STARTEC GLOBAL COMMUNICATIONS CORPORATION
UNDERWRITERS' WARRANT AGREEMENT
UNDERWRITERS' WARRANT AGREEMENT dated as of ___________,
1997 by and between STARTEC GLOBAL COMMUNICATIONS CORPORATION, a
Maryland Corporation (the "Company"), and XXXXXX, XXXXX XXXXX,
INCORPORATED ("XXXXXX") and BOENNING & SCATTERGOOD, INC.
("BOENNING") (Xxxxxx and Boenning sometimes being referred to
collectively herein as the "Underwriters").
W I T N E S S E T H:
WHEREAS, the Company proposes to issue warrants to the
Underwriters (the "Warrants") to purchase up to 150,000 shares
of common stock, par value $0.01 per share, of the Company (the
"Stock"), of which 110,000 Warrants are to be issued to Xxxxxx
and the remaining 40,000 Warrants are to be issued to Boenning;
and
WHEREAS, the Underwriters have agreed, pursuant to an
underwriting agreement (the "Underwriting Agreement") dated
_________, 1997, to which the Underwriters and the Company are
parties, to act as the co-lead underwriters in connection with
the Company's public offering of up to 2,300,000 shares of its
Stock at a public offering price of $_____ per share (the
"Public Offering"); and
WHEREAS, the Warrants to be issued pursuant to this
Agreement will be issued on the Closing Date (as such term is
defined in the Underwriting Agreement) by the Company to the
Underwriters in the amounts set forth in the first recital above
written, in consideration for, and as part of their
compensation in connection with, acting as underwriters pursuant
to the Underwriting Agreement;
NOW, THEREFORE, in consideration of the foregoing premises,
which are incorporated into the terms hereof, of the payment by
Xxxxxx and Boenning to the Company of $1,100 and $400
respectively for the Warrants to be purchased hereunder, the
agreements herein set forth and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Grant. The Holders (as that term is defined in
Section 3 hereof) of the Warrants issued hereunder are hereby
granted the right to purchase, at any time from _______________,
1998 (the first anniversary of the effective date of the
Company's Registration Statement relating to the Public Offering
(the "Effective Date")) until 5:00 p.m., Washington, DC time,
on _________, 2003 (the sixth anniversary of the Effective Date),
up to an aggregate of 150,000 shares of the Stock of the
Company, at an initial exercise price (subject to adjustment as
provided in Section 8 hereof) of $____ per Share (110% of the
initial public offering price per share in the Public Offering),
subject to the terms and conditions of this Agreement. The
shares issuable upon exercise of the Warrants are referred to
herein as the "Warrant Shares".
2. Warrant Certificates. The warrant certificates (the
"Warrant Certificates") delivered and to be delivered pursuant
to this Agreement shall be in the form set forth in Exhibit A,
attached hereto and made a part hereof, with such appropriate
insertions, omissions, substitutions, and other variations as
required or permitted by this Agreement.
3. Exercise of Warrants. The Warrants are exercisable
during the term set forth in Section 1 hereof at the Exercise
Price (defined below) per Warrant Share set forth in Section 6
hereof, payable by certified or cashier's check or money order
payable in lawful money of the United States, subject to
adjustment as provided in Section 8 hereof; provided, however,
that if the fair market value of one share of Stock is greater
than the Exercise Price (at the date of calculation as set forth
below), in lieu of exercising a Warrant for cash, the Holder may
elect to receive Warrant Shares equal to the value (as determined
below) of the Warrant (or the portion thereof being canceled) by
surrender of the Warrant Certificate at the principal office of
the Company together with the properly completed and executed
Form of Election to Purchase in the form attached as Exhibit B,
in which event the Company shall issue to the Holder a number of
Warrant Shares computed using the following formula:
Where: X = the number of Warrant Shares to be issued to
the Holder;
Y = the number of shares of Stock purchasable
pursuant to the Warrant Certificate surrendered, or, if only a
portion of the Warrant represented by such Warrant Certificate is
being exercised, the portion of the Warrant being canceled (at
the date of such calculation);
A = the fair market value of one share of the
Company's Stock (at the date of such calculation); and
B = Exercise Price (as adjusted to the date of
such calculation).
For purposes of the above calculation, fair market value of
one share of Stock shall be determined by the Company's Board of
Directors in good faith; provided, however, that where there
exists a public market for the Stock at the time of such
exercise, the fair market value per share shall be equal to the
average of the closing bid and asked prices of the Stock quoted
in the Over-The-Counter Market Summary or the last reported sale
price of the Stock or the closing price quoted on the Nasdaq
National Market or on any exchange on which the Stock is listed,
whichever is applicable, as published in The Wall Street Journal
for the five (5) trading days prior to the date of determination
of fair market value. Notwithstanding the foregoing, in the
event the Warrant is exercised in connection with a pubic
offering by the Company (except for the Public Offering), the
fair market value per share shall be equal to the per share
offering price to the public of the Stock in such public
offering. Upon surrender of a Warrant Certificate with the
annexed Form of Election to Purchase duly executed, together with
payment of the Exercise Price (as hereinafter defined) for the
Warrant Shares (and such other amounts, if any, arising pursuant
to Section 4 hereof) at the Company's principal office, the
registered holder of a Warrant Certificate (each, a "Holder"
and, collectively, the "Holders") shall be entitled to receive a
certificate or certificates for the Warrant Shares so purchased.
