Exhibit 4.1
WARRANT AGREEMENT
between
MOTIENT CORPORATION
and
EquiServe Trust Company, N.A.,
Warrant Agent
Dated as of May 1, 2002
TABLE OF CONTENTS
Page
1. DEFINITIONS..............................................................1
Affiliate.......................................................1
Common Stock....................................................1
Company.........................................................1
Current Market Value............................................1
Determination Date..............................................1
Exchange Act....................................................1
Exercise Price..................................................1
Expiration Date.................................................2
Holders.........................................................2
Independent Financial Expert....................................2
Non-Surviving Combination.......................................2
Person..........................................................2
Underlying Common Stock.........................................2
Warrant Agent...................................................2
Warrant Certificates............................................2
Warrants........................................................2
2. ORIGINAL ISSUE OF WARRANTS...............................................3
2.1 Form of Warrant Certificates.............................3
2.2 Execution and Delivery of Warrant Certificates...........3
3. EXERCISE PRICE; EXERCISE OF WARRANTS GENERALLY...........................3
3.1. Exercise Price...........................................3
3.2. Exercise of Warrants.....................................3
3.3. Expiration of Warrants...................................4
3.4. Method of Exercise; Payment of Exercise Price............4
3.5. Non-Surviving Combination................................4
4. ADJUSTMENTS..............................................................5
4.1. Adjustments..............................................5
4.2. Notice of Adjustment.....................................9
4.3. Statement on Warrants....................................9
4.4. No Fractional Shares.....................................9
5. WARRANT TRANSFER BOOKS..................................................10
6. WARRANT HOLDERS.........................................................10
6.1. No Voting Rights........................................10
6.2. Right of Action.........................................11
7. WARRANT AGENT...........................................................11
7.1. Nature of Duties and Responsibilities Assumed...........11
7.2. Right to Consult Counsel................................13
7.3. Compensation and Reimbursement..........................13
7.4. Warrant Agent May Hold Company Securities...............13
7.5. Resignation and Removal; Appointment of
Successor...............................................13
8. COVENANTS OF THE COMPANY................................................14
8.1 Reservation of Common Stock for Issuance
on Exercise of Warrants.................................14
8.2. Reports to Holders......................................14
9. MISCELLANEOUS...........................................................15
9.1. Money and Other Property Deposited with
the Warrant Agent.......................................15
9.2. Payment of Taxes........................................15
9.3. Surrender of Certificates...............................15
9.4. Mutilated, Destroyed, Lost and Stolen
Warrant Certificates....................................15
9.5. Notices.................................................16
9.6. Applicable Law..........................................16
9.7. Persons Benefitting.....................................16
9.8. Counterparts............................................17
9.9. Amendments..............................................17
9.10. Headings................................................17
9.11. Specific Performance....................................17
WARRANT AGREEMENT
AGREEMENT dated as of May 1, 2002 between Motient Corporation, a Delaware
corporation (the "Company"), and EquiServe Trust Company, N.A., as Warrant Agent
(the "Warrant Agent").
The Company proposes to issue and deliver its warrant certificates (the
"Warrant Certificates") evidencing warrants (the "Warrants") to acquire, under
certain circumstances, up to an aggregate of 1,496,512 shares, subject to
adjustment, of its Common Stock (defined below) pursuant to the Debtors' Amended
Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code (the
"Plan"), confirmed by order of the United States Bankruptcy Court for the
Eastern District of Virginia entered on April 26, 2002, in In re Motient
Corporation et al (Case No. 02-80125). Each Warrant will entitle the registered
holder thereof to purchase one share of the Company's Common Stock, subject to
adjustment.
In consideration of the foregoing and for the purpose of defining the terms
and provisions of the Warrants and the respective rights and obligations
thereunder of the Company and the record holders of the Warrants, the Company
and the Warrant Agent hereby agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following terms shall have the following
meanings:
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
when used with respect to any Person means the power to direct the management
and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise, and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Closing Price" of a share of Common Stock for any day shall mean the last
reported sales price, regular way, or, in the event that no sale takes place on
such day, the average of the reported closing bid and asked prices, regular way,
in either case as reported on the principal national securities exchange on
which such security is listed or admitted to trading or, if not listed or
admitted to trading on any national securities exchange, on the NASDAQ National
Market or the NASDAQ SmallCap Market or, if such security is not quoted on the
NASDAQ National Market or the NASDAQ SmallCap Market, the average of the closing
bid and asked prices on each such day in the over-the-counter market as reported
by NASDAQ or, if bid and asked prices for such security on each such day shall
not have been reported through NASDAQ, the average of the bid and asked prices
for such day as furnished by any reputable investment banking firm regularly
making a market in such security selected for such purpose by the Board of
Directors of the Company or a committee thereof. If the Closing Price cannot be
calculated on such date on any of the foregoing bases, the Closing Price of such
security on such date shall be the fair market value as reasonably determined by
an Independent Financial Expert selected for such purpose by the Board of
Directors of the Company or a committee thereof.
"Common Stock" means the common stock, par value $0.01 per share, of the
Company.
"Company" has the meaning set forth in the preamble to this Agreement and
the successors and assigns of such entity.
"Current Market Value" means the average of the Closing Prices of the
Common Stock for the 10 consecutive trading days immediately preceding the day
as of which "Current Market Value" is being determined.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exercise Date" means the trading day immediately following the date that
the average of the Closing Prices of the Common Stock for ninety consecutive
trading days is equal to or greater than the Minimum Share Price.
"Exercise Period" means the period commencing on the Exercise Date and
extending to and through the Expiration Date.
"Exercise Price" has the meaning set forth in Section 3.1.
