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EXHIBIT 10.1
WARRANT AGREEMENT
WARRANT AGREEMENT dated April 1, 1999 between NUCENTRIX BROADBAND
NETWORKS, INC. (f/k/a Heartland Wireless Communications, Inc.) (the "Company"),
and ▇▇▇▇▇▇ Trust and Savings Bank, as Warrant Agent (the "Warrant Agent").
The Company proposes to issue Common Stock Purchase Warrants, as
hereinafter described (the "Warrants"), to purchase an aggregate of 1,100,000
shares (subject to adjustment as provided herein) of its Common Stock, $.001
par value (the "Common Stock"), and the shares of Common Stock issuable on
exercise of the Warrants being referred to herein as the "Warrant Shares"),
pursuant to the Company's Plan of Reorganization under Chapter 11 of the
Bankruptcy Code, dated January 19, 1999 (the "Plan of Reorganization").
The Company requests the Warrant Agent to act on behalf of the Company
and the Warrant Agent is willing so to act in connection with the issuance,
division, transfer, exchange and exercise of the Warrants.
In consideration of the foregoing and for the purposes of defining the
terms and provisions of the Warrants and the respective rights and obligations
thereunder of the Company and the registered owners of the Warrants (the
"Holders"), the Company and the Warrant Agent hereby agree as follows:
SECTION 1. Appointment of Warrant Agent.
The Company hereby appoints the Warrant Agent to act as agent for the
Company in accordance with the instructions set forth in this Agreement, and
the Warrant Agent hereby accepts such appointment and agrees so to act.
SECTION 2. Transferability and Form of Warrant.
2.1 Registration. The Company shall maintain at the principal office
of the Warrant Agent a warrant register (the "Warrant Register") in which the
ownership of the Warrants outstanding from time to time, and divisions,
combinations, substitutions, exchanges and transfers thereof shall be
registered. The Warrants shall be numbered and shall be registered in the
Warrant Register as they are issued or delivered upon any such division,
combination, substitution, exchange or transfer, as the case may be. The
Company and the Warrant Agent shall be entitled to treat the Holder of any
Warrant, as evidenced by the Warrant Register, as the owner in fact thereof for
all purposes and prior to presentment of any Warrant for registration of
transfer as provided in Section 2.2 shall not be bound to recognize any
equitable or other claim to or interest in such Warrant on the part of any
other person.
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2.2 Transfer. The Warrants shall be transferable only on the books of
the Company by registration of such transfer on the Warrant Register maintained
at the principal office of the Warrant Agent upon delivery thereof duly
endorsed by the Holder or by his duly authorized attorney or representative, or
accompanied by proper evidence of succession, assignment or authority to
transfer. In all cases of transfer by an attorney, the original power of
attorney, duly approved, or a copy thereof, duly certified, shall be deposited
and remain with the Warrant Agent. In case of transfer by executors,
administrators, guardians or other legal representatives, duly authenticated
evidence of their authority shall be produced, and may be required to be
deposited and remain with the Warrant Agent in its discretion. Upon any
registration of transfer, the Warrant Agent shall countersign and deliver a new
Warrant or Warrants for a like aggregate number of Warrant Shares to the person
or persons entitled thereto. The Holders may transfer the Warrants only upon
proper registration of such transaction or pursuant to an appropriate exemption
from registration.
2.3 Form of Warrant. The text of the Warrant and the Purchase Form
shall be substantially as set forth in Exhibit A attached hereto. The price per
Warrant Share and the number of Warrant Shares issuable upon exercise of each
Warrant are subject to adjustment upon the occurrence of certain events, all as
hereinafter provided. The Warrants shall be executed on behalf of the Company
by its Chairman of the Board, President or one of its Vice Presidents, under
its corporate seal reproduced thereon attested by its Secretary or an Assistant
Secretary. The signature of any such officer on the Warrants may be manual or
facsimile.
Warrants bearing the manual or facsimile signature of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them shall have ceased to hold
such office prior to the delivery of such Warrants or did not hold such offices
on the date of this Agreement.
Warrants shall be dated as of the date of countersignature thereof by
the Warrant Agent either upon initial issuance or upon division, exchange,
substitution or transfer.
SECTION 3. Countersignature of Warrants.
The Warrants shall be countersigned by the Warrant Agent (or any
successor to the Warrant Agent then acting as warrant agent under this
Agreement) and shall not be valid for any purpose unless so countersigned.
Warrants may be countersigned, however, by the Warrant Agent (or by its
successor as warrant agent hereunder) and may be delivered by the Warrant
Agent, notwithstanding that the persons whose manual or facsimile signatures
appear thereon as proper officers of the Company shall have ceased to be such
officers at the time of such countersignature, issuance or delivery. The
Company shall issue, and the Warrant Agent shall, upon written instructions of
the Chairman of the Board, President, one of the Vice Presidents, the Secretary
or an assistant secretary of the Company, countersign and deliver Warrants
entitling the Holders thereof to purchase not more than 1,100,000 Warrant
Shares (subject to Section 7 hereof and adjustment pursuant to Section 10
hereof) and the Warrant Agent shall also countersign and deliver Warrants as
otherwise provided in this Agreement.
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SECTION 4. Exchange of Warrant Certificates.
Each Warrant certificate may be exchanged for another certificate or
certificates entitling the Holder thereof to purchase a like aggregate number
of Warrant Shares as the certificate or certificates surrendered then entitle
such Holder to purchase. Any Holder desiring to exchange a Warrant certificate
or certificates shall make such request in writing delivered to the Warrant
Agent, and shall surrender, properly endorsed, the certificate or certificates
to be so exchanged. Thereupon, the Warrant Agent shall countersign and deliver
to the person entitled thereto a new Warrant certificate or certificates, as
the case may be, as so requested.
SECTION 5. Term of Warrants; Exercise of Warrants.
5.1 Term of Warrants. Subject to the terms of this Agreement, each
Holder shall have the right, which may be exercised (subject to Sections
10.1(g) and 10.1(h) hereof) until the close of business on October 1, 2007, to
purchase from the Company the number of fully paid and nonassessable Warrant
Shares which the Holder may at the time be entitled to purchase on exercise of
such Warrants.
5.2 Exercise of Warrants. Warrants may only be exercised for the
purchase of whole Warrant Shares. Warrants may be exercised upon surrender to
the Company at the principal office of the Warrant Agent, of the certificate or
certificates evidencing the Warrants to be exercised (except as otherwise
provided below), together with the Purchase Form on the reverse thereof duly
filled in and signed, and upon payment to the Warrant Agent for the account of
the Company of the Warrant Price (as defined in and determined in accordance
with the provisions of Sections 9 and 10 hereof), for the number of Warrant
Shares in respect of which such Warrants are then exercised. Payment of the
aggregate Warrant Price shall be made in cash or by wire transfer of
immediately available funds to such account as the Warrant Agent may from time
to time specify for the purpose by written notice to the Holders.
