the Company or by a
court, shall be a bank or trust company in good standing, incorporated under the
laws of the United States of America or any State thereof and having, at the
time of its appointment, a combined capital surplus of at least $100 million.
Such successor Warrant Agent shall execute and deliver to its predecessor and to
the Company an instrument accepting such appointment hereunder and all the
provisions of this Agreement, and thereupon such successor Warrant Agent,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with like
effect as if originally named as Warrant Agent hereunder, and such predecessor
shall thereupon become obligated to (i) transfer and deliver, and such successor
Warrant Agent shall be entitled to receive, all securities, records or other
property on deposit with or held by such predecessor as Warrant Agent hereunder
and (ii) upon payment of the amounts then due it pursuant to Section 6.02(a)
hereof, pay over, and such successor Warrant Agent shall be entitled to receive,
all monies deposited with or held by any predecessor Warrant Agent hereunder.
(e) Any corporation or bank into which the Warrant Agent hereunder may be
merged or converted, or any corporation or bank with which the Warrant Agent may
be consolidated, or any corporation or bank resulting from any merger,
conversion or consolidation to which the Warrant Agent shall be a party, or any
-46-
corporation or bank to which the Warrant Agent shall sell or otherwise transfer
all or substantially all of its corporate trust business, shall be the successor
to the Warrant Agent under this Agreement (provided that such corporation or
bank shall be qualified as aforesaid) without the execution or filing of any
document or any further act on the part of any of the parties hereto.
(f) No Warrant Agent under this Warrant Agreement shall be personally
liable for any action or omission of any successor Warrant Agent.
ARTICLE VII
MISCELLANEOUS
-------------
SECTION 7.01. Amendment. This Agreement and the terms of the Warrants
---------
may be amended by the Company and the Warrant Agent, without the consent of the
holder of any Warrant Certificate, for the purpose of curing any ambiguity, or
of curing, correcting or supplementing any defective or inconsistent provision
contained herein or therein, or to effect any assumptions of the Company's
obligations hereunder and thereunder by a successor corporation under the
circumstances described in Section 5.01(d) hereof or in any other manner which
the Company may deem necessary or desirable and which shall not adversely affect
the interests of the holders of the Warrant Certificates.
The Company and the Warrant Agent may modify this Agreement and the terms
of the Warrants with the consent of not less than a majority of the votes of the
holders of the then outstanding Warrants, each Warrant holder having that number
of votes as the number of shares into which his Warrants are exercisable at such
time (including fractional shares), for the purpose of adding any provision to
or changing in any manner or eliminating any of the provisions of this Agreement
or modifying in any manner the rights of the holders of the outstanding
Warrants; provided, however, that no such modification that decreases the
-------- -------
Exercise Rate, reduces the period of time during which the Warrants are
exercisable hereunder, otherwise materially and adversely affects the exercise
rights of the holders of the Warrants, reduces the percentage required for
modification, or effects any change to this Section 7.01 may be made with
respect to an outstanding Warrant without the consent of the holder of such
Warrant; provided, further, that any modification to Section 4.04 shall require
-------- -------
the consent of a majority of the votes of the holders of Warrants and Warrant
Shares, each Warrant holder or Warrant Share
-47-
holder, as applicable, having that number of votes as the number of shares into
which his Warrants are exercisable at such time (including fractional shares)
plus the number of Warrant Shares held by such holder.
Any modification or amendment made in accordance with this Agreement will
be conclusive and binding on all present and future holders of Warrant
Certificates whether or not they have consented to such modification or
amendment or waiver and whether or not notation of such modification or
amendment is made upon such Warrant Certificates. Any instrument given by or on
behalf of any holder of a Warrant Certificate in connection with any consent to
any modification or amendment will be conclusive and binding on all subsequent
holders of such Warrant Certificate.
SECTION 7.02. Notices and Demands to the Company and Warrant Agent. If
----------------------------------------------------
the Warrant Agent shall receive any notice or demand addressed to the Company by
the holder of a Warrant Certificate pursuant to the provisions hereof or of the
Warrant Certificates, the Warrant Agent shall promptly forward such notice or
demand to the Company.