"Expiration Date" means the date which is the second anniversary of the
effective date of the Plan; provided, if such date shall be a holiday or a day
on which banks are authorized to close, then Expiration Date shall mean 5:00
p.m., New York City time on the next following day which in the State of New
York is not a holiday or a day on which banks are authorized to close.
"Holders" means from time to time, the registered holders of the Warrants
and, unless otherwise provided or indicated herein, the registered holders of
the Underlying Common Stock, in each case as registered upon the books to be
maintained by the Warrant Agent for that purpose pursuant to Section 5 hereof.
"Independent Financial Expert" means a nationally recognized investment
banking firm that does not (and whose directors, officers, employees and
Affiliates do not) have a direct or indirect financial interest in the Company
or any of its Affiliates, that has not been and at the time it is called upon to
give independent financial advice to the Company is not (and none of whose
directors, officers, employees or Affiliates is) a promoter, director or officer
of the Company or any of its Affiliates, and that does not provide any advice or
opinions to the Company or any of its Affiliates except as an Independent
Financial Expert retained by the Company hereunder.
"Minimum Share Price" means $15.44, subject to adjustment as provided
herein.
"Non-Surviving Combination" means any merger, consolidation or other
business combination by the Company with one or more Persons (other than a
direct or indirect wholly owned subsidiary of the Company) in which the other
Person is the survivor, or a sale of all or substantially all of the assets of
the Company to one or more such Persons in a single transaction or series of
related transactions, and with respect to which consideration (other than common
equity securities of the Company) is distributed to holders of Common Stock in
exchange for all or substantially all of their equity interest in the Company;
provided that, if any such merger, consolidation or other business combination
in which such consideration is so distributed is structured so that the Company
is the surviving entity, such transaction shall nevertheless be deemed to be a
Non-Surviving Combination.
"Person" means any natural person, corporation, partnership, joint venture,
firm, association, joint-stock company, trust, unincorporated organization,
government, or governmental agency or political subdivision, or any other
entity, whether acting in an individual, fiduciary or other capacity.
"Underlying Common Stock" means the shares of Common Stock issuable or
issued upon the exercise of the Warrants.
"Warrant Agent" has the meaning set forth in the preamble to this Agreement
or the successor or successors of such Warrant Agent appointed in accordance
with the terms hereof.
"Warrant Certificates" have the meaning set forth in the preamble to this
Agreement.
"Warrants" have the meaning set forth in the preamble to this Agreement.
2. ORIGINAL ISSUE OF WARRANTS.
2.1. Form of Warrant Certificates. The Warrant Certificates shall be in
registered form only and substantially in the form attached hereto as Exhibit A,
shall be dated the date on which countersigned by the Warrant Agent and may have
such legends, summaries and endorsements typed, stamped, printed, lithographed
or engraved thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any law or with any rule or regulation pursuant thereto, or to
conform to usage.
2.2. Execution and Delivery of Warrant Certificates. Warrant Certificates
evidencing Warrants to purchase initially an aggregate of up to 1,496,512 shares
of Common Stock may be executed, on or after the date of this Agreement, by the
Company and delivered to the Warrant Agent for countersignature, and the Warrant
Agent shall thereupon countersign and deliver such Warrant Certificates to the
Company or upon the order and at the direction of the Company to the Persons
entitled to receive such Warrants pursuant to the Plan. The Warrant Agent is
hereby authorized to countersign and deliver Warrant Certificates as required by
this Section 2.2 or by Sections 3.4, 5 or 9.4. The Warrant Certificates shall be
executed on behalf of the Company by its Chairman of the Board, Chief Executive
Officer, President or Vice President, either manually or by facsimile signature
printed thereon. The Warrant Certificates shall be manually countersigned by the
Warrant Agent and shall not be valid for any purpose unless so countersigned. In
case any officer of the Company whose signature shall have been placed upon any
of the Warrant Certificates shall cease to be such officer of the Company before
countersignature by the Warrant Agent and issue and delivery thereof, such
Warrant Certificates may, nevertheless, be countersigned by the Warrant Agent
and issued and delivered with the same force and effect as though such Person
had not ceased to be such officer of the Company.
3. EXERCISE PRICE; EXERCISE OF WARRANTS GENERALLY.
3.1. Exercise Price. Each Warrant Certificate shall, when countersigned by
the Warrant Agent, entitle the respective Holder thereof, subject to the
provisions of this Agreement, to purchase one share of Common Stock for each
Warrant represented thereby at an exercise price (the "Exercise Price") of $0.01
per share, subject to adjustment as provided in Section 4.
3.2. Exercise of Warrants. Subject to the terms and conditions set forth
herein, the Warrants shall be exercisable in full or in part on or prior to the
Expiration Date as follows:
3.2(a) The Warrants shall be exercisable at any time or from time to
time on or after the Exercise Date through but not including the Expiration
Date.
3.2(b) The Warrants shall be exercisable in connection with certain
Non-Surviving Combinations, in accordance with Section 3.5.
Notwithstanding anything contained herein to the contrary, the exercise of the
Warrants in accordance with this Agreement shall only be permitted during the
Exercise Period and if the Warrants have not been exercised for any reason
during the Exercise Period, including without limitation because there has been
no Exercise Date prior to the Expiration Date, then the Warrants shall be
cancelled and shall be of no further force or effect.
3.3. Expiration of Warrants. The Warrants shall terminate and become void
as of 5:00 P.M. New York City time on the Expiration Date.
All obligations of the Company under this Agreement shall cease upon the
Expiration Date, except any obligations that specifically survive under this
Agreement.