Subject to Sections 6 and 10.1(g) and (h) hereof, upon such surrender
of Warrants and payment of the Warrant Price as aforesaid, the Company shall
reasonably, promptly issue and cause to be delivered to or upon the written
order of the Holder, and in such name or names as the Holder may designate, a
certificate or certificates for the number of full Warrant Shares so purchased
upon the exercise of such Warrants, together with cash, as provided in Section
12 hereof, in respect of any fractional Warrant Shares otherwise issuable upon
such exercise of Warrants. Such certificate or certificates shall be deemed to
have been issued and any person so designated to be named therein shall be
deemed to have become a holder of record of such Warrant Shares as of the date
of the surrender of such Warrants and payment of such Warrant Price, as
aforesaid; provided, however, that if, at the date of surrender of such
Warrants and payment of such Warrant Price, the transfer books for the Warrant
Shares or other class of stock purchasable upon the exercise of such Warrants
shall be closed, the certificates for the Warrant Shares in respect of which
such Warrants are then exercised shall be issuable as of the date on which such
books shall next be opened and until such date the Company shall be under no
duty to deliver any certificate for such Warrant Shares; provided further,
however,
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that the transfer books of record, unless otherwise required by law, shall not
be closed at any one time for a period longer than twenty days. The rights of
purchase represented by the Warrants shall be exercisable, at the election of
the Holders thereof, either in full or from time to time in part and, in the
event that a certificate evidencing Warrants is exercised in respect of less
than all of the Warrant Shares purchasable on such exercise at any time prior
to the date of expiration of the Warrants, a new certificate evidencing the
remaining Warrant or Warrants will be delivered, and the Warrant Agent is
hereby irrevocably authorized to countersign and to deliver the required new
Warrant certificate or certificates pursuant to the provisions of this Section
and of Section 3 hereof and the Company, whenever required by the Warrant
Agent, will supply the Warrant Agent with Warrant certificates duly executed on
behalf of the Company for such purpose.
SECTION 6. Payment of Taxes.
The Company will pay all documentary stamp taxes, if any, attributable
to the initial issuance of 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 of any Warrants or
certificates for Warrant Shares registered in a name other than that of the
Holder of Warrants in respect of which such Warrants or Warrant Shares are
originally issued.
SECTION 7. Mutilated or Missing Warrants.
In case any of the certificates evidencing the Warrants shall be
mutilated, lost, stolen or destroyed, the Company may in its discretion issue,
and the Warrant Agent shall countersign and deliver in exchange and
substitution for and upon cancellation of the mutilated Warrant certificate, or
in lieu of and substitution for the Warrant certificate lost, stolen or
destroyed, a new Warrant certificate of like tenor and representing an
equivalent right or interest; but only upon receipt of evidence satisfactory to
the Company and the Warrant Agent of such loss, theft or destruction of such
Warrant and indemnity, if requested, also satisfactory to them. An applicant
for such a substitute Warrant certificate shall also comply with such other
reasonable regulations and pay such other reasonable charges as the Company and
the Warrant Agent, or either of them, may prescribe.
SECTION 8. Reservation of Warrant Shares; Purchase of Warrants.
8.1 Reservation of Warrant Shares. There have been reserved, and the
Company shall at all times keep reserved, out of its authorized Common Stock, a
number of shares of Common Stock sufficient to provide for the exercise in full
of the rights of purchase represented by the Warrants outstanding from time to
time. The transfer agent for the Common Stock (the "Transfer Agent") and every
subsequent transfer agent for any shares of the Company's capital stock
issuable upon the exercise of any of such rights of purchase will be
irrevocably authorized and directed at all times to reserve such number of
authorized shares as shall be requisite for such purpose. The Company will keep
a copy of this Agreement, as from time to time in effect, on file with the
Transfer Agent or its successors and with every subsequent transfer agent for
any shares of the
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Company's capital stock issuable upon the exercise of the rights of purchase
represented by the Warrants. The Warrant Agent is hereby irrevocably authorized
to requisition from time to time from the Transfer Agent or its successor the
stock certificates required to honor outstanding Warrants upon exercise thereof
in accordance with the terms of this Agreement. The Company will supply such
Transfer Agent or its successor with duly executed stock certificates for such
purposes and will provide or otherwise make available any cash which may be
payable as provided in Sections 5.2 and 12 hereof. All Warrants surrendered in
the exercise of the rights thereby evidenced shall be canceled by the Warrant
Agent and shall thereafter be delivered to the Company.
8.2 Purchase of Warrants by the Company. The Company shall have the
right, except as limited by law, other agreement or herein, to purchase or
otherwise acquire Warrants at such times, in such manner and for such
consideration as it may deem appropriate.
8.3 Cancellation of Warrants. In the event the Company shall purchase
or otherwise acquire Warrants, the same shall thereupon be delivered to the
Warrant Agent and be canceled by it and retired. The Warrant Agent shall cancel
any Warrants surrendered for division, combination, exchange, substitution,
transfer or exercise in whole or in part.
SECTION 9. Warrant Price.
The price per share at which Warrant Shares shall be purchasable upon
exercise of the Warrants (the "Warrant Price") shall equal $27.63, subject to
adjustment pursuant to Section 10 hereof.
SECTION 10. Adjustment of Warrant Price and Number of Warrant Shares.
The number and kind of securities purchasable upon the exercise of
each Warrant and the Warrant Price shall be subject to adjustment from time to
time upon the happening of certain events, as hereinafter defined.
10.1 Mechanical Adjustments. The number of Warrant Shares purchasable
upon the exercise of each Warrant and the Warrant Price shall be subject to
adjustment as follows:
(a) In case the Company shall (i) pay a dividend in shares of
Common Stock or make a distribution in shares of Common Stock, (ii)
subdivide its outstanding shares of Common Stock, (iii) combine its
outstanding shares of Common Stock into a smaller number of shares of
Common Stock or (iv) issue by reclassification or recapitalization of
its shares of Common Stock other securities of the Company, the number
of Warrant Shares purchasable upon exercise of each Warrant
immediately prior thereto shall be adjusted so that the Holder of each
Warrant shall be entitled to receive the kind and number of Warrant
Shares or other securities of the Company which he or she would have
owned or have been entitled to receive after the happening of any of
the events described above, had such Warrant been exercised
immediately prior to the happening of such event or
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any record date with respect thereto. An adjustment made pursuant to
this paragraph (a) shall become effective immediately after the
effective date of such event retroactive to the record date, if any,
for such event.
(b) (i) In case the Company shall at any time or from time to
time
(w) distribute to all holders of its shares of Common Stock
evidences of its indebtedness or assets (excluding cash dividends or
distributions payable out of consolidated earnings or earned surplus
legally available for the payment of dividends and dividends or
distributions referred to in Subsection 10.1(a) above), or any rights,
options or warrants containing the right to subscribe for or purchase,
or convertible or exchangeable securities containing the right to
obtain upon conversion or exchange thereof, any additional shares of
Common Stock, or
(x) issue to any person any rights, options or warrants
containing the right to subscribe for or purchase, or convertible or
exchangeable securities containing the right to obtain upon conversion
or exchange thereof, any additional shares of Common Stock, and the
consideration per share for which such additional shares of Common
Stock may at any time thereafter be issuable pursuant to such rights,
options or warrants, or upon exercise of the conversion or exchange
right in such convertible or exchangeable securities, shall be less
than the then current market price per share of Common Stock
(determined pursuant to Subsection 10.1(c) hereof),
then in each case the number of Warrant Shares thereafter purchasable upon the
exercise of each Warrant shall be determined
(y) in the case of a distribution referred to in clause (w)
above, by multiplying the number of Warrant Shares theretofore
purchasable upon the exercise of such Warrant by a fraction, of which
the numerator shall be the then current market price per share of
Common Stock (as determined pursuant to Subsection 10.1(c) hereof) on
the date of such distribution, and of which the denominator shall be
the excess of (a) such then current market price per share of Common
Stock, over (b) the then fair value (as determined by the Board of
Directors of the Company, whose determination shall be conclusive) of
the portion of the assets or evidences of indebtedness so distributed
or of such subscription rights, options or warrants, or of such
convertible or exchangeable securities, applicable to one share of
Common Stock, or
(z) in the case of an issuance referred to in clause (x)
above, as provided in Subsection 10.1(b)(ii) hereof, on the basis that
(i) the maximum number of shares of additional Common Stock issuable
pursuant to all such rights, options or warrants, or obtainable upon
conversion or exchange of all such convertible or exchangeable
securities, as the case may be, shall be deemed to have been issued as
of the date for determination of the current market price, as
hereinafter provided, and (ii) the aggregate consideration for all
such maximum number of additional shares of Common Stock shall be
deemed to be the
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minimum consideration received and receivable by the Company for the
issuance of such additional shares of Common Stock pursuant to the
terms of such rights, options or warrants, or such convertible or
exchangeable securities.