(References herein to a "Holder" or "Holders of Warrant Shares
shall mean the registered holder or holders thereof). The
purchase rights represented by each Warrant Certificate are
exercisable, at the option of the Holder thereof, in whole or in
part, (but not as to fractional Warrant Shares). In the case of
the purchase of less than all the Warrant Shares purchasable on
the exercise of the Warrants represented by a Warrant
Certificate, the Company shall cancel the Warrant Certificate
represented thereby upon the surrender thereof and shall execute
and deliver a new Warrant Certificate of like tenor for the
balance of the Warrant Shares purchasable thereunder.
4. Issuance of Certificates. Upon the exercise of the
Warrants and payment of the Exercise Price therefor, the issuance
of certificates for the Warrant Shares underlying such Warrants
shall be made forthwith (and, in any event, within three (3)
business days thereafter) without further charge to the Holder
thereof, and such certificates shall (subject to the provisions
of Sections 5 and 7 hereof) be issued in the name of, or in such
names as may be directed by, the Holder effecting such exercise;
provided, however, that the Company shall not be required to pay
any tax which may be payable in respect of any transfer involved
in the issuance and delivery of any such certificates in a name
other than that of such Holder, and the Company shall not be
required to issue or deliver such 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. The Warrant Certificates and the certificates
representing the Warrant Shares shall be executed on behalf of
the Company by the persons and in the manner prescribed by the
Bylaws of the Company and by applicable law. Warrant
Certificates shall be dated the date of execution by the Company
upon initial issuance, division, exchange, substitution or
transfer.
5. Restrictions on Transfer of Warrants. The Holder of a
Warrant Certificate (and its Permitted Transferee, as defined
below), by its acceptance thereof, covenants and agrees that the
Warrants are being acquired as an investment and not with a view
to the distribution thereof; that the Warrants may be sold,
transferred, assigned, hypothecated or otherwise disposed of, in
whole or in part, to (i) any person who is an officer, director,
employee, agent or other affiliate of the Underwriters or (ii)
such other person as may be approved by counsel for the Company
(a "Permitted Transferee"), provided such transfer, assignment,
hypothecation or other disposition is made in accordance with the
provisions of the Securities Act of 1933, as amended (the "1933
Act"). Any transfer of a Warrant Certificate shall be effected
by delivery of such Warrant Certificate at the principal office
of the Company, together with the properly completed and executed
Form of Assignment in the form attached as Exhibit C.
6. Exercise Price
a. Initial and Adjusted Exercise Price. Except as
otherwise provided in Section 8 hereof, the initial exercise
price of each Warrant to purchase Warrant Shares shall be $____
per Share. The adjusted exercise price shall be the price which
shall result from time to time from any and all adjustments of
the initial exercise price in accordance with the provisions of
Section 8 hereof.
b. Exercise Price. The term "Exercise Price" herein shall
mean the initial exercise price or the adjusted exercise price,
depending upon the context.
7. Registration Rights.
a. Warrant Legend. The Warrant Certificates shall bear the
following legends:
THE SECURITIES ISSUABLE UPON EXERCISE OF THE WARRANT REPRESENTED
BY THIS CERTIFICATE MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO
(I) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "1933 ACT"), (II) TO THE EXTENT
APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER
SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (III) AN
OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY
SATISFACTORY TO COUNSEL FOR THE ISSUER, THAT AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT IS AVAILABLE.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED
FOR SALE OR SOLD EXCEPT PURSUANT TO (I) AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE 1933 ACT, OR (II) AN OPINION OF COUNSEL, IF
SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE
ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH 1933 ACT
IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANT REPRESENTED BY THIS
CERTIFICATE IS RESTRICTED IN ACCORDANCE WITH THE WARRANT
AGREEMENT REFERRED TO HEREIN.
b. Demand Registration. On any one (1) occasion commencing
at any time one (1) year after the Effective Date and expiring
six (6) years after the Effective Date, the Holders of the
Warrants and the Warrant Shares representing at least a Majority
(as hereinafter defined) of such securities shall have the right,
exercisable by written notice to the Company, to have the Company
prepare and file with the Securities and Exchange Commission (the
"Commission") a registration statement on Form X-0, XX-0 (or
other appropriate form) and such other documents, including a
prospectus, as may be necessary in the opinion of both counsel
for the Company and counsel for the Holders, in order to comply
with the provisions of the 1933 Act, so as to permit a public
offering and sale, for a period of not less than twelve (12)
months, of the Warrant Shares by such Holders, and any other
Holders of the Warrants and/or Warrant Shares who shall notify
the Company within thirty (30) business days after receipt of the
notice described in the succeeding sentence. The Company
covenants and agrees to give written notice of any registration
request under this Section 7(b) by any Holder(s) of Warrants or
Warrants Shares to all other Holders of the Warrants and the
Warrant Shares within ten (10) calendar days from the date of the
receipt of any such registration request. For purposes of this
Agreement, the term "Majority," or any stated percentage, in
reference to the Holders of the Warrants and/or Warrant Shares or
any category thereof, shall mean the Holders of Warrant Shares
and Warrants or category thereof representing, in the aggregate,
in excess of fifty percent (50%) or such other stated percentage
of the then-outstanding Warrant Shares and Warrant Shares or
category thereof into which then-outstanding Warrants or category
thereof are then exercisable, excluding all Warrant Shares and
Warrants that (i) are held by the Company, an affiliate, officer,
director, employee or agent thereof or any of their respective
affiliates, members of their family, persons acting as nominees
or in conjunction therewith, or (ii) have been resold to the
public pursuant to a registration statement filed with the
Commission under the 1933 Act. For the purposes of subsection
(i) above, the Underwriters and their respective officers,
directors, employees and agents shall not be deemed to be
affiliates, officers, directors, employees or agents of the
Company. No registration statement filed pursuant to this demand
registration provision (without the consent of the Holders
holding a Majority of the Warrant Shares requested to be
registered pursuant to such registration statement) may relate to
any securities other than the Warrant Shares, and no other
securities may be sold incidentally to any such underwritten
public offering of Warrant Shares so registered.
