EXHIBIT 10.51
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OPTION AND WARRANT AGREEMENT
Dated as of June 30, 1999
BY AND BETWEEN
ACCESS ONE COMMUNICATIONS CORP.
(AS ISSUER OF WARRANTS)
AND
MCG FINANCE CORPORATION
(AS PURCHASER OF WARRANTS)
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Option to Acquire Warrants to Purchase up to 10%
of the Issued and Outstanding Shares
of Capital Stock of Company (on a Fully Diluted Basis)
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TABLE OF CONTENTS
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ARTICLE 1: GRANT OF WARRANTS.....................................................................1
1.1. GRANT OF OPTION.......................................................................1
1.2. WARRANT ENTITLEMENT...................................................................2
1.3. OPTION AND WARRANTS AS ADDITIONAL COMPENSATION........................................2
ARTICLE 2: PURCHASER'S REPRESENTATIONS AND AGREEMENTS............................................2
ARTICLE 3: COMPANY'S REPRESENTATIONS AND WARRANTIES..............................................3
3.1. LEGAL EXISTENCE AND POWER.............................................................3
3.2. AUTHORIZATION; NON-CONTRAVENTION......................................................3
3.3. EXECUTION, DELIVERY AND BINDING EFFECT................................................3
3.4. BROKER AND FINDER FEES................................................................3
3.5. OFFER AND SALE OF SECURITIES..........................................................4
3.6. CAPITALIZATION; WARRANT SHARES AS A PERCENT OF CAPITAL STOCK..........................4
3.7. RESERVATION AND ISSUANCE OF WARRANT SHARES............................................4
3.8. DISCLOSURES...........................................................................4
3.9. ACKNOWLEDGMENT REGARDING PURCHASER'S PURCHASE OF THE WARRANTS.........................5
ARTICLE 4: THE WARRANTS AND WARRANT SHARES.......................................................5
4.1. WARRANT CERTIFICATES..................................................................5
4.2. EXERCISE OF WARRANTS..................................................................6
4.3. TRANSFERS OF WARRANTS AND WARRANT SHARES..............................................6
4.4. REGISTRATION AND RELATED RIGHTS.......................................................7
4.5. RIGHTS UPON EQUITY DISPOSITIONS AND NON-SURVIVING TRANSACTIONS.......................13
4.6. REPURCHASE OFFERS....................................................................15
4.7. CUMULATIVE RIGHTS....................................................................16
4.8. EXERCISE OF RIGHTS CONDITIONED UPON CLOSING OF TRANSACTION INVOLVED..................16
4.9. PAYMENT OF TAXES AND EXPENSES........................................................16
4.10. RESERVATION AND ISSUANCE OF WARRANT SHARES...........................................16
4.11. CORRECTIVE ADJUSTMENTS...............................................................16
4.12. LISTING OF SHARES....................................................................17
4.13. LISTS OF HOLDERS.....................................................................17
4.14. STATEMENT OF WARRANT INTEREST........................................................17
4.15. RIGHT OF INSPECTION..................................................................17
4.16. ATTENDANCE AND PARTICIPATION RIGHTS..................................................17
4.17. COMPLIANCE WITH APPROVAL REQUIREMENTS................................................18
ARTICLE 5: ANTI-DILUTION PROVISIONS.............................................................18
5.1. ADJUSTMENTS TO WARRANT SHARES PURCHASABLE AND EXERCISE PRICE.........................18
5.2. NOTICE OF ADJUSTMENT.................................................................22
5.3. PRESERVATION OF PURCHASE RIGHTS UPON CERTAIN TRANSACTIONS............................22
ARTICLE 6: COMPANY'S COVENANTS..................................................................23
6.1. INFORMATION..........................................................................23
6.2. BOOKS AND RECORDS....................................................................24
6.3. NO AMENDMENTS TO ORGANIC DOCUMENTS...................................................24
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6.4. REINCORPORATION AND REORGANIZATION...................................................25
6.5. EXISTENCE, GOOD STANDING AND AUTHORIZATIONS..........................................25
6.6. CONDUCT OF BUSINESS..................................................................25
ARTICLE 7: DEFINITIONS..........................................................................25
7.1. DEFINITIONS..........................................................................25
7.2. GENERAL CONSTRUCTION AND INTERPRETATION..............................................30
ARTICLE 8: MISCELLANEOUS........................................................................31
8.1. COMPLIANCE WITH FCC AND STATE PUC REQUIREMENTS.......................................31
8.2. COMPLIANCE WITH PURCHASER'S REGULATORY REQUIREMENTS..................................31
8.3. BINDING EFFECT AND GOVERNING LAW.....................................................32
8.4. SURVIVAL.............................................................................32
8.5. NO WAIVER; DELAY.....................................................................32
8.6. MODIFICATION.........................................................................32
8.7. NOTICES..............................................................................32
8.8. PRIOR AGREEMENTS SUPERSEDED..........................................................34
8.9. SEVERABILITY.........................................................................34
8.10. COUNTERPARTS.........................................................................34
8.11. LIMITATION OF LIABILITY..............................................................34
8.12. FORUM SELECTION; CONSENT TO JURISDICTION.............................................34
8.13. WAIVER OF JURY TRIAL.................................................................35
EXHIBIT A -- ARTICLES OF INCORPORATION.................................ERROR! BOOKMARK NOT DEFINED.
EXHIBIT B -- AUTHORIZING RESOLUTIONS...................................ERROR! BOOKMARK NOT DEFINED.
EXHIBIT C -- FORM OF WARRANT CERTIFICATE...............................ERROR! BOOKMARK NOT DEFINED.
EXHIBIT D -- RESTRICTIVE LEGENDS.......................................ERROR! BOOKMARK NOT DEFINED.
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OPTION AND WARRANT AGREEMENT
THIS OPTION AND WARRANT AGREEMENT (as defined in Article 7 along with all
the other defined terms, this "Agreement") is made and effective as of June 30,
1999 by and between ACCESS ONE COMMUNICATIONS CORP. (as more fully defined in
Article 7, "Company"), and MCG FINANCE CORPORATION (as more fully defined in
Article 7, "Purchaser", "Lender" and/or a "Holder").
R E C I T A L S
WHEREAS, Company (together with certain of its Affiliates) has requested
Lender (and Lender has agreed) to enter into the Credit Agreement and various
related Loan Documents (as defined in the Credit Agreement) pursuant to which
Lender will provide Company (together with certain of its Affiliates) with
credit facilities initially aggregating up to $7.5 million; and
WHEREAS, to induce Lender to enter into the Credit Agreement and other Loan
Documents and as additional consideration for the credit to be provided
thereunder, Company has agreed to issue and deliver to Purchaser an Option to
acquire the Warrants (evidenced by Warrant Certificates) to purchase up to an
aggregate of 10% (on a fully diluted basis and subject to adjustment including
under Section 5.1.m) of the Capital Stock and voting rights of Company;
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration (receipt and sufficiency of which are hereby
acknowledged), and intending to be legally bound hereby, Company and Purchaser
hereby agree as follows:
ARTICLE 1 . GRANT OF WARRANTS
1.1. GRANT AND EXERCISE OF OPTION. Company hereby grants to Purchaser an
option (the "Option") to acquire warrants (the "Warrants") to purchase
collectively shares of voting Common Stock representing, as of the date of
exercising such Option, 10% of the issued and outstanding shares of Capital
Stock and voting rights of Company (on a fully diluted basis) (but excluding
from such calculation any shares of Common Stock sold after the date hereof and
prior to the date of exercising such Option in connection with which the price
per share sold is based upon a valuation of the equity of the Company that is no
less than $20.0 million and as to which Purchaser does not elect to exercise its
preemptive rights under Section 5.1.h). The actual number of Warrants and
Warrant Shares purchasable pursuant to the Warrants will be established as of
the date that the Option is exercised, and such number of Warrants and Warrant
Shares will thereafter be adjusted from time to time as provided herein. The
Option is exercisable immediately and may be exercised by the holder hereof by
written notice to Company at any time prior to the earlier to occur of the
following two events: (a) 11:59 p.m. (Eastern Time) on June 30, 2009 and (b) the
date on which
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Lender accepts payment of the Deferred Interest accrued under Section 1.1.5 of
the Credit Agreement. Any notice of exercise of the Option shall include an
acknowledgment that the holder hereof is forgoing any further right to collect
the accrued Deferred Interest under Section 1.1.5 of the Credit Agreement.
Immediately upon exercise of the Option, Company shall issue and deliver to such
holder Warrant Certificates evidencing the Warrants, together with a
capitalization chart and an explanation of how the number of Warrants is being
calculated. Any dispute between Company and such holder with respect to the
number of Warrants and Warrant Shares purchasable to be represented by such
Warrant Certificates shall be resolved by an Independent Appraiser selected by
such holder with the approval of Company (which approval shall not be
unreasonably withheld). The terms of Articles 4, 5, and 6 hereof shall not be
effective until the Option is exercised (other than Sections 4.10, 4.14, 4.15,
4.16, 5.1.h, 5.1.m and 6.1, which Sections are effective immediately as of the
date hereof). Purchaser (without the necessity of any consent by Company) may
transfer the Option to and among any Holder-Affiliated Transferees.
1.2. WARRANT ENTITLEMENT. Each Warrant entitles the registered Holder of
such Warrant to purchase (during the Exercise Period) one fully paid,
nonassessable Warrant Share at a price of $.01 per share (as such amount may be
adjusted from time to time as provided herein, the "Exercise Price").
1.3. OPTION AND WARRANTS AS ADDITIONAL COMPENSATION. The Option and
Warrants (and the grant thereof hereunder) are additional compensation for the
cost, expense and risk incurred by Lender (and/or its Affiliates) associated
with the underwriting and establishment of the loan credit facilities to be
provided for in the Credit Agreement, but neither the grant nor the exercise of
any Option or Warrants in any way affects or relieves Company (or any Affiliate
thereof) of any of its obligations to fully and timely perform and to fully and
timely repay the entire indebtedness due under the Credit Agreement and related
Loan Documents.
ARTICLE 2 . PURCHASER'S REPRESENTATIONS AND AGREEMENTS
Purchaser represents and warrants that it is acquiring the Option (a)
solely for the purpose of investment and not with a view to any distribution of
the Warrants or any Warrant Shares within the meaning of the Securities Act, and
(b) with no present intention of selling or otherwise transferring the Option,
the Warrants, the Warrant Certificates or the Warrant Shares except as provided
herein. Purchaser further represents and warrants as follows: (1) it has such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of its prospective investment in the Option and
Warrants, and (2) it has the ability to bear the economic risks of its
prospective investment, and (3) it is able (without materially impairing its
financial condition) to hold the Option, the Warrants and Warrant Shares for an
indefinite period of time and to suffer a complete loss on its investment in
such Option, Warrants and Warrant Shares. Purchaser agrees that it will not
offer, sell or otherwise transfer any Option, Warrants, Warrant Certificates or
Warrant Shares except in compliance with this Agreement and the Securities Act
(and the regulations of the Commission thereunder) , as well as in compliance
with any applicable laws, regulations and orders
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of and/or administered by any State PUC (to the extent failure to so comply
could reasonably be expected to have or cause a material adverse effect on the
operations of Company) or the FCC.
ARTICLE 3 . COMPANY'S REPRESENTATIONS AND WARRANTIES
Company represents and warrants that:
3.1. LEGAL EXISTENCE AND POWER. Company (a) is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New Jersey, and (b) has all requisite power to execute, deliver and perform this
Agreement, and (c) has all requisite power to issue and deliver the Option, to
issue, execute, deliver and perform the Warrants and Warrant Certificates (if
and when the Option is exercised), and to issue and deliver the Warrant Shares
(if and when any Warrants are exercised). The Articles of Incorporation of
Company (as amended from time to time prior to the effective date hereof) are
attached as Exhibit A.