An adjustment pursuant to Subsection 10.1(b)(i)(y) shall be made whenever any
such distribution is made, and shall become effective on the date of
distribution retroactive to the record date for the determination of
stockholders entitled to receive such distribution. For purposes of Subsection
10.1(b)(i)(z), the date as of which the current market price of Common Stock
shall be determined shall be the earliest of (a) the record date for the
determination of stockholders entitled to receive distribution of such rights,
options, warrants, or convertible or exchangeable securities, (b) the date on
which the Company shall enter into a firm contract for issuance of the same,
and (c) the date on which the same are in fact issued.
(ii) In case the Company shall issue any additional
shares of its Common Stock for a consideration per share less than the
then current market price per share of Common Stock (determined
pursuant to Subsection 10.1(c) hereof), then in each case the number
of Warrant Shares thereafter purchasable upon the exercise of each
Warrant shall be determined by multiplying the number of Warrant
Shares theretofore purchasable upon the exercise of such Warrant by a
fraction, of which the numerator shall be the number of shares of
Common Stock outstanding immediately prior to the issuance of such
additional shares of Common Stock plus the number of such additional
shares of Common Stock so issued, and of which the denominator shall
be the number of shares of Common Stock outstanding immediately prior
to the issuance of such additional shares of Common Stock plus the
number of shares of Common Stock which the aggregate consideration for
the total number of such additional shares of Common Stock so issued
would purchase at the then current market price per share of the
Common Stock. For purposes of this Subsection 10.1(b)(ii) the date as
of which the current market price per share of Common Stock shall be
determined shall be the earlier of (a) the date on which the Company
shall enter into a firm contract for the issuance of such additional
shares of Common Stock, and (b) the actual date of issuance thereof.
The provisions of this Subsection 10.1(b)(ii) shall not apply to any
issuance for which an adjustment is provided in Subsection 10.1(a), or
upon the issuance of any additional shares of Common Stock upon
exercise of any rights, options or warrants, or conversion or exchange
of any convertible or exchangeable securities, if an adjustment has
previously been made pursuant to Subsection 10.1(b)(i)(z) upon the
issuance of such rights, options or warrants, or of such convertible
or exchangeable securities.
(c) For the purpose of any computation under Section 10.1(b)
and Section 12 hereof, the current market price per share of Common Stock at
any date shall be the average representative closing bid price of the Common
Stock (if then traded in the over-the-counter market) or the average closing
price of the Common Stock (if then traded on NASDAQ's National Market System or
on a national securities exchange) for the five consecutive trading days ending
on the trading day immediately prior to the date as of which such computation
is made; if the Common Stock is not then quoted on the
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NASDAQ National Market or the NASDAQ Small Cap Market or listed on a national
securities exchange, the current market price per share thereof shall be the
result obtained by dividing the Company's then aggregate shareholders' equity
(as determined by its Board of Directors, such determination to be conclusive)
by the number of then outstanding shares of Common Stock.
(d) No adjustment in the number of Warrant Shares purchasable
hereunder shall be required unless such adjustment would require an increase or
decrease of at least 1% in the number of Warrant Shares purchasable upon the
exercise of each Warrant; provided, however, that any adjustments which by
reason of this Section 10.1(d) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
shall be made to the nearest one-thousandth of a share.
(e) (i) Whenever the number of Warrant Shares purchasable
upon the exercise of each Warrant is adjusted, as herein provided, the
Warrant Price payable upon exercise of each Warrant shall be adjusted
by multiplying such Warrant Price immediately prior to such adjustment
by a fraction, of which the numerator shall be the number of Warrant
Shares purchasable upon the exercise of each Warrant immediately prior
to such adjustment, and of which the denominator shall be the number
of Warrant Shares so purchasable immediately thereafter.
(ii) If, at any time after any adjustment of the
number of Warrant Shares obtainable upon exercise of any Warrant shall
have been made pursuant to the foregoing Subsection 10.1(b)(i)(z) on
the basis of the issuance of rights, options or warrants, or
convertible or exchangeable securities, or after any new adjustment of
the number of Warrant Shares obtainable upon exercise of any Warrant
shall have been made pursuant to this Subsection,
(w) such rights, options or warrants or
rights or the right of conversion or exchange shall
expire, and a portion of such rights, options or
warrants, or the right of conversion or exchange in
respect of a portion of such other securities, as
the case may be, shall not have been exercised,
and/or
(x) the consideration per share, for which
additional shares of Common Stock are issuable
pursuant to such rights, options or warrants or the
terms or such other securities, shall be increased
solely by virtue of provisions therein contained for
an automatic increase in such consideration per
share upon the arrival of a specified date or the
happening of a specified event,
in any such case, such previous adjustment shall be rescinded and annulled and
the additional shares of Common Stock which were deemed to have been issued by
virtue of the computation made in connection with the adjustment so rescinded
and annulled shall no longer be deemed to have been issued by virtue of such
computation. Thereupon, a re-computation shall be made of the effect of such
rights, options or warrants or other securities on the basis of
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(y) treating the number of additional
shares of Common Stock, if any, theretofore actually
issued or issuable pursuant to the previous exercise
of such rights, options or warrants, or such right
of conversion or exchange, as having been issued on
the date or dates of such exercise and for the
consideration actually received and receivable
therefor, and
(z) treating any such rights, options or
warrants, or any such other securities, which then
remain outstanding as having been granted or issued
immediately after the time of such increase of the
consideration per share for which additional shares
of Common Stock are issuable under such rights,
options or warrants, or such other securities;
and, if and to the extent called for by the foregoing provisions of this
Subsection 10.1(e)(ii) on the basis aforesaid, a new adjustment of the number
of Warrant Shares obtainable upon exercise of any Warrant shall be made, which
new adjustment shall supersede the previous adjustment so rescinded and
annulled.
(f) For the purpose of this Section 10.1, the term "shares of
Common Stock" shall mean (i) the class of stock designated as the Common
Stock of the Company at the date of this Agreement, or (ii) any other class
of stock resulting from successive changes or reclassification of such shares
consisting solely of changes in par value, or from par value to no par value,
or from no par value to par value. In the event that at any time, as a result
of an adjustment made pursuant to paragraph (a) above, the Holders shall
become entitled to purchase any shares of the Company other than shares of
Common Stock, thereafter the number of such other shares so purchasable upon
exercise of each Warrant and the Warrant Price of such shares shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Warrant
Shares contained in Subsection 10.1(a) through Subsection 10.1(e), inclusive,
above, Subsections 10.1(g) and 10.1(h) below, and the provisions of Section 5
and Sections 10.2 and 10.3 hereof, with respect to the Warrant Shares, shall
apply on like terms to any such other shares.