c. Piggyback Registration. If, at any time within eight
(8) years after the Effective Date, the Company should file a
registration statement with the Commission under the 1933 Act
(other than in connection with a merger or pursuant to Form S-8)
it will give written notice by registered mail, at least
forty-five (45) calendar days prior to the filing of each such
registration statement, to each of the Underwriters (if then a
Holder) and to all other Holders of the Warrants and/or the
Warrant Shares of its intention to do so. If the Underwriters or
other Holders of the Warrants and/or the Warrant Shares notify
the Company within thirty (30) calendar days after receipt of any
such notice of its or their desire to include any Warrant Shares
in such proposed registration statement, the Company shall afford
such Underwriters and Holders of the Warrants and/or Warrant
Shares the opportunity to have any such Warrant Shares registered
under such registration statement; provided, however, that the
Holders shall not be entitled to piggyback registration rights in
respect of any registration statement filed pursuant to the
demand registration rights granted to Signet Bank pursuant to
that certain Warrants Agreement dated as of July 1, 1997.
Notwithstanding the provisions of this Section 7(c), the Company
shall have the right at any time after it shall have given
written notice pursuant to this Section 7(c) (irrespective of
whether a written request for inclusion of any such securities
shall have been made) to elect not to file any such proposed
registration statement, or to withdraw the same after the filing
but prior to the effective date thereof.
If the underwriter of an offering to which the above
piggyback registration rights apply objects to such rights, such
objection shall preclude such inclusion. However, in the event
(i) the Holders of Warrant Shares or Warrants do not constitute
at least forty percent (40%) of the Warrant Shares to be sold by
Holders requesting to sell shares in such offering, or (ii) such
offering is pursuant to a registration pursuant to a demand for
registration made by Signet Bank, the Company will, within one
hundred eighty (180) days of completion of such subsequent
underwriting, file at its sole expense, a registration statement
relating to such excluded Warrant Shares, which shall be in
addition to any registration statement required to be filed
pursuant to Section 7(b), unless such Holders had refused an
opportunity provided with the consent of the underwriter, to be
included in the registration statement on the condition that they
agree not to offer the securities for sale (without the prior
written consent of the underwriter) for a period not exceeding
(60) calendar days from the effective date of such registration
statement.
If the underwriter in such underwritten offering shall
advise the Company that it declines to include a portion or all
of the Warrant Shares requested by the Underwriters and the
Holders to be included in the registration statement, then (i)
registration of all of the Warrant Shares shall be excluded from
such registration statement on the condition that all securities
to be registered by other selling security holders, if any, are
also excluded and (ii) registration of a portion of such Warrant
Shares allocated among the Underwriters and the Holders and any
other selling securityholders in proportion to the respective
numbers of securities to be registered by the Underwriters and
each such Holder and other selling securityholder (provided that,
for purposes of such allocation, Warrants shall be treated as
representing the number of Warrant Shares then represented
thereby). In such event the Company shall give the Underwriters
and the Holders prompt notice of the number of Warrant Shares
excluded.
d. Covenants of the Company in Respect of Registration.
In connection with any registrations under Sections 7(b) and 7(c)
hereof, the Company covenants and agrees as follows:
(1) The Company shall use its best efforts to file a
registration statement within sixty (60) calendar days of receipt
of any demand therefor; provided, however, that the Company shall
not be required to produce audited or unaudited financial
statements for any period prior to the date such financial
statements are required to be filed in a report on Form 10-K or
Form 10-Q (or Form 10-KSB or Form 10-QSB), as the case may be.
The Company shall use its best efforts to have any registration
statement declared effective at the earliest possible time, and
shall furnish each Holder desiring to sell Warrant Shares such
number of prospectuses as shall reasonably be requested.
(2) The Company shall pay all costs (excluding any
underwriting discounts or commissions), fees and expenses in
connection with any registration statement filed pursuant to
Sections 7(b) or 7(c) hereof including, without limitation, the
actual and reasonable costs and expenses of one firm serving as
legal counsel to the Holders, the Company's legal and accounting
fees, printing expenses, and any blue sky fees and expenses.
(3) The Company will take all necessary and reasonable
steps which may be required to qualify or register the Warrant
Shares included in a registration statement for offering and sale
under the securities or blue sky laws of such states as
reasonably are requested by the Holder(s), provided that the
Company shall not be obligated to execute or file any general
consent to service of process or to qualify as a foreign
corporation to do business under the laws of any such
jurisdiction.