3.2. AUTHORIZATION; NON-CONTRAVENTION. Company has duly authorized each of
the following by all requisite actions thereof: (a) the execution, delivery and
performance of this Agreement, and (b) the issuance and delivery of the Option,
and (c) the issuance and delivery of the Warrants upon exercise of the Option,
and (d) the execution, delivery and performance of the Warrant Certificates, and
(e) the issuance and delivery of the Warrant Shares upon any exercise of the
Warrants. None of the actions or activities by Company the authorization of
which is described in the first sentence of this Section (when performed by
Company) will violate, breach or cause a default under (or will require any
consent that has not been obtained under) any applicable law or regulation
(including the laws, regulations and orders of and/or administered by the FCC or
any State PUC), the Organic Documents of Company, any voting or other
equity-related agreements, any other material agreements or instruments, any
order, injunction or decree of any court or governmental authority, or any
permit, authorization or license that (with respect to each of the foregoing
items, as applicable) Company is a party to, Company is bound by or Company
operates pursuant to. The resolutions of Company's Board of Directors
authorizing the actions described in the first sentence of this Section are
attached as Exhibit B and are in full force and effect as of the effective date
hereof.
3.3. EXECUTION, DELIVERY AND BINDING EFFECT. This Agreement has been duly
executed and delivered by Company. This Agreement and the Option constitute and
the Warrants and Warrant Certificates will constitute valid and binding
obligations of Company enforceable against Company in accordance with their
terms except as (a) the enforceability hereof or thereof may be limited by
applicable bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (b) the availability of equitable remedies may be limited by
equitable principles of general applicability.
3.4. BROKER AND FINDER FEES. Company has not dealt with any broker, finder,
investment bank or other advisor in connection with the issuance and sale of the
Option, the Warrants or Warrant Shares, and no broker, finder, investment
banking or advisory fee or commission has been
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or will be payable (or asserted to be payable) by Company with respect to the
issuance and sale of the Option, the Warrants or the Warrant Shares.
3.5. OFFER AND SALE OF SECURITIES. The offer, sale and issuance of the
Option complied with or are exempt from, and the issuance of the Warrants and
Warrant Shares pursuant to the terms hereof and thereof will comply with or will
be exempt from, the requirements of federal and applicable state securities or
"Blue Sky" laws.
3.6. CAPITALIZATION; WARRANT SHARES AS A PERCENT OF CAPITAL STOCK.
a. Schedule 3.6 accurately and completely describes all of the
authorized, issued and outstanding shares of Capital Stock of Company. All
of such outstanding shares of Capital Stock have been validly issued and
are fully paid and nonassessable.
b. Except as disclosed on Schedule 3.6 or as is required under this
Agreement, Company is not subject to any obligation (contingent or
otherwise) to purchase or otherwise acquire or retire any of its Capital
Stock, and no Person has any right of first refusal, preemptive right, put
right or similar right with respect to any Capital Stock of Company. Except
as disclosed on Schedule 3.6 or as is required under this Agreement, there
are no outstanding warrants, options, convertible securities or other
rights, agreements or arrangements under which Company is or may be
obligated to issue any Capital Stock. Except as disclosed on Schedule 3.6
or as is required under this Agreement, Company has not granted to any
Person the right to require Company to register any securities of Company
under the Securities Act (whether on a demand basis or in connection with
the registration of securities of Company for its own account or for the
account of any other Person).
c. The Warrant Shares (as of the date of exercise of the Option) will
represent 10% of the issued and outstanding shares of Capital Stock and
voting rights on a fully diluted basis (except as provided in Section 1.1
and subject to adjustment including under Section 5.1.m).
3.7. RESERVATION AND ISSUANCE OF WARRANT SHARES. Company has reserved among
its currently authorized but unissued shares of Common Stock the full number of
Warrant Shares deliverable upon exercise of all of the Warrants. The Warrant
Shares (when and if issued upon exercise of the Warrants in accordance with the
terms hereof) (a) will be duly authorized, validly issued, fully paid and
nonassessable, and (b) will be free from all taxes (other than income taxes that
may be imposed upon the Holder thereof), liens (other than liens that may be
created by the Holder thereof as and to the extent permitted under this
Agreement), preemptive rights, rights of first refusal or similar rights of
other equityholders of Company.
3.8. DISCLOSURES. All information relating to or concerning Company (and
its direct and indirect Subsidiaries, if any) set forth in this Agreement or
otherwise provided to Purchaser in connection with the transactions contemplated
by this Agreement is true, correct and complete in all material respects, and
Company has not omitted to state any material fact necessary in order to make
the statements made herein or therein (in light of the circumstances under which
there were made) not misleading.
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3.9. ACKNOWLEDGMENT REGARDING PURCHASER'S PURCHASE OF THE WARRANTS. Company
acknowledges and agrees that (a) Purchaser is acting solely in the capacity of
an arm's length purchaser with respect to this Agreement and the transactions
contemplated hereby, and (b) Company has been advised by legal counsel in
connection herewith, and (c) Purchaser is not acting as a financial advisor or
fiduciary of Company (or in any similar capacity) with respect to this Agreement
or the transactions contemplated hereby, and (d) any advice given by Purchaser
or any of its representatives or agents in connection with this Agreement and
the transactions contemplated hereby is merely incidental to Purchaser's
purchase of the Warrants.
ARTICLE 4 . THE WARRANTS AND WARRANT SHARES
4.1. WARRANT CERTIFICATES.
a. Form of Certificate; Registration Among Company's Records. The
Warrants shall be evidenced by one or more Warrant Certificates, each of
which will be substantially in the form of Exhibit C with the applicable
legend specified on Exhibit D (but shall incorporate such changes therein
as may be required from time to time to reflect any adjustments made
pursuant to Article 5). Each Warrant Certificate shall be uniquely
numbered, shall identify the record Holder thereof, and shall be registered
on the books and records of Company in substantially the same manner as
other equity interests of Company.
b. Exchange and Transfer of Certificates. A Warrant Certificate (and
the Warrants evidenced thereby) may be exchanged or (subject to compliance
with the applicable requirements hereof) may be transferred from time to
time at the option of the Holder thereof. Upon surrender of any such
Warrant Certificate to Company, then Company shall issue and deliver to (or
in accordance with the written instructions of) such Holder one or more new
Warrant Certificates evidencing in the aggregate the same number of
Warrants.
c. Missing and Mutilated Certificates. If any Warrant Certificate is
lost, stolen, mutilated or destroyed, then Company (upon request of the
registered Holder thereof) shall issue and deliver to (or in accordance
with the written instructions of) such Holder one or more replacement
Warrant Certificates evidencing in the aggregate the same number of
Warrants. Company's obligation under this Clause is conditioned upon its
receipt of reasonably satisfactory evidence of such loss, theft, mutilation
or destruction.
d. Authorization of Certificate Signer. Any Warrant Certificate may be
signed on behalf of Company (and delivered to the Holder entitled thereto)
by any person who, on the actual date of execution of such Warrant
Certificate, is a proper officer of Company to sign such Warrant
Certificate even though (1) on the date of execution of this Agreement such
person was not such an officer, and/or (2) on the date of delivery of such
Warrant Certificate such person has ceased to serve as such officer of
Company.
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4.2. EXERCISE OF WARRANTS.
a. Exercise Period. The Warrants are exercisable at any time and from
time to time after the exercise of the Option and prior to 11:59 p.m.
(Eastern Time) on June 30, 2009 (as such period may be extended from time
to time by mutual agreement of the Holders and Company, "Exercise Period"),
at which time any unexercised Warrants shall expire.
b. Method of Exercise. A Holder of any Warrant Certificate may
exercise any such Warrants from time to time during the Exercise Period to
purchase Warrant Shares upon (1) the surrender of such Warrant Certificate
evidencing such Warrants, and (2) the payment of the Exercise Price in
cash, by certified or cashier's check payable to the order of Company or by
wire transfer to Company. Such surrender and payment must occur at an
office of Company or at such other address as Company may specify in
writing to the then registered Holder of such Warrant Certificate.
c. Issuance of Warrant Shares Upon Exercise. Upon surrender of any
Warrant Certificate and payment of the applicable Exercise Price (as
described above in this Section), then Company shall issue, sell and
deliver to or upon the instructions of the Holder of such Warrant
Certificate and/or its designee one or more certificates evidencing in the
aggregate the number of Warrant Shares represented by such Warrant
Certificate that are then being purchased (each of which Warrant Shares
shall be validly issued, fully paid and nonassessable). Any persons so
designated to be named therein shall be deemed to have become a Holder of
record of such Warrant Shares as of the date of exercise of such Warrants.
If less than all of the Warrants evidenced by a Warrant Certificate are
exercised at any time prior to the last day of the Exercise Period, then
Company shall issue to such Holder (or its designee) one or more new
Warrant Certificates evidencing the remaining number of Warrants evidenced
by such Warrant Certificate that are not then exercised by Holder.
d. Rights of a Holder of Warrant Shares Upon Exercise. Upon any
exercise of Warrants by a Holder entitled thereto in accordance with and as
provided under this Agreement, the Holder of such issued Warrant Shares
shall be entitled to all of the rights and benefits of a holder of voting
Capital Stock under the Organic Documents of Company as well as the rights
and benefits of a Holder of Warrant Shares under this Agreement
(notwithstanding any provision of such Organic Documents to the contrary).
To the extent that the rights and benefits of a holder of voting Capital
Stock under the Organic Documents are inconsistent with or less favorable
than the rights and benefits of a Holder of Warrant Shares under this
Agreement, then the terms and provisions of this Agreement shall control
and govern with respect to the rights and benefits of such Holder.
4.3. TRANSFERS OF WARRANTS AND WARRANT SHARES.
a. General Transferability. Except as otherwise expressly provided
herein, upon compliance with any applicable requirements under the
Securities Act and the laws, regulations and orders of and/or administered
by each State PUC (to the extent failure to so comply could reasonably be
expected to have or cause a material adverse effect on the operations of
Company) or the FCC, then the Warrants, the corresponding Warrant
Certificates and the Warrant Shares may be transferred by Purchaser (or any
other subsequent Holder) from time to time in whole or in part upon
complying
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with the right of first refusal under Clause "b" of this Section or as otherwise
provided under Clause "c" of this Section (but without the necessity of
obtaining any consent of Company).
b. Restrictions on Transferability (Right of First Refusal). So long
as (i) all other holders of equity (or rights to acquire equity) of Company
are subject to at least as restrictive a condition on their ability to
transfer such equity interests and (ii) no Public Offering has occurred,
and (iii) no Event of Default then exists under the Credit Agreement, then
Prior to selling any of the Warrants to any Person (other than as provided
in Clause "c" below), Purchaser (or a subsequent Holder-Affiliated
Transferee who is then the Holder of such Warrants) will afford Company the
right (for a period of 5 Business Days after such Holder provides notice
thereof to Company) to purchase such Warrants on the same terms and
conditions (including price, consideration and method of payment) as such
Holder is proposing to sell such Warrants to any such other Person. If
Company does not irrevocably commit to so acquire all such Warrants under
such terms and conditions during such 5-Business-Day period (and thereafter
consummate such acquisition within 30 calendar days after such commitment),
then such Holder at any time thereafter may sell such Warrants to any such
other Person on terms and conditions that are substantially the same or
less favorable to such acquiror than as was offered to Company. For
purposes of the immediately preceding sentence, the term "less favorable"
terms and conditions will include a higher price per Warrant Share and/or a
higher percentage of consideration in immediately available funds.
c. Unrestricted Transferability to Certain Persons. Notwithstanding
the foregoing or any other provision of this Agreement, upon compliance
with any applicable requirements under the Securities Act and the laws,
regulations and orders of and/or administered by each State PUC (to the
extent failure to so comply could reasonably be expected to have or cause a
material adverse effect on the operations of Company) or the FCC, then the
Warrants, the Warrant Certificates and/or the Warrant Shares may be
transferred by Purchaser (or any other subsequent Holder) from time to time
in whole or in part without any restriction or condition (including without
the necessity of complying with any right of first refusal) to any
Holder-Affiliated Transferee, to any Affiliate of such Holder and/or to any
Person who is also acquiring some or all of the indebtedness of Company
under the Credit Agreement.
d. Treatment of Holder Prior to Notice of Transfer. Prior to receiving
notice of any such transfer (either from such Holder or from such
transferee), Company shall be otherwise entitled to treat such known Holder
as the Holder of record hereunder for purposes of giving and receiving
notices and for purposes of exercising rights hereunder.
e. Rights of a Subsequent Holder. Unless otherwise limited or
restricted pursuant to the document of transfer, then a subsequent Holder
of Warrants, Warrant Certificates or Warrant Shares hereunder shall be
entitled to all of the rights and benefits of the transferring Holder under
this Agreement and under the Organic Documents.
