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EXHIBIT 4.2
WARRANT AGREEMENT
Dated as of
February 7, 2000
between
METRICOM, INC.
and
BANKBOSTON N.A.
as Warrant Agent
and
BANK ONE TRUST COMPANY, N.A.
as Initial Warrant Agent
Warrants for
Common Stock of
METRICOM, INC.
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TABLE OF CONTENTS
Page
ARTICLE 1
Definitions
SECTION 1.1. Definitions 1
SECTION 1.2. Other Definitions 5
ARTICLE 2
Warrant Certificates
SECTION 2.1. Form and Dating 6
SECTION 2.2. Legends 8
SECTION 2.3. Execution and Countersignature 15
SECTION 2.4. Certificate Register 16
SECTION 2.5. Separation of Warrants and Notes 16
SECTION 2.6. Transfer and Exchange 16
SECTION 2.7. Replacement Certificates 18
SECTION 2.8. Temporary Certificates 18
SECTION 2.9. Cancellation 18
ARTICLE 3
Exercise Terms
SECTION 3.1. Exercise Price 19
SECTION 3.2. Exercise Periods; Restrictions on Exercise 19
SECTION 3.3. Expiration 19
SECTION 3.4. Manner of Exercise 20
SECTION 3.5. Issuance of Warrant Shares 20
SECTION 3.6. Fractional Warrant Shares 21
SECTION 3.7. Reservation of Warrant Shares 21
SECTION 3.8. Compliance with Law 22
ARTICLE 4
Antidilution Provisions
SECTION 4.1. Changes in Common Stock 22
SECTION 4.2. Cash Dividends and Other Distributions 23
SECTION 4.3. Rights Issue to All Holders of Common Stock 23
SECTION 4.4. Other Issuances of Common Stock or Rights 24
SECTION 4.5. Combination; Liquidation 25
SECTION 4.6. Other Events 26
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SECTION 4.7. Superseding Adjustment 26
SECTION 4.8. Minimum Adjustment 27
SECTION 4.9. Notice of Adjustment 27
SECTION 4.10. Notice of Certain Transactions 28
SECTION 4.11. Adjustment to Warrant Certificate 28
SECTION 4.12. Exceptions to Antidilution Provisions 29
ARTICLE 5
Warrant Agent
SECTION 5.1. Appointment of Warrant Agent 39
SECTION 5.2. Right and Duties of Warrant Agent 40
SECTION 5.3. Individual Rights of Warrant Agent 41
SECTION 5.4. Warrant Agent's Disclaimer 41
SECTION 5.5. Compensation and Indemnity 41
SECTION 5.6. Successor Warrant Agent 41
ARTICLE 6
Miscellaneous
SECTION 6.1. Financial Statements and Reports of the Company 44
SECTION 6.2. Third Party Beneficiaries 44
SECTION 6.3. Rights of Holders 44
SECTION 6.4. Amendment 44
SECTION 6.5. Notices 45
SECTION 6.6. Governing Law 46
SECTION 6.7. Successors 46
SECTION 6.8. Multiple Originals 46
SECTION 6.9. Table of Contents 46
SECTION 6.10. Severability 46
EXHIBIT A Form of Face of Warrant Certificate
APPENDIX A List of Financial Experts
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WARRANT AGREEMENT dated as of February 7, 2000 (this "Agreement"),
between METRICOM, INC., a Delaware corporation (the "Company"), BankBoston N.A.,
as Warrant Agent (the "Warrant Agent") and Bank One Trust Company, N.A., as
Initial Warrant Agent (the "Initial Warrant Agent").
The Company desires to issue the warrants (the "Warrants" and each a
"Warrant") described herein which will initially entitle the holders thereof
(the "Holders") to purchase an aggregate of 1,425,000 shares of its common
stock, par value $0.001 per share (the "Common Stock"), of the Company at a
purchase price of $87.00 per share subject to the adjustments described herein,
in connection with an offering of (i) $300,000,000 aggregate principal amount of
13% Senior Notes due 2010 (collectively, the "Notes" and each $1,000 principal
amount thereof a "Note") issued by the Company and Metricom Finance, Inc., a
Delaware corporation and wholly owned subsidiary of the Company ("Finance Sub"
and together with the Company, the "Issuers"), pursuant to the provisions of the
Indenture (as defined below), and (ii) 300,000 Warrants initially entitling the
Holder to purchase 4.75 shares of Common Stock, subject to adjustment as
provided herein. In connection with the sale of the Notes, each purchaser of a
Note is required to purchase a Warrant, resulting in an aggregate of 300,000
Warrants to be issued to the purchasers of the Notes.
Each Note will be transferable only along with the corresponding
Warrant forming a unit and will not become separately transferable until the
earliest to occur of (i) August 15, 2000, (ii) an Event of Default, as defined
in the Indenture, (iii) an Exercise Event, as defined herein, or (iv) such other
date, as Xxxxxx Brothers Inc. shall determine in its sole discretion (the
"Separation Date").
The Company further desires the Warrant Agent to act on behalf of
the Company in connection with the issuance of the Warrants as provided herein
and the Warrant Agent is willing to so act.
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of Warrants:
ARTICLE 1
Definitions
Any capitalized terms not otherwise defined herein shall have the
meaning attributed such term in the Indenture.
SECTION 1.1. Definitions.
"Affiliate" means, as applied to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person. For purposes of this definition, "control" and
correlative meanings, the terms "controlling," "controlled by" and "under common
control with," as applied to any Person, mean the possession,
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directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.
"Board of Directors" means (1) in respect of a limited liability
company, the board of advisors of that company; (2) in respect of a corporation,
the board of directors of the corporation, or any authorized committee thereof;
and (3) in respect of any other Person, the board or committee of that Person
serving a similar function.
"Business Day" means any day other than a Legal Holiday.
"Capital Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents, however designated,
whether voting or non-voting, in equity of such Person, whether now outstanding
or issued after the date hereof, including, without limitation, all Common Stock
and Preferred Stock.