(4) The Company shall indemnify the Holder(s) of the
Warrant Shares to be sold pursuant to any registration statement,
each, director, officer, partner, employee and agent of each such
Holder and each person, if any, who controls such Holder within
the meaning of Section 15 of the 1933 Act or Section 20(a) of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), against all losses, claims, damages, expenses or liability
(including, without limitation, all expenses reasonably incurred
in investigating, preparing or defending against any claim
whatsoever) to which any of them may become subject under the
1933 Act, the Exchange Act or otherwise, arising from such
registration statement, but only to the same extent and with the
same effect as the provisions pursuant to which the Company has
agreed to indemnify the Underwriters contained in Section 9 of
the Underwriting Agreement.
(5) The Holder(s) of the Warrant Shares to be sold
pursuant to a registration statement, and their successors and
assigns, shall severally, and not jointly, indemnify the Company,
its officers and directors and each persons, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act or
Section 20(a) of the Exchange Act, against all losses, claims,
damages, expenses or liability (including all expenses reasonably
incurred in investigating, preparing or defending against any
claim whatsoever) to which they may become subject under the 1933
Act, the Exchange Act or otherwise, arising from information
furnished by or on behalf of such Holders, or their successors or
assigns, for specific inclusion in such registration statement to
the same extent and with the same effect as the provisions
contained in Section 9 of the Underwriting Agreement pursuant to
which the Underwriters have agreed to indemnify the Company.
(6) Nothing contained in this Agreement shall be
construed as requiring the Holder(s) to exercise their Warrants
prior to the initial filing of any registration statement or the
effectiveness thereof.
(7) If the manner of distribution proposed by the
Holders is an underwriting, the Company shall furnish to each
Holder participating in the offering and to each underwriter of
such offering, a signed counterpart, addressed to such Holder or
underwriter of (i) an opinion of counsel to the Company, dated
the effective date of such registration statement (and, if such
registration includes an underwritten public offering, an opinion
dated the date of the closing under the underwriting agreement),
and (ii) a "cold comfort" letter dated the effective date of such
registration statement (and, if such registration includes an
underwritten public offering, a letter dated the date of the
closing under the underwriting agreement) signed by the
independent public accountants who have issued a report (or
reports) on the Company's financial statements included in such
registration statements, in each case covering substantially the
same matters with respect to such registration statement (and the
prospectus included therein) and, in the case of such
accountants' letter, with respect to events subsequent to the
date of such financial statements, as are customarily covered in
opinions of issuer's counsel and in accountants' letters, with
respect to events subsequent to the date of such financial
statements, as are customarily covered in opinions of issuer's
counsel in accountants' letters delivered to underwriters in
underwritten public offerings of securities.
(8) The Company shall, as soon as practicable after
the effective date of the registration statement, and in any
event within the first full four fiscal quarters following the
effective date, make "generally available to its security
holders" (within the meaning of Rule 158 under the 0000 Xxx) an
earnings statement (which need not be audited) complying with
Section 11(a) of the 0000 Xxx.
(9) The Company shall deliver promptly to one
designated representative for each Holder participating in the
offering requesting the correspondence described below and any
managing underwriter, copies of all correspondence between the
Commission and the Company, its counsel or auditors with respect
to the registration statement and permit each Holder and
underwriter to do such investigation, upon reasonable advance
notice, with respect to information contained in or omitted from
the registration statement as it deems reasonably necessary to
comply with applicable securities laws or rules of the National
Association of Securities Dealers, Inc. (the "NASD"). Such
investigation shall include access to books, records and
properties and opportunities to discuss the business of the
Company with its officers and independent auditors, all to such
reasonable extent and at such reasonable times and as often as
any such Holder shall reasonably request.
(10) In connection with an offering for which the
Holders have demand rights, the Company shall enter into an
underwriting agreement with the managing underwriter selected for
such underwriting by Holders holding a Majority of the Warrant
Shares requested to be included in such underwriting. In
connection with an offering for which the Holders have piggyback
rights, the Company shall have the sole right to select the
managing underwriter. Such underwriting agreement shall be
satisfactory in form and substance to the Company, a Majority of
such Holders and such managing underwriter, and shall contain
such representations, warranties and covenants by the Company and
such other terms as are customarily contained in agreements of
that type used by the managing underwriter. The Holders shall be
parties to any underwriting agreement relating to an underwritten
sale of their Warrant Shares and may, at their option, require
that any or all the representations, warranties and covenants of
the Company to or for the benefit of such underwriter shall also
be made to and for the benefit of such Holders. Such Holders
shall not be required to make any representations or warranties
to or agreements with the Company or the underwriter except as
they may relate to such Holders, their ownership of Warrant
Shares subject to registration, and their intended methods of
distribution.
8. Adjustments to Exercise Price and Number of Securities.
a. Adjustment of Exercise Price. Except as
hereinafter provided, in the event the Company shall, at any
time or from time to time after the date hereof, issue any
shares of Stock as a stock dividend to the holders of Stock, or
subdivide or combine the outstanding shares of Stock into a
greater or lesser number of shares (any such issuance,
subdivision or combination being herein called a "Change of
Shares"), then, and thereafter upon each Change of Shares, the
Exercise Price for the Warrants (whether or not the same shall be
issued and outstanding) in effect immediately prior to such
Change of Shares shall be changed to a price (including any
applicable fraction of a cent to the nearest cent) determined
by dividing (i) the sum of (a) the total number of shares of
Stock outstanding immediately prior to such Change of Shares,
multiplied by the Exercise Price in effect immediately prior to
such Change of Shares, and (b) the consideration, if any,
received by the Company upon such issuance, subdivision or
combination by (ii) the total number of shares of Stock
outstanding immediately after such Change of Shares; provided,
however, that in no event shall the Exercise Price be adjusted
pursuant to this computation to an amount in excess of the
Exercise Price in effect immediately prior to such computation,
except in the case of a combination of outstanding shares of
Stock. For the purposes of any adjustment to be made in
accordance with this Section 8(a) the following provisions shall
be applicable:
(1) Shares or equivalents of Stock issuable by way of
dividend or other distribution on any stock of the Company shall
be deemed to have been issued immediately after the opening of
business on the day following the record date for the
determination of stockholders entitled to receive such dividend
or other distribution and shall be deemed to have been issued
without consideration.