4.4. REGISTRATION AND RELATED RIGHTS.
a. Incidental Registration in a Public Offering. Each Holder of
Warrant Shares and each Holder of Warrants shall have the right to require
Company to include all or (at such
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Holder's election) any portion of such Warrant Shares and the Warrant Shares
purchasable upon exercise of any such Warrants in any Public Offering of
Company's securities.
Company shall give written notice to each Holder of Warrants and each
Holder of Warrant Shares (at each such Holder's last known address as it appears
on Company's books and records) promptly after the occurrence of any of the
following events: (i) Company deciding to proceed with any registration of
securities that would constitute a Public Offering if declared effective, or
(ii) the initial filing of a registration statement with the Commission
pertaining to any Public Offering, or (iii) any amendment, supplement or
modification to any registration statement for a Public Offering by Company
(other than amendments, supplements and modifications that occur automatically
through incorporation by reference as a result of subsequently prepared publicly
available materials), or (iv) any withdrawal of any registration statement for a
Public Offering by Company. Once any such registration statement is declared
effective by the Commission, then Company may not amend or modify it without
providing each Holder of Warrants and each Holder of Warrant Shares with written
notice thereof at least 5 Business Days prior to filing any such amendment or
modification with the Commission.
In connection with any such Public Offering, Company shall enter into an
underwriting agreement with one or more underwriters that shall provide, among
other things, that the underwriters shall offer to purchase at the closing of
such Public Offering all of the Warrant Shares and all of the Warrants (or such
lesser portion thereof as any Holder may request) at the price paid by the
underwriters for the Capital Stock (or if a security convertible into or
exchangeable for, or rights to purchase, Capital Stock, then the conversion,
exchange or purchase price for the Capital Stock provided for by such security
less the conversion, exchange or exercise premium on the date of such offering)
sold by Company and/or any selling shareholders (less, with respect to Warrants,
the Exercise Price then in effect). Notwithstanding the foregoing, if the
underwriters shall advise Company in writing that, in their experience and
professional opinion arrived at in good faith based upon existing market
conditions, inclusion of such number of Warrant Shares (together with the shares
of Capital Stock requested for registration by any other selling equityholders)
will adversely affect the price or distribution of the securities to be offered
in such Public Offering solely for the account of Company, then (1) Company
shall promptly furnish each such Holder with a copy of such written advice by
the underwriters, and (2) such Holders shall then have the right to include only
such number of Warrant Shares and Warrants that such advice by the underwriters
indicates may be distributed without adversely affecting the distribution of the
securities solely for Company's account. As among Holders of Warrant Shares
and/or Warrants, such availability for inclusion in the registration for such
Public Offering shall be allocated pro rata based upon the total number of
Warrant Shares owned or purchasable by such Holder. As between such Holders and
any other holders of Capital Stock requesting to be included in such Public
Offering, priority for inclusion in the registration for such Public Offering
shall be allocated pro rata based upon the total number of shares of Capital
Stock owned or purchasable by such holder and the Holders.
In connection with an Initial Public Offering, provided that all other
holders of equity interests of Company are subject to identical (or more
restrictive) restrictions with respect to their equity interests, each Holder of
Warrants and each Holder of Warrant Shares shall agree to refrain
8
from selling or otherwise transferring (other than to a Holder-Affiliated
Transferee) any Warrant Shares not included in such Initial Public Offering for
a period of time (not to exceed 90 calendar days after the effective date of the
registration statement for such Initial Public Offering) as may be appropriate
under the circumstances and reasonably requested by Company and the underwriters
for such offering.
b. Demand Registration Following an Initial Public Offering or
Surviving Public Combination. In addition to any other registration rights
to which any Holder is entitled, at any time and from time to time after
the closing of an Initial Public Offering or a Surviving Public
Combination, Company (upon each request of Holders of at least 50% of the
Warrant Shares and Warrants) shall prepare, shall file with the Commission
and shall use its best efforts to cause to become effective as promptly as
reasonably possible a registration statement (on Form S-3 or any successor
form, if available) covering such number of Warrant Shares owned or then
purchasable as is requested by such Holders. Notwithstanding the foregoing,
Company shall not be required to so prepare and file upon the demand of
such Holders either (a) more than three (3) such registration statements
that are declared effective by the Commission and maintained in effect by
Company for at least 90 consecutive calendar days and are not on a Form S-3
(or any successor form), or (b) any such registration statement within the
first 90 calendar days after the closing of an Initial Public Offering, or
(c) any such registration statement within the first 90 calendar days after
the closing of a Public Offering that was effective for at least 90
consecutive calendar days and in which 50% or more of the Warrant Shares
and Warrants were included.
In connection with any such demand registration, Company shall use its best
efforts to engage (or, at Holders' request, shall use its best efforts to assist
Holders in engaging) one or more underwriters to purchase on a best-efforts or a
firm-offer basis the Warrant Shares owned or then purchasable at the price at
which such Warrant Shares are to be resold under such registration statement
less the underwriters' discount (less, with respect to Warrants, the Exercise
Price then in effect). The registration statement shall also provide that sales
of the Warrant Shares may be made by dealers, on an exchange if listed, directly
to purchasers or in any other manner. No such registration statement filed
pursuant to this demand registration provision (without the consent of Holders
of at least 50% of the total Warrant Shares and Warrants) 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.
In connection with any such demand registration, Company shall keep
effective and maintain the registration, qualification, approval or listing
covering the Warrant Shares for a period of at least 90 consecutive calendar
days (or in the event such registration is on Form S-3 or any successor form, on
a continuous basis). Company from time to time shall amend or supplement the
prospectus and registration statement used in connection with any such
registration to the extent necessary to comply with applicable law (including to
reflect additional information relating to the plan of distribution), and shall
immediately advise each Holder if any such prospectus or registration statement
does not so comply and/or if any stop order or similar order is issued or
threatened or any request for amendment or supplement is received from any
regulatory agency. Company shall make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain
9
the lifting thereof at the earliest possible moment. Company shall comply with
all other applicable laws in connection with any offering of Warrant Shares and
will promptly make available an earnings statement in accordance with Section
11(a) of the Securities Act and the regulations promulgated thereunder.
c. Holders Entitled to Equivalent Rights. If Company has otherwise
granted or hereafter grants to any Person any other or additional
registration rights with respect to any securities of Company (or similar
registration rights with any more favorable or less restrictive terms),
then Company will promptly notify each Holder of Warrants and each Holder
of Warrant Shares, and such registration rights (or the more favorable or
less restrictive terms thereof) will be deemed automatically to be
incorporated into this Agreement (without the necessity of any other action
by the parties hereto) as additional registration rights that each Holder
is entitled to exercise.
d. Sales Through Underwriters and Dealers. Company shall effect the
registration or qualification of the Warrant Shares, and the notification
to or approval of any governmental authority under any federal or state
law, and the listing with any securities exchange on which the Common Stock
is listed, in each instance as may be necessary to permit the sale of
Warrant Shares through underwriters, and, in the case of a demand
registration hereunder, also through dealers, on an exchange, directly to
purchasers or in any other manner.
e. Certain Additional Agreements in Connection with Registrations. In
connection with any Public Offering, Company (1) shall enter into, execute
and deliver all agreements and other instruments and documents (including
opinions of counsel, comfort letters and underwriting agreements) that are
customary and appropriate with such public offerings, and (2) shall
cooperate with any underwriters to facilitate sales of the Warrant Shares
to the same extent as if such Warrant Shares were being offered directly by
Company, and (3) shall furnish each Holder such numbers of copies of
registration statements and prospectuses (and amendments and supplements
thereto) as such Holder may reasonably request, and (4) shall take all such
other actions as are necessary or advisable to facilitate the registration
and sale of such Warrant Shares. In connection with any Public Offering as
to which any Holder is requesting registration of Warrant Shares, each such
Holder (i) shall provide Company with such information regarding itself,
himself or herself as may be reasonably required by Company, and (ii) shall
reasonably cooperate with Company in the preparation of the registration
statement, and (iii) shall enter into, execute and deliver all agreements
and other instruments and documents that are customary and appropriate for
selling equityholders to execute in connection with a secondary public
offering.
f. Indemnification by Company. In connection with any offering of
Warrant Shares pursuant to the provisions of this Section, Company hereby
indemnifies and holds harmless each Holder of Warrants and each Holder of
Warrant Shares (and the directors, officers and controlling Persons of each
such Holder), each other Person (if any) who acts on behalf of or at the
request of any such Holder, each underwriter, and each other Person who
participates in the offering of Warrant Shares (collectively, for purposes
of this Clause, the "Indemnified Parties") against any losses, claims,
damages or liabilities, joint or several, to which such Indemnified Party
may become subject under the Securities Act or any other statute or at
common law, insofar as such losses,
10
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon either of the following:
(i) any untrue statement or alleged untrue statement of any
material fact contained (on the effective date thereof) in any
registration statement (or any amendment thereto) under which such
Warrant Shares were registered under the Securities Act, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading,
or
(ii) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus or prospectus
(or any amendment or supplement thereto) or the omission or alleged
omission therefrom of a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, or
(iii) any violation by Company of any federal or state law, rule
or regulation applicable to Company in connection with any
registration statement or prospectus (or any amendment or supplement
thereto).
Company shall also reimburse each such Indemnified Party for any legal or any
other expenses reasonably incurred in connection with investigating or defending
any such loss, claim, damage, liability or action. Notwithstanding the
foregoing, Company shall not be liable to an Indemnified Party in any such case
to the extent that any such loss, claim, damage or liability arises out of or is
based upon any untrue or alleged untrue statement or omission or alleged
omission made in such registration statement, preliminary prospectus,
prospectus, or amendment or supplement in reliance upon and in conformity with
written information furnished to Company through an instrument duly executed by
such Indemnified Party specifically stating that it is expressly for use
therein. Such indemnity shall remain in full force and effect and shall survive
the transfer of such Warrants or Warrant Shares by any such Holder.
g. Indemnification by Holders. Each Holder whose Warrant Shares are
sold under any registration statement pursuant to this Section (by
inclusion of such Warrant Shares thereunder) shall indemnify and hold
harmless Company (the officers, directors and controlling Persons thereof),
each other Holder of Warrants and each other Holder of Warrant Shares (and
the directors, officers and controlling Persons of each such Holder), each
other Person (if any) who acts on behalf of or at the request of Company or
such other Holder, each underwriter, and each other Person who participates
in the offering of Warrant Shares (collectively, for purposes of this
Clause, the "Indemnified Parties") against any losses, claims, damages or
liabilities, joint or several, to which such Indemnified Party may become
subject under the Securities Act or any other statute or at common law,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon either of the following:
(i) any untrue statement or alleged untrue statement of any
material fact contained (on the effective date thereof) in any
registration statement (or any
11
amendment thereto) under which such Warrant Shares were registered
under the Securities Act at the request of such Holder, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading,
or
(ii) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus or prospectus
(or any amendment or supplement thereto) or the omission or alleged
omission therefrom of a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
but only to the extent (with respect to either of the foregoing Clauses) that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in such registration statement, preliminary prospectus,
prospectus, amendment or supplement in reliance upon and in conformity with
written information furnished to Company through an instrument duly executed by
such Holder specifically stating that it is expressly for use therein. Each such
Holder shall also reimburse each such Indemnified Party for any legal or any
other expenses reasonably incurred in connection with investigating or defending
any such loss, claim, damage, liability or action. Notwithstanding the
foregoing, no such Holder shall be liable to any Indemnified Party in any such
instance to the extent (a) such loss, claim, damage or liability relates to any
untrue statement or omission, or any alleged untrue statement or omission, made
in a preliminary prospectus but eliminated or remedied in a final prospectus,
and (b) a copy of the final prospectus was not delivered to the Person asserting
the claim at or prior to the time required by the Securities Act in an instance
for which delivery thereof would have constituted a defense to the claim
asserted by such Person.
h. Certain Notices and Other Rights Relating to Indemnification. A
party from whom indemnity may be sought pursuant to the provisions of this
Section shall not be liable for such indemnity with respect to any claim as
to which indemnity is sought unless the party seeking such indemnity shall
have notified such indemnifying party in writing of the nature of such
claim promptly after such indemnified party becomes aware of the assertion
thereof. Notwithstanding the foregoing, the failure to so notify such
indemnifying party shall not relieve such party from any liability which it
may have to such indemnified party otherwise than on account of the
provisions of this Section or if the failure to give such notice promptly
shall not have been prejudicial to such indemnifying party. No indemnifying
party shall be liable for any compromise or settlement of any such action
effected without its consent. No indemnifying party (in the defense of any
such claim or suit), without the consent of each indemnified party, shall
consent to any compromise or settlement that does not include as an
unconditional term thereof the giving by the claimant to such indemnified
party of a complete release from all liability in respect of such claim or
suit.
i. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
this Section for any reason is held to be unenforceable although applicable
in accordance with its terms, Company and the Holders, as amongst
themselves, shall contribute to the losses, claims, damages, liabilities
and expenses described herein in such proportions so that the portion
thereof for which any Holder shall be
12
responsible shall be limited to the portion determined by a court or the
parties to any settlement to be directly attributable to an untrue
statement of a material fact or an omission to state a material fact in a
registration statement, preliminary prospectus, prospectus or amendment or
supplement thereto in specific reliance upon and in conformity with written
information furnished to Company through an instrument duly executed by
such Holder specifically stating that it is expressly for use therein, and
Company shall be responsible for the balance. Notwithstanding the
foregoing, the liability of each Holder shall be limited to the net
proceeds received by such Holder from the sale of the Warrant Shares sold
by it thereunder. Company and the Holders agree that it would not be just
and equitable if their respective obligations to contribute were to be
determined by pro rata allocation, by reference to the proceeds realized by
them or in any manner which does not take into account the equitable
considerations set forth in this Clause.