SECTION 7.03. Addresses for Notices to Parties and for Transmission of
--------------------------------------------------------
Documents. All notices hereunder to the parties hereto shall be deemed to have
---------
been given when sent by certified or registered mail, postage prepaid, or by
facsimile transmission, confirmed by first class mail, postage prepaid,
addressed to any party hereto as follows:
To the Company:
UNIFI Communications, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
with copies to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
To the Warrant Agent:
-48-
Fleet National Bank
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust Administration
or at any other address of which either of the foregoing shall have notified the
other in writing.
SECTION 7.04. Notices to Holders. Notices to holders of Warrants shall
------------------
be mailed to such holders at the addresses of such holders as they appear in the
Warrant Register. Notices to holders of Warrant Shares shall be mailed to such
holders as they appear in the records of the Company or the Transfer Agent. Any
such notice shall be sufficiently given if sent by first-class mail, postage
prepaid.
SECTION 7.05. APPLICABLE LAW. THE VALIDITY, INTERPRETATION AND
--------------
PERFORMANCE OF THIS AGREEMENT AND EACH WARRANT CERTIFICATE ISSUED HEREUNDER AND
OF THE RESPECTIVE TERMS AND PROVISIONS THEREOF SHALL BE GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PROVISIONS
THEREOF.
SECTION 7.06. Persons Having Rights Under Agreement. Nothing in this
-------------------------------------
Agreement expressed or implied and nothing that may be inferred from any of the
provisions hereof is intended, or shall be construed, to confer upon, or give
to, any person or corporation other than the Company, the Warrant Agent and the
holders of the Warrant Certificates or Warrant Shares any right, remedy or claim
under or by reason of this Agreement or of any covenant, condition, stipulation,
promise or agreement hereof; and all covenants, conditions, stipulations,
promises and agreements in this Agreement contained shall be for the sole and
exclusive benefit of the Company and the Warrant Agent and their successors and
of the holders of the Warrant Certificates.
SECTION 7.07. Headings. The descriptive headings of the several Articles
--------
and Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
SECTION 7.08. Counterparts. This Agreement may be executed in any number
------------
of counterparts, each of which so executed shall be deemed to be an original;
but such counterparts shall together constitute but one and the same instrument.
-49-
SECTION 7.09. Inspection of Agreements. A copy of this Agreement and the
------------------------
Warrant Shares Registration Rights Agreement shall be available during regular
business hours at the principal corporate trust office of the Warrant Agent, for
inspection by the holder of any Warrant Certificate Warrant Shares. The
Warrant Agent may require such holder to submit his Warrant Certificate or
evidence of ownership of Warrant Shares for inspection by it.
-50-
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as of the day and year first above written.
UNIFI COMMUNICATIONS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------
Name:
Title:
FLEET NATIONAL BANK,
as Warrant Agent
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Name:
Title:
-51-
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
[FACE]
[Unless and until it is exchanged in whole or in part for Warrants in
certificated form, this Warrant may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC"),
to the issuer or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or such other
name as requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]/3/
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
PROMULGATED UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) PROMULGATED UNDER THE
SECURITIES ACT) (AN INSTITUTIONAL "ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S.
PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH RULE 904 UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT WITHIN THREE
YEARS (OR SUCH SHORTER PERIOD AS MAY THEN BE REQUIRED BY RULE 144(k) UNDER THE
SECURITIES ACT) AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE
TRANSFER THIS SECURITY, EXCEPT (A) TO THE ISSUER THEREOF, OR ANY SUBSIDIARY
THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
PROMULGATED UNDER THE SECURITIES ACT, (C) TO AN INSTITUTIONAL ACCREDITED
INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHED (OR HAS FURNISHED ON ITS BEHALF
BY A U.S. BROKER-DEALER) TO THE WARRANT AGENT A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON
-----------------
/3/ This paragraph is to be included only if the Warrant is in global form.