3.4. Method of Exercise; Payment of Exercise Price. In order to exercise a
Warrant, the Holder thereof must surrender the Warrant Certificate evidencing
such Warrant to the Warrant Agent, with the exercise subscription form on the
reverse of or attached to the Warrant Certificate duly executed, together with
any required payment in full of the Exercise Price for the shares of Underlying
Common Stock as to which the Warrant Certificate is submitted for exercise. Any
such payment of the Exercise Price shall be in cash or by certified or official
bank check payable in United States currency to the order of the Warrant Agent.
All funds received upon the exercise of Warrants shall be deposited by the
Warrant Agent for the account of the Company, unless otherwise instructed in
writing by the Company.
If fewer than all the Warrants represented by a Warrant Certificate are
exercised, such Warrant Certificate shall be surrendered and a new Warrant
Certificate for the number of Warrants that were not exercised shall be issued
by the Warrant Agent. The Warrant Agent shall countersign the new Warrant
Certificate, register it in such name or names as may be directed in writing by
the Holder and deliver the new Warrant Certificate to the Person or Persons
entitled to receive the same.
Upon surrender of a Warrant Certificate in conformity with the foregoing
provisions, the Warrant Agent shall thereupon requisition from the Company, and
after receipt thereof the Warrant Agent shall deliver to the Holder of such
Warrant Certificate, a certificate or other appropriate evidence of ownership of
any shares of Underlying Common Stock or other securities or property (including
any money) to which the Holder is entitled, registered or otherwise placed in,
or payable to the order of, such name or names as may be directed in writing by
the Holder, and shall deliver such evidence of ownership and any other
securities or property (including any money) to the Person or Persons entitled
to receive the same, together with an amount in cash in lieu of any fraction of
a share as provided in Section 4.4. Such surrender shall be deemed to have been
effected as of the close of business on the day on which such Warrant
Certificate shall have been surrendered, and at such time the rights of the
Holder of the Warrant Certificate, in its capacity as such Holder, shall cease,
and the Person or Person in which name or name any securities evidencing the
Warrant Certificate are to be issued upon such surrender shall be deemed to have
become the holder or holders of record of the such securities.
3.5 Non-Surviving Combination.
3.5(a) If the Company proposes, prior to the Expiration Date, to enter
into a transaction that would constitute a Non-Surviving Combination if
closed, the Company shall give written notice thereof to the Holders of the
Warrants, promptly after a definitive agreement or agreement in principle
is reached with respect to the Non-Surviving Combination. Such notice shall
describe the transaction in reasonable detail and specify whether the
consideration to be received by the holders of Company Common Stock will
consist of cash or items other than cash. The Company also shall furnish to
each Holder of Warrants all notices and materials furnished by the Company
to its stockholders in connection with such transaction.
3.5.(b) The Company agrees that it will not enter into an agreement
prior to the Expiration Date providing for a Non-Surviving Combination in
which only cash is paid to the holders of Common Stock and the amount of
cash payable per share of Common Stock exceeds the Minimum Share Price,
unless the party to such transaction that is the surviving entity (the
"Survivor") shall be obligated to purchase each outstanding Warrant for a
cash purchase price equal to (i) the cash amount the Holder of such Warrant
would have received if such Holder had exercised such Warrant immediately
prior to such Non-Surviving Combination (or, if applicable, the record date
therefor) and the Survivor had purchased the number of shares of Underlying
Common Stock then issuable upon such exercise in such Non-Surviving
Combination, less (ii) the Exercise Price for such Warrant then in effect.
3.5(c) If the Company consummates a Non-Surviving Combination prior to
the Expiration Date and Section 3.5(b) above does not apply, the Warrants
shall automatically become warrants to purchase the kind and amount of
securities, cash or other assets which the Holder of a Warrant would have
owned immediately after Non-Surviving Combination if the Holder of a
Warrant had exercised the Warrant immediately before the effective date of
the Non-Surviving Combination, subject to all of the terms, conditions and
restrictions set forth herein; provided, that if the quotient obtained by
dividing (x) value of the consideration (both the cash and items other than
cash) to be received by the Holders of the Warrants in a transaction that
would constitute a Non-Surviving Combination if closed (such value to be
determined by the Board of Directors of the Company in good faith) by (y)
the number of shares of Common Stock then outstanding plus the number of
shares of Underlying Common Stock, exceeds the Minimum Share Price, then
the Warrants shall be immediately exercisable from and after the
consummation of the Non-Surviving Combination (and the Exercise Date shall
be deemed to have occurred). Concurrently with the consummation of such
Non-Surviving Combination, the corporation formed by or surviving any such
consolidation or merger if other than the Company, or the person to which
such sale or conveyance shall have been made, shall enter into a
supplemental Warrant Agreement so providing and further providing for
adjustments which shall be as nearly equivalent as may be practical to the
adjustments provided for in this Section 3.5. The successor company shall
mail to each Holder of a Warrant a notice describing the supplemental
Warrant Agreement. If the issuer of securities deliverable upon exercise of
Warrants under the supplemental Warrant Agreement is an affiliate of the
formed, surviving, transferee or lessee corporation, that issuer shall join
in the supplemental Warrant Agreement.
3.5(d) If this Section 3.5 applies, Section 4.1 hereof does not apply.
4. ADJUSTMENTS.
4.1. Adjustments. The Exercise Price, the Minimum Share Price and, in
certain circumstances, the kind of property receivable upon exercise of a
Warrant shall be subject to adjustment from time to time as provided in
paragraphs 4.1(a), 4.1(b) and 4.1(c) below, and the number of shares of Common
Stock issuable upon exercise of each Warrant shall be subject to adjustment from
time to time as provided in paragraph 4.1(g) below.