4.5. RIGHTS UPON EQUITY DISPOSITIONS AND NON-SURVIVING TRANSACTIONS.
a. Offer to Purchase. In connection with any Equity Disposition or any
Non-Surviving Transaction, Company or the acquiror in any Equity
Disposition or Non-Surviving Transaction shall also offer to purchase on
the terms set forth below all of the Warrant Shares and all of the
Warrants. If an Equity Disposition is of less than all of the Capital Stock
then outstanding, then the number of Warrants and Warrant Shares subject to
purchase under this Section shall be reduced proportionately (to the
nearest whole number), and such reduced number will be allocated pro rata
among all Holders desiring to tender Warrant Shares or Warrants in
connection with such transaction.
b. Notice of Proposed Transaction. Company shall give written notice
to each Holder of Warrants and each Holder of Warrant Shares (at each such
Holder's last known address as it appears on Company's books and records)
promptly after an agreement in principle is reached with respect to any
Equity Disposition or any Non-Surviving Transaction (but, in any event, at
least 30 calendar days prior to the closing of any such transaction).
c. Purchase Price. If a Holder accepts the offer under this Section,
then (as a condition to consummation of such Equity Disposition or any
Non-Surviving Transaction) either Company or such acquiror shall purchase
(either before or concurrently with the consummation of such transaction)
all Warrants and Warrant Shares tendered by a Holder thereof at a cash
price per Warrant and Warrant Share equal to the result of the following
formula:
(i) the product of (1) the aggregate consideration received by
all sellers and transferors in connection with such transaction or
series of related transactions (including the consideration to be
received by the holders of Warrants and Warrant Shares pursuant to
this provision) and (2) a fraction the numerator of which is the
number of Warrants and Warrant Shares tendered for purchase in
connection with such transaction or series of related transactions and
the denominator of which is the sum of the number of shares of Common
Stock outstanding immediately prior to such transaction or series of
related transactions plus the number of Warrants and Warrant Shares
tendered for purchase (which result is the amount of consideration
available
13
for all Warrants and Warrant Shares tendered in connection with such
transaction), divided by
(ii) the number of Warrants and Warrant Shares tendered for
purchase in connection with such transaction (which result is the
amount of consideration available for each Warrant and Warrant Share
tendered in connection with such transaction), minus
(iii) the Exercise Price then in effect (but only with respect to
Warrants and not Warrant Shares).
Notwithstanding the foregoing, in connection with any such Equity Disposition or
Non-Surviving Transaction, each Holder may elect (at its option) to receive the
purchase price payable under this Section pro rata in kind in the same form of
consideration as is to be received by Company or such selling equityholder.
d. Payment of Purchase Price. Company (either before or concurrently
with the consummation of such transactions) shall distribute to the
respective Holders of Warrants and Warrant Shares (or to such other Person
as such Holder may direct Company in writing) the applicable purchase price
for each tendered Warrant Share and Warrant in cash, by certified or
cashier's check, by wire transfer or by any other means acceptable to such
Holder. In addition, Company shall also deliver to each such Holder (as and
to the extent applicable) a return or re-issuance of Warrants and Warrant
Shares not purchased in connection with any such transaction.
e. Determination of "Aggregate Consideration". Unless the entire
consideration in such transaction consists of cash or unless otherwise
agreed by Holders of Warrants and Warrant Shares, then the fair value of
the "aggregate consideration" to be received by all sellers and transferors
in connection with an Equity Disposition or Non-Surviving Transaction shall
be determined by an Independent Appraiser selected by Holders of a majority
of the Warrants and Warrant Shares and approved by Company (which approval
may not be unreasonably withheld, delayed or conditioned). Such Independent
Appraiser shall use one or more valuation methods that the Independent
Appraiser (in its best professional judgment) determines to be most
appropriate under the circumstances; provided, that (i) such valuation
methods shall take into account any related agreements that result in
personal gain, payments or compensation to any director, officer or
equityholder of Company, and (ii) such valuation methods shall not give
effect to (1) any discount for any lack of liquidity or minority status, or
(2) the fact that such equity securities may not be registered under the
Securities Act. Such Independent Appraiser, as promptly as is reasonably
possible, will prepare and deliver to Company and to each Holder of a
Warrant or Warrant Share a written valuation report indicating (a) the
methods of valuation considered or used, and (b) the value of the
"aggregate consideration" paid by the acquiror in connection with the
particular Equity Disposition or Non-Surviving Transaction or otherwise
received by the sellers and transferors in connection therewith, and (c)
the nature and scope of the examination or investigation upon which the
determination of value was made. Unless the valuation report is revised by
the Independent Appraiser within 5 Business Days after delivery thereof or
unless Company and Holders otherwise
14
mutually agree, then the valuation report shall be deemed final at the end of
such 5-Business-Day period. Company shall pay the fees and expenses associated
with the Independent Appraiser.
4.6. REPURCHASE OFFERS.
a. Offer to Repurchase. Within 30 calendar days following the
occurrence of any Repurchase Condition, Company shall make a written offer
(each, a "Repurchase Offer") to repurchase at the Repurchase Price up to
all of the Warrant Shares and Warrants owned by each Holder. Each such
Repurchase Offer (among other things) shall indicate the date of occurrence
of the relevant Repurchase Condition and shall provide a calculation of the
Current Market Price per Warrant Share (together with a copy of
documentation supporting such calculation). Each such Repurchase Offer
shall be delivered by Company to each such Holder entitled thereto by
first-class mail to the last known address of such Holder on the books and
records of Company.
b. "Repurchase Condition". A "Repurchase Condition" will be deemed to
occur (1) on February 28, 2002, and (2) on February 28, 2009, and (3) at
any time after February 28, 2002, and prior to June 30, 2009 upon a written
request from Holders of at least 50% of the outstanding Warrants and
Warrant Shares, and (4) upon any full repayment of the indebtedness under
the Loan Documents, and (5) upon the occurrence of any Event of Default
under and as defined in the Credit Agreement.
c. "Repurchase Price". The "Repurchase Price" for each Warrant and
Warrant Share in connection with any such Repurchase Offer will be the
greater of (a) the Deferred Interest (as determined and defined in the
Credit Agreement) as of the date of consummating any such Repurchase
transaction (or if Lender has previously opted to exercise the Option
rather than collect the Deferred Interest, then as of the date that such
decision was made) divided by the number of Warrants and Warrant Shares
then outstanding or (b) the Current Market Price per Warrant Share, less
with respect to Warrants (but not Warrant Shares) the Exercise Price then
in effect.
d. Acceptance of Repurchase Offer. At any time within 60 calendar days
after a Holder receives a Repurchase Offer (together with a final written
valuation report), each such Holder may accept such Repurchase Offer by
agreeing to tender for repurchase by Company all or any portion of such
Holder's Warrant Shares and Warrants.
e. Payment of Purchase Price. Within 30 calendar days of receiving any
such agreement to tender Warrant Shares or Warrants, Company shall
distribute to each such Holder (or to such other Person as such Holder may
direct Company in writing) the applicable Repurchase Price for each such
tendered Warrant Share and Warrant in cash, by certified or cashier's
check, by wire transfer or by any other means acceptable to such Holder
(concurrently with which distribution, such Holder shall deliver to Company
the Warrant Certificates and/or Warrant Shares). In addition, Company shall
also deliver to each such Holder (as and to the extent applicable) a return
or re-issuance of Warrants and Warrant Shares not tendered for repurchase.
Notwithstanding the foregoing, with respect to the Repurchase Condition
occurring concurrently with any full repayment of the indebtedness under
the Loan Documents under Clause "b(4)" above, unless the Holders otherwise
consent, Company shall establish a cash escrow of the Repurchase Price with
a "well
15
capitalized" depository institution concurrently with any such full
repayment of the indebtedness under the Loan Documents (but such cash
escrow shall be returned to Company if the Holders elect not to accept such
Repurchase Offer).
4.7. CUMULATIVE RIGHTS. The rights of Holders upon the occurrence of events
set forth in this Article 4 are cumulative. If more than one such event occurs
simultaneously (or the time period for exercising any such rights overlaps),
then each Holder can elect which rights (if any) to exercise and any prior
inclusion or surrender of Warrants or Warrant Shares with respect to a
transaction that has not yet closed may be rescinded by such Holder during such
overlapping period in order to exercise rights arising under any concurrently
occurring event.
4.8. EXERCISE OF RIGHTS CONDITIONED UPON CLOSING OF TRANSACTION INVOLVED.
The rights of Holders to have Warrants or Warrant Shares included and sold in
any Public Offering or purchased in any Equity Disposition or Non-Surviving
Transaction pursuant to this Article 4 are conditioned upon the consummation of
the proposed transaction. Neither Company nor any equityholder involved in any
such proposed transaction shall have any obligation to Holders to consummate any
such proposed transaction once an agreement in principle or decision to proceed
with respect thereto is reached, except as expressly provided in this Article 4.
4.9. PAYMENT OF TAXES AND EXPENSES. Company will pay all expenses
(including reasonable costs and expenses of Holders and legal counsel thereto,
but excluding underwriter's and/or broker's discounts and commissions), taxes
(other than income taxes) and other fees and charges attributable to the
issuance, registration, qualification, notification, approval, listing, transfer
pursuant to Section 4.5, and/or repurchase of the Warrants, the Warrant
Certificates and the Warrant Shares.
4.10. RESERVATION AND ISSUANCE OF WARRANT SHARES. Company at all times
shall reserve (and keep free from preemptive rights or similar rights of
equityholders of Company) among its authorized but unissued shares of Capital
Stock the full number of Warrant Shares deliverable upon exercise of all of the
Warrants. Company covenants that all Warrant Shares (when and if issued upon
exercise of the Warrants in accordance with the terms hereof) will be duly
authorized, validly issued, fully paid and nonassessable (and will be free from
all taxes, liens, charges and security interests with respect to the issuance
thereof). Before taking any action that could cause an adjustment pursuant to
Article 5, Company will take any corporate action that (in the opinion of its
counsel) may be necessary or appropriate in order that Company may validly and
legally issue fully paid and nonassessable Warrant Shares at the Exercise Price
as so adjusted.
4.11. CORRECTIVE ADJUSTMENTS. Company hereby acknowledges that Purchaser
has relied upon, among other things, the representation and warranty set forth
in Section 3.6 regarding the outstanding Capital Stock of Company and the rights
to acquire Capital Stock of Company as of the date of this Agreement. If it is
later determined that the representation and warranty set forth in Section 3.6
is untrue or inaccurate such that the outstanding Capital Stock or rights to
acquire Capital Stock are greater that the amount disclosed therein, then
Company shall notify each Holder in writing within 10 Business Days of
discovering such inaccuracy and shall promptly prepare, execute and deliver to
the Holders such additional documents and certificates as are necessary to
equitably
16
adjust the Warrants and Warrant Shares deliverable upon exercise of all Warrants
for the benefit of Holders. Such adjustment shall include the issuance of
additional Warrants or the reduction in Exercise Price of the Warrants, as
approved in writing by Holders of a majority of the Warrants.