(2) The reclassification of securities of the Company
other than shares of Stock into securities including shares of
Stock shall be deemed to involve the issuance of such shares of
Stock for a consideration other than cash immediately prior to
the close of business on the date fixed for the determination of
security holders entitled to receive such shares, and the value
of the consideration allocable to such shares of Stock shall be
determined in good faith by the Board of Directors of the Company
on the basis of a record of values of similar property or
services.
(3) The number of shares of Stock at any one time
outstanding shall be deemed to include the aggregate maximum
number of shares issuable (subject to readjustment upon the
actual issuance thereof) upon the exercise of options, rights or
warrants and upon the conversion or exchange of convertible or
exchangeable securities.
b. Adjustment of Number of Warrants. Upon each adjustment
of the Exercise Price pursuant to Section 8(a) above, the number
of Shares purchasable upon the exercise of each Warrant shall be
the number derived by multiplying the number of shares of Stock
purchasable immediately prior to such adjustment by the Exercise
Price in effect prior to such adjustment and dividing the product
so obtained by the applicable adjusted Exercise Price.
c. Action Upon Reclassification, Merger, Etc. The Company
will not merge, reorganize or take any other action which would
terminate the Warrants without first making adequate provision
for the Warrants as provided for herein. In case of any
reclassification or change of the outstanding shares of Stock
(other than a change in par value to no par value, or from nor
par value to par value, or as a result of a subdivision or
combination), or in case of any consolidation of the Company
with, or merger of the Company with or into, another corporation
(other than a consolidation or merger in which the Company is the
continuing corporation and which does not result in any
reclassification or change of the outstanding Stock except a
change as a result of a subdivision or combination of such shares
or a change in par value, as aforesaid), or in the case of a sale
or conveyance to another corporation or other entity of the
property of the Company as an entirety, the Holder of each
Warrant then outstanding or to be outstanding shall have the
right thereafter (until the expiration of such Warrant) to
purchase, upon exercise of such Warrant, the kind and number of
shares of stock and other securities and property receivable upon
such reclassification, change, consolidation, merger, sale or
conveyance as if the Holder were the owner of the Shares
underlying such Warrants immediately prior to any such events at
a price equal to the product of (x) the number of shares issuable
upon exercise of the Warrants and (y) the Exercise Prices in
effect immediately prior to the record date for such
reclassification, change, consolidation, merger, sale or
conveyance, as if such Holder has exercised the Warrants. In
the event of a consolidation, merger, sale or conveyance of
property, the corporation formed by such consolidation or merger,
or acquiring such property, shall execute and deliver to the
Holders a supplemental warrant agreement to such effect. Such
supplemental warrant agreement shall provide for adjustments
which shall be identical to the adjustment to those provided in
Section 8. The provisions of this Section 8(c) shall similarly
apply to successive reclassifications, changes, consolidations,
mergers, sales or conveyances.
d. Effect of Adjustments on Warrant Certificates.
Irrespective of any adjustments or changes in the Exercise Price
or the number of Shares purchasable upon exercise of the
Warrants, the Warrant Certificates theretofore and thereafter
issued shall, unless the Company shall exercise its option to
issue new Warrant Certificates, continue to express the Exercise
Price per share and the number of shares purchasable thereunder
as the Exercise Price per share and the number of shares
purchasable thereunder were expressed in the Warrant Certificates
when the same were originally issued.
e. Notification to Holders. After each adjustment of the
Exercise Price pursuant to this Section 8, the Company will
promptly prepare a certificate signed by the Chairman or
President, and by the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary, of the Company setting
forth: (i) the Exercise Price as so adjusted; (ii) the number of
Shares purchasable upon exercise of each Warrant, after such
adjustment; and (iii) a brief statement of the facts accounting
for such adjustment. The Company will promptly cause a copy of
such certificate to be sent by first class mail to each Holder at
his last address as it shall appear on the registry books of the
Company. No failure to mail such notice nor any defect therein
or in the mailing thereof shall affect the validity thereof
except as to the Holder to whom the Company failed to mail such
notice, or except as to the Holder whose notice was defective.