4.1(a) Stock Splits; Reverse Stock Splits; Reclassifications. In case
the Company shall (i) declare or pay a dividend or other distribution on
its outstanding Common Stock in shares of Common Stock, (ii) subdivide its
outstanding shares of Common Stock, (iii) combine its outstanding Common
Stock into a smaller number of shares, or (iv) issue any shares of its
capital stock in a reclassification of the Common Stock (which
reclassification also involves any of the events described in clauses (i),
(ii) or (iii) above, including any such reclassification in connection with
a merger, consolidation or other business combination in which the Company
is the continuing corporation), (A) the Exercise Price in effect at the
record date for such dividend or distribution or the effective date of such
subdivision, combination or reclassification shall be adjusted so that the
Holder of each Warrant exercised after such time shall be entitled to
receive the kind and number of shares of Common Stock or other securities
of the Company that such Holder would have owned or have been entitled to
receive after the happening of any of the events described above, had such
Warrant been exercised in full immediately prior to the happening of such
event or any record date with respect thereto (with any record date
requirement being deemed to have been satisfied) and (B) the Minimum Share
Price in effect at the record date for such dividend or distribution or the
effective date of such subdivision, combination or reclassification shall
be proportionately increased or decreased, as the case may be. In the case
of a reclassification which does not also involve any of the events
described in clauses (i), (ii) or (iii) above, there shall be no adjustment
in the Minimum Share Price. In the case of a reclassification which does
not also involve any of the events described in clauses (i), (ii) or (iii)
above, there shall be no adjustment in the Exercise Price, but rather an
adjustment shall be made in the kind of property receivable upon exercise
of a Warrant. An adjustment made pursuant to this Section 4.1(a) shall
become effective immediately after the effective date of such event
retroactive to the record date, if any, for such event.
4.1(b) Rights; Options; Warrants. In case the Company shall issue
rights, options, warrants or convertible or exchangeable securities (other
than a convertible or exchangeable security subject to Section 4.1(a)) to
no fewer than all holders of its Common Stock, entitling them to subscribe
for or purchase Common Stock at a price per share of Common Stock
(determined in the case of such rights, options, warrants or convertible or
exchangeable securities, by dividing (A) the total consideration receivable
by the Company in connection with the issuance of such rights, options,
warrants or convertible or exchangeable securities (as specified below), by
(B) the total number of shares of Common Stock covered by such rights,
options, warrants or convertible or exchangeable securities) that is lower
(at the record date for such issuance) than the then Current Market Value
per share of Common Stock in effect immediately prior to such issuance, the
Exercise Price shall be adjusted by multiplying the Exercise Price in
effect immediately prior thereto by a fraction, of which the numerator
shall be an amount equal to the sum of (A) the number of shares of Common
Stock outstanding immediately prior to such issuance plus (B) the number of
shares of Common Stock which the total consideration receivable by the
Company in connection with the issuance of such rights, options, warrants
or convertible or exchangeable securities would purchase to such Current
Market Value per share, and of which the denominator shall be an amount
equal to the sum of (A) the total number of shares of Common Stock
outstanding immediately prior to such issuance plus (B) the total number of
shares of Common Stock covered by such rights, options, warrants, or
convertible or exchangeable securities; provided, that no adjustment of the
Exercise Price shall be made with respect to additional shares of Common
Stock which are distributed to the holders of Common Stock as a
distribution or subdivision for which an adjustment is provided under
Section 4.1(a) above.
For purposes of this Section 4.1(b), the consideration receivable by
the Company in connection with the issuance of rights, options, warrants or
convertible or exchangeable securities shall be deemed to be the
consideration received by the Company for such rights, options, warrants or
convertible or exchangeable securities, plus the aggregate consideration or
premiums stated in such rights, options, warrants or convertible or
exchangeable securities to be paid for the shares of Common Stock covered
thereby. Any adjustment pursuant to this Section 4.1(b) shall be made
whenever any such rights, options, warrants or convertible or exchangeable
securities are issued, but shall be effective retroactively in respect of
exercises of Warrants made between the record date for the determination of
stockholders entitled to receive such rights, options, warrants or
convertible or exchangeable securities and the date such rights, options,
warrants or convertible or exchangeable securities are issued.
4.1(c) Distribution of Assets or Securities. In case the Company shall
make a distribution to all holders of shares of Common Stock of any
evidences of its indebtedness or assets (other than cash dividends or
distributions paid out of net profit or surplus) or securities (other than
those referred to in Section 4.1(a) or 4.1(b) ) and other than in
connection with the total liquidation, dissolution or winding-up of the
Company, the Exercise Price to be in effect after such record date shall be
determined by multiplying the Exercise Price in effect immediately prior to
such record date by a fraction, of which the numerator shall be the Current
Market Value per share of Common Stock on such record date, less the fair
market value (as determined in good faith by the Company's board of
directors, whose determination shall be conclusive) of the portion of the
indebtedness, assets or securities so to be distributed applicable to one
share of Common Stock and of which the denominator shall be the Current
Market Value per share of Common Stock. An adjustment made pursuant to this
Section 4.1(c) shall be made whenever such distribution is made, but shall
be effective retroactively in respect of exercises of Warrants made between
the record date for such distribution and the date of such distribution.