(g) If at any time up to and including the fifth anniversary
of April 1, 1999 (the "Effective Date") the Company proposes to consolidate
with or merge into another corporation, or in the event of any proposed sale
or conveyance to another corporation of all or substantially all of the
issued and outstanding stock or assets of the Company, in any such case for
consideration consisting entirely of cash, or of cash and evidences of
indebtedness of such other corporation and/or any of its affiliates (such
indebtedness to be valued for all purposes of this Agreement at the par or
face amount thereof) (such cash and evidences of indebtedness, collectively,
"Cash"), then, as a condition to the consummation of such transaction (a
"Cash Transaction"), the Warrant Price shall be adjusted according to the
following schedule:
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(i) in the case of a Cash Transaction occurring up
to and including the first anniversary of the Effective Date, the
adjusted Warrant Price shall be equal to the result obtained by
dividing $120,000,000 by the product of (x) the number of issued and
outstanding shares of Common Stock as of the Effective Date and (y)
0.97 (such product being hereinafter referred to as the "Applicable
Share Portion");
(ii) in the case of a Cash Transaction occurring
after the first anniversary of the Effective Date and up to and
including the second anniversary of the Effective Date, the adjusted
Warrant Price shall be equal to the result obtained by dividing
$150,000,000 by the Applicable Share Portion;
(iii) in the case of a Cash Transaction occurring
after the second anniversary and up to and including the third
anniversary of the Effective Date, the adjusted Warrant Price shall
equal the result obtained by dividing $180,000,000 by the Applicable
Share Portion;
(iv) in the case of a Cash Transaction occurring
after the third anniversary and up to and including the fourth
anniversary of the Effective Date, the adjusted Warrant Price shall
equal the result obtained by dividing $210,000,00 by the Applicable
Share Portion; and
(v) in the case of a Cash Transaction occurring
after the fourth anniversary and up to and including the fifth
anniversary of the Effective Date, the adjusted Warrant Price shall
equal the result obtained by dividing $240,000,000 by the Applicable
Share Portion.
There will be no adjustment to the Warrant Price pursuant to this
Section 10.1(g) in the case of a Cash Transaction occurring subsequent to the
fifth anniversary of the Effective Date. Such adjusted Warrant Price shall
become effective upon the giving of the notice referred to therein so that the
Holders of the Warrants shall thereupon be entitled to exercise the Warrants at
such adjusted Warrant Price.
In the event of an adjustment to the Warrant Price pursuant to this
Section 10.1(g), not later than the fifth New York City business day following
the execution and delivery of the definitive agreement with respect to the Cash
Transaction giving rise to such adjustment, the Company shall give notice (a
"Special Adjustment Notice") to each Holder in accordance with Section 10.3 (i)
setting forth in reasonable detail the terms of such Cash Transaction, (ii)
stating the date agreed or proposed for consummation of the same (which shall
not be earlier than the twenty-fifth New York City business day following the
date of such notice), (iii) specifying the details of such adjustment to the
Warrant Price, and (iv) containing a statement to the effect that all
outstanding Warrants not exercised prior to 5:00 P.M., New York time, on the
twentieth New York City business day following the date of such Special
Adjustment Notice shall, as provided in Section 11 hereof but subject to the
next succeeding paragraph hereof, terminate and become void. Cash and Warrants
delivered upon exercise thereof, and the certificates evidencing the Warrant
Shares issued upon such exercise, during the period from the date
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of such Special Adjustment Notice through and including the date on which all
unexercised Warrants shall expire as aforesaid shall be placed in escrow with
the Warrant Agent (such cash to be invested by the Warrant Agent for the
account, benefit and risk of each exercising Holder in debt securities issued
by the United States of America or any agency or instrumentality thereof and
entitled to its full faith and credit, if and to the extent so directed by such
Holder). So long as the certificates evidencing such Warrant Shares and the
funds delivered in payment therefor shall remain in escrow, the persons in
whose names such certificates are to be registered in the stock transfer
records of the Company shall have no rights as shareholders arising by virtue
of the issuance of such certificates. If the Cash Transaction in question shall
be consummated not later than the 90th (or, if prior thereto the Company shall
have given written notice thereof to the Holders, the 150th) day following the
date of such Special Adjustment Notice (x) the Warrant Agent shall within five
days thereafter sell any investments acquired by it as aforesaid, and deliver
out of escrow to the Holders or as they may direct such certificates evidencing
their respective Warrant Shares and any accrued earnings on their investments,
and to the Company an amount in cash equal to the exercise price of such
Warrants originally delivered to it by the exercising Holders, and (y) the
Company shall cause the registration of the certificates evidencing such
Warrant Shares in the names of the respective holders thereof in its stock
transfer records.
Notwithstanding the foregoing, if such Cash Transaction shall not be
consummated not later than the 90th (or 150th, if extended as aforesaid) day
following the date of such Special Adjustment Notice (i) such adjustment of the
Warrant Price, such termination of unexercised Warrants and such exercise of
all Warrants exercised during the period from the date of such Special
Adjustment Notice through and including the date on which all unexercised
Warrants expired as aforesaid shall be reversed. All such Warrants, exercised
and unexercised, shall be reinstated and the Holders thereof restored to their
former positions, and in this connection the Warrant Agent shall within five
days after such 90th (or 150th) day sell any investments acquired by it as
aforesaid, and deliver out of escrow to the Holders or as they may direct their
Warrants and funds in an amount in each case equal to the sum of the exercise
price previously paid by them and any accrued earnings arising from the
investment thereof, and to the Company for cancellation the certificates
evidencing the Warrant Shares which would have been delivered to the exercising
Holders had such Cash Transaction been timely consummated.
Unless such Cash Transaction shall fail to be timely consummated as
specified in the next preceding paragraph, the Warrant Price for the Warrants
shall be adjusted in accordance with this Section 10.1(g) only for the first
proposed Cash Transaction after the Effective Date. The Warrant Price as
adjusted by reason of a proposed Cash Transaction shall in all cases be subject
to further adjustment as provided in Subsections (a) - (f), inclusive, of this
Section 10.1 for so long as the Warrants remain outstanding.