"Change of Control" means such time as (1) a "person" or "group,"
within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act, other
than a Permitted Holder, becomes the ultimate "beneficial owner," as defined in
Rule 13d-3 under the Exchange Act, of more than 50% of the total voting power of
the then outstanding Voting Stock of the Company on a fully diluted basis; (2)
individuals who at the beginning of any period of two consecutive calendar years
constituted the Board of Directors of the Company, together with any directors
who are members of such Board of Directors on the date hereof and any new
directors whose election by the Board of Directors or whose nomination for
election by the stockholders of the Company was approved by a vote of at least
two-thirds of the members of the Board of Directors then still in office who
either were members of the Board of Directors at the beginning of such period or
whose election or nomination for election was previously so approved, cease for
any reason to constitute a majority of the members of such Board of Directors
then in office; (3) the sale, lease, transfer, conveyance or other disposition,
other than by way of merger or consolidation, in one or a series of related
transactions, of all or substantially all of the assets of the Company and its
Subsidiaries taken as a whole to any such "person" or "group," other than to a
Permitted Holder or a Restricted Subsidiary of the Company; (4) the merger or
consolidation of the Company with or into another corporation or the merger of
another corporation with or into the Company with the effect that immediately
after such transaction any such "person" or "group" of persons or entities,
other than a Permitted Holder, shall have become the ultimate beneficial owner
of securities of the surviving corporation of such merger or consolidation
representing more than 50% of the total voting power of the then outstanding
Voting Stock of the surviving corporation; or (5) the approval by the holders of
the Capital Stock of the Company of a plan relating to the liquidation or
dissolution of such Issuer. In no event shall the consummation of a Holding
Company Reorganization constitute a Change of Control.
"Combination" means an event (other than the Holding Company
Reorganization) in which the Company consolidates with, merges with or into, or
sells all or substantially all of its assets to another Person.
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"Current Market Value" per share of Common Stock or any other
security of the Company at any date means: (i) if the security is not of a class
registered under the Exchange Act, (a) the value of the security, determined in
good faith by the Board of Directors and certified in a resolution of the Board
of Directors, based on the most recently completed arm's-length transaction
between the Company and a Person other than an Affiliate of the Company, the
closing of which occurred on such date or within the six-month period preceding
such date, or (b) if no such transaction shall have occurred on such date or
within such six-month period, the value of the security as determined by an
independent Financial Expert; or (ii) if the security is of a class registered
under the Exchange Act, the average of the last reported sale price of the
Common Stock (or the equivalent in an over-the-counter market) for each Business
Day during the period commencing 15 Business Days before such date and ending on
the date one day prior to such date, or if the security of a class registered
under the Exchange Act for less than 15 consecutive Business Days before such
date, the average of the daily closing bid prices (or such equivalent) for all
of the Business Days before such date for which daily closing bid prices are
available (provided, however, that if the closing bid price is not determinable
for at least 10 Business Days in such period, then clause (i) above and not this
clause (ii) shall be used to determine Current Market Value).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exercise Date" means, for a given Warrant, the day on which such
Warrant is exercised pursuant to Section 3.4.
"Exercise Event" means, with respect to each Warrant as to which
such event is applicable, the earlier of: (i) a Change of Control and (ii) any
date when the Company (A) consolidates or merges into or with another Person
(but only where holders of Common Stock receive consideration in exchange for
all or part of such Common Stock other than common stock in the surviving
Person) if the Common Stock (or other securities) thereafter issuable upon
exercise of the Warrants will not be registered under the Exchange Act or (B)
sells all or substantially all of its assets to another Person if the Common
Stock (or other securities) thereafter issuable upon exercise of the Warrants
will not be registered under the Exchange Act; provided, that the events in (A)
and (B) will not be deemed to have occurred if the consideration for the Common
Stock in either such transaction consists solely of cash. Notwithstanding
anything herein to the contrary, the consummation of the Holding Company
Reorganization shall not constitute an Exercise Event.
"Financial Expert" means one of the Persons listed in Appendix A
hereto.
"Holding Company Reorganization" has the meaning set forth in the
Indenture.
"Indenture" means the Senior Notes Indenture dated as of December
29, 1999, between the Company and the Trustee, with respect to the Notes, as
supplemented by the First Supplemental Indenture dated as of February 7, 2000,
and as it may be amended or supplemented from time to time.
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"Independent Financial Expert" means a Financial Expert that does
not, and whose directors, executive officers and 5% stockholders do not, have a
direct or indirect financial interest in the Company or any of its subsidiaries
or Affiliates, which has not been for at least five years and, at the time it is
called upon to give independent financial advice to the Company, is not (and
none of its directors, executive officers or 5% stockholders is) a promoter,
director, or officer of the Company or any of its subsidiaries or Affiliates.
The Independent Financial Expert may be compensated and indemnified by the
Company for opinions or services it provides as an Independent Financial Expert.
"Indirect Participant" means a Person who holds a beneficial
interest in a Global Note through a Participant.
"Issue Date" means February 7, 2000 or such date on which additional
Notes are originally issued.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue on
such payment for the intervening period.
"Officer" means the Chairman of the Board of Directors, the
President, any Vice President, the Treasurer, or an Assistant Treasurer, or the
Secretary or an Assistant Secretary of the Company.
"Participant" means, with respect to DTC or its nominee, an
institution that has an account therewith.
"Permitted Holder" means either MCI Worldcom, Inc. or Vulcan
Ventures Incorporated, or any majority owned Affiliate thereof.
"Preferred Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents, however designated,
whether voting or non-voting, of that Person's equity that have a preference as
to the payment of dividends or as to payments upon a liquidation of that Person,
whether now outstanding or issued after the date hereof, including without
limitation, all series and classes of such equity.
"Person" means any natural person, limited liability company,
corporation, partnership, government, agency or instrumentality of a government,
or any other entity.
"Restricted Subsidiary" has the meaning set forth in the Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
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"Trustee" means Bank One Trust Company, N.A., or any successor
trustee under the Indenture.
"Voting Stock" of any Person as of any date means the Capital Stock
of that Person that is at the time entitled to vote in the election of directors
or similar individuals of that Person.
"Warrant Certificates" mean the registered certificates (including
without limitation, the global certificates) issued by the Company under this
Agreement representing the Warrants.
"Warrant Shares" mean the shares of Common Stock (and any other
securities) for which the Warrants are exercisable.
SECTION 1.2. Other Definitions.