4.1(d) Expiration of Rights, Options and Conversion Privileges. Upon
the expiration of any rights, options, warrants or conversion or exchange
rights that have previously resulted in an adjustment hereunder, if any
thereof shall not have been exercised, the Exercise Price then in effect
shall, upon such expiration, be readjusted and shall thereafter, upon any
future exercise, be such as it would have been had it been originally
adjusted (or had the original adjustment not been required, as the case may
be) as if (i) the only shares of Common Stock so issued were the shares of
Common Stock, if any, actually issued or sold upon the exercise of such
rights, options, warrants or conversion or exchange rights and (ii) such
shares of Common Stock, if any, were issued or sold for the consideration
actually received by the Company upon such exercise plus the consideration,
if any, actually received by the Company for issuance of all such rights,
options, warrants or conversion or exchange rights whether or not
exercised; provided, that no such readjustment shall have the effect of
decreasing the number of shares issuable upon exercise of each Warrant at
such Exercise Price by a number that is in excess of the amount or number
of the adjustment initially made in respect of the issuance of such rights,
options, warrants or conversion or exchange rights.
4.1(e) No Adjustment for Cash Dividends. No adjustment shall be made
in the Exercise Price or Minimum Share Price or the property receivable
upon exercise of a Warrant by reason of a cash dividend or distribution
made during the term of the Warrant out of net profits or surplus.
4.1(f) De Minimis Adjustments. No adjustment in the Exercise Price or
Minimum Share Price shall be required unless such adjustment would require
an increase or decrease of at least $0.01; provided, that any adjustments
which by reason of this Section 4.1(f) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment.
4.1(g) Adjustment of Number of Shares. Unless the Company shall have
exercised its election as provided in Section 4.1(h), upon each adjustment
of the Exercise Price as a result of the calculations made in Sections
4.1(a), (b) or (c), each Warrant outstanding immediately prior to the
making of such adjustment shall thereafter evidence the right to purchase,
at the adjusted Exercise Price that number of shares of Common Stock
obtained by (A) multiplying (i) the number of shares of Common Stock
purchasable upon exercise of a Warrant immediately prior to such adjustment
of the Exercise Price by (ii) the Exercise Price in effect immediately
prior to such adjustment of the Exercise Price and (B) dividing the product
so obtained by the Exercise Price in effect immediately after such
adjustment of the Exercise Price.
4.1(h) Adjustment of Number of Warrants. The Company may elect, on or
after the date of any adjustment of the Exercise Price, to adjust the
number of Warrants in substitution for an adjustment in the number of
shares of Common Stock purchasable upon the exercise of a Warrant as
provided in Section 4.1(g).
4.1(i) Rounding. All adjustments to the Exercise Price shall be made
to the nearest one-tenth of a cent. All adjustments to the number of shares
of Common Stock issuable upon exercise of a Warrant shall be made to the
nearest one-thousandth of a share; provided, that no fractional shares will
be issued.
4.2. Notice of Adjustment. Whenever the Exercise Price is adjusted, as
herein provided, the Company 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 accountants regularly employed by the Company)
setting forth the number of shares of Common Stock or other stock or property
issuable upon the exercise of each Warrant 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, and shall cause the Warrant Agent
promptly to mail by first class mail, postage prepaid, to each Holder notice of
such adjustment or adjustments and a copy of such accountant's certificate. 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 mail a
copy to each Holder as provided in this Section 4.2.
4.3. Statement on Warrants. Irrespective of any adjustment in the number or
kind of shares issuable upon the exercise of the Warrants, Warrants theretofore
or thereafter issued may continue to express the same number and kind of shares
as are stated in the Warrants initially issuable pursuant to this Agreement;
provided, that the actual number of shares of capital stock subject to such
Warrants shall take into account any adjustments thereto required to be made
pursuant to the provisions of this Agreement.
4.4. No Fractional Shares. The Company shall not be required to issue
fractional shares of Common Stock on the exercise of Warrants. If more than one
Warrant shall be presented for exercise in full at the same time by the same
Holder, the number of full shares of Common Stock which shall be issuable upon
such exercise thereof shall be computed on the basis of the aggregate number of
shares of Common Stock acquirable on exercise of the Warrants so presented. If
any fraction of a share of Common Stock would, except for the provisions of this
Section, be issuable on the exercise of any Warrant (or specified portion
thereof), the Company shall deliver to the Warrant Agent and, after receipt
thereof, the Warrant Agent shall pay an amount in cash calculated by the Company
to be equal to the then Current Market Value per share of Common Stock
multiplied by such fraction computed to the nearest whole cent.
5. WARRANT TRANSFER BOOKS.
The Warrant Certificates shall be issued in registered form only. The
Company shall cause to be kept at the office of the Warrant Agent a register in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Warrant Certificates and of transfers or
exchanges of Warrant Certificates as herein provided.
At the option of the Holder, Warrant Certificates may be exchanged at such
office, and upon payment of the charges hereinafter provided. Whenever any
Warrant Certificates are so surrendered for exchange, the Company shall execute,
and the Warrant Agent shall countersign and deliver, the Warrant Certificates
that the Holder making the exchange is entitled to receive.
All Warrant Certificates issued upon any registration of transfer or
exchange of Warrant Certificates shall be the valid obligations of the Company,
evidencing the same obligations, and entitled to the same benefits under this
Agreement, as the Warrant Certificates surrendered for such registration of
transfer or exchange.
Every Warrant Certificate surrendered for registration of transfer or
exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Warrant Agent, duly
executed by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Warrant Certificates. The Company may require payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of Warrant
Certificates.
Any Warrant Certificate when duly endorsed in blank shall be deemed
negotiable, and when a Warrant Certificate shall have been so endorsed, the
Holder thereof may be treated by the Company, the Warrant Agent and all other
Persons dealing therewith as the absolute owner thereof for any purpose and as
the Person entitled to exercise the rights represented thereby, or to the
transfer thereof on the register of the Company maintained by the Warrant Agent,
any notice to the contrary notwithstanding; but until such transfer on such
register, the Company and the Warrant Agent may treat the registered Holder
thereof as the owner for all purposes.