4.12. LISTING OF SHARES. If Company lists any shares of Common Stock on any
national securities exchange, inter-dealer quotation system or other market,
then Company (at its expense) will use its best efforts to cause the Warrant
Shares to be approved for listing, subject to notice of issuance, and will
provide prompt notice to each such exchange, system or other market of the
issuance thereof from time to time.
4.13. LISTS OF HOLDERS. Company (from time to time upon the request of any
Holder) will provide such Holder with a list of the registered Holders and their
respective addresses.
4.14. STATEMENT OF WARRANT INTEREST. Company (from time to time upon the
request of any Holder) will provide such Holder with a statement of such
Holder's interest in Company containing the following information (as
applicable): (a) the number of Warrants that would be issued if the Option were
then exercised (and an explanation, in reasonable detail, of the calculation
thereof), and (b) the number of Warrants then owned of record by such Holder,
and (c) the number of Warrant Shares purchasable upon the exercise of each
Warrant then owned of record by such Holder, and (d) the Exercise Price of each
Warrant then owned of record by such Holder, and (e) the number of Warrant
Shares then owned of record by such Holder, and (f) a chart describing (in
reasonable detail) the then current capitalization of Company.
4.15. RIGHT OF INSPECTION. At any time and from time to time during normal
business hours (upon reasonable prior written notice) Company will permit any
Holder (or any agent or representative thereof, but at such Holder's cost and
expense) (i) to visit, and (ii) to examine and make copies of and abstracts from
the books and records of Company and its Subsidiaries, and (iii) to discuss the
affairs, finances, and accounts of Company and its Subsidiaries with any of
their respective officers, directors and independent accountants.
4.16. ATTENDANCE AND PARTICIPATION RIGHTS. So long as the Warrants and
Warrant Shares of Holders collectively represent 5% or more of the Common Stock
of Company (on a fully diluted basis), then a representative of Holders shall be
entitled (if at any time hereafter Holders so elect) to attend each of the
meetings of Company's Board of Directors (including, each committee thereof).
Notwithstanding the foregoing, at the request of Company, representatives of
Holders may be required temporarily to leave any such meeting of the Board of
Directors if such action is necessary to preserve Company's attorney-client
privilege with respect to such meetings or the information disseminated therein.
In addition, at all times while any Holder owns Warrant Shares representing 5%
or more of the issued and outstanding Common Stock, such Holder (at its option)
shall be entitled to designate a pro rata percent of the positions on the Board
of Directors (and each committee thereof) of Company (rounded upwards to the
next whole number). The Company will cause any directors designated by a Holder
to be included among the nominees who are recommended for election as directors
by management of the Company, at each meeting of the Company's stockholders at
which directors of the Company are proposed to be elected.
17
4.17. COMPLIANCE WITH APPROVAL REQUIREMENTS. If any Warrants or Warrant
Shares require registration or approval of the FCC, any State PUC or any other
governmental authority (or the taking of any other action under the laws of the
United States of America or any political subdivision thereof) before such
securities may be validly issued, then Company will secure and maintain such
registration or approval or will take such other action as and when necessary.
ARTICLE 5 . ANTI-DILUTION PROVISIONS
5.1. ADJUSTMENTS TO WARRANT SHARES PURCHASABLE AND EXERCISE PRICE.
a. General Intent Regarding Anti-Dilution. It is the intent of Company
and Purchaser that the Warrant Shares purchasable upon exercise of the
Warrants (as of the date on which the Option is exercised) (together with
the rights under Clause 5.1 regarding preemptive rights) will represent at
least 10% of the issued and outstanding shares of Capital Stock and voting
rights from time to time on a fully diluted basis. It is also the intent of
Company and Purchaser that the aggregate purchase price to acquire the
percentage interest represented by the Warrant Shares (on a fully diluted
basis) not exceed the aggregate Exercise Price for all Warrant Shares as of
the effective date hereof. Notwithstanding the foregoing, the percentage of
the issued and outstanding shares of Capital Stock represented by the
Warrants and/or Warrant Shares may increase from time to time hereafter (i)
upon the occurrence of any redemption of equity as to which Holders do not
participate, and/or (ii) if any Subsidiaries of Company are not
wholly-owned by Company. Further notwithstanding the foregoing, the
anti-dilution protections contained in this Subsection "a" and Subsections
"c" and "e" of this Section 5.1 shall not apply to (and the percentage of
the issued and outstanding shares of Capital Stock represented by the
Warrants and/or Warrant Shares may decrease upon) any sale of Common Stock
in connection with which the price per share sold is based upon a valuation
of the equity of the Company that is no less than $20.0 million and with
respect to which Holders elect not to exercise preemptive rights under
Subsection "h". For purposes of Subsections "c" and "e" of this Section
5.1, the "Target Market Price" shall mean the price per share at such time
determined based upon a $20.0 million valuation of the equity.
b. Equity Dividends, Restructurings and Reclassifications. If Company
at any time (1) declares or pays a dividend on its outstanding Capital
Stock in shares of Common Stock or other securities of Company, or (2)
subdivides its outstanding shares of Common Stock, or (3) combines its
outstanding shares of Common Stock into a smaller number of shares, or (4)
issues by reclassification of the Common Stock other securities of Company
(including any such reclassification in connection with a merger,
consolidation or other business combination in which Company is the
surviving entity), then the number and kind of Warrant Shares purchasable
upon exercise of each Warrant shall be adjusted so that each Holder of a
Warrant upon exercise of such Warrant shall be entitled to receive the
aggregate number and kind of Warrant Shares or other securities of Company
that such Holder would have owned or would have been entitled to receive
after the occurrence of any such event had such Warrant been exercised
immediately prior to the occurrence of such event (or, if earlier, any
record date with respect thereto). Any adjustment
18
required by this Clause (a) shall become effective on the date of such event
retroactive to the record date with respect thereto (if any), and (b) shall be
made successively whenever any such event occurs.
c. Rights to Purchase Below Target Current Market Price. If Company
issues any rights, options or warrants to subscribe for or purchase Common
Stock (or securities convertible or exchangeable into Common Stock) at a
price per share (or having a conversion or exchange price per share) less
than the Target Market Price per share of Common Stock or without
consideration, then the current Exercise Price to be in effect after such
issuance shall be reduced to a price determined as follows:
multiply (1) the Exercise Price in effect immediately prior to such
issuance by (2) a fraction (i) the numerator of which is the number of
shares of Common Stock outstanding on the date of such issuance plus
the number of shares of Common Stock which the aggregate offering
price of the total number of shares of Common Stock so to be offered
(or the aggregate initial conversion or exchange price of the
convertible or exchangeable securities so to be offered) would
purchase at the Target Market Price and (ii) the denominator of which
is the number of shares of Common Stock outstanding on the date of
such issuance plus the number of additional shares of Common Stock to
be offered for subscription or purchase (or into which the convertible
or exchangeable securities so to be offered are initially
convertible).
The provisions of this Clause, however, will not apply to any issuance of
Warrants or to any issuance of Warrant Shares upon exercise of any Warrants. If
such subscription price may be paid in a consideration any of which is in a form
other than cash, then the value of such consideration (unless Company and
Holders otherwise mutually agree) shall be as determined by an Independent
Appraiser, and the Board of Directors of Company shall cause the related shares
to be fully paid. Any adjustment required by this Clause (a) shall become
effective on the date of issuance retroactive to the record date for determining
equityholders entitled to receive such issuance, and (b) shall be made
successively whenever any such event occurs.
d. Distributions of Indebtedness, Assets or Securities. If Company
distributes to any holders of Capital Stock (including any such
distribution in connection with a merger or consolidation in which Company
is the continuing entity) evidences of indebtedness of Company, assets or
securities (excluding dividends or distributions otherwise appropriately
covered under other Clauses of this Section 5.1), then the current Exercise
Price to be in effect after such distribution shall be reduced to a price
determined as follows:
multiply (1) the Exercise Price in effect immediately prior to such
record date by (2) a fraction (i) the numerator of which is the
Current Market Price per share of Common Stock on such record date
minus the fair value (as determined by an Independent Appraiser,
unless otherwise mutually agreed by Company and Holders) of the
portion of the assets, evidences of
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indebtedness or other securities so to be distributed applicable to
one share of Capital Stock and (ii) the denominator of which is the
Current Market Price per share of Common Stock.
Any adjustment required by this Clause (a) shall become effective on the date of
issuance retroactive to the record date for determining equityholders entitled
to receive such distribution, and (b) shall be made successively whenever any
such event occurs.
e. Other Issuances Below Target Market Price. If Company issues or
sells any shares of Common Stock (or rights, options, warrants or
convertible or exchangeable securities containing a right to subscribe for
or purchase shares of Common Stock) (excluding (i) issuances or sales with
respect to transactions otherwise appropriately covered under other Clauses
of this Section 5.1 and (ii) any Warrant Shares), at a price per share less
than the Target Market Price per share of Common Stock in effect
immediately prior to such sale or issuance, then the number of Warrant
Shares thereafter purchasable upon the exercise of each Warrant shall be
determined as follows:
multiply (1) the number of Warrant Shares theretofore purchasable upon
the exercise of each Warrant by (2) a fraction (i) the numerator of
which shall be the total number of shares of Common Stock outstanding
immediately after such issuance or sale and (ii) the denominator of
which shall be an amount equal to the sum of (A) the total number of
shares of Common Stock outstanding immediately prior to such issuance
or sale plus (B) the number of shares of Common Stock that the
aggregate consideration received (as determined below) for such
issuance or sale would purchase at the Target Market Price per share
of Common Stock in effect immediately prior to such sale and issuance.
For purposes of such adjustments, the shares of Common Stock that the holder of
any such rights, options, warrants or convertible or exchangeable securities is
entitled to subscribe for or purchase shall be deemed to be issued and
outstanding as of the date of such issuance or sale, and the "consideration
received" by Company shall be deemed to be (a) the consideration received by
Company for such rights, options, warrants or convertible or exchangeable
securities plus (b) the consideration or premiums stated in such rights,
options, warrants or convertible or exchangeable securities to be paid for the
shares of Common Stock purchasable thereby. If Company (i) issues or sells
shares for consideration that includes any property other than cash or (ii)
issues or sells shares together with other securities as a part of a unit at a
price per unit, then the "price per share" and the "consideration received" by
Company for purposes of this Clause (unless Company and Holders otherwise
mutually agree) will be determined by an Independent Appraiser. Any adjustment
required by this Clause (a) shall become effective retroactive to the date of
issuance or sale of any such rights, options, warrants or convertible or
exchangeable securities, and (b) shall be made successively whenever any such
event occurs.
f. Dividend Dilution Fee. If any dividend, distribution or other
payment is made or accrued after the date hereof with respect to any
Capital Stock or other equity securities of Company, then Company
(concurrently with any actual payment thereof) shall make a payment in
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immediately available funds to each Holder of Warrants and/or Warrant
Shares equal to such Holder's percentage ownership of Company's outstanding
Capital Stock (but, for such purposes, treating all Warrants as though they
had then been exercised) of such dividend, distribution or other payment.