(h) If at any time up to and including the fifth anniversary
of the Effective Date the Company proposes to consolidate with or merge into
another corporation, or in the event of any proposed sale or conveyance to
another corporation of all or substantially all of the issued and outstanding
stock or assets of the Company, in any case for a consideration consisting of a
combination of Cash and equity securities of
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such other corporation and/or any of its affiliates, and/or other property,
then, as a condition to the consummation of such transaction (a "Combined
Transaction"), the Company or such successor or purchasing corporation, as the
case may be, shall execute with the Warrant Agent an agreement providing that
(i) each outstanding Warrant shall be deemed divided into two notional Warrants
(for convenience of reference, an "A Warrant" and a "B Warrant"), such A
Warrant to be a Warrant evidencing the right to purchase the total number of
Warrant Shares which might have been purchased under such Warrant being
notionally divided immediately prior to the effectiveness of such agreement,
multiplied by a fraction of which the numerator shall be the Cash component of
the purchase price of the proposed Combined Transaction, and the denominator
shall be the sum of such Cash portion and the value of the equity securities
and/or other property, comprising the balance of such purchase price, and such
B Warrant to be a Warrant evidencing the right to purchase a number of Warrant
Shares equal to the excess of the total number of Warrant Shares which might
have been purchased under such Warrant being notionally divided immediately
prior to the effectiveness of such agreement over the number of Warrant Shares
obtainable upon exercise of such A Warrant, and (ii) the Warrant Price in
respect of each A Warrant shall be adjusted as provided in Subsection 10.1(g)
as if the A Warrants represented all outstanding Warrants and the portion of
the proposed Combined Transaction allocable to the A Warrants were a Cash
Transaction, and the Warrant Price in respect of each B Warrant shall be
adjusted as provided in Section 10.5 below. (For example, if the consideration
in the proposed Combined Transaction consists of 75% Cash and 25% equity
securities (based upon fair market value of the equity securities), then a
Warrant representing 100 Warrant Shares would be notionally divided into an A
Warrant representing the right to purchase 75 Warrant Shares, subject to
adjustment as provided in Subsection 10.1(g), and a B Warrant representing the
right to purchase 25 Warrant Shares, subject to adjustment as provided in
Section 10.5.)
In the event of an adjustment to the Warrant Price of the A Warrants
pursuant to this Subsection 10.1(h), a Special Adjustment Notice shall be given
to each Holder in accordance with Subsection 10.1(g), mutatis mutandis, as to
the Combined Transaction, the A Warrants and the B Warrants, and the provisions
of the antepenultimate and penultimate paragraphs of Section 10.1(g) shall
apply in respect of said A Warrants.
Unless such Combined Transaction shall fail to be timely consummated
as specified in the penultimate paragraph of Subsection 10.1(g), mutatis
mutandis, the Warrant Price for the Warrants shall be adjusted in accordance
with this Section 10.1(h) only for the first proposed Combined Transaction
after the Effective Date. The Warrant Price as adjusted by reason of a proposed
Combined Transaction shall in all cases be subject to further adjustment as
provided in Subsections (a) - (f), inclusive, of this Section 10.1 for so long
as the Warrants remain outstanding.
Any proposed sale or conveyance of all or substantially all of the
issued and outstanding stock of the Company for a consideration which,
depending upon the election of each selling stockholder may (as to such
stockholder individually) be either a Cash Transaction or a Combined
Transaction, shall be deemed to be a Combined Transaction to which this
Subsection 10.1(h) applies unless all selling stockholders elect to receive a
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consideration consisting solely of Cash. For purposes of this Subsection
10.1(h) the respective Cash and non-Cash components of the aggregate
consideration to be paid to all selling stockholders shall be determined by
summing the respective Cash and non-Cash components of the consideration to be
paid to each selling stockholder. For purposes of this Subsection 10.1(h), if
the equity securities of the other corporation involved in such Combined
Transaction are publicly traded, they shall be valued at the average closing
price of such equity securities for the five consecutive trading days ending on
the trading day immediately preceding the date on which the notice to Holders
pursuant to this Subsection 10.1(h) is given. If not publicly traded, such
securities shall have such value, and in any event any other property
constituting a part of the purchase price in such Combined Transaction shall
have such value, as is assigned by the Company's Board of Directors, its
determination to be conclusive.
(i) Notwithstanding the foregoing provisions, the issuance of
any options or rights to purchase shares of Common Stock pursuant to any
employee benefit plan or program of the Company duly adopted and as in effect
on the Effective Date shall not be deemed to constitute an issuance of common
stock or other convertible securities to which any of the adjustment provisions
described above applies.
10.2 Voluntary Adjustment by the Company. The Company may at its
option, at any time during the term of the Warrants, reduce the then current
Warrant Price to any amount deemed appropriate by the Board of Directors of the
Company.
10.3 Notice of Adjustment. Whenever the number of Warrant Shares
purchasable upon the exercise of each Warrant or the Warrant Price of such
Warrant Shares is adjusted, as herein provided, the Company shall cause the
Warrant Agent promptly to mail by first class mail, postage prepaid, at the
expense of the Company, to each Holder notice of such adjustment or adjustments
and shall deliver to the Warrant Agent a certificate of a firm of independent
public accountants selected by the Board of Directors of the Company (who may
be the regular accountants employed by the Company) setting forth the number of
Warrant Shares purchasable upon the exercise of each Warrant and the Warrant
Price of such Warrant Shares after such adjustment, setting forth a brief
statement of the facts requiring such adjustment and setting forth the
computation by which such adjustment was made. Such certificate shall be
conclusive evidence of the correctness of such adjustment. The Warrant Agent
shall be entitled to rely on such certificate and shall be under no duty or
responsibility with respect to any such certificate, except to exhibit the
same, from time to time, to any Holder desiring an inspection thereof during
reasonable business hours. The Warrant Agent shall not at any time be under any
duty or responsibility to any Holders to determine whether any facts exist
which may require any adjustment of the Warrant Price or the number of Warrant
Shares or other stock or property purchasable on exercise thereof, or with
respect to the nature or extent of any such adjustment when made, or with
respect to the method employed in making such adjustment.
10.4 No Adjustment for Dividends. Except as provided in Section 10.1,
no adjustment in respect of any dividend shall be made during the term of a
Warrant or upon the exercise of a Warrant.
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10.5 Reorganization, Reclassification, Merger, Consolidation or
Disposition of Assets. Except as otherwise provided in Subsections 10.1(g) and
(h), in case the Company shall reorganize its capital, reclassify its capital
stock, consolidate or merge with or into another corporation or sell, transfer
or otherwise dispose of all or substantially all of its property, assets or
business to another corporation and, pursuant to the terms of such
reorganization, reclassification, merger, consolidation or disposition of
assets, shares of common stock of the successor or acquiring corporation,
shares of stock or other securities or property of any nature whatsoever
(including warrants or other subscription or purchase rights) in addition to or
in lieu of common stock of the successor or acquiring corporation ("Other
Property"), are to be received by or distributed to the holders of Common Stock
of the Company, then each Holder shall have the right thereafter to receive,
upon exercise of Warrants, the number of shares of common stock of the
successor or acquiring corporation or of the Company, if it is the surviving
corporation, and Other Property receivable upon or as a result of such
reorganization, reclassification, merger, consolidation or disposition of
assets by a holder of the number of shares of Common Stock for which such
Warrants are exercisable immediately prior to such event. In case of any such
reorganization, reclassification, merger, consolidation or disposition of
assets, the successor or acquiring corporation (if other than the Company)
shall expressly assume the due and punctual observance and performance of each
and every covenant and condition of this Warrant Agreement to be performed and
observed by the Company and all the obligations and liabilities hereunder,
subject to such modifications as may be deemed appropriate (as determined by
resolution of the Board of Directors of the Company) in order to provide for
adjustments of shares of the Common Stock for which Warrants are exercisable
which shall be as nearly equivalent as practicable to the adjustments provided
for in this Section 10. For purposes of this Section 10.5, "common stock of the
successor or acquiring corporation" shall include stock of such corporation of
any class which is not preferred as to dividends or assets over any other class
of stock of such corporation and which is not subject to redemption and shall
also include any evidences of indebtedness, shares of stock or other securities
which are convertible into or exchangeable for any such stock, either
immediately or upon the arrival of a specified date or the happening of a
specified event and any warrants or other rights to subscribe for or purchase
any such stock. The foregoing provisions of this Section 10.5 shall similarly
apply to successive reorganizations, reclassifications, mergers, consolidations
or disposition of assets.