6. WARRANT HOLDERS.
6.1. No Voting Rights. Prior to the exercise of the Warrants, no Holder of
a Warrant Certificate, as such, shall be entitled to any rights of a stockholder
of the Company, including, without limitation, the right to vote, to consent, to
exercise any preemptive right, or to receive any notice of any proceedings of
the Company, except with respect to notices or other rights as may be
specifically provided for herein.
6.2. Right of Action. All rights of action in respect of this Agreement are
vested in the Holders of the Warrants and the Underlying Common Stock, and any
Holder of any Warrant or Underlying Common Stock, without the consent of the
Warrant Agent or the Holder of any other Warrant or other Underlying Common
Stock, may, in such Holder's own behalf and for such Holder's own benefit,
enforce, and may institute and maintain any suit, action or proceeding against
the Company suitable to enforce, or otherwise in respect of, such Holder's right
to exercise, exchange or tender for purchase such Holder's Warrants in the
manner provided in this Agreement.
7. WARRANT AGENT.
7.1. Nature of Duties and Responsibilities Assumed. The Company hereby
appoints the Warrant Agent to act as agent of the Company in accordance with the
provisions of this Agreement. The Warrant Agent hereby accepts the appointment
as agent of the Company and agrees to perform that agency upon the terms and
conditions herein set forth, by all of which the Company and the Holders of
Warrants, by their acceptance thereof, shall be bound. The Warrant Agent shall
not by countersigning Warrant Certificates or by any other act hereunder be
deemed to make any representations as to validity or authorization of the
Warrants or the Warrant Certificates (except as to its countersignature thereon)
or of any securities or other property delivered upon exercise or tender of any
Warrant, or as to the accuracy of the computation of the Exercise Price or the
number or kind or amount of stock or other securities or other property
deliverable upon exercise of any Warrant, or the correctness of the
representations of the Company made in certificates that the Warrant Agent
receives. The Warrant Agent shall not have any duty to calculate or determine
any adjustments with respect to any of the Exercise Price, the Minimum Share
Price or the kind and amount of shares or other securities or any property
receivable by Holders upon the exercise or tender of Warrants required from time
to time, and the Warrant Agent shall have no duty or responsibility in
determining the accuracy or correctness of such calculation. The Warrant Agent
shall not (a) be liable for any recital or statement of fact contained herein or
in the Warrant Certificates or for any action taken, suffered or omitted by it
in good faith on the belief that any Warrant Certificate or any other documents
or any signatures are genuine or properly authorized, (b) be responsible for any
failure on the part of the Company to comply with any of its covenants and
obligations contained in this Agreement or in the Warrant Certificates, or (c)
be liable for any act or omission in connection with this Agreement except for
its own gross negligence or willful misconduct. The Warrant Agent is hereby
authorized to accept instructions with respect to the performance of its duties
hereunder from the President, any Vice President or the Secretary of the Company
and to apply to any such officer for instructions (which instructions will be
promptly given in writing when requested), and the Warrant Agent shall not be
liable to the Company or any Holder for any action taken or suffered to be taken
by it in good faith in accordance with the instructions of any such officer, but
in its discretion the Warrant Agent may in lieu thereof accept other evidence of
such or may require such further or additional evidence as it may deem
reasonable. Anything in this Agreement to the contrary notwithstanding, in no
event shall the Warrant Agent be liable for special, 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 action.
Whenever in the performance of its duties, the Warrant Agent shall deem it
necessary or desirable that any fact or matter be proved or established by the
Company prior to taking any action hereunder, such fact or matter (unless other
evidence in respect thereof is specifically prescribed herein) may be deemed to
be conclusively proved and established by a certificate signed by the President,
any Vice President, or the Secretary of the Company and delivered to the Warrant
Agent. The Warrant Agent shall not be charged with any knowledge it may obtain
in its individual capacity or in any capacity other than as Warrant Agent.
The Warrant Agent shall not at any time be under any duty or responsibility
to any Holders to determine whether any facts exist that may require any
adjustment of the Exercise Price or the number of shares of Common Stock or
other stock or property issuable on exercise of the Warrants, 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 or the validity or value (or the kind
or amount) of any shares of Common Stock or other stock or property which may be
issuable on exercise of the Warrants.
The Warrant Agent shall not be responsible for any failure of the Company
to make any cash payment or to issue, transfer or deliver any shares of Common
Stock or stock certificates or other common stock or properties upon the
exercise of any Warrant.
The Warrant Agent may execute and exercise any of the rights and powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorneys, agents or employees, provided reasonable care has been exercised
in the selection and in the continued employment of any such attorney, agent or
employee. The Warrant Agent shall not be under any obligation or duty to
institute, appear in or defend any action, suit or legal proceeding in respect
hereof, unless first indemnified to its satisfaction, 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 such indemnity. The Warrant
Agent shall promptly notify the Company in writing of any claim made or action,
suit or proceeding instituted against it arising out of or in connection with
this Agreement.
The Company will perform, execute, acknowledge and deliver or cause to be
performed, executed, acknowledged and delivered all such further acts,
instruments and assurances as may reasonably be required by the Warrant Agent in
order to enable the Warrant Agent to carry out or perform its duties under this
Agreement.
The Warrant Agent shall act solely as agent of the Company hereunder. The
Warrant Agent shall not be liable except for the failure to perform such duties
as are specifically set forth herein, and no implied covenants or obligations
shall be read into this Agreement against the Warrant Agent, whose duties and
obligations shall be determined solely by the express provisions hereof.
7.2. Right to Consult Counsel. The Warrant Agent may at any time consult
with legal counsel satisfactory to it (who may be legal counsel for the
Company), and the Warrant Agent shall incur no liability or responsibility to
the Company or to any Holder for any action taken, suffered or omitted by it in
good faith in accordance with the opinion or advice of such counsel.