Defined in
Term Section
------- ----------
"Agreement"............................................................Recitals
"Cashless Exercise".........................................................3.4
"Certificate Register"......................................................2.4
"Common Stock".........................................................Recitals
"Company"..............................................................Recitals
"Delivering Seller"......................................................5.7(a)
"DTC" or "Depository"....................................................2.2(b)
"Exercise Price"............................................................3.1
"Expiration Date"........................................................3.2(c)
"Finance Sub"..........................................................Recitals
"Global Warrants"...........................................................2.1
"Holders"..............................................................Recitals
"Initial Period"............................................................5.1
"Issuers"..............................................................Recitals
"Notes"................................................................Recitals
"Participants"...........................................................2.6(b)
"Reference Security"...................................................4.12(vi)
"Separability Legend"....................................................2.2(a)
"Separation Date"......................................................Recitals
"Successor Company"......................................................4.5(a)
"Transfer Agent"............................................................3.5
"Warrant Agent"........................................................Recitals
"Warrant" and "Warrants"...............................................Recitals
All terms used herein with their initial letters capitalized and not
otherwise defined herein are used herein with the meaning given those terms in
the Indenture.
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SECTION 1.3. Rules of Construction. Unless the text otherwise requires:
(i) a defined term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation; and
(v) words in the singular include the plural and words in the
plural include the singular.
ARTICLE 2
Warrant Certificates
SECTION 2.1. Form and Dating. Each Warrant Certificate shall be
issued in registered form only, substantially in the form of Exhibit A. The
Warrant Certificates may have notations, legends or endorsements required by
law, stock exchange rule, agreements to which the Company is subject, if any, or
usage (including CUSIP numbers) (provided that any such notation, legend or
endorsement is in a form acceptable to the Company) and shall bear the legends
required by Section 2.2. Each Warrant Certificate shall be dated the date of its
countersignature.
The terms and provisions contained in the form of Warrant annexed
hereto as Exhibit A shall constitute, and are hereby expressly made, a part of
this Warrant Agreement. To the extent applicable, the Company, the Warrant Agent
and the Initial Warrant Agent, by their execution and delivery of this Warrant
Agreement, agree to such terms and provisions and to be bound thereby.
Warrants offered and sold shall be issued initially in the form of
one or more permanent global Warrant Certificates in registered form,
substantially in the form set forth in Exhibit A (the "Global Warrants"),
registered in the name of the Depositary or the nominee of the Depositary,
deposited with the Initial Warrant Agent, as custodian for the Depositary, duly
executed by the Company and countersigned by the Warrant Agent and the Initial
Warrant Agent as hereinafter provided. The aggregate number of Warrants
represented by the Global Warrant may from time to time be increased or
decreased by adjustments made on the records of the Warrant Agent or the Initial
Warrant Agent, as applicable, as custodian for the Depositary or its nominee, in
accordance with the instructions given by the Holder thereof, as hereinafter
provided.
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Warrants in definitive form may be issued in exchange for interests
in the Global Warrant pursuant to such procedures as the Company and the Warrant
Agent or the Initial Warrant Agent, as applicable, shall reasonably agree upon
and shall be issued in the form of permanent certificated Warrants in registered
form in substantially the form set forth in Exhibit A.
Ownership of beneficial interests in Global Warrants will be limited
to Participants or Indirect Participants.
The definitive Warrant Certificates shall be typed, printed,
lithographed or engraved or produced by any combination of these methods or may
be produced in any other manner permitted by the rules of any securities
exchange on which the Warrants may be listed, all as determined by the officers
executing such Warrant Certificates, as evidenced by their execution of such
Warrant Certificates.
SECTION 2.2. Legends. (a) Each Warrant Certificate issued prior to
the Separation Date shall bear the following legend (the "Separability Legend"):
UNTIL THE SEPARATION DATE (AS DEFINED), THIS WARRANT HAS BEEN ISSUED AS,
AND MUST BE TRANSFERRED AS, A UNIT TOGETHER WITH THE ASSOCIATED 13%
SENIOR NOTES DUE 2010 (THE "NOTES") OF METRICOM, INC. (THE "COMPANY")
AND METRICOM FINANCE, INC. EACH UNIT CONSISTS OF $1,000 PRINCIPAL AMOUNT
OF NOTES AND A WARRANT TO PURCHASE 4.75 SHARES OF COMMON STOCK OF THE
COMPANY, SUBJECT TO ADJUSTMENT UNDER CERTAIN CIRCUMSTANCES. A COPY OF
THE WARRANT AGREEMENT PURSUANT TO WHICH THE WARRANTS HAVE BEEN ISSUED IS
AVAILABLE FROM THE COMPANY UPON REQUEST.
The Company shall give written notice to the Warrant Agent of the
occurrence of the Separation Date.
(b) Each Global Warrant issued in global form and deposited with DTC
shall bear the following legend:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY ("DTC"), TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH
AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
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TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE WARRANT AGREEMENT REFERRED TO HEREIN.
SECTION 2.3. Execution and Countersignature. One Officer shall sign
the Warrant Certificates for the Company by manual or facsimile signature. If an
Officer whose signature is on a Warrant Certificate no longer holds that office
at the time the Warrant Agent or the Initial Warrant Agent, as applicable,
countersigns the Warrant Certificate, the Warrant Certificate shall nevertheless
be valid. A Warrant Certificate shall not be valid until an authorized signatory
of the Warrant Agent or the Initial Warrant Agent, as applicable, manually
countersigns the Warrant Certificate. Such authorized signature shall be
conclusive evidence that the Warrant Certificate has been countersigned under
this Agreement.
The Warrant Agent or the Initial Warrant Agent, as applicable, shall
initially countersign and deliver Warrant Certificates entitling the Holders
thereof to purchase in the aggregate not more than 4.75 Warrant Shares upon a
written order of the Company signed by one Officer.
The Warrant Agent or the Initial Warrant Agent, as applicable, may
appoint an agent reasonably acceptable to the Company to countersign the Warrant
Certificates. Unless limited by the terms of such appointment, such agent may
countersign Warrant Certificates whenever the Warrant Agent or the Initial
Warrant Agent, as applicable, may do so. Each reference in this Agreement to
countersignature by the Warrant Agent or the Initial Warrant Agent, includes
countersignature by such agent. Such agent will have the same rights as the
Warrant Agent or the Initial Warrant Agent, as applicable, for service of
notices and demands.
SECTION 2.4. Certificate Register. The Warrant Agent or the Initial
Warrant Agent, as applicable, shall keep a register ("Certificate Register") of
the Warrant Certificates and of their transfer and exchange. The Certificate
Register shall show the names and addresses of the respective Holders and the
date and number of Warrants represented on the face of each Warrant Certificate.