A-1
-52-
TRANSFER OF THIS SECURITY, (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH RULE 904 PROMULGATED UNDER THE SECURITIES ACT,
(E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 PROMULGATED
UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF
THIS SECURITY WITHIN THREE YEARS (OR SUCH SHORTER PERIOD AS MAY THEN BE REQUIRED
BY RULE 144(k) UNDER THE SECURITIES ACT) AFTER THE ORIGINAL ISSUANCE OF THIS
SECURITY, IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR,
THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE WARRANT AGENT AND THE
ISSUER SUCH CERTIFICATIONS, WRITTEN LEGAL OPINIONS OR OTHER INFORMATION AS
EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING
MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
IN THE EVENT A PUBLIC EQUITY OFFERING SHALL NOT HAVE OCCURRED ON OR PRIOR TO
MARCH 1, 2002 RESULTING IN GROSS PROCEEDS OF AT LEAST $35.0 MILLION TO THE
COMPANY, HOLDERS OF WARRANTS OR WARRANT SHARES SHALL HAVE THE RIGHT TO REQUIRE
THE COMPANY TO OFFER TO PURCHASE ALL OF SUCH HOLDERS WARRANTS OR WARRANT SHARES
AT A PRICE PER WARRANT OR WARRANT SHARE, AS APPLICABLE, EQUAL TO THE FAIR MARKET
VALUE THEREOF, AS DETERMINED IN ACCORDANCE WITH THE PROCEDURES SET FORTH IN THE
WARRANT AGREEMENT. UNTIL THE EARLIER TO OCCUR OF (i) THE CONSUMMATION OF A
PUBLIC EQUITY OFFERING RESULTING IN GROSS PROCEEDS TO THE COMPANY OF AT LEAST
$35.0 MILLION AND (ii) MARCH 1, 2002, THE WARRANTS AND THE WARRANT SHARES SHALL
BE TRANSFERABLE ONLY ON THE BOOKS OF THE TRANSFER AGENT AS SET FORTH IN THE
WARRANT AGREEMENT.
CUSIP #[ ]
No. [ ] [ ] Warrants
WARRANT CERTIFICATE
UNIFI COMMUNICATIONS, INC.
This Warrant Certificate certifies that [ ], or registered
assigns, is the registered holder of [ ] Warrants (the "Warrants") to purchase
--------
shares of Common Stock, par value $.01 per share (the "Common Stock"), of UNIFI
------------
COMMUNICATIONS, INC., a Delaware corporation (the "Company"). Each Warrant
-------
entitles the
A-2
-53-
holder to purchase from the Company at any time from 9:00 a.m. New York City
time on or after the occurrence of an Exercise Event until 5:00 p.m., New York
City time, [ ] fully paid and nonassessable share of Common Stock (a "Warrant
-------
Share", or, if adjusted, the "Warrant Shares", which may also include any other
----- --------------
securities or property purchasable upon exercise of a Warrant, such adjustment
and inclusion each as provided in the Warrant Agreement) at the exercise price
(the "Exercise Price") of $.25 per Warrant upon surrender of this Warrant
--------------
Certificate and payment of the Exercise Price at any office or agency maintained
for that purpose by the Company (the "Warrant Agent Office"), subject to the
--------------------
conditions set forth herein, in the Warrant Agreement and in the Warrant Shares
Registration Rights Agreement.
"Exercise Event" means, with respect to each Warrant as to which such
event is applicable (but not with respect to any other Warrant), the date of the
earliest of: (1) March 1, 1998, (2) 30 days after the occurrence of a Change of
Control and (3) the date that is 180 days after the consummation of an initial
public offering of the Company's Common Stock.
The Exercise Price shall be payable by certified check or official
bank check or by such other means as is acceptable to the Company in the lawful
currency of the United States of America which as of the time of payment is
legal tender for payment of public or private debts. The Company has initially
designated the corporate trust office of the Warrant Agent in the Borough of
Manhattan, The City of New York, as the initial Warrant Agent Office. The
number of Warrant Shares issuable upon exercise of the Warrants ("Exercise
--------
Rate") is subject to adjustment upon the occurrence of certain events set forth
in the Warrant Agreement.
Any Warrants not exercised on or prior to 5:00 p.m., New York City
time, March 1, 2007 shall thereafter be void.
Reference is hereby made to the further provisions on the reverse
hereof which provisions shall for all purposes have the same effect as though
fully set forth at this place.
This Warrant Certificate shall not be valid unless countersigned by
the Warrant Agent, as such term is used in the Warrant Agreement.
THIS WARRANT CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
PROVISIONS THEREOF.
A-3
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WITNESS the facsimile seal of the Company and facsimile signatures of
its duly authorized officers.
Dated:
UNIFI COMMUNICATIONS, INC.