7.3. Compensation and Reimbursement. The Company agrees to pay to the
Warrant Agent from time to time compensation for all services rendered by it
hereunder as the Company and the Warrant Agent may agree from time to time, and
to reimburse the Warrant Agent for reasonable expenses and disbursements
incurred in connection with the execution and administration of this Agreement
(including the reasonable compensation and the reasonable expenses of its
counsel), and further agrees to indemnify the Warrant Agent for, and to hold it
harmless against, any loss, liability or expense incurred without gross
negligence or bad faith on its part, arising out of or in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder. 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 any of its rights or powers,
if it shall have reasonable grounds for believing that repayment of such funds
or adequate indemnity against such risk or liability is not reasonably assured
of it.
7.4. Warrant Agent May Hold Company Securities. 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 its Affiliates
or become pecuniarily interested in transactions in which the Company or its
Affiliates may be interested, or contract with or lend money to the Company or
its Affiliates or otherwise act as fully and freely as though it were not the
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.
7.5. Resignation and Removal; Appointment of Successor.
7.5(a) No resignation or removal of the Warrant Agent and no
appointment of a successor warrant agent shall become effective until the
acceptance of appointment by the successor warrant agent as provided
herein. The Warrant Agent may resign its duties and be discharged from all
further duties and liability hereunder (except liability arising as a
result of the Warrant Agent's own gross negligence or willful misconduct)
thirty days after giving written notice to the Company. The Company or the
Holders of a majority of the Warrants may remove the Warrant Agent upon
written notice, and the Warrant Agent shall thereupon in like manner be
discharged from all further duties and liabilities hereunder, except as
aforesaid. The Warrant Agent shall, at the Company's expense, cause to be
mailed (by first-class mail, postage prepaid) to each Holder of a Warrant
at his last address as shown on the register of the Company maintained by
the Warrant Agent a copy of said notice of resignation or notice of
removal, as the case may be. Upon such resignation or removal, the Company
shall appoint in writing a new warrant agent. If the Company shall fail to
make such appointment within a period of 30 days after it has been notified
in writing of such resignation by the resigning Warrant Agent or after such
removal, then the Holder of any Warrant may apply to any court of competent
jurisdiction for the appointment of a new warrant agent. Any new warrant
agent, whether appointed by the Company or by such a court, shall be a
corporation doing business under the laws of the United States or any state
thereof, in good standing and having a combined capital and surplus of not
less than $50,000,000. The combined capital and surplus of any such new
warrant agent shall be deemed to be the combined capital and surplus as set
forth in the most recent annual report of its condition published by such
warrant agent prior to its appointment, provided that such reports are
published at least annually pursuant to law or to the requirements of a
Federal or state supervising or examining authority. After acceptance in
writing of such appointment by the new warrant agent, it shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named herein as the Warrant Agent, without any further
assurance, conveyance, act or deed; but if for any reason it shall be
necessary or expedient to execute and deliver any further assurance,
conveyance, act or deed, the same shall be done at the expense of the
Company and shall be legally and validly executed and delivered by the
resigning or removed Warrant Agent. Not later than the effective date of
any such appointment, the Company shall give notice thereof to the
resigning or removed Warrant Agent. Failure to give any notice provided for
in this Section, however, or any defect therein, shall not affect the
legality or validity of the resignation of the Warrant Agent or the
appointment of a new warrant agent, as the case may be.
7.5(b) Any corporation into which the Warrant Agent or any new warrant
agent may be merged, or any corporation resulting from any consolidation to
which the Warrant Agent or any new warrant agent shall be a party, shall be
a successor Warrant Agent under this Agreement without any further act,
provided that such corporation would be eligible for appointment as
successor to the Warrant Agent under the provisions of Section 7.5(a). Any
such successor Warrant Agent shall promptly cause notice of its succession
as Warrant Agent to be mailed (by first-class mail, postage prepaid) to
each Holder of a Warrant at such Holder's last address as shown on the
register of the Company maintained by the Warrant Agent.
8. COVENANTS OF THE COMPANY.
8.1. Reservation of Common Stock for Issuance on Exercise of Warrants. The
Company covenants that it will at all times reserve and keep available, free
from pre-emptive rights, out of its authorized but unissued Common Stock, solely
for the purpose of issue upon exercise of Warrants as herein provided, such
number of shares of Common Stock as shall then be issuable upon the exercise of
all outstanding Warrants. The Company covenants that all shares of Common Stock
which shall be so issuable shall, upon such issue, be duly and validly issued
and fully paid and non-assessable.
8.2. Reports to Holders. The Company will supply without cost to each
Holder and file with the Warrant Agent, contemporaneously with mailing them to
stockholders of the Company, copies of any annual reports and quarterly reports
that the company furnishes to its stockholders.
9. MISCELLANEOUS.
9.1. Money and Other Property Deposited with the Warrant Agent. Any moneys,
securities or other property which at any time shall be deposited by the Company
or on its behalf with the Warrant Agent pursuant to this Agreement shall be and
are hereby assigned, transferred and set over to the Warrant Agent solely and
exclusively for the purpose for which such moneys, securities or other property
shall have been deposited; but such moneys, securities or other property need
not be segregated from other funds, securities or other property except to the
extent required by law. The Warrant Agent shall distribute any money deposited
with it for payment and distribution to the Holders by mailing by first-class
mail a check, in such amount as is appropriate, to each such Holder at the
address shown on the Warrant register of the Company, or as it may be otherwise
directed in writing by such Holder. Any money deposited with the Warrant Agent
for payment and distribution to the Holders that remains unclaimed for two years
after the date the money was deposited with the Warrant Agent shall be paid to
the Company upon its request therefor.