The Company and the Warrant Agent or the Initial Warrant Agent, as applicable,
may deem and treat the Person in whose name a Warrant Certificate is registered
as the absolute owner of such Warrant Certificate for all purposes whatsoever
and neither the Company nor the Warrant Agent or the Initial Warrant Agent, as
applicable, shall be affected by notice to the contrary.
SECTION 2.5. Separation of Warrants and Notes. (a) Prior to the
Separation Date no Warrant may be sold, assigned or otherwise transferred to any
Person unless, simultaneously with such transfer, the Initial Warrant Agent
receives confirmation from the Trustee for the Notes that the Holder thereof has
requested a transfer of the related Notes to the same transferee.
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(b) On or after the Separation Date, the holder of a Warrant
Certificate containing a Separability Legend may surrender such Warrant
Certificate accompanied by a written application to the Warrant Agent, duly
executed by the Holder thereof, for a new Warrant Certificate or certificates
not containing the Separability Legend.
SECTION 2.6. Transfer and Exchange. (a) The Warrant Certificates
shall be issued in registered form only and shall be transferable only upon the
surrender of such Warrant Certificate for registration of transfer. When a
Warrant Certificate is presented to the Warrant Agent or the Initial Warrant
Agent, as applicable, with a request to register a transfer, the Warrant Agent
or the Initial Warrant Agent, as applicable, shall register the transfer as
requested if the reasonable requirements of the Warrant Agent, or the Initial
Warrant Agent, as applicable, and of Section 8-401(1) of the Uniform Commercial
Code as in effect in the State of New York are met; provided, however, that
prior to the Separation Date the Initial Warrant Agent shall not register a
transfer of a Warrant Certificate and such transfer will be void and of no
effect unless the Notes that are a part of the same Unit as the Warrants
represented by the Warrant Certificate to be transferred are simultaneously
transferred to the same transferee. To permit the registration of transfers and
exchanges, the Company shall, at the request of the Warrant Agent or the Initial
Warrant Agent, as applicable, execute and the Warrant Agent or the Initial
Warrant Agent, as applicable, shall countersign Warrant Certificates. All
Warrant Certificates issued upon any registration of transfer or exchange of
Warrant Certificates shall be valid obligations of the Company, entitled to the
same benefits under this Agreement as the Warrant Certificates surrendered upon
such registration of transfer or exchange. No service charge will be made to a
Holder for any registration of transfer or exchange upon surrender of any
Warrant Certificate at the office of the Warrant Agent or the Initial Warrant
Agent, as applicable, maintained for that purpose. However, the Company may
require payment of a sum sufficient to cover any tax, assessment or other
governmental charge that may be imposed in connection with any registration of
transfer or exchange of Warrant Certificates but not for any exchange or
original issuance (not involving a transfer) pursuant to Section 2.8, 3.4 or
3.5.
(b) Notwithstanding any other provisions of this Section 2.6, unless
and until it is exchanged in whole or in part for Warrants in definitive
registered form, the Global Warrant may not be transferred except as a whole by
DTC to a nominee of DTC or by a nominee of DTC to DTC or another nominee of DTC
or by DTC or any such nominee to a successor depositary or a nominee of such
successor depositary. Interests of beneficial owners in the Global Warrant may
be transferred in accordance with the rules and procedures of DTC. Members of,
or participants in, DTC ("Participants") shall have no rights under this
Agreement with respect to the Global Warrant held on their behalf by DTC or the
Warrant Agent or the Initial Warrant Agent, as applicable, as its custodian, and
DTC may be treated by the Company, the Warrant Agent or the Initial Warrant
Agent, as applicable, and any agent of the Company or the Warrant Agent or the
Initial Warrant Agent, as applicable, as the absolute owner of such Global
Warrant for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Warrant Agent or the Initial Warrant
Agent, as applicable, or any agent of the Company or the Warrant Agent or the
Initial Warrant Agent, as applicable, from giving effect to any written
certification, proxy or other authorization furnished by DTC, and nothing herein
shall impair, as between DTC and its Participants, the operation of customary
practices governing the exercise of
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the rights of a Holder of any Warrants. The registered holder of the Global
Warrant may grant proxies and otherwise authorize any person, including
Participants and persons that may hold interests through Participants, to take
any action which a Holder is entitled to take under this Agreement or the
Warrants.
If DTC notifies the Company that it is unwilling or unable to
continue as depositary for the Global Warrant or Warrants or if at any time DTC
shall no longer be eligible under the next sentence of this paragraph, the
Company shall appoint a successor depositary with respect to the Warrants. Each
depositary appointed pursuant to this Section 2.6 must, at the time of its
appointment and at all times while it serves as depositary, be a clearing agency
registered under the Exchange Act and any other applicable statute or
regulation. The Company will execute, and the Warrant Agent or the Initial
Warrant Agent, as applicable, upon receipt of written instructions from the
Company, will countersign and deliver, Warrants in definitive registered form in
any authorized denominations, in an aggregate amount equal to the amount of the
Global Warrant or Warrants representing such Warrants in exchange for such
Global Warrant or Warrants if DTC notifies the Company that it is unwilling or
unable to continue as depositary for the Global Warrant or Warrants or if at any
time DTC shall no longer be eligible to serve as depositary and a successor
depositary for the Warrants is not appointed by the Company within 60 days after
the Company receives such notice or becomes aware of such ineligibility.
SECTION 2.7. Replacement Certificates. If a mutilated Warrant
Certificate is surrendered to the Warrant Agent or the Initial Warrant Agent, as
applicable, or if the Holder of a Warrant Certificate claims that the Warrant
Certificate has been lost, destroyed or wrongfully taken, the Company shall
issue and the Warrant Agent or the Initial Warrant Agent, as applicable, shall
countersign a replacement Warrant Certificate if the reasonable requirements of
the Warrant Agent, or the Initial Warrant Agent, as applicable, and of Section
8-405 of the Uniform Commercial Code as in effect in the State of New York are
met. Such Holder shall furnish an indemnity bond sufficient in the judgment of
the Company and the Warrant Agent or the Initial Warrant Agent, as applicable,
to protect the Company and the Warrant Agent or the Initial Warrant Agent, as
applicable, from any loss which either of them may suffer if a Warrant
Certificate is replaced. The Company and the Warrant Agent or the Initial
Warrant Agent, as applicable, may charge the Holder for their expenses in
replacing a Warrant Certificate. Every replacement Warrant Certificate is an
additional obligation of the Company.