10.6 Statement on Warrants. Irrespective of any adjustments in the
Warrant Price or 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 price and number and kind of shares as are stated
in the Warrant certificates initially issuable pursuant to this Agreement.
SECTION 11. Expiration of Warrants.
At 5:00 P.M., New York time, on October 1, 2007 (or on such earlier
date as may be specified in a Special Adjustment Notes given pursuant to
Section 10.1(g) or 10.1(h), but subject to reinstatement as provided in said
Sections 10.1(g)), all outstanding Warrants shall become void and all rights of
all holders thereof and thereunder and under this Agreement shall cease.
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SECTION 12. Fractional Interests.
The Company shall not be required to issue fractional Warrant Shares
on the exercise of Warrants. The number of full Warrant Shares which shall be
issuable upon the exercise of Warrants shall be computed on the basis of the
aggregate number of Warrant Shares purchasable on exercise of the Warrants so
presented. If any fraction of a Warrant Share would, except for the provisions
of this Section 12, be issuable on the exercise of any Warrant (or specified
portion thereof), the Company shall pay an amount in cash equal to the then
current market price per Warrant Share (as defined in Section 10.1(c) above)
multiplied by such fraction.
SECTION 13. No Rights as Stockholders.
Nothing contained in this Agreement or in any of the Warrants shall be
construed as conferring upon the Holders or their transferees the right to vote
or to receive dividends or to consent to or receive notice as stockholders in
respect of any meeting of stockholders for the election of directors of the
Company or any other matter, or any rights whatsoever as stockholders of the
Company.
SECTION 14. Disposition of Proceeds on Exercise of Warrants; Inspection of
Warrant Agreement.
The Warrant Agent shall account promptly to the Company with respect
to Warrants exercised and concurrently pay the Company all monies received by
the Warrant Agent for the purchase of the Warrant Shares through the exercise
of such Warrants.
The Warrant Agent shall keep copies of this Agreement and any notices
given or received hereunder available for inspection by the Holders during
normal business hours at its principal office in New York, New York. The
Company shall supply the Warrant Agent from time to time with such numbers of
copies of this Agreement as the Warrant Agent may request.
SECTION 15. Merger or Consolidation or Change of Name of Warrant Agent.
Any corporation into which the Warrant Agent may be merged or with
which it may be consolidated, or any corporation resulting from any merger or
consolidation to which the Warrant Agent shall be a party, shall be the
successor to the Warrant Agent hereunder without the execution or filing of any
paper or any further act on the part of any of the parties hereto, provided
that such corporation would be eligible for appointment as a successor Warrant
Agent under the provisions of Section 17 hereof. In case at the time such
successor to the Warrant Agent shall succeed to the agency created by this
Agreement, any of the Warrants shall have been countersigned but not delivered,
any such successor to the Warrant Agent may adopt the countersignature of the
original
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Warrant Agent and deliver such Warrants so countersigned; and in case at that
time any of the Warrants shall not have been countersigned, any successor to
the Warrant Agent may countersign such Warrants either in the name of the
predecessor Warrant Agent or in the name of the successor Warrant Agent; and in
all such cases Warrants shall have the full force provided in the Warrants and
in this Agreement.
In case at any time the name of the Warrant Agent shall be changed and
at such time any of the Warrants shall have been countersigned but not
delivered, the Warrant Agent may adopt the countersignatures under its prior
name and deliver such Warrants so countersigned; and in case at that time any
of the Warrants shall not have been countersigned, the Warrant Agent may
countersign such Warrants either in its prior name or in its changed name; and
in all such cases such Warrants shall have the full force provided in the
Warrants and in this Agreement.
SECTION 16. Concerning the Warrant Agent.
The Warrant Agent undertakes the duties and obligations imposed by
this Agreement upon the following terms and conditions, and no implied duties
or obligations shall be read into this Agreement against the Warrant Agent, by
all of which the Company and the Holders, by their acceptance of Warrants,
shall be bound:
16.1 Correctness of Statements. The statements contained herein and in
the Warrants shall be taken as statements of the Company and the Warrant Agent
assumes no responsibility for the correctness of any of the same except such as
describe the Warrant Agent or action taken by it. The Warrant Agent assumes no
responsibility with respect to the distribution of the Warrants except as
herein otherwise provided.
16.2 Breach of Covenants. The Warrant Agent shall not be responsible
for any failure of the Company to comply with the covenants contained in this
Agreement or in the Warrants to be complied with by the Company.
16.3 Performance of Duties. The Warrant Agent may execute and exercise
any of the rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents and shall not be
responsible for the misconduct of any agent appointed with due care.
16.4 Reliance on Counsel. The Warrant Agent may consult at any time
with legal counsel satisfactory to it (who may be counsel for the Company) and
the Warrant Agent shall incur no liability or responsibility to the Company or
to any Holder in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with the opinion or the advice of
such counsel.
16.5 Proof of Actions Taken. Whenever in the performance of its duties
under this Agreement the Warrant Agent shall deem it necessary or desirable
that any fact or matter be proved or established by the Company prior to taking
or suffering any action hereunder, such fact or matter (unless other evidence
in respect thereof be herein specifically prescribed) may be deemed
conclusively to be proved and established by a
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certificate signed by the Chairman of the Board, the President, one of the Vice
Presidents or the Secretary of the Company 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.
16.6 Compensation. The Company agrees to pay the Warrant Agent
reasonable compensation for all services rendered by the Warrant Agent in the
performance of its duties under this Agreement, to reimburse the Warrant Agent
for all expenses, taxes (other than taxes based on income) and governmental
charges and other charges of any kind and nature incurred by the Warrant Agent
in the performance of its duties under this Agreement, and to indemnify the
Warrant Agent and save it harmless against any and all liabilities, including
judgments, costs and counsel fees, for anything done or omitted by the Warrant
Agent in the performance of its duties under this Agreement except as a result
of the Warrant Agent's negligence, intentional misconduct, bad faith or
unlawful conduct. The costs and expenses of enforcing this right of
indemnification shall also be paid by the Company. The indemnification provided
for hereunder shall survive the expiration of the Warrants and termination of
this Agreement.
16.7 Legal Proceedings. 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 or one or more Holders shall
furnish the Warrant Agent with reasonable security and indemnity for any costs
and expenses which may be incurred, but this provision shall not affect the
power of the Warrant Agent to take such action as the Warrant Agent may
consider proper, whether with or without any such security or indemnity. All
rights of action under this Agreement or under any of the Warrants may be
enforced by the Warrant Agent without the possession of any of the Warrants or
the production thereof at any trial or other proceeding relative thereto, and
any such action, suit or proceeding instituted by the Warrant Agent shall be
brought in its name as Warrant Agent, and any recovery of judgment (other than
in respect of a claim under Section 16.6) shall be for the ratable benefit of
the Holders, as their respective rights or interests may appear.
16.8 Other Transactions in Securities of Company. The Warrant Agent
and any stockholder, director, officer or employee of the Warrant Agent may
buy, sell or deal in any of the Warrants, or other securities of the Company or
have a pecuniary interest in any transaction in which the Company may be
interested, or contract with the Company or otherwise act as fully and freely
as though it were not Warrant Agent under this Agreement. Nothing herein shall
preclude the Warrant Agent from acting in any other capacity for the Company or
for any other legal entity.