9.2. Payment of Taxes. The Company shall pay all taxes and other
governmental charges that may be imposed on the Company or on the Warrants or on
any securities deliverable upon exercise of Warrants with respect thereto. The
Company shall not be required, however, to pay any income taxes imposed on the
Holder of any Warrant or any tax or other charge imposed in connection with any
transfer involved in the issue of any certificate for shares of Common Stock or
other securities underlying the Warrants or payment of cash to any Person other
than the Holder of a Warrant Certificate surrendered upon the exercise or
purchase of a Warrant, and in case of such transfer or payment, the Company
shall not be required to issue any stock certificate or pay any cash until such
tax or charge has been paid or it has been established to the Company's
satisfaction that no such tax or other charge is due.
9.3. Surrender of Certificates. Any Warrant Certificate surrendered for
exercise, payment of any Exercise Price, or purchase shall, if surrendered to
the Company, be delivered to the Warrant Agent, and all Warrant Certificates
surrendered or so delivered to the Warrant Agent shall be promptly cancelled by
such Warrant Agent and shall not be reissued by the Company. The Warrant Agent
shall promptly return such cancelled Warrant Certificates to the Company.
9.4. Mutilated, Destroyed, Lost and Stolen Warrant Certificates. If (a) any
mutilated Warrant Certificate is surrendered to the Warrant Agent or (b) the
Company and the Warrant Agent receive evidence to their satisfaction of the
destruction, loss or theft of any Warrant Certificate, and there is delivered to
the Company and the Warrant Agent such indemnity as may be required by them to
save each of them harmless, then, in the absence of notice to the Company or the
Warrant Agent that such Warrant Certificate has been acquired by a bona fide
purchaser, the Company shall execute and upon the Company's written request the
Warrant Agent shall countersign and deliver, in exchange for any such mutilated
Warrant Certificate or in lieu of any such destroyed, lost or stolen Warrant
Certificate, a new Warrant Certificate of like tenor and for a like aggregate
number of Warrants.
Upon the issuance of any new Warrant Certificate under this Section 9.4,
the Company may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and other
expenses (including the reasonable fees and expenses of the Warrant Agent and of
counsel to the Company) in connection therewith.
Every new Warrant Certificate executed and delivered pursuant to this
Section 9.4 in lieu of any destroyed, lost or stolen Warrant Certificate shall
constitute an original contractual obligation of the Company, whether or not the
destroyed, lost or stolen Warrant Certificate shall be at any time enforceable
by anyone, and shall be entitled to the benefits of this Agreement equally and
proportionately with any and all other Warrant Certificates duly executed and
delivered hereunder.
The provisions of this Section 9.4 are exclusive and shall preclude (to the
extent lawful) all other rights or remedies with respect to the replacement of
mutilated, destroyed, lost, or stolen Warrant Certificates.
9.5. Notices. Any notice, demand or delivery authorized by this Agreement
shall be sufficiently given or made when mailed if sent by first-class mail,
postage prepaid, addressed to any Holder of a Warrant at such Holder's address
shown on the register of the Company maintained by the Warrant Agent and to the
Company or the Warrant Agent as follows:
If to the Company: Motient Corporation
00000 Xxxxxxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxx 00000-0000
Attention: General Counsel
If to the Warrant Agent: EquiServe Trust Company, N.A.
c/o EquiServe, Inc.
000 Xxxxxxxxxx Xxxx - 3rd Floor - Suite 4660
Xxxxxx Xxxx, XX 00000
Attn: Reorganization Department
or such other address as shall have been furnished in accordance with the
foregoing to the party giving or making such notice, demand or delivery.
9.6. Applicable Law. This Agreement and each Warrant issued hereunder and
all rights arising hereunder shall be governed by the laws of the State of
Delaware, except that the rights and obligations of the Warrant Agent as set
forth in Sections 7.1 et. seq. shall be governed by the laws of the Commonwealth
of Massachusetts.
9.7. Persons Benefiting. This Agreement shall be binding upon and inure to
the benefit of the Company and the Warrant Agent, and their respective
successors, assigns, beneficiaries, executors and administrators, and the
Holders from time to time of the Warrants. Nothing in this Agreement is intended
or shall be construed to confer upon any Person, other than the Company, the
Warrant Agent and the Holders of the Warrants, any right, remedy or claim under
or by reason of this Agreement or any part hereof.
9.8. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together constitute one and the same instrument.
9.9. Amendments. The Company and the Warrant Agent may from time to time
supplement or amend this Agreement without the consent of any Holder in order to
cure any ambiguity, manifest error or other mistake in this Agreement, or to
make provision in regard to any matters or questions arising hereunder which the
Company and the Warrant Agent may deem necessary or desirable and which shall
not adversely affect, alter or change the interests of the Holders.
9.10. Headings. The descriptive headings of the several Sections of this
Agreement are inserted for convenience and shall not control or affect the
meaning or construction of any of the provisions hereof.
9.11. Specific Performance. In addition to any other remedies which the
Company or the Holders may have at law or in equity, the Company and the Holders
shall have the right to have all obligations, undertakings, agreements,
covenants and other provisions of this Agreement specifically performed and
shall have the right to obtain an order or decree of such specific performance
in any of the courts of the United States or of any state or other political
subdivision thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
MOTIENT CORPORATION
By:
--------------------------------------
Name:
Title:
EquiServe Trust Company, N.A.,
as Warrant Agent
By: /s/Xxxxxx X. Xxxxxxx, Xx.
-------------------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: President and Chief Executive
Officer
A-1
EXHIBIT A
(Attached)