SECTION 2.8. Temporary Certificates. Until definitive Warrant
Certificates are ready for delivery, the Company may prepare and the Warrant
Agent or the Initial Warrant Agent, as applicable, shall countersign temporary
Warrant Certificates. Temporary Warrant Certificates shall be substantially in
the form of definitive Warrant Certificates but may have variations that the
Company considers appropriate for temporary Warrant Certificates. Without
unreasonable delay, the Company shall prepare and the Warrant Agent or the
Initial Warrant Agent, as applicable, shall countersign definitive Warrant
Certificates and deliver them in exchange for temporary Warrant Certificates.
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SECTION 2.9. Cancellation. (a) In the event the Company shall
purchase or otherwise acquire Warrant Certificates, the same shall thereupon be
delivered to the Warrant Agent or the Initial Warrant Agent, as applicable, for
cancellation.
(b) The Warrant Agent or the Initial Warrant Agent, as applicable,
and no one else shall cancel and may, but shall not be required to, destroy all
Warrant Certificates surrendered for transfer, exchange, replacement, exercise
or cancellation unless the Company directs the Warrant Agent or the Initial
Warrant Agent, as applicable, to deliver canceled Warrant Certificates to the
Company. The Company may not issue new Warrant Certificates to replace Warrant
Certificates to the extent they represent Warrants which have been exercised or
Warrants which the Company has purchased or otherwise acquired.
ARTICLE 3
Exercise Terms
SECTION 3.1. Exercise Price. Each Warrant shall initially entitle
the Holder thereof, subject to adjustment pursuant to the terms of this
Agreement, to purchase 4.75 shares of Common Stock for a per share exercise
price (the "Exercise Price") of $87.00.
SECTION 3.2. Exercise Periods; Restrictions on Exercise. Subject to
the terms and conditions set forth herein, the Warrants shall be exercisable at
any time or from time to time after the earlier of August 15, 2000 and the
occurrence of an Exercise Event and prior February 15, 2010 (the "Expiration
Date").
SECTION 3.3. Expiration. Each Warrant shall terminate and become
void as of the earlier of (i) the close of business on the Expiration Date or
(ii) the date such Warrant is exercised. The Issuer shall give notice not less
than 90 and not more than 120 days prior to the Expiration Date to the Holders
of all then outstanding Warrants to the effect that the Warrants will terminate
and become void as of the close of business on the Expiration Date; provided,
however, that if the Company fails to give notice as provided in this Section
3.3, the Warrants will nevertheless expire and become void on the Expiration
Date.
SECTION 3.4. Manner of Exercise. Warrants may be exercised upon (i)
surrender to the Warrant Agent or the Initial Warrant Agent, as applicable, at
the principal corporate trust office of the Warrant Agent or the Initial Warrant
Agent, as applicable, of the related Warrant Certificate, together with the form
of election to purchase Common Stock on the reverse thereof duly filled in and
signed by the Holder thereof, and (ii) payment to the Warrant Agent, for the
account of the Company, of the Exercise Price for each Warrant Share issuable
upon the exercise of such Warrants then exercised. Such payment shall be made in
cash or by certified or official bank check payable to the order of the Company
or by wire transfer of funds to an account designated by the Company for such
purpose. Subject to Section 3.2, the rights represented by the Warrants shall be
exercisable at the election of the Holders thereof either in full at any time or
from time to time in part and in the event that a Warrant Certificate is
surrendered for exercise of less than all the Warrants represented by such
Warrant Certificate at any time prior to the
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Expiration Date, a new Warrant Certificate representing the remaining Warrants
shall be issued. The Warrant Agent or the Initial Warrant Agent, as applicable,
shall countersign and deliver the required new Warrant Certificates, and the
Company, at the request of the Warrant Agent or the Initial Warrant Agent, as
applicable, shall supply the Warrant Agent or the Initial Warrant Agent, as
applicable, with Warrant Certificates duly signed on behalf of the Company for
such purpose.
SECTION 3.5. Issuance of Warrant Shares. Subject to Section 2.6,
upon the surrender of Warrant Certificates and form of election properly
completed and executed and payment of the per share Exercise Price, as set forth
in Section 3.4, the Company shall issue and cause the Warrant Agent or the
Initial Warrant Agent, as applicable, or, if appointed, a transfer agent for the
Common Stock ("Transfer Agent") to countersign and deliver to or upon the
written order of the Holder and in such name or names as the Holder may
designate a certificate or certificates for the number of full Warrant Shares so
purchased upon the exercise of such Warrants or other securities or property to
which it is entitled, registered or otherwise, to the Person or Persons entitled
to receive the same, together with cash as provided in Section 3.6 in respect of
any fractional Warrant Shares otherwise issuable upon such exercise. Such
certificate or certificates shall be deemed to have been issued and any Person
so designated to be named therein shall be deemed to have become a holder of
record of such Warrant Shares as of the date of the surrender of such Warrant
Certificates, form of election and payment of the per share Exercise Price, as
aforesaid; provided, however, that if, at such date, the transfer books for the
Warrant Shares shall be closed, the certificates for the Warrant Shares in
respect of which such Warrants are then exercised shall be issuable as of the
date on which such books shall next be opened and until such date the Company
shall be under no duty to deliver any certificates for such Warrant Shares;
provided further, however, that such transfer books, unless otherwise required
by law, shall not be closed at any one time for a period longer than 20 calendar
days.
SECTION 3.6. Fractional Warrant Shares. The Company shall not be
required to issue fractional Warrant Shares on the exercise of Warrants. If more
than one Warrant shall be exercised in full at the same time by the same Holder,
the number of full Warrant Shares which shall be issuable upon such exercise
shall be computed on the basis of the aggregate number of Warrant Shares
purchasable pursuant thereto. If any fraction of a Warrant Share would, except
for the provisions of this Section 3.6, be issuable on the exercise of any
Warrant (or specified portion thereof), the Company shall pay at the time of
exercise an amount in cash equal to the Current Market Value per Warrant Share,
as determined on the day immediately preceding the date the Warrant is
exercised, multiplied by such fraction, computed to the nearest whole cent.