16.9 Liability of Warrant Agent. The Warrant Agent shall act hereunder
solely as agent, and its duties shall be determined solely by the provisions
hereof. The Warrant Agent shall not be liable for anything which it may do or
refrain from doing in connection with this Agreement except for its own
negligence, intentional misconduct, bad faith or unlawful conduct. The Warrant
Agent shall not be liable for interest on any amount on deposit with it
pursuant to Section 10.1(g). Notwithstanding anything in this Agreement to the
contrary, in no event shall the Warrant Agent be liable for special,
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indirect or consequential loss or damage of any kind whatsoever (including but
not limited to lost profits), even if the Warrant Agent has been advised of the
likelihood of such loss or damage and regardless of the form of the action.
16.10 Reliance on Documents. The Warrant Agent may conclusively rely
upon and will not incur any liability or responsibility to the Company or to
any Holder for any action taken in reliance on any notice, resolution, waiver,
consent, order, certificate, or other paper, document or instrument reasonably
believed by it to be genuine and to have been signed, sent or presented by the
proper party or parties.
16.11 Validity of Agreement, etc. 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 hereof by the Warrant
Agent) or in respect of the validity or execution of any Warrant (except its
countersignature thereof) or in respect of the necessity or the extent of any
adjustment to the Warrant Price or the number of Warrant Shares purchasable
under a Warrant; nor shall the Warrant Agent by any act hereunder be deemed to
make any representation or warranty as to the authorization, reservation, value
or registration under securities laws of any Warrant Shares (or other stock) to
be issued pursuant to this Agreement or any Warrant, or as to whether any
Warrant Shares (or other stock) will, when issued, be validly issued, fully
paid and nonassessable, or as to the Warrant Price or the number or amount of
Warrant Shares or other securities or other property issuable upon exercise of
any Warrant or the method employed in making any adjustment to the foregoing.
16.12 Instructions from Company. The Warrant Agent is hereby
authorized and directed to accept instructions with respect to the performance
of its duties hereunder from the Chairman of the Board, the President, one of
the Vice Presidents or the Secretary of the Company and to apply to such
officers for advice or instructions in connection with its duties, and shall
not be liable for any action taken or suffered to be taken by it in good faith
in accordance with instructions of any such officer or officers. Any
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 under this Agreement and the date on
or after which such action shall be taken or such omission shall be effective.
The Warrant Agent shall not be liable for any action taken by, or omission of,
the Warrant Agent in accordance with a proposal included in any such
application on or after the date specified in such application (which date
shall not be less than ten business days after the date any officer of the
Company actually receives such application, unless any such officer shall have
consented in writing to an earlier date) unless, prior to taking any such
action (or the effective date in the case of an omission), the Warrant Agent
shall have received written instructions in response to such application
subject to the proposed action or omission and/or specifying the action to be
taken or omitted.
16.13. No Requirement to Expend or Risk Funds. No provision of this
Agreement shall require the Warrant Agent to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder or in the exercise of its rights if there shall be reasonable grounds
for believing that repayment of such funds of adequate indemnification against
such risk or liability is not reasonably assured to it.
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16.14. Further Assurances. 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. The
Warrant Agent shall not be required to take notice or be deemed to have any
notice of any fact, event or determination under this Agreement unless and
until the Warrant Agent shall be specifically notified in writing by the
Company of such fact, event or determination.
16.15. Incomplete Exercise or Transfer Instructions. If, with respect
to any Warrants surrendered to the Warrant Agent for exercise or transfer, the
certificate attached to the form of assignment or form of election to purchase,
as the case may be, has not be completed, the Warrant Agent shall not take any
further action with respect to such requested exercise of transfer without
first consulting with the Company.
SECTION 17. Change of Warrant Agent.
The Warrant Agent may resign and be discharged from its duties under
this Agreement by giving to the Company sixty days' notice in writing. The
Warrant Agent may be removed by like notice to the Warrant Agent from the
Company; provided, however, that the Warrant Agent may be removed immediately
upon written notice if the Company determines in good faith that the Warrant
Agent acted negligently or in bad faith or engaged in intentional misconduct or
unlawful conduct in the performance of its duties hereunder. If the Warrant
Agent shall resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor to the Warrant Agent. If the Company
shall fail to make such appointment within a period of sixty days after such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Warrant Agent or by any Holder
(who shall with such notice submit his Warrant for inspection by the Company),
then any Holder may apply to any court of competent jurisdiction for the
appointment of a successor to the Warrant Agent. Notwithstanding anything
herein to the contrary, no resignation or removal of a Warrant Agent shall be
effective until a successor Warrant Agent has been appointed and accepted its
duties as such. Any successor warrant agent, whether appointed by the Company
or such a court, shall be a bank or trust company, in good standing, organized
under the laws of the United States of America or any state thereof and having
at the time of its appointment as warrant agent a combined capital and surplus
of at least $50,000,000, or a stock transfer company. After appointment, the
successor warrant agent shall be vested with the same powers, rights, duties
and responsibilities as if it had been originally named as Warrant Agent
without further act or deed; but the former Warrant Agent shall deliver and
transfer to the successor warrant agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance, act or
deed necessary for the purpose of transferring such property to the successor
warrant agent. Failure to file any notice provided for in this Section 17,
however, or any defect therein, shall not affect the legality or validity of
the resignation or removal of the
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Warrant Agent or the appointment of the successor warrant agent, as the case
may be. In the event of such resignation or removal, the successor warrant
agent shall mail, first class, to each Holder, at the expense of the Company,
written notice of such resignation or removal and the name and address of such
successor warrant agent.
SECTION 18. Identity of Transfer Agent.
Forthwith upon the appointment of any successor transfer agent for the
Common Stock, or any other shares of the Company's capital stock issuable upon
the exercise of the Warrants, the Company will file with the Warrant Agent a
statement setting forth the name and address of such successor transfer agent.
SECTION 19. Notices.
Any notice pursuant to this Agreement by the Company or by any Holder
to the Warrant Agent, or by the Warrant Agent or by any Holder to the Company,
shall be in writing, shall be given by registered or certified mail, and shall
be deemed given upon receipt as follows: (a) to the Company, at its offices at
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel,
with copies to Weil, Gotshal & ▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇; or (b) to the Warrant Agent,
to ▇▇▇▇▇▇ Trust and Savings Bank, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇ ▇▇▇.
Each party hereto may from time to time change the address to which
notices to it are to be delivered or mailed hereunder by similar notice in
writing to the other party as provided herein.
Any notice mailed pursuant to this Agreement by the Company or the
Warrant Agent to the Holders shall be in writing and shall be mailed first
class, postage prepaid, or hand delivered to such Holders at their respective
addresses on the books of the Warrant Agent.
SECTION 20. Supplements and Amendments.