By: ____________________________
Name:
Title:
Attest:
By: _______________________
Name:
Title:
Certificate of Authentication:
This is one of the Warrants
referred to in the within
mentioned Warrant Agreement:
FLEET NATIONAL BANK,
as Warrant Agent
By: _____________________________
Authorized Signatory
▇-▇
-▇▇-
[▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ CERTIFICATE]
[REVERSE]
UNIFI COMMUNICATIONS, INC.
The Warrants are issued pursuant to a Warrant Agreement dated as of
February 21, 1997 (the "Warrant Agreement"), duly executed and delivered by the
-----------------
Company and Fleet National Bank, a national banking association, as Warrant
Agent (the "Warrant Agent"), which Warrant Agreement is hereby incorporated by
-------------
reference in and made a part of this instrument and is hereby referred to for a
description of the rights, limitation of rights, obligations, duties and
immunities thereunder of the Warrant Agent, the Company and the holders (the
words "holders" or holder" meaning the registered holders or registered holder)
of the Warrants. The holders will have certain registration rights with respect
to the Warrant Shares issuable upon exercise of the Warrants as set forth in the
Warrant Shares Registration Rights Agreement.
Subject to the provisions of the Warrant Agreement and the Warrant
Shares Registration Rights Agreement, the holder of each Warrant shall have the
right to purchase from the Company (and the Company shall issue and sell to such
holder of the Warrant), at any time and from time to time on any Business Day
(as defined below) on or prior to 5:00 p.m., New York City time, on the
Expiration Date, March 1, 2007 (or such other number as may result from
adjustments in the Exercise Rate as provided in the Warrant Agreement) fully
paid and nonassessable share of Common Stock at the Exercise Price (and any
other securities or property purchasable upon exercise of such Warrant at the
time of such exercise as provided in the Warrant Agreement). Warrants may be
exercised by (i) surrendering at any Warrant Agent Office this Warrant
Certificate with the form of Election to Exercise set forth hereon duly
completed and executed and (ii) paying in full the Warrant Exercise Price for
each such Warrant exercised and any other amounts required to be paid pursuant
to the Warrant Agreement.
If all of the items referred to in the last sentence of the preceding
paragraph are received by the Warrant Agent at or prior to 11:00 a.m., New York
City time, on a Business Day, the exercise of the Warrant to which such items
relate will be effective on such Business Day. If any items referred to in the
last sentence of the preceding paragraph are received after 11:00 a.m., New York
City time, on a Business Day, the exercise of the Warrants to which such item
relates will be deemed to be effective on the next succeeding Business Day.
Notwithstanding the foregoing, in the case of an exercise of Warrants on the
Expiration Date, if all of the items referred to in the last sentence of the
preceding paragraph are received by the Warrant Agent at or prior
A-5
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to 5:00 p.m., New York City time, on such Expiration Date, the exercise of the
Warrants to which such items relate will be effective on the Expiration Date.
As soon as practicable after the exercise of any Warrant or Warrants,
the Company shall issue or cause to be issued to or upon the written order of
the registered holder of this Warrant Certificate, a certificate or certificates
evidencing the Share or Shares to which such holder is entitled, in fully
registered form, registered in such name or names as may be directed by such
holder pursuant to the Election to Exercise, as set forth on the reverse of this
Warrant Certificate. Such certificate or certificates evidencing the Warrant
Share or Warrant Shares shall be deemed to have been issued and any persons who
are designated to be named therein shall be deemed to have become the holder of
record of such Warrant Share or Warrant Shares as of the close of business on
the date upon which the exercise of this Warrant was deemed to be effective as
provided in the preceding paragraph.
The Company will not be required to issue fractional shares of Common
Stock upon exercise of the Warrants or distribute Warrant Share certificates
that evidence fractional shares of Common Stock. In lieu of fractional shares
of Common Stock, there shall be paid to the registered Holder of this Warrant
Certificate at the time such Warrant Certificate is exercised an amount in cash
equal to the same fraction of the Current Market Value (as defined in the
Warrant Agreement) per share on the Business Day preceding the date this Warrant
Certificate is surrendered for exercise.