The affidavit of the Secretary or an Assistant Secretary of the
Company that such notice has been mailed shall, in the absence of
fraud, be prima facie evidence of the facts stated therein.
f. Events Not Triggering Adjustment. No adjustment of the
Exercise Price shall be made upon the issuance or sale of: (i)
the Warrants or the Warrant Shares; (ii) the shares of Stock
pursuant to the Public Offering; or (iii) the shares of Stock
issuable upon the exercise of the options or warrants outstanding
or shares reserved for issuance pursuant to stock option plans in
effect on the date hereof as described in the prospectus relating
to the Public Offering. In addition, no adjustment of the
Exercise Price shall be made if the amount of said adjustments
shall be less than five cents ($.05) per Warrant Share, provided,
however, that in such case any adjustment that would otherwise be
required then to be made shall be carried forward and shall be
made at the time of and together with the next subsequent
adjustment which, together with any adjustment so carried
forward, shall amount to at least five cents ($.05) per Warrant
Share.
g. Securities Included in the Definition of "Stock". For
the purpose of this Agreement, the term "Stock" shall mean (i)
the class of stock designated as Common Stock in the Charter of
the Company as it may be amended as of the date hereof, or (ii)
any other class of stock resulting from successive changes or
reclassification of such stock 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 the Company shall, after
the date hereof issue securities with greater or superior voting
rights than those of the shares of stock outstanding as of the
date hereof, each Holder, at its option, may receive upon
exercise of any Warrant either shares of Stock or a like number
of such securities with greater or superior voting rights.
h. Noncash Dividends and Other Distributions. In the event that
the Company shall at any time prior to the exercise or expiration
of all the Warrants declare a dividend (other than a dividend
consisting solely of shares of Stock) or otherwise distribute to
its stockholders any assets, property, rights, evidences of
indebtedness, securities (other than shares of Stock), whether
issued by the Company or by another, or any other thing of value,
the Holders of the unexercised Warrants shall thereafter be
entitled, in addition to the shares of Stock or other securities
and property receivable upon the exercise thereof, to receive,
upon the exercise of such Warrants, the same property, assets,
rights, evidences of indebtedness, securities or any other thing
of value that they would have been entitled to receive at the
time of such dividend or distribution as if the Warrants had been
exercised immediately prior to such dividend or distribution. At
the time of any such dividend or distribution, the Company shall
make appropriate reserves to ensure the timely performance of the
provisions of this Section 8h.
i. Subscription Rights for Shares of Stock and Other
Securities. In the event that the Company or an affiliate of the
Company shall, at any time after the date hereof and prior to the
exercise or expiration of all the Warrants, issue any rights to
subscribe for shares of Stock or any other securities of the
Company or of such affiliate to all the stockholders of the
Company, the Holders of the unexercised Warrants shall be
entitled to receive, in addition to the Warrant Shares receivable
upon the exercise of the Warrants, such rights at the time such
rights are distributed to the other stockholders of the Company.
9. Exchange and Replacement of Warrant Certificates. Each
Warrant Certificate is exchangeable, without charge, upon the
surrender thereof by the Holder at the principal executive office
of the Company, for a new Warrant Certificate of like tenor and
date representing in the aggregate the right to purchase the
same number of Warrant Shares in such denominations as shall be
designated by the Holder thereof at the time of such surrender.
Upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of any
Warrant Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to it, and
reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of the
Warrants, if mutilated, the Company will make and deliver a new
Warrant Certificate of like tenor, in lieu thereof.
10. Elimination of Fractional Interests. The Company shall
not be required to issue certificates representing fractions of
Warrant Shares upon the exercise of the Warrants, nor shall it be
required to issue scrip or pay cash in lieu of fractional
interests; provided, however, that if a Holder exercises all
Warrants held of record by such Holder the fractional interests
shall be eliminated by rounding any fraction up to the nearest
whole number of Warrant Shares.
11. Reservation and Listing of Securities. The Company
shall at all times reserve and keep available out of its
authorized shares of Stock, solely for the purpose of issuance
upon the exercise of the Warrants, such number of shares of Stock
as shall be issuable as Warrant Shares upon the exercise thereof.
The Company covenants and agrees that, upon exercise of the
Warrants and payment of the Exercise Price therefor, all the
Warrant Shares issuable upon such exercise shall be duly and
validly issued, fully paid, nonassessable and not subject to the
preemptive rights of any stockholder. As long as the Warrants
shall be outstanding, the Company shall use its best efforts to
cause the Stock to be listed and quoted (subject to official
notice of issuance) on all securities exchanges or associations
on which the Stock issued to the public in connection with the
Public Offering may then be listed or quoted.
12. Limitations on Rights of, and Certain Notices to
Warrant Holders. Nothing contained in this Agreement shall be
construed as conferring upon the Holders of Warrants, prior to
the exercise thereof, the right to receive cash dividends to vote
or to consent or to receive notice as a stockholder in respect of
any meetings of stockholders for the election of directors or any
other matter, or as having any rights whatsoever as a stockholder
of the Company. If, however, at any time prior to the expiration
of the Warrants or their earlier exercise, any of the following
events shall occur:
(1) the Company shall take a record of the holders of
its shares of Stock for the purpose of entitling them to receive
a dividend or distribution payable otherwise than in cash, or a
cash dividend or distribution payable otherwise than out of
current or retained earnings, as indicated by the accounting
treatment of such dividend or distribution on the books of the
Company; or
(2) the Company shall offer to all the holders of its
Stock any additional shares of capital stock of the Company or
securities convertible into or exchangeable for shares of Stock
or such other capital stock of the Company, or any option, right
or warrant to subscribe therefor; or
(3) a dissolution, liquidation or winding up of the
Company (other than in connection with a consolidation or merger)
or a sale of all or substantially all of its property, assets and
business as an entirety shall be proposed; then, in any one or
more of said events, the Company shall give written notice of
such event at least thirty (30) calendar days prior to the date
fixed as a record date or the date of closing the transfer books
for the determination of the stockholders entitled to such
dividend, distribution, convertible or exchangeable securities or
subscription rights, or entitled to vote on such proposed
dissolution, liquidation, winding up or sale. Such notice shall
specify such record date or the date of closing the transfer
books, as the case may be. Failure to give such notice or any
defect therein shall not affect the validity of any action taken
in connection with the declaration or payment of any such
dividend, or the issuance of any convertible or exchangeable
securities, or subscription rights, options or warrants, or any
proposed dissolution, liquidation, winding up or sale.
13. Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed
to have been duly made when (i) personally delivered, (ii) three
(3) business days after having been properly addressed, enclosed
in a properly sealed envelope or wrapper and sent postage-paid by
first class mail, (iii) transmitted by facsimile transmission, if
acknowledged by such facsimile equipment as received, or (iv) one
(1) business day after being sent, at the expense of the sender,
by Federal Express, Airborne, U.S. Express Mail or similar
overnight carrier (a) if to a Holder of the Warrants, to the
address of such Holder as shown on the books of the Company or
(b) if to the Company, at its principal office or to such other
address as the Company may designate by notice to the Holders.
14. Supplements and Amendments. The Company and the
Underwriters may, from time to time, supplement or amend this
Agreement without the approval of any Holders of Warrants (other
than the Underwriters) in order to cure any ambiguity, to correct
or supplement any provision contained herein which may be
defective or inconsistent with any provisions herein, or to make
any other provisions in regard to matters or questions arising
hereunder which the Company and the Underwriters may deem
necessary or desirable and which the Company and the Underwriters
deem shall not adversely affect the interests of the Holders of
Warrants other than the Underwriters.
15. Successors. All the covenants and provisions of this
Agreement shall be binding upon and inure to the benefit of the
Company, the Underwriters, the Holders and their respective
successors and assigns hereunder.
16. Termination. This Agreement shall terminate at the
close of business on __________, 2006 (the eighth anniversary of
the Effective Date). Notwithstanding the foregoing, the
registration provisions and indemnification provisions of Section
7 shall survive such termination until the close of business on
the later of the expiration of any applicable statue of
limitations or ________, 2008.
17. Governing Law; Submission to Jurisdiction. This
Agreement and each Warrant Certificate issued hereunder shall be
deemed to be a contract made under the laws of the State of
Maryland and for all purposes shall be construed in accordance
with the laws of said State without giving effect to the rules of
said State governing the conflicts of laws. The Company, each of
the Underwriters and each and any Holders hereby agrees that any
action, proceeding or claim against it arising out of, or
relating in any way to, this Agreement, the Warrants or the
Warrant Certificates shall be brought and enforced in the courts
of the State of Maryland or of the United States of America for
the District of Maryland, and irrevocably submits to such
jurisdiction, which jurisdiction shall be exclusive. The
Company, each of the Underwriters and each and any Holders hereby
irrevocably waives any objection to such exclusive jurisdiction
or inconvenient forum. Any such process or summons to be served
upon any of the Company, the Underwriters and the Holders (at the
option of the party bringing such action, proceeding or claim)
may be served by transmitting a copy thereof, by registered or
certified mail, return receipt requested, postage prepaid,
addressed to it at the address provided for in Section 13 hereof.
Such mailing shall be deemed personal service and shall be legal
and binding upon the party so served in any action, proceeding or
claim.
18. Entire Agreement; Modification. This Agreement
(including the Underwriting Agreement to the extent portions
thereof are referred to herein) contains the entire understanding
between the parties hereto with respect to the subject matter
hereof. Subject to Section 14, this Agreement may not be
modified except upon the express agreement of the Company and a
Majority of the of the Holders of the Warrants and the Warrant
Shares.
19. Severability. If any provision of this Agreement shall
be held to be invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provision of this
Agreement.
20. Captions. The caption headings of the Sections of this
Agreement are for convenience of reference only and are not
intended, nor should they be construed as, a part of this
Agreement and shall be given no substantive effect.
21. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any person or corporation, other
than the Company and the Underwriters and any other Holder(s) of
the Warrants or Warrant Shares, any legal or equitable right,
remedy or claim under this Agreement; and this Agreement shall be
for the sole and exclusive benefit of the Company and the
Underwriters and any other Holder(s) of the Warrants or Warrant
Shares.
22. Counterparts. This Agreement may be executed in any
number of counterparts, each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts
together shall together constitute but one and the same
instrument.
23. Binding Effect. This Agreement shall be binding upon
and inure to the benefit of the Company, each of the Underwriters
and their successors and assigns and the Holders from time to
time of the Warrant(s) or any of them.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above
written.
STARTEC GLOBAL COMMUNICATIONS CORPORATION
By:_______________________________________
Print Name:________________________________
Title:_____________________________________
XXXXXX, XXXXX XXXXX, INCORPORATED
By:_______________________________________
Print Name:________________________________
Title:_____________________________________
BOENNING & SCATTERGOOD, INC.