The Company and the Warrant Agent may from time to time supplement or
amend this Agreement, without the approval of any Holder in order to cure any
ambiguity or to correct or supplement any provision contained herein which may
be defective or inconsistent with any other provision herein, or to make any
other provisions in regard to matters or questions arising hereunder which the
Company and the Warrant Agent may deem necessary or desirable and which shall
not be inconsistent with the provisions of the Warrants and which shall not
adversely affect the interests of the Holders. Any supplement or amendment to
this Agreement which would adversely affect the interests of the Holders may be
made by the Company and the Warrant Agent only with the approval of the holders
of a majority of the outstanding Warrants. Upon such approval, such supplement
or amendment shall be binding on all Holders. Notwithstanding anything in this
Agreement to the contrary, no supplement or amendment that changes the rights
and duties of the Warrant Agent under this Agreement will be effective against
the Warrant Agent without the execution of such supplement or amendment by the
Warrant Agent.
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SECTION 21. Successors.
All the covenants and provisions of this Agreement by or for the
benefit of the Company or the Warrant Agent shall bind and inure to the benefit
of their respective successors and assigns hereunder.
SECTION 22. Merger or Consolidation of the Company.
The Company will not merge or consolidate with or into any other
corporation unless the corporation resulting from such merger or consolidation
(if not the Company) shall expressly assume, by supplemental agreement
reasonably satisfactory in form to the Warrant Agent and executed by such
resulting corporation and delivered to the Warrant Agent, the due and punctual
performance and observance of each and every covenant and condition of this
Agreement to be performed and observed by the Company.
SECTION 23. Applicable Law.
This Agreement and each Warrant issued hereunder shall be governed by,
and construed in accordance with, the laws of the State of Delaware.
SECTION 24. Benefits of this Agreement.
Nothing in this Agreement shall be construed to give any person or
corporation other than the Company, the Warrant Agent, and the Holders any
legal or equitable right, remedy or claim under this Agreement. This Agreement
shall be for the sole and exclusive benefit of the Company, the Warrant Agent
and the Holders.
SECTION 25. Counterparts.
This Agreement may be executed in any number of counterparts and each
of such counterparts shall for all purposes be deemed to be an original, and
all such counterparts shall together constitute but one and the same
instrument.
SECTION 26. Captions.
The captions of the Sections and subsections of this Agreement have
been inserted for convenience only and shall not be deemed part of or used in
the construction of this Agreement.
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
NUCENTRIX BROADBAND NETWORKS, INC.
By: ▇.▇. ▇▇▇▇▇▇▇
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Title: Chairman and CEO
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▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
as Warrant Agent
By: ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Title: Vice President
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No. R-___ EXHIBIT A
WARRANTS
NUCENTRIX BROADBAND NETWORKS, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
COMMON STOCK PURCHASE WARRANTS
THIS CERTIFIES THAT, for value received , the registered
holder hereof, or registered assigns (the "Holder"), is entitled to purchase
from Nucentrix Broadband Networks, Inc., a Delaware corporation (the
"Company"), subject to the terms and conditions hereof and of the Warrant
Agreement referred to below, at any time on or after the date of this Common
Stock Purchase Warrant (the "Warrant") and until 5:00 P.M., New York time, on
October 1, 2007 (subject to earlier expiration under the circumstances
specified in the Warrant Agreement), at the purchase price of $27.63 per share
(the "Warrant Price"), _____ shares of Common Stock, $.001 par value, of the
Company (the "Common Stock"). The number of shares of Common Stock purchasable
upon exercise of this Warrant and the Warrant Price per share shall be subject
to adjustment from time to time as set forth in the Warrant Agreement referred
to below.
This Warrant may be exercised in whole or in part by presentation of
this Warrant with the Purchase Form on the reverse side hereof duly executed
and simultaneous payment of the Warrant Price (subject to adjustment) at the
principal office of ▇▇▇▇▇▇ Trust and Savings Bank (the "Warrant Agent").
Payment of such price shall be made at the option of the Holder hereof in cash
or by wire transfer of immediately available funds to such account as the
Warrant Agent may from time to time specify for the purpose by written notice
to the Holders.
This Warrant is one of a duly authorized issue of Warrants evidencing
the right to purchase initially an aggregate of up to 1,100,000 shares of
Common Stock issued pursuant to the Plan of Reorganization (as defined in the
Warrant Agreement) under and in accordance with a Warrant Agreement dated as of
April 1, 1999 between the Company and the Warrant Agent and is subject to the
terms and provisions contained in the Warrant Agreement, to all of which the
Holder of this Warrant by acceptance hereof consents. A copy of the Warrant
Agreement, as from time to time in effect, may be obtained for inspection by
the Holder hereof upon written request to the Warrant Agent.
Upon any partial exercise of this Warrant, there shall be
countersigned and issued to the Holder hereof a new Warrant in respect of the
shares of Common Stock as to which this Warrant shall not have been exercised.
This Warrant may be exchanged at the office of the Warrant Agent by surrender
of this Warrant properly endorsed either separately or in combination with one
or more other Warrants for one or more new Warrants entitling the Holder
thereof to purchase the same aggregate number of shares as were purchasable on
exercise of the Warrant or Warrants exchanged. No fractional shares will be
issued upon the exercise of this Warrant, but the Company shall pay the cash
value of any fraction upon the exercise of one or more Warrants. This Warrant
is
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transferable at the office of the Warrant Agent in New York, New York in the
manner and subject to the limitations set forth in the Warrant Agreement.
The Holder hereof, until the transfer hereof has been effected on the
books of the Company by registration of such transfer on the Warrant Register
(as defined in the Warrant Agreement) maintained at the principal office of the
Warrant Agent, may be treated by the Company, the Warrant Agent, and all other
persons dealing with this Warrant as the absolute owner hereof for any purpose
and as the person entitled to exercise the rights represented hereby, or to the
transfer hereof on the books of the Company, any notice to the contrary
notwithstanding.
This Warrant does not entitle any Holder hereof to any of the rights
of a stockholder of the Company.
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This Warrant shall not be valid or obligatory for any purpose until it
shall have been countersigned by the Warrant Agent.
DATED:
NUCENTRIX BROADBAND NETWORKS,
INC.
By:
Title:
----------------------------
(Corporate Seal)
Attest:
----------------------------
Secretary
COUNTERSIGNED:
▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
as Warrant Agent
By:
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Authorized Signature
Title:
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NUCENTRIX BROADBAND NETWORKS, INC.
PURCHASE FORM
The undersigned hereby irrevocably elects to exercise the right of
purchase represented by the within Warrant Certificate for, and to purchase
thereunder, shares of the stock provided for therein and herewith makes
payment in full for such shares in the amount of $ by delivery of cash
and/or wire transfer of immediately available funds, all in accordance with the
terms and conditions specified in the within Warrant Certificate and the
Warrant Agreement therein referred to, and requests that certificates for such
shares be issued in the name indicated below and delivered to the address
stated below:
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(Please Print Name, Address and Social Security No.)
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and, if said number of shares shall not be all the shares purchasable
thereunder, that a new Warrant Certificate for the balance remaining of the
Warrants under the within Warrant Certificate be registered in the name of the
undersigned Warrantholder or the Assignee below indicated and delivered to the
address stated below.
DATED:
Name of Warrantholder or Assignee:
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(Please Print)
Address:
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Signature:
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Signature Guaranteed By: 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, unless this Warrant has
been assigned.
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ASSIGNMENT
(To be signed only upon assignment of Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
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(Name and Address of Assignee Must Be Printed or Typewritten)
the within Warrant, hereby irrevocably constituting and appointing ____________
attorney to transfer said Warrant on the Company, with full power of
substitution in the premises.
DATED:
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Signature of Registered Holder
Signature Guaranteed By: 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, unless this Warrant has
been assigned.
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