Warrant Certificates, when surrendered at any office or agency
maintained by the Company for that purpose by the registered holder thereof in
person or by legal representative or attorney duly authorized in writing, may be
exchanged for a new Warrant Certificate or new Warrant Certificates evidencing
in the aggregate a like number of Warrants, in the manner and subject to the
limitations provided in the Warrant Agreement and the Warrant Shares
Registration Rights Agreement, without charge except for any tax or other
governmental charge imposed in connection therewith.
Upon due presentment for registration of transfer of this Warrant
Certificate at any office or agency maintained by the Company for that purpose,
a new Warrant Certificate evidencing in the aggregate a like number of Warrants
shall be issued to the transferee in exchange for this Warrant Certificate,
subject to the limitations provided in the Warrant Agreement, without charge
except for any tax or other governmental charge imposed in connection therewith.
The Company and the Warrant Agent may deem and treat the registered
holder hereof as the absolute owner of this Warrant Certificate (notwithstanding
any notation of ownership or other
A-6
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writing hereon made by anyone) for the purpose of any exercise hereof and for
all other purposes, and neither the Company nor the Warrant Agent shall be
affected by any notice to the contrary.
The term "Business Day" shall mean any day on which (i) banks in New
York City, (ii) the principal national securities exchange or market, if any, on
which the Common Stock is listed or admitted to trading and (iii) the principal
national securities exchange or market, if any, on which the Warrants are listed
or admitted to trading are open for business.
In the event a Public Equity Offering shall not have occurred on or
prior to March 1, 2002 resulting in gross proceeds of at least $35.0 million to
the Company, holders of Warrants or Warrant Shares shall have the right to
require the Company to offer to purchase all of such holders Warrants or Warrant
Shares at a price per Warrant or Warrant Share, as applicable, equal to the fair
market value thereof, as determined in accordance with the procedures set forth
in the Warrant Agreement.
A-7
(FORM OF ELECTION TO EXERCISE)
(To be executed upon exercise of Warrants on the Exercise Date)
The undersigned hereby irrevocably elects to exercise [ ] of the
Warrants represented by this Warrant Certificate and purchase the whole number
of Warrant Shares issuable upon the exercise of such Warrants and herewith
tenders payment for such Warrant Shares in the amount of $[ ] in cash or by
certified or official bank check, in accordance with the terms hereof. The
undersigned requests that a certificate representing such Warrant Shares be
registered in the name of ______________________ whose address is
_____________________________ and that such certificate be delivered to
___________________________ whose address is __________________________. Any
cash payments to be paid in lieu of a fractional Warrant Share should be made to
__________________ whose address is ________________________ and the check
representing payment thereof should be delivered to ______________________ whose
address is ______________________.
Dated __________________,
Name of holder of
Warrant Certificate:
------------------------------------------
(Please Print)
Tax Identification or
Social Security Number:
----------------------------------------
Address:
--------------------------------------------------------
--------------------------------------------------------
Signature:
--------------------------------------------------------
Note: The above signature must correspond with the name as
written upon the face of this Warrant Certificate in
every particular, without alteration or enlargement or
any change whatever and if the certificate representing
the Warrant Shares or any Warrant Certificate
representing Warrants not exercised is to be registered
in a name other than that in which this Warrant
Certificate is registered, or if any cash payment to be
paid in lieu of a fractional share is to be made to a
person other than the registered holder of this Warrant
Certificate,
A-8
the signature of the holder hereof must be guaranteed
as provided in the Warrant Agreement.
Dated ____________________,
Signature:
---------------------------------------------------
Note: The above signature must correspond with the name as
written upon the face of this Warrant Certificate in
every particular, without alteration or enlargement
or any change whatever.
Signature Guaranteed:
----------------------------------------------
[FORM OF ASSIGNMENT]
For value received _______________________ hereby sells, assigns and
transfers unto _____________________ the within Warrant Certificate, together
with all right, title and interest therein, and does hereby irrevocably
constitute and appoint __________________________ attorney, to transfer said
Warrant Certificate on the books of the within-named Company, with full power of
substitution in the premises.
Dated ____________________,
Signature:
--------------------------------------------------------
Note: The above signature must correspond with the name as
written upon the face of this Warrant Certificate in
every particular, without alteration or enlargement
or any change whatever.