By:_______________________________________
Print Name:________________________________
Title:_____________________________________
EXHIBIT A
STARTEC GLOBAL COMMUNICATIONS CORPORATION
WARRANT CERTIFICATE
THE SECURITIES ISSUABLE UPON EXERCISE OF THE WARRANT
REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO (I) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), (II) TO THE
EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE
UNDER SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES), OR
(III) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY
SATISFACTORY TO COUNSEL FOR THE ISSUER, THAT AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT IS AVAILABLE. THE SECURITIES
REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED FOR SALE OR
SOLD EXCEPT PURSUANT TO (I) AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE 1933 ACT, OR (II) AN OPINION OF COUNSEL, IF SUCH
OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE
ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH 1933 ACT
IS AVAILABLE. THE TRANSFER OR EXCHANGE OF THE WARRANT
REPRESENTED BY THIS CERTIFICATE IS RESTRICTED IN ACCORDANCE WITH
THE WARRANT AGREEMENT REFERRED TO HEREIN. EXERCISABLE COMMENCING
________, 1998 THROUGH 5:00 P.M., WASHINGTON, DC TIME ________,
2003.
NO. WC- ___ _________ WARRANTS
This Warrant Certificate certifies that ______________
_______________ or registered assigns, is the registered holder
of _________ warrants (the "Warrants") to purchase initially, at
any time from _______, 1998, until 5:00 p.m., Washington, DC time
on _______, 2003 (the "Expiration Date"), up to _____________
fully paid and non-assessable shares (the "Shares"), of the
Common Stock, par value $0.01 per share (the "Stock"), of STARTEC
Global Communications Corporation, a Maryland corporation (the
"Company") at the initial exercise price of $____ per Share (the
"Exercise Price"), upon the surrender of this Warrant Certificate
and payment of the Exercise Price at an office or agency of the
Company, but subject to the conditions set forth herein and in
the warrant agreement dated as of ____________________, 1997
(the "Warrant Agreement") by and between the Company and Xxxxxx,
Xxxxx Xxxxx, Incorporated and Boenning & Scattergood, Inc.
Payment of the Exercise Price shall be made as provided in
Section 3 of the Warrant Agreement. No Warrant may be exercised
after 5:00 X.X, Xxxxxxxxxx, XX time, on the Expiration Date, at
which time all Warrants evidenced hereby, unless exercised prior
thereto, shall thereafter be void. The Warrants evidenced by
this Warrant Certificate are part of a duly authorized issue of
Warrants issued pursuant to the Warrant Agreement, 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 Company and the holders (the words
"holders" or "holder" meaning the registered holders or
registered holder) of the Warrants. The Warrant Agreement
provides that upon the occurrence of certain events the Exercise
Price and the type and/or number of the Company's securities
issuable thereupon may, subject to certain conditions, be
adjusted. In such event, the Company will, at the request of the
holder, issue a new Warrant Certificate evidencing the adjustment
in the Exercise Price and the number and/or type of securities
issuable upon the exercise of the Warrants; provided, however,
that the failure of the Company to issue such new Warrant
Certificates shall not in any way change, alter, or otherwise
impair, the rights of the holder as set forth in the Warrant
Agreement. Upon due presentment for registration of transfer of
this Warrant Certificate at an office or agency of the Company, a
new Warrant Certificate or Warrant Certificates of like tenor and
evidencing in the aggregate a like number of Warrants shall be
issued to the transferee(s) in exchange as provided herein,
without any charge except for any tax or other governmental
charge imposed in connection with such transfer. Upon the
exercise of less than all of the Warrants evidenced by this
Certificate, the Company shall forthwith issue to the holder
hereof a new Warrant Certificate representing such number of
unexercised Warrants. The Company may deem and treat the
registered holder(s) hereof as the absolute owner(s) of this
Warrant Certificate (notwithstanding any notation of ownership or
other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder(s) hereof,
and for all other purposes, and the Company shall not be affected
by any notice to the contrary. All terms used in this Warrant
Certificate which are defined in the Warrant Agreement shall have
the meanings assigned to them in the Warrant Agreement.
IN WITNESS WHEREOF, the undersigned has executed this
certificate this __th day of _______, 1997.
STARTEC Global Communications Corporation
By:_______________________________________
Print Name:________________________________
Title:_____________________________________
[SEAL] ATTEST:
By:____________________________
EXHIBIT B
FORM OF ELECTION TO PURCHASE
The undersigned hereby irrevocably elects to exercise the
right, represented by this Warrant Certificate, to purchase:
_______ Shares and herewith tenders in payment for such
securities the amount of $____________, in accordance with the
terms of this Warrant Certificate and of the Warrant Agreement.
The undersigned requests that a certificate for such securities
be registered in the name of _________________________________,
whose address is _______________________________________________,
and that such Certificate be delivered to
___________________________________, whose address is
_________________________________________________________
____________________________________________.
Dated:___________ Signature:________________________
(Signature must conform in all respects to the name of holder as
specified on the face of the Warrant Certificate.)
_______________________________
(Insert Social Security or Other Identifying Number of Holder)
EXHIBIT C
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires
to transfer the Warrant Certificate.)
FOR VALUE RECEIVED __________________________________ hereby
sells, assigns and transfers unto ______________________________
(Please print name and address of transferee) this Warrant
Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint
___________________________________ Attorney, to transfer the
within Warrant Certificate on the books of STARTEC Global
Communications Corporation, with full power of substitution.
Dated:___________ Signature: _______________________________
(Signature must conform in all respects to the name of holder as
specified on the face of the Warrant Certificate.)
______________________________
(Insert Social Security or Other Identifying Number of Holder)