SECTION 3.7. Reservation of Warrant Shares. The Company shall at all
times keep reserved out of its authorized shares of Common Stock a number of
shares of Common Stock sufficient to provide for the exercise of all outstanding
Warrants. The registrar for the Common Stock shall at all times until the
Expiration Date reserve such number of authorized shares as shall be required
for such purpose. The Company will keep a copy of this Agreement on file with
the Transfer Agent. All Warrant Shares which may be issued upon exercise of
Warrants shall, upon issue, be fully paid, nonassessable, free of preemptive
rights and free from all taxes, liens, charges and security interests with
respect to the issue thereof. The Company will supply such Transfer Agent with
duly executed stock certificates for such purpose and will itself
16
provide or otherwise make available any cash which may be payable as provided in
Section 3.6. The Company will furnish to such Transfer Agent a copy of all
notices of adjustments (and certificates related thereto) transmitted to each
Holder.
Before taking any action which would cause an adjustment pursuant to
Article 4 to reduce the Exercise Price below the then par value (if any) of the
Common Stock, the Company shall take any and all corporate action which may, in
the opinion of its counsel, be necessary in order that the Company may validly
and legally issue fully paid and nonassessable shares of Common Stock at the
Exercise Price as so adjusted.
The Company covenants that all shares of Common Stock which may be
issued upon exercise of Warrants will, upon issue, be fully paid, nonassessable,
free of preemptive rights, free from all taxes and free from all liens, charges
and security interests, created by or through the Company, with respect to the
issue thereof.
SECTION 3.8. Compliance with Law. Notwithstanding anything in this
Agreement to the contrary, in no event shall a Holder be entitled to exercise a
Warrant unless (i) a registration statement filed under the Securities Act in
respect of the issuance of the Warrant Shares is then effective or (ii) in the
opinion of counsel to the Company addressed to the Warrant Agent the exercise of
such Warrants is exempt from the registration requirements of the Securities Act
and such securities are qualified for sale or exempt from qualification under
the applicable securities laws of the States or other jurisdictions in which
such holders reside.
SECTION 3.9 Listing of Warrant Shares. The Company shall take all
action reasonably necessary to have the Warrant Shares approved for listing on a
national securities exchange or market.
ARTICLE 4
Antidilution Provisions
SECTION 4.1. Changes in Common Stock. In the event that at any time
or from time to time the Company shall (i) pay a dividend or make a distribution
on its Common Stock payable in shares of its Common Stock or other equity
interests of the Company, (ii) subdivide its outstanding shares of Common Stock
into a larger number of shares of Common Stock, (iii) combine its outstanding
shares of Common Stock into a smaller number of shares of Common Stock or (iv)
increase or decrease the number of shares of Common Stock outstanding by
reclassification of its Common Stock, then the number of shares of Common Stock
issuable upon exercise of each Warrant immediately after the happening of such
event shall be adjusted to a number determined by multiplying the number of
shares of Common Stock that such holder would have owned or have been entitled
to receive upon exercise had such Warrants been exercised immediately prior to
the happening of the events described above (or, in the case of a dividend or
distribution of Common Stock or other shares of capital stock, immediately prior
to the record date therefor) by a fraction, the numerator of which shall be the
total number of shares of Common Stock outstanding immediately after the
happening of the events described above and the denominator of which shall be
the total number of shares of Common Stock outstanding
17
immediately prior to the happening of the events described above; and subject to
Section 4.8, the Exercise Price for each Warrant shall be adjusted to a number
determined by dividing the Exercise Price immediately prior to such event by the
aforementioned fraction. An adjustment made pursuant to this Section 4.1 shall
become effective immediately after the effective date of such event, retroactive
to the record date therefor in the case of a dividend or distribution in shares
of Common Stock or other shares of the Company's Capital Stock.
SECTION 4.2. Cash Dividends and Other Distributions. In the event
that at any time or from time to time the Company shall distribute to all
holders of Common Stock (i) any dividend or other distribution of cash,
evidences of its indebtedness, shares of its capital stock or any other assets,
properties or debt securities or (ii) any options, warrants or other rights to
subscribe for or purchase any of the foregoing (provided, however, that no
adjustment shall be made upon the exercise of such rights, options or warrants,
and other than, in each case, (w) the issuance of any rights under a shareholder
rights plan, (x) any dividend or distribution described in Section 4.1, (y) any
rights, options, warrants or securities described in Section 4.3 and (z) any
cash dividends or other cash distributions from current or retained earnings),
then the number of shares of Common Stock issuable upon the exercise of each
Warrant shall be increased to a number determined by multiplying the number of
shares of Common Stock issuable upon the exercise of such Warrant immediately
prior to the record date for any such dividend or distribution by a fraction,
the numerator of which shall be the Current Market Value per share of Common
Stock on the record date for such dividend or distribution and the denominator
of which shall be such Current Market Value per share of Common Stock on the
record date for such dividend or distribution less the sum of (x) the amount of
cash, if any, distributed per share of Common Stock and (y) the fair value (as
determined in good faith by the Board of Directors, whose determination shall be
evidenced by a board resolution filed with the Warrant Agent, a copy of which
will be sent to Holders upon request) of the portion, if any, of the
distribution applicable to one share of Common Stock consisting of evidences of
indebtedness, shares of stock, securities, other assets or property, warrants,
options or subscription or purchase rights; and, subject to Section 4.8, the
Exercise Price shall be adjusted to a number determined by dividing the Exercise
Price immediately prior to such record date by the aforementioned fraction. Such
adjustments shall be made whenever any distribution is made and shall become
effective as of the date of distribution, retroactive to the record date for any
such distribution; provided, however, that the Company is not required to make
an adjustment pursuant to this Section 4.2 if at the time of such distribution
the Company makes the same distribution to Holders of Warrants as it makes to
holders of Common Stock pro rata based on the number of shares of Common Stock
for which such Warrants are exercisable (whether or not currently exercisable).
No adjustment shall be made pursuant to this Section 4.2 which shall have the
effect of decreasing the number of shares of Common Stock issuable upon exercise
of each Warrant or increasing the Exercise Price.