Notwithstanding the foregoing, Company shall not be obligated to make any
such payment to a Holder (and no Holder shall be entitled to receive such
payment) to the extent that such Holder otherwise receives actual payment
of the corresponding dividend or distribution relating to such Warrant
Share as a holder of Warrant Shares in such class of equity security.
g. Catchall Anti-Dilution Protection. If Company otherwise issues any
securities or instruments or engages in any transaction an effect of which
is to dilute the economic value or voting rights of any Holder's Warrants
or Warrant Shares in a manner contrary to the general intent expressed
under Clause "a" of this Section (including the issuance of any securities
or instruments with enhanced voting rights, preemptive rights, dividend
preferences or liquidation preferences), then Company will implement an
equitable adjustment to such Holder's interest in Company (in a manner
reasonably acceptable to such Holder) in order to account for the effects
of such transaction. Any adjustment required by this Clause shall be made
successively whenever any such event occurs. If Company and Holders are
unable to agree on the amount or form of any such equitable adjustment,
then Company will retain an Independent Appraiser acceptable to Holders
(which acceptance may not be unreasonably withheld) that will determine the
amount and form of such equitable adjustment.
h. Preemptive Rights for Any Non-Protected Issuances. If Company
otherwise issues or sells any shares of Capital Stock (or rights, options,
warrants or convertible or exchangeable securities containing the right to
subscribe for or purchase shares of Common Stock) (excluding issuances or
sales with respect to transactions for which Holders otherwise
appropriately received anti-dilution protection under other Clauses of this
Section 5.1), then each Holder of Warrants and/or Warrant Shares shall be
entitled at any time during the term of this Warrant Agreement to acquire
(at the lesser of the price paid by such acquiror of Capital Stock or the
Current Market Price therefor, and on terms and conditions otherwise at
least as favorable as was offered to such acquiror) an amount of additional
shares of Capital Stock that would entitle such Holder to have the same
aggregate percentage of Capital Stock (on a fully diluted basis) as such
Holder had or was entitled to have immediately prior to such transaction.
i. Rights Applicable to Shares Other than Common Stock. If at any time
(as a result of an adjustment made pursuant to this Section 5.1) a Holder
becomes entitled to receive any shares of Company other than shares of
Common Stock, then thereafter the number of such other shares so receivable
upon exercise of any Warrant shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Warrant Shares contained in this Section
5.1, and the provisions of Article 4 with respect to the Warrant Shares
shall apply on like terms to such other shares.
j. Holders Entitled to Equivalent Rights. If Company has otherwise
granted or hereafter grants to any Person any other or additional
anti-dilution protection or preemptive rights with respect to any
securities of Company (or similar protections or rights with any more
favorable or less restrictive
21
terms), then Company will promptly notify each Holder of Warrants and each
Holder of Warrant Shares, and such protections and rights (or the more favorable
or less restrictive terms thereof) will be deemed automatically to be
incorporated into this Agreement (without the necessity of any other action by
the parties hereto) as additional protections and rights that each Holder is
entitled to exercise.
k. Expiration of Rights Previously Subject to Adjustment. Upon the
expiration of any rights, options or warrants that resulted in adjustments
pursuant to this Section 5.1 that were not exercised, then the Exercise
Price and the number of Warrant Shares purchasable shall be readjusted and
thereafter shall be such as it would have been had it been originally
adjusted (or had the original adjustment not been required, as applicable)
as if (A) the only shares of Common Stock purchasable upon exercise of such
rights, options or warrants were the shares of Common Stock (if any)
actually issued or sold upon the exercise of such rights, options or
warrants and (B) such shares of Common Stock so issued or sold (if any)
were issuable for the consideration actually received by Company for the
issuance, sale or grant of all such rights, options or warrants whether or
not exercised; provided that no such readjustment may have the effect of
increasing the Exercise Price or decreasing the number of Warrant Shares
purchasable upon the exercise of a Warrant by an amount in excess of the
amount of the adjustment initially made in respect to the issuance, sale or
grant of such rights, options or warrants.
l. Election to Adjust Warrants Rather than Exercise Price. Any Holder
may elect on or after the date of any adjustment to the Exercise Price to
adjust the number of Warrants (and Warrant Shares purchasable) instead of
the Exercise Price. Upon any such election, the number of Warrants (and
Warrant Shares purchasable) will be determined by multiplying the number of
Warrants and Warrant Shares purchasable by a fraction the numerator of
which is the Exercise Price in effect immediately prior to such adjustment
and the denominator of which is the Exercise Price in effect as a result of
such adjustment.
m. Adjustments for Subsidiaries Not Wholly-Owned by Company. If
Company at any time does not own 100% of the Capital Stock of any
Subsidiary, then the number of Warrant Shares purchasable upon exercise of
each Warrant shall be adjusted in accordance with the following formula:
multiply (1) the percentage of the Capital Stock of Company to which
Holders would otherwise be entitled under this Warrant Agreement by (2) a
fraction (i) the numerator of which is 1 and (ii) the denominator of which
is the percentage of the Capital Stock of such Subsidiary then owned by
Company.
5.2. NOTICE OF ADJUSTMENT. Upon any adjustment required under this Article
5, Company (at its expense) shall mail (within 10 Business Days after such
adjustment) by first-class mail, postage prepaid, to each Holder of Warrants and
each Holder of Warrant Shares a notice of such adjustment. Such notice shall
include the following (each in reasonable detail): (i) the number of Warrant
Shares purchasable upon the exercise of each Warrant and the Exercise Price of
such Warrant after such adjustment, and (ii) a brief statement of the facts
requiring such adjustment, and (iii) the computation by which such adjustment
was made.
5.3. PRESERVATION OF PURCHASE RIGHTS UPON CERTAIN TRANSACTIONS. In
connection with any merger, consolidation, reorganization or combination of
Company with or into another Person (whether or not Company is the surviving
entity), or any sale, transfer or lease to another Person of
22
all or substantially all the property of Company, then Company (or such
successor or purchasing Person) shall execute an agreement in favor of each
Holder of Warrants giving such Holder the right thereafter upon payment of the
Exercise Price in effect immediately prior to such action to purchase upon
exercise of each Warrant the kind and amount of securities, cash and property
that such Holder would have owned or would have been entitled to receive after
the happening of such merger, consolidation, combination, sale, transfer or
lease had such Warrant been exercised immediately prior to such action. If any
such successor, reorganized or purchasing Person is not a corporation taxed as a
"C" corporation, then such Person shall also provide appropriate tax
indemnification with respect to such shares and other securities and property so
that, upon exercise of the Warrants, each Holder thereof will have the same
benefits such Holder otherwise would have had if such successor or purchasing
Person were a corporation. Such agreement shall provide for adjustments that
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Article 5. The provisions of this Section shall similarly apply to
successive mergers, consolidations, combinations, sales, transfers or leases.
ARTICLE 6 . COMPANY'S COVENANTS
6.1. INFORMATION.
a. Information Provided by Company to Other Persons. Whether or not
Company is subject to the reporting requirements of Sections 13 or 15(d) of
the Exchange Act, Company will provide each Holder with a copy of all
information (including financial information) and other communications that
are sent by or on behalf of Company (i) to any class of Company's
equityholders (if such communication is material), or (ii) to the members
of Company's Board of Directors, or (iii) to the Commission. Company shall
provide such information and communications to Holders concurrently with
providing it to such third parties.
b. Specific Additional Information. Company will also provide each
Holder written notice of (and describing in reasonable detail) the
occurrence of any of the following events:
1. Company offers or issues to any Person any shares of Capital
Stock or securities convertible into or exchangeable for Capital Stock
or any right to subscribe for or purchase any thereof; or
2. A dissolution, liquidation or winding up of Company; or
3. An agreement in principle is reached and/or a letter of intent
is executed with respect to any Equity Disposition or Non-Surviving
Transaction; or
4. Company declares or makes (directly or indirectly) any
payment, dividend or distribution (in cash or otherwise) with respect
to, or incurs any liability for the purchase, acquisition, redemption
or retirement of, any Capital Stock or as a dividend, return of
capital or other payment or distribution of any kind to any
equityholder.
23
Each such notice shall be mailed by Company to each Holder (at such Holder's
last known address on the books and records of Company) at least 20 Business
Days prior to the applicable record date of such transaction.
c. Additional Requested Information. In addition to the information
and disclosures otherwise required under this Agreement, Company will also
provide to each Holder any information reasonably requested from time to
time by such Holder relating to the operations, business plans and/or
ownership of Company.
d. Disclosure of Information by Holders. Each Holder will employ
reasonable procedures to treat as confidential all written, non-public
information delivered to such Holder pursuant to this Agreement concerning
the performance, operations, assets, structure and business plans of
Company that is conspicuously designated by Company as confidential
information. While other or different confidentiality procedures may be
employed by each Holder, the actual procedures employed by such Holder for
this purpose will be conclusively deemed to be reasonable if they are at
least as protective of such information as the procedures generally
employed by such Holder to safeguard the confidentiality of such Holder's
own information that such Holder generally considers to be confidential.
Notwithstanding the foregoing, each Holder may disclose any information
concerning Company in such Holder's possession from time to time (a) to
permitted participants, transferees, assignees, pledgees and investors
(including prospective participants, transferees, assignees, pledgees and
investors), but subject to a reasonable confidentiality agreement regarding
any non-public confidential information thereby disclosed, and (b) in
response to credit inquiries consistent with general banking practices, and
(c) to any federal or state regulator of such Holder, and (d) to such
Holder's Affiliates, employees, legal counsel, appraisers, accountants,
agents and investors, and (e) to any Person pursuant to compulsory judicial
process, and (f) to any judicial or arbitration forum in connection with
enforcing this Agreement or defending any action based upon this Agreement
or the relationship between such Holder and Company, and (g) to any other
Person with respect to the public or non-confidential portions of any such
information. Moreover, each Holder (without any compensation, remuneration
or notice to Company) may also include operational, performance and
structural information and data relating to Company in compilations,
reports and data bases assembled by such Holder (or its Affiliates) and
used to conduct, support, assist in and validate portfolio, industry and
credit research and analysis for itself and/or other Persons; provided,
however, that such Holder may not thereby disclose to other Persons any
information relating to Company in a manner that is attributable to Company
unless (1) such disclosure is permitted under the standards outlined above
in this Section or (2) Company otherwise separately consents thereto (which
consent may not be unreasonably withheld).
6.2. BOOKS AND RECORDS. Company and each of its Subsidiaries shall keep and
maintain satisfactory and adequate books and records of account in accordance
with generally accepted accounting principles.
6.3. NO AMENDMENTS TO ORGANIC DOCUMENTS. Without the prior written consent
of Holders representing a majority of Warrant Shares and Warrants (which consent
may not be unreasonably withheld), Company shall not permit any amendments to
its Organic Documents. Without limiting the generality of the foregoing, without
the prior written consent of Holders
24
representing a majority of Warrant Shares and Warrants (which consent may not be
unreasonably withheld), Company shall not establish any class of Capital Stock
or issue any shares of Capital Stock that have rights, dividends or preferences
senior to or more advantageous than the rights, dividends and preferences of the
Warrant Shares.
6.4. REINCORPORATION AND REORGANIZATION. Company shall not at any time
reincorporate in any jurisdiction or reorganize into a different form of legal
entity unless (in each such instance) Company shall have received a favorable
opinion of counsel to the effect that such reincorporation or reorganization
shall impose no direct or contingent liability on Holders under the laws of such
jurisdiction. A copy of each such opinion shall be provided to each Holder.
6.5. EXISTENCE, GOOD STANDING AND AUTHORIZATIONS. Company and each of its
Subsidiaries shall preserve and maintain its existence in good standing as a
organization under the laws of its jurisdiction of incorporation and the
validity of all its authorizations and licenses required in the conduct of its
businesses.
6.6. CONDUCT OF BUSINESS. Without the prior written consent of Holders
representing a majority of Warrant Shares and Warrants (which consent may not be
unreasonably withheld), Company (a) will continue to engage in (and only in)
businesses of the same general type as now conducted by it, and (b) will comply,
and will cause each Subsidiary to comply, in all material respects with all
applicable material laws, regulations, and orders, and (c) will not (and will
not permit any Subsidiary to) engage in any transaction (including employment
arrangements) with any Affiliate or other related party other than for value
received and under reasonable and customary terms and conditions that are at
least as favorable to Company as would be achieved in an arm's length
transaction.
ARTICLE 7 . DEFINITIONS
7.1. DEFINITIONS. As used herein, the following terms have the following
respective meanings:
7.1.1. "Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by or under direct or indirect common
control with such Person. A Person shall be deemed to "control" another
Person if such first Person possesses directly or indirectly the power to
direct (or to cause the direction of or to materially influence) the
management and policies of the second Person, whether through the ownership
of voting securities, by contract or otherwise. Without limiting the
generality of the foregoing, each of the following Persons will be deemed
to be an Affiliate of Company: (a) each Person (other than a Holder) who
owns 5% or more of any class or series of Capital Stock of Company, and (b)
each Person (other than a Holder) who serves on the board of directors of
the Company or any Subsidiary thereof, and (c) each senior executive
officer of Company.