Signature Guaranteed:
-----------------------------------------------
A-9
SCHEDULE OF EXCHANGES OF CERTIFICATED WARRANTS/4/
----------------------------------------------
The following exchanges of a part of this Global Warrant for certificated
Warrants have been made:
Number of
Warrants of
Amount of Amount of this Global
decrease in increase in Warrant Signature of
Number of Number of following authorized
Date of Warrants of this Warrants of this such decrease officer of
Exchange Global Warrant Global Warrant (or increase) Warrant Agent
--------------------------------------------------------------------------------
-------------------
/4/ This is to be included only if the Warrant is in global form.
A-10
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have the Warrants represented by this Warrant
Certificate purchased by the Company pursuant to Section 4.04 of the Warrant
Agreement, check the Box: [ ]
If you wish to have a portion of the Warrants represented by this
Warrant Certificate purchased by the Company pursuant to Section 4.04 of the
Warrant Agreement, state the number of Warrants:
----------------
Date: ________________ Your Signature:
-------------------------------------
(Sign exactly as your name appears on the
other side of this Warrant Certificate)
By:
-------------------------------------------
NOTICE: To be signed
by an executive officer
NOTICE: Signature(s) must be guaranteed by an institution which is a
participant in the Securities Transfer Agent Medallion Program ("STAMP") or
similar program.
A-11
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF WARRANTS
Re: Warrants to Purchase Common Stock (the "Warrants")
of UNIFI COMMUNICATIONS, INC.
This Certificate relates to ____ Warrants held in* ___ book-entry or*
_______ certificated form by ______ (the "Transferor").
The Transferor:*
[_] has requested the Warrant Agent by written order to deliver in
exchange for its beneficial interest in the Global Warrant held by the
Depositary a Warrant or Warrants in definitive, registered form of authorized
denominations and an aggregate number equal to its beneficial interest in such
Global Warrant (or the portion thereof indicated above); or
[_] has requested the Warrant Agent by written order to exchange or
register the transfer of a Warrant or Warrants.
In connection with such request and in respect of each such Warrant,
the Transferor does hereby certify that Transferor is familiar with the Warrant
Agreement relating to the above captioned Warrants and the restrictions on
transfers thereof as provided in Section 1.07 of such Warrant Agreement, and
that the transfer of this Warrant does not require registration under the
Securities Act of 1933, as amended (the "Act") because[*]:
---
[_] Such Warrant is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 1.07(a)(y)(A) or Section
1.07(d)(i)(A) of the Warrant Agreement).
[_] Such Warrant is being transferred to a qualified institutional buyer
(as defined in Rule 144A under the Act), in reliance on Rule 144A or in
accordance with Regulation S under the Act.
[_] Such Warrant is being transferred in accordance with Rule 144 under
the Act.
B-1
[_] Such Warrant is being transferred in reliance on and in compliance
with an exemption from the registration requirements of the Act, other than Rule
144A or Rule 144 or Regulation S under the Act. An opinion of counsel to the
effect that such transfer does not require registration under the Act
accompanies this Certificate.
______________________________
[INSERT NAME OF TRANSFEROR]
By: _________________________
Date: _____________
*Check applicable box.