SECTION 4.3. Rights Issue to All Holders of Common Stock. In the
event that at any time or from time to time the Company shall issue to all
holders of Common Stock without any charge, rights, options or warrants
entitling the holders thereof to subscribe for shares of Common Stock (provided,
however, that no adjustment shall be made upon the exercise of such rights,
options or warrants), or securities convertible into or exchangeable or
exercisable for Common Stock, entitling such holders to subscribe for or
purchase shares of Common Stock
18
(provided, however, that no adjustment shall be made upon the conversion,
exchange or exercise of such securities (other than issuances specified in this
and the foregoing clause which are made as the result of anti-dilution
adjustments in such securities)) at a price per share that is lower at the
record date for such issuance than the then Current Market Value per share of
Common Stock (other than in connection with the adoption of a shareholder rights
plan by the Company), then the number of shares of Common Stock issuable upon
the exercise of each Warrant shall be increased to a number determined by
multiplying the number of shares of Common Stock theretofore issuable upon
exercise of each Warrant by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding on the date of issuance of such
rights, options, warrants or securities plus the number of additional shares of
Common Stock offered for subscription or purchase or into or for which such
securities that are issued are convertible, exchangeable or exercisable, and the
denominator of which shall be the number of shares of Common Stock outstanding
on the date of issuance of such rights, options, warrants or securities plus the
total number of shares of Common Stock which the aggregate consideration
expected to be received by the Company (assuming the exercise or conversion of
all such rights, options, warrants or securities) would purchase at the then
Current Market Value per share of Common Stock. Subject to Section 4.8, in the
event of any such adjustment, the Exercise Price shall be adjusted to a number
determined by dividing the Exercise Price immediately prior to such date of
issuance by the aforementioned fraction. Such adjustment shall be made
immediately after such rights, options or warrants are issued and shall become
effective, retroactive to the record date for the determination of stockholders
entitled to receive such rights, options, warrants or securities.
Notwithstanding anything to the contrary in this Article 4, no adjustment to the
number of Warrant Shares issuable upon exercise of the Warrants or to the
Exercise Price shall be made as a result of the offering by the Company to all
holders of its Common Stock of rights, options or warrants entitling the holders
thereof to subscribe for Common Stock or securities convertible into or
exchangeable or exercisable for shares of Common Stock, resulting from the
operation of any anti-dilution provision in any warrant or other security of the
Company convertible into, exercisable or exchangeable for Common Stock of the
Company, which such warrant or security is outstanding on the date of this
Agreement. No adjustment shall be made pursuant to this Section 4.3 which shall
have the effect of decreasing the number of shares of Common Stock purchasable
upon exercise of each Warrant or of increasing the Exercise Price.
SECTION 4.4. Other Issuances of Common Stock or Rights. In the event
that at any time or from time to time the Company shall issue (i) shares of
Common Stock (subject to the provisions below), (ii) rights, options or warrants
entitling the holder thereof to subscribe for shares of Common Stock (provided,
however, that no adjustment shall be made upon the exercise of such rights,
options or warrants), or (iii) securities convertible into or exchangeable or
exercisable for Common Stock (provided, however, that no adjustment shall be
made upon the conversion, exchange or exercise of such securities (other than
issuances specified in (i), (ii) or (iii) which are made as the result of
anti-dilution adjustments in such securities)), at a price per share at the
record date of such issuance that is less than the then Current Market Value per
share of Common Stock, then the number of shares of Common Stock issuable upon
the exercise of each Warrant shall be increased to a number determined by
multiplying the number of shares of Common Stock theretofore issuable upon
exercise of each Warrant by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding immediately after such sale or
19
issuance plus the number of additional shares of Common Stock offered for
subscription or purchase or into or for which such securities that are issued
are convertible, exchangeable or exercisable, and the denominator of which shall
be the number of shares of Common Stock outstanding immediately prior to such
sale or issuance plus the total number of shares of Common Stock which the
aggregate consideration expected to be received by the Company (assuming the
exercise or conversion of all such rights, options, warrants or securities, if
any) would purchase at the then Current Market Value per share of Common Stock,
and subject to Section 4.8 the Exercise Price shall be adjusted to a number
determined by dividing the Exercise Price immediately prior to such date of
issuance by the aforementioned fraction; provided, however, that no adjustment
to the number of Warrant Shares issuable upon the exercise of the Warrants or to
the Exercise Price shall be made as a result of (i) the issuance of shares of
Common Stock under any warrants, options or other rights existing on the date
hereof, (ii) the issuance of shares of Common Stock in bona fide public or
private offerings that are underwritten or in which a placement agent is
retained by the Company or (iii) the issuance of options, rights or shares of
Common Stock pursuant to any option, under any employee benefit plans approved
by the Board of Directors. Such adjustments shall be made whenever such rights,
options or warrants or convertible securities are issued. No adjustment shall be
made pursuant to this Section 4.4 which shall have the effect of decreasing the
number of shares of Common Stock issuable upon exercise of each warrant or of
increasing the Exercise Price. For purposes of Section 4.4 only, any issuance of
Common Stock, or rights, options or warrants to subscribe for, or other
securities convertible into or exercisable or exchangeable for, Common Stock,
which issuance (or agreement to issue) (A) is in exchange for or otherwise in
connection with the bona fide acquisition of property (excluding any such
exchange exclusively for cash but including any such exchange incident to an
acquisition by merger or the establishment or modification of any commercial
relationship by contract) of any Person and (B) is at a price per share
determined by the Board of Directors to be equal to the fair market value
thereof at the time an agreement in principle is reached or at the time a
definitive agreement is entered into, except that in the event the fair market
value exceeds $30,000,000, the Issuers shall be required to obtain an opinion
from financial advisors with respect to the fairness to the Issuers (or Company,
as appropriate) of the transaction from a financial point of view, shall be
deemed to have been made at a price per share equal to the Current Market Value
per share at the record date with respect to such issuance (the time of closing
or consummation of such exchange or acquisition) if such definitive agreement is
entered into within 90 days of the date of such agreement in principle.
SECTION 4.5. Combination; Liquidation. (a) Except as provided in
Section 4.5(b), in the event of a Combination, each Holder shall have the right
to receive upon exercise of the Warrants the kind and amount of shares of
capital stock or other securities or property which such Holder would have been
entitled to receive upon or as a result of such Combination had such Warrant
been exercised immediately prior to such event. Unless paragraph (b) is
applicable to a Combination, the Company shall provide that the surviving or
acquiring Person (the "Successor Company") in such Combination will enter into
an agreement with the Warrant Agent or the Initial Warrant Agent, as applicable,
confirming the Holders' rights pursuant to this Section 4.5(a) and providing for
adjustments, which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article 4. The provisions of this Section
4.5(a) shall similarly apply to successive Combinations involving any Successor
Company.