25
7.1.2. "Agreement" means this Option and Warrant Agreement, as
amended, modified and supplemented from time to time.
7.1.3. "Appraised Valuation" means, as of any relevant date, the value
of a Warrant Share, a share of Common Stock or other security or equity
interest (as applicable) as determined by an Independent Appraiser. Such
Independent Appraiser will be selected by Holders of a majority of the
Warrants and Warrant Shares and approved by Company (which approval may not
be unreasonably withheld, delayed or conditioned). Such Independent
Appraiser shall use one or more valuation methods that the Independent
Appraiser (in its best professional judgment) determines to be most
appropriate under the circumstances; provided, that such valuation methods
shall not give effect to (1) any discount for any lack of liquidity of the
Warrants, Warrant Shares and/or such other security, or (2) the minority
status of any holder of Warrants, Warrant Shares or other security, or (3)
the fact that Company may have no class of equity securities registered
under the Securities Act. Such Independent Appraiser, as promptly as is
reasonably possible, will prepare and deliver to Company and to each Holder
of a Warrant or Warrant Share a written valuation report indicating (a) the
methods of valuation considered or used, and (b) the value of a Warrant
Share or other security, and (c) the nature and scope of the examination or
investigation upon which the determination of value was made. Unless the
valuation report is revised by the Independent Appraiser within 5 Business
Days after delivery thereof or unless Company and Holders otherwise
mutually agree, then the valuation report shall be deemed final at the end
of such 5-Business-Day period. Company shall pay the fees and expenses
associated with the Independent Appraiser.
7.1.4. "Business Day" means any day except a Saturday, Sunday or other
day on which commercial banks in Arlington, Virginia are authorized by law
to close.
7.1.5. "Capital Stock" means the Common Stock, and all other classes
of common stock (whether voting or non-voting), and all other forms of
capital stock or securities of Company (preferred or otherwise).
7.1.6. "Commission" means the Securities and Exchange Commission or
any entity or agency that succeeds to any or all of its functions under the
Securities Act or the Exchange Act.
7.1.7. "Common Stock" means the voting common stock of Company (which
has a par value of $0.001 per share).
7.1.8. "Company" means ACCESS ONE COMMUNICATIONS CORP., a New Jersey
corporation, and its successors and permitted assigns.
7.1.9. "Credit Agreement" means the Credit Facility Agreement dated as
of June 30, 1999 by and among Company (and certain of its Affiliates) and
Lender (and certain other lenders), as the same may be amended, modified or
otherwise supplemented from time to time (including any renewals,
refinancings or extensions thereof or increases in the credit extended
thereunder).
7.1.10. "Current Market Price" means, with respect to any share of
Common Stock or any other security of Company at the date herein specified,
the following:
26
(i) if Company does not then have such securities registered
under the Exchange Act, then the Current Market Price per share of
such security will be the greater of the Exercise Price per Warrant
Share then in effect or the Appraised Valuation per share of such
security, or alternatively
(ii) if Company does then have such securities registered under
the Exchange Act, then the Current Market Price per share of such
security will be the greater of the Exercise Price per Warrant Share
then in effect or the Appraised Valuation per share of such security
or the average of the daily market prices of such security for 20
consecutive Business Days during the period commencing 30 Business
Days before such date (or, if Company has had a class of such
securities registered under the Exchange Act for less than 30
consecutive Business Days before such date, then the average of the
daily market prices for all of the Business Days before such date for
which daily market prices are available). The market price for each
such Business Day shall be as follows: (A) for a security listed or
admitted to trading on any securities exchange, then the closing price
(regular way) on such day (or if no sale takes place on such day, then
the average of the closing bid and asked prices on such day), and (B)
for a security not then listed or admitted to trading on any
securities exchange, then the last reported sale price on such day (or
if no sale takes place on such day, then the average of the closing
bid and asked prices on such day, as reported by a reputable quotation
source designated by Company), and (C) for a security not then listed
or admitted to trading on any securities exchange and as to which no
such reported sale price or bid and asked prices are available, then
the average of the reported high bid and low asked prices on such day,
as reported by a reputable quotation service, or a newspaper of
general circulation in Manhattan Borough (New York, NY) customarily
published on each business day, designated by Company (or if there is
no bid and asked prices on such day, then the average of the high bid
and low asked prices, as so reported, on the most recent day (not more
than 30 calendar days prior to the date in question) for which prices
have been so reported), and (D) if there are no bid and asked prices
reported during the 30 calendar days prior to the date in question,
then the Current Market Price per share of the security shall be
determined as if Company did not have a class of such securities
registered under the Exchange Act.
7.1.11. "Equity Disposition" means the sale, issuance, transfer or
other Equity Disposition of Capital Stock (or securities convertible into,
or exchangeable for, Capital Stock or rights to acquire Capital Stock or
such securities) to one or more Persons through any transaction or series
of related transactions (other than as a result of a Public Offering) if,
after such sale, issuance, transfer or Equity Disposition, the Initial
Shareholders no longer beneficially own in the aggregate more than 50% of
the Capital Stock and voting rights on a fully-diluted basis (without
giving effect to any Warrant Shares purchased or purchasable) then
outstanding. For purposes of this definition, (i) any redemption or
repurchase of any shares of Capital Stock (or securities convertible into,
or exchangeable for, Capital Stock or rights to acquire Capital Stock or
such securities) by Company shall constitute an "Equity Disposition" and
(ii) any transfer of Capital Stock (or securities convertible into, or
exchangeable for, Capital Stock or rights to acquire Capital Stock or such
securities) by a shareholder to any member of his or her immediately family
or to any trust for which he or she is the trustee shall not constitute an
"Equity Disposition" provided that such shareholder retains control over
the voting rights associated with such Capital Stock.
27
7.1.12. "Event of Dilution" means any of the events described in
Section 5.1 as to which anti-dilution rights are granted pursuant to
Article 5.
7.1.13. "Exchange Act" means the Securities and Exchange Act of 1934,
as amended, or any similar Federal statute, as implemented by the
Commission or any court of competent jurisdiction.
7.1.14. "Exercise Period" has the meaning set forth in Section 4.2.
7.1.15. "Exercise Price" has the meaning set forth in Section 1.2.
7.1.16. "FCC" means the Federal Communications Commission or any other
entity or agency that succeeds to its responsibilities and powers.
7.1.17. "Holder" means any owner or holder of any Warrant (and
corresponding Warrant Certificate) or any Warrant Share, and (with respect
to each) any successor, assignee, transferee, trustee, estate, heir,
executor, administrator, or personal representative thereof.
7.1.18. "Holder-Affiliated Transferee" means any Affiliate of a
Holder, and/or any current director, officer, employee, business unit or
division, or successor-in-interest of such Holder, and/or (with respect to
Purchaser) any pledgee of Purchaser's interest under the Credit Agreement.
7.1.19. "Independent Appraiser" means a Person who (a) is with a
nationally recognized investment banking or appraisal firm, and (b) is
qualified in the valuation of businesses, transactions and securities of
the general type being analyzed, and (c) does not have a material direct or
material indirect financial interest in Company or any Holder.
7.1.20. "Initial Public Offering" means the first time (after the
effective date of this Agreement) that Company issues or otherwise offers
for sale any Capital Stock (or securities convertible into, or exchangeable
for, Capital Stock or rights to acquire Capital Stock or such securities)
pursuant to a registration statement filed with the Commission under the
Securities Act.
7.1.21. "Initial Shareholders" means, collectively, the holders of
Capital Stock of Company as of the effective date of this Agreement.
7.1.22. "Lender" means MCG FINANCE CORPORATION, a Delaware
corporation, and its successors, assigns, pledgees and transferees.
7.1.23. "Non-Surviving Transaction" means either (a) any merger,
consolidation or other business combination by Company with one or more
Persons in which the other Person effectively is the survivor or (b) any
sale, transfer, lease or license of all or any material portion of the
assets (or the economic benefits thereof) of Company to one or more other
Persons through any transaction or series of related transactions.
7.1.24. "Organic Document" means, relative to any entity, its
certificate and articles of incorporation, organization or formation, its
by-laws or operating agreements, and all equityholder
28
agreements, voting agreements and similar arrangements applicable to any of its
authorized shares of capital stock, its partnership interests or its equity
interests, and any other arrangements relating to the control or management of
any such entity (whether existing as a corporation, a partnership, an LLC or
otherwise).
7.1.25. "Person" means an individual, an association, a partnership, a
corporation, a trust or an unincorporated organization or any other entity
or organization.
7.1.26. "Public Offering" means any issuance or other sale of any
Capital Stock (or securities convertible into, or exchangeable for, Capital
Stock or rights to acquire Capital Stock or such securities) of Company
pursuant to a registration statement filed with the Commission under the
Securities Act.
7.1.27. "Purchaser" means Lender, and its successors, assigns,
pledgees and transferees with respect to the Warrants, corresponding
Warrant Certificates and/or Warrant Shares.
7.1.28. "Registration Rights" means the rights of the Holders of the
Warrant Certificates to have the Warrant Shares registered for sale under
an effective registration statement under the Securities Act.
7.1.29. "Repurchase Condition" has the meaning set forth in Section
4.6.
7.1.30. "Repurchase Offer" has the meaning set forth in Section 4.6.
7.1.31. "Repurchase Price" has the meaning set forth in Section 4.6.
7.1.32. "Securities Act" means the Securities Act of 1933, as amended,
or any similar Federal statute, as implemented by the Commission or any
court of competent jurisdiction.
7.1.33. "State Communications Acts" means the laws of any state in
which Company does business that govern the provision of communications
services offered or performed by Company within such state and are
applicable to Company, as amended from time to time, and as implemented by
the rules, regulations, and orders of the applicable State PUC or any court
of competent jurisdiction.
7.1.34. "State PUC" means the public utility commission or other
regulatory agency of any state in which Company does business that is
vested with jurisdiction over Company and over State Communications Acts or
the provision of communication services within such state.
7.1.35. "Subsidiary" of any Person means (a) any other Person as to
which the first Person directly or indirectly owns or controls 50% or more
of the equity, voting rights or enterprise value thereof or (b) any other
Person the accounts of which would be consolidated with those of the first
Person in its consolidated or combined financial statements according to
generally accepted accounting principles.
29
7.1.36. "Surviving Public Combination" means any merger, consolidation
or other business combination by Company with one or more Persons in which
Company is the survivor (or a purchase of assets by Company from one or
more other Persons) if Company is thereafter required to file reports with
respect to any of its Capital Stock with the Commission pursuant to the
Exchange Act.
7.1.37. "Target Market Price" has the meaning set forth in Section
5.1.
7.1.38. "Warrant Certificate" means a certificate (substantially in
the form of Exhibit C) evidencing one or more Warrants.
7.1.39. "Warrant" means the irrevocable and unconditional right
(subject to the terms hereof) to acquire a fully paid and nonassessable
Warrant Share at a purchase price per share equal to the Exercise Price
(and any other right or warrant issued upon any exchange or transfer of any
such Warrant or any adjustment relating thereto).
7.1.40. "Warrant Share" means a share of Common Stock issuable upon
exercise of a Warrant (until such share is registered by Company and sold
by the Holder thereof to a third party in a public transaction).
7.2. GENERAL CONSTRUCTION AND INTERPRETATION.
7.2.1. Plural; Gender. Unless otherwise expressly stated or the
context clearly indicates a different intention, then (as may be
appropriate in the particular context) (a) a singular number or noun used
herein includes the plural, and a plural number or noun includes the
singular, and (b) the use of the masculine, feminine or neuter gender
pronouns herein includes each and all genders.
7.2.2. Section, Schedule and Exhibit References. Unless otherwise
expressly stated or the context clearly indicates a different intention,
then all references to sections, paragraphs, clauses, schedules and
exhibits herein are to be interpreted as references to sections,
paragraphs, clauses, schedules and exhibits of and to this Agreement. In
addition, the words "herein", "hereof", "hereunder", "hereto" and other
words of similar import herein refer to this Agreement as a whole, and not
to any particular section, paragraph or clause in this Agreement.
7.2.3. Titles and Headings. Unless otherwise expressly stated or the
context clearly indicates a different intention, then the various titles
and headings herein are inserted for convenience only and do not affect the
meaning or interpretation of any provision hereof.