B-2
EXHIBIT C
Transferee Letter of Representation
UNIFI COMMUNICATIONS, INC.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
In connection with our proposed purchase of warrants to purchase
Common Stock, par value $.01 per share, (the "Securities") of UNIFI
----------
Communications, Inc. (the "Company") we confirm that:
-------
1. We understand that the Securities have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") and, unless so
--------------
registered, may not be sold except as permitted in the following sentence. We
agree on our own behalf and on behalf of any investor account for which we are
purchasing Securities to offer, sell or otherwise transfer such Securities prior
to the date which is three years after the later of the date of original issue
and the last date on which the Company or any affiliate of the Company was the
owner of such Securities, or any predecessor thereto (the "Resale Restriction
------------------
Termination Date") only (a) to the Company, (b) pursuant to a registration
----------------
statement which has been declared effective under the Securities Act, (c) so
long as the Securities are eligible for resale pursuant to Rule 144A, under the
Securities Act, to a person we reasonably believe is a qualified institutional
buyer under Rule 144A (a "QIB") that purchases for its own account or for the
---
account of a QIB and to whom notice is given that the transfer is being made in
reliance on Rule 144A, (d) pursuant to offers and sales that occur outside the
United States within the meaning of Regulation S under the Securities Act, (e)
to an institutional "accredited investor" within the meaning of subparagraphs
(a)(1), (2), (3) or (7) of Rule 501 under the Securities Act that is purchasing
for his own account or for the account of such an institutional "accredited
investor," or (f) pursuant to any other available exemption from the
registration requirements of the Securities Act, subject in each of the
foregoing cases to any requirement of law that the disposition of our property
or the property of such investor account or accounts be at all times within our
or their control and to compliance with any applicable state
C-1
securities laws. The foregoing restrictions on resale will not apply subsequent
to the Resale Restriction Termination Date. If any resale or other transfer of
the Securities is proposed to be made pursuant to clause (e) above prior to the
Resale Restriction Termination Date, the transferor shall deliver a letter from
the transferee substantially in the form of this letter to the warrant agent
under the Warrant Agreement pursuant to which the Securities were issued (the
"Warrant Agent") which shall provide, among other things, that the transferee is
--------------
an institutional "accredited investor" within the meaning of subparagraphs
(a)(1), (2), (3) or (7) of Rule 501 under the Securities Act and that it is
acquiring such Securities for investment purposes and not for distribution in
violation of the Securities Act. The Warrant Agent and the Company reserve the
right prior to any offer, sale or other transfer prior to the Resale Restriction
Termination Date of the Securities pursuant to clauses (c), (d), (e) or (f)
above to require the delivery of a written opinion of counsel, certifications,
and or other information satisfactory to the Company and the Warrant Agent.
2. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) purchasing
for our own account or for the account of such an institutional "accredited
investor," and we are acquiring the Securities for investment purposes and not
with a view to, or for offer or sale in connection with, any distribution in
violation of the Securities Act and we have such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of our investment in the Securities, and we and any accounts for which we
are acting are each able to bear the economic risk of our or its investment for
an indefinite period.
3. We are acquiring the Securities purchased by us for our own account or
for one or more accounts as to each of which we exercise sole investment
discretion.
C-2
4. You and your counsel are entitled to rely upon this letter and you are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceeding or official inquiry with respect
to the matters covered hereby.
Very truly yours,
-----------------------------------------
(Name of Purchaser)
By:
--------------------------------------
Date:
------------------------------------
Upon transfer the Securities would be registered in the name
of the new beneficial owner as follows:
Name:______________________________
Address:___________________________
Taxpayer ID Number:________________
C-3
EXHIBIT D
[FORM OF CERTIFICATE OF ELECTION]
The Company has not effected a Public Equity Offering resulting in
gross proceeds to the Company of at least $35.0 million and in accordance with
Section 4.04 of the Warrant Agreement you have the option of choosing the
following:
If you wish to have this Warrant or Warrant Share purchased (subject
to the limitations set forth in the Warrant Agreement) by the Company pursuant
to Section 4.04 of the Warrant Agreement, check the Box: [ ]
Included herewith is a Valuation Report describing the fair market
value of the Warrants and Warrant Shares as of the Valuation Date as determined
by an Independent Financial Expert chosen by the Company.
In the event that holders of 66-2/3% of the votes of the Warrants and
Warrant Shares held by the holders who complete and return this form with the
Box above checked elect to have another Independent Financial Expert appointed
to determine the fair market value of the Warrants and Warrant Shares on the
Valuation Date, such an Independent Financial Expert will be appointed to
determine the fair market value of the Warrant and Warrant Shares on the
Valuation Date. Such Independent Financial Expert shall be selected by the
Electing Holders holding a majority of the votes of the holders of Warrants and
Warrant Shares held by the Electing Holders, each Electing Holder having that
number of votes as the number of Warrant Shares into which such holder's
Warrants are exercisable (including fractional shares) plus the number of
Warrant Shares held by such holder. The fees of the Independent Financial Expert
so chosen shall be borne by holders of Warrants and Warrant Shares (pro rata
based on each holder's votes) and shall be deducted from the Warrant Purchase
Price or Warrant Share Purchase Price, as applicable.
Please check the following box if you wish to appoint another
Independent Financial Expert to issue another valuation report.
Check here: [ ].
Capitalized terms used herein and not defined have the meaning set
forth in the Warrant Agreement.