20
(b) In the event of (i) a Combination where consideration to the
holders of Common Stock in exchange for their shares is payable solely in cash
or (ii) the dissolution, liquidation or winding-up of the Company, the holders
of the Warrants shall be entitled to receive, upon surrender of their Warrant
Certificates, distributions on an equal basis with the holders of Common Stock
or other securities, issuable upon exercise of the Warrants, as if the Warrants
had been exercised immediately prior to such event, less the Exercise Price.
In case of any Combination described in this Section 4.5(b), the
surviving or acquiring Person and, in the event of any dissolution, liquidation
or winding-up of the Company, the Company shall deposit promptly with the
Warrant Agent or the Initial Warrant Agent, as applicable, the funds, if any,
necessary to pay to the holders of the Warrants the amounts to which they are
entitled as described above. After such funds and the surrendered Warrant
Certificates are received, the Warrant Agent is required to deliver a check in
such amount as is appropriate (or, in the case of consideration other than cash,
such other consideration as is appropriate) to such Person or Persons as it may
be directed in writing by the Holders surrendering such Warrants.
SECTION 4.6. Other Events. If any event occurs as to which the
foregoing provisions of this Article 4 are not strictly applicable or, if
strictly applicable, would not, in the good faith judgment of the Board of
Directors, fairly and adequately protect the purchase rights of the Warrants in
accordance with the essential intent and principles of such provisions, then
such Board of Directors shall make such adjustments in the application of such
provisions, in accordance with such essential intent and principles, as shall be
reasonably necessary, in the good faith opinion of such Board of Directors, to
protect such purchase rights as aforesaid, but in no event shall any such
adjustment have the effect of increasing the Exercise Price or decreasing the
number of shares of Common Stock issuable upon exercise of any Warrant.
SECTION 4.7. Superseding Adjustment. Upon the expiration of any
rights, options, warrants or conversion or exchange privileges which resulted in
adjustments pursuant to this Article 4, if any thereof shall not have been
exercised, the number of Warrant Shares issuable upon the exercise of each
Warrant shall be readjusted pursuant to the applicable section of Article 4 as
if (A) the only shares of Common Stock issuable upon exercise of such rights,
options, warrants, conversion or exchange privileges were the shares of Common
Stock, if any, actually issued upon the exercise of such rights, options,
warrants or conversion or exchange privileges and (B) shares of Common Stock
actually issued, if any, were issuable for the consideration actually received
by the Company upon such exercise plus the aggregate consideration, if any,
actually received by the Company for the issuance, sale or grant of all such
rights, options, warrants or conversion or exchange privileges whether or not
exercised and the Exercise Price shall be readjusted inversely; provided,
however, that no such readjustment shall (except by reason of an intervening
adjustment under Section 4.1) have the effect of decreasing the number of
Warrant Shares purchasable upon the exercise of each Warrant or increase the
Exercise Price by an amount in excess of the amount of the adjustment initially
made in respect of the issuance, sale or grant of such rights, options, warrants
or conversion or exchange privileges.
21
SECTION 4.8. Minimum Adjustment. The adjustments required by the
preceding Sections of this Article 4 shall be made whenever and as often as any
specified event requiring an adjustment shall occur, except that no adjustment
of the Exercise Price or the number of shares of Common Stock issuable upon
exercise of Warrants that would otherwise be required shall be made unless and
until such adjustment either by itself or with other adjustments not previously
made increases or decreases by at least 1% the Exercise Price or the number of
shares of Common Stock issuable upon exercise of Warrants immediately prior to
the making of such adjustment. Any adjustment representing a change of less than
such minimum amount shall be carried forward and made as soon as such
adjustment, together with other adjustments required by this Article 4 and not
previously made, would result in a minimum adjustment. For the purpose of any
adjustment, any specified event shall be deemed to have occurred at the close of
business on the date of its occurrence. In computing adjustments under this
Article 4, fractional interests in Common Stock shall be taken into account to
the nearest one-hundredth of a share.
SECTION 4.9. Notice of Adjustment. Whenever the Exercise Price or
the number of shares of Common Stock and other property, if any, issuable upon
exercise of the Warrants is adjusted, as herein provided, the Company shall
deliver to the Warrant Agent a certificate of a firm of independent accountants
selected by the Board of Directors (who may be the regular accountants employed
by the Company) setting forth, in reasonable detail, the event requiring the
adjustment and the method by which such adjustment was calculated (including a
description of the basis on which (i) the Board of Directors determined the fair
value of any evidences of indebtedness, other securities or property or
warrants, options or other subscription or purchase rights and (ii) the Current
Market Value of the Common Stock was determined, if either of such
determinations were required), and specifying the Exercise Price and the number
of shares of Common Stock issuable upon exercise of Warrants after giving effect
to such adjustment. The Company shall promptly cause the Warrant Agent to mail a
copy of such certificate to each Holder in accordance with Section 7.6. The
Warrant Agent shall be entitled to rely on such certificate and shall be under
no duty or responsibility with respect to any such certificate, except to
exhibit the same from time to time, to any Holder desiring an inspection thereof
during reasonable business hours. The Warrant Agent shall not at any time be
under any duty or responsibility to any Holder to determine whether any facts
exist which may require any adjustment of the Exercise Price or the number of
shares of Common Stock or other stock or property issuable on exercise of the
Warrants, or with respect to the nature or extent of any such adjustment when
made, or with respect to the method employed in making such adjustment or the
validity or value of any shares of Common Stock, evidences of indebtedness,
warrants, options, or other securities or property.
SECTION 4.10. Notice of Certain Transactions. In the event that the
Company shall propose to (a) pay any dividend payable in securities of any class
to the holders of its Common Stock or to make any other non-cash dividend or
distribution to the holders of its Common Stock, (b) offer the holders of its
Common Stock rights to subscribe for or to purchase any securities convertible
into shares of Common Stock or shares of stock of any class or any other
securities, rights or options, (c) issue any (i) shares of Common Stock, (ii)
rights, options or warrants entitling the holders thereof to subscribe for
shares of Common Stock, or (iii) securities convertible into or exchangeable or
exercisable for Common Stock (in the case of (i), (ii) and (iii),
22
if such issuance or adjustment would result in an adjustment hereunder), (d