7.2.4. "Including" and "Among Other" References. Unless otherwise
expressly stated or the context clearly indicates a different intention,
then all references herein to phrases containing or lists preceded by the
words "include", "includes", "including", "among other", "among other
things" or other words or phrases of similar import are to be interpreted
to mean such "without limitation" (whether or not such additional phrase is
actually added). In other words, such words and phrases connote an
illustrative example or list rather than an exclusive example or list.
30
7.2.5. Time of Day References. Unless otherwise expressly stated or
the context clearly indicates a different intention, then all time of day
references in and restrictions imposed hereunder are to be calculated using
Eastern Time.
7.2.6. Successors and Assigns. Unless otherwise expressly stated or
the context clearly indicates a different intention, then all references to
any Person (including any Official Body) herein are to be interpreted as
including (as applicable) such Person's successors, assigns, estate, heirs,
executors, administrators and personal representatives.
7.2.7. Modifications to Documents. Unless otherwise expressly stated
or the context clearly indicates a different intention, then all references
herein to any other agreement or instrument are to be interpreted as
including all extensions, renewals, amendments, supplements, substitutions,
replacements and waivers thereto and thereof from time to time.
7.2.8. References to Laws and Regulations. Unless otherwise expressly
stated or the context clearly indicates a different intention, then all
references to any law, regulation, rule, order or policy herein are to be
interpreted as references to such law, regulation, rule or policy (a) as
implemented and interpreted from time to time by Official Bodies with
appropriate jurisdiction therefor, and (b) as amended, modified,
supplemented, replaced and repealed from time to time.
7.2.9. Financial and Accounting Terms. Unless otherwise expressly
stated or the context clearly indicates a different intention, then
financial and accounting terms used in the foregoing definitions or
elsewhere herein shall be defined and determined in accordance with
Generally Accepted Accounting Principles (GAAP).
ARTICLE 8 . MISCELLANEOUS
8.1. COMPLIANCE WITH FCC AND STATE PUC REQUIREMENTS. Company and Purchaser
each hereby acknowledge its intent that this Agreement, the Warrants, the
Warrant Certificates and the Warrant Shares (as well as the exercise of rights
hereunder) each comply with all of the laws, regulations and orders of and/or
administered by the FCC or any State PUC relating to Purchaser's ownership,
exercise and/or other realization of rights in connection herewith. If at any
time the terms and conditions of any such ownership, exercise or other ability
to realize upon rights violates, is in conflict with or requires any consent
under any such legal requirements, then Company and Purchaser (or any subsequent
Holder) will cooperate and negotiate in good faith to amend the underlying
documents (or the relevant rights therein) and/or to file and prosecute (or to
cause others to file and prosecute) applications for any such consent in order
to enable Company and Purchaser (or such subsequent Holder) to be in compliance
with such legal requirements.
8.2. COMPLIANCE WITH PURCHASER'S REGULATORY REQUIREMENTS. Company and
Purchaser each hereby acknowledge its intent that this Agreement, the Warrants,
the Warrant Certificates and the Warrant Shares (as well as the exercise of
rights hereunder) each comply with all of the statutory and regulatory
requirements applicable to Purchaser (or any subsequent Holder) relating to its
31
ownership, exercise and/or other realization of rights in connection herewith.
If at any time the terms and conditions of any such ownership, exercise or other
ability to realize upon rights violates or is in conflict with any such
regulatory requirements applicable to Purchaser (or such subsequent Holder),
then Company and Purchaser (or such subsequent Holder) will cooperate and
negotiate in good faith to amend the underlying documents (or the relevant
rights therein) in order to enable Purchaser (or such subsequent Holder) to be
in compliance with such statutory and regulatory requirements.
8.3. BINDING EFFECT AND GOVERNING LAW. This Agreement (and the Warrants,
the Warrant Certificates and other documents in connection herewith) are binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns (to the extent authorized). This Agreement (and the
Warrants, the Warrant Certificates and other documents in connection herewith)
are governed as to their validity, interpretation, construction and effect by
the laws of the Commonwealth of Virginia (without giving effect to the conflicts
of law rules of Virginia) or, to the extent that the particular issue in
controversy involves Company's legal power or authorization in connection
herewith, matters of internal governance, or matters of corporate law, then
resolution of such issue shall be governed by the corporate laws of the State of
New Jersey.
8.4. SURVIVAL. All agreements, representations, warranties and covenants of
Company contained herein or in any documentation required hereunder will survive
the execution and delivery of this Agreement and will continue in full force and
effect so long as this Agreement otherwise remains effective.
8.5. NO WAIVER; DELAY. To be effective, any waiver by Purchaser must be
expressed in a writing executed by Purchaser. If Purchaser waives any power,
right or remedy arising hereunder or under any applicable law, then such waiver
will not be deemed to be a waiver upon the later occurrence or recurrence of any
events giving rise to the earlier waiver. No failure or delay by Purchaser to
insist upon the strict performance of any term, condition, covenant or agreement
hereunder, or to exercise any right, power or remedy hereunder, will constitute
a waiver of compliance with any such term, condition, covenant or agreement, or
preclude Purchaser from exercising any such right, power, or remedy at any later
time or times. The remedies provided herein are cumulative and not exclusive of
each other and the remedies provided by law.
8.6. MODIFICATION. Except as otherwise expressly provided in this
Agreement, no modification or amendment hereof will be effective unless made in
a writing signed by appropriate officers of the parties hereto.
8.7. NOTICES. Unless otherwise provided in this Agreement, any notice,
request, consent, waiver or other communication required or permitted under or
in connection with this Agreement will be deemed satisfactorily given if it is
in writing and is delivered either personally to the addressee thereof, or by
prepaid registered or certified U.S. mail (return receipt requested), or by a
nationally recognized commercial courier service with next-day delivery charges
prepaid, or by telegraph, or by facsimile (voice confirmed), or by any other
reasonable means of personal delivery to the party entitled thereto at its
respective address set forth below:
If to Company [Party Entitled to Notice]
32
or its Affiliates: c/o Access One Communications Corp.
----------------- 0000 XX 00xx Xxxxxx
Xx. Xxxxxxxxxx, XX 00000
Attention: President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to the following listed counsel or
such other counsel as may be designated by
Company from time to time (and which notice
shall not constitute notice to Company and
failure to give such notice shall not affect
the effectiveness of notice to Company):
Xxxxxx & Xxxxxx
000 Xxxx Xxxxxxxx Xxxx Xx, Xxxxx 000
Xxxx Xxxxx, XX 00000
Attention: Xxxx Xxxxxx, Esquire
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Purchaser: MCG Finance Corporation
---------------
0000 Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Investment Administration
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to the following listed counsel or
such other counsel as may be designated by
Purchaser from time to time (and which
notice shall not constitute notice to
Purchaser and failure to give such notice
shall not affect the effectiveness of notice
to Purchaser):
Xxxxxx X. Xxxxxxxxxx, Esquire
Xxxxx Xxxx LLP
000 00xx Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any party to this Agreement may change its address or facsimile number for
notice purposes by giving notice thereof to the other in accordance with this
Section, provided that such change shall not be effective until 2 calendar days
after notice of such change. All such notices and other communications will be
deemed given and effective (a) if by mail, then upon actual receipt or 5
calendar days after mailing as provided above (whichever is earlier), or (b) if
by facsimile, then upon successful transmittal to such party's designated
number, or (c) if by telegraph, then upon actual
33
receipt or 2 Business Days after delivery to the telegraph company (whichever is
earlier), or (d) if by nationally recognized commercial courier service, then
upon actual receipt or 2 Business Days after delivery to the courier service
(whichever is earlier), or (e) if otherwise delivered, then upon actual receipt.
8.1. PRIOR AGREEMENTS SUPERSEDED. This Agreement completely and fully
supersedes all oral agreements and all other and prior written agreements by and
between Company and Purchaser concerning the terms and conditions of this
Agreement.
8.2. SEVERABILITY. If fulfillment of any provision of or any transaction
related to this Agreement or the Credit Agreement, the time performance of such
provision or transaction is due shall involve transcending the limit of validity
prescribed by law, then ipso facto, the obligation to be fulfilled shall be
reduced to the limit of such validity. If any clause or provision of this
Agreement operates or would prospectively operate to invalidate this Agreement
in whole or in part, then such clause or provision only shall be void, as though
not contained herein, and the remainder of this Agreement shall remain operative
and in full force and effect.
8.3. COUNTERPARTS. This Agreement may be executed in any number of
counterparts with the same effect as if all the signatures on such counterparts
appeared on one document. Each such counterpart will be deemed to be an original
but all counterparts together will constitute one and the same instrument.
8.4. LIMITATION OF LIABILITY. Notwithstanding any other provision of this
Agreement (unless expressly provided otherwise), neither Company nor any Holder
(nor any director, officer, employee, representative, legal counsel or agent of
Company or any Holder) shall have any liability to any other Person that is a
party to or beneficiary of this Agreement (or to any equityholder of Company)
with respect to (and each Person that is a party to this Agreement hereby
waives, releases and agrees not to xxx upon any claim for) any special,
indirect, consequential, punitive or non-foreseeable damages suffered by such
Person in connection with or in any way related to the transactions contemplated
or the relationship established by this Agreement, or any act, omission or event
occurring in connection herewith.
8.5. FORUM SELECTION; CONSENT TO JURISDICTION. ANY LITIGATION IN CONNECTION
WITH OR IN ANY WAY RELATED TO THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), ACTIONS OR INACTIONS OF ANY
HOLDER OR COMPANY WILL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF
THE COMMONWEALTH OF VIRGINIA OR IN THE UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF VIRGINIA; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST COMPANY MAY ALSO BE BROUGHT (AT SUCH HOLDER'S OPTION) IN THE
COURTS OF ANY OTHER JURISDICTION WHERE ANY PROPERTY OF COMPANY MAY BE FOUND OR
WHERE ANY HOLDER MAY OTHERWISE OBTAIN PERSONAL JURISDICTION OVER COMPANY.
COMPANY HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE
COURTS OF THE COMMONWEALTH OF VIRGINIA AND OF THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA FOR THE PURPOSE OF ANY SUCH LITIGATION AS
SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY FINAL AND
NON-APPEALABLE JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION.
COMPANY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID,
34
OR BY PERSONAL SERVICE WITHIN OR OUTSIDE THE COMMONWEALTH OF VIRGINIA. COMPANY
HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF
ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM
THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE
EXTENT THAT COMPANY HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION
OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE,
ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH
RESPECT TO ITSELF OR ITS PROPERTY, THEN COMPANY HEREBY IRREVOCABLY WAIVES SUCH
IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT.
8.6. WAIVER OF JURY TRIAL. EACH HOLDER AND COMPANY EACH HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION (WHETHER AS CLAIM, COUNTER-CLAIM, AFFIRMATIVE
DEFENSE OR OTHERWISE) IN CONNECTION WITH OR IN ANY WAY RELATED TO THIS
AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN), ACTIONS OR INACTIONS OF ANY HOLDER OR COMPANY. COMPANY
ACKNOWLEDGES AND AGREES (A) THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION, AND (B) THAT IT HAS BEEN ADVISED BY LEGAL
COUNSEL IN CONNECTION HEREWITH, AND (C) THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR PURCHASER ENTERING INTO THIS AGREEMENT.
[BALANCE OF PAGE INTENTIONALLY BLANK]
35
IN WITNESS WHEREOF, the parties have caused this Warrant Agreement to be
duly executed, as an instrument under seal (whether or not any such seals are
physically attached hereto) as of the date and year first above written.
ATTEST: ACCESS ONE COMMUNICATIONS
CORP. (Company)
By: By: /s/ Xxxxxxx Xxxxxx
---------------------------- ------------------------------
Name: Xxxxx Xxxxxx Name: Xxxxxxx X. Xxxxxx
Title: President Title: Chairman and Chief Executive
Officer
[CORPORATE SEAL] Address: 0000 XX 00xx Xxxxxx
Xx. Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
WITNESS: MCG FINANCE CORPORATION
(Purchaser)
/s/ Xxxx X. Xxxxxx By: /s/ X. Xxxxx Xxxxxxx for Xxxxxx X. Xxxxxx
---------------------------- ------------------------------------------
Xxxxxx X. Xxxxxx, Executive Vice
President
Address: 0000 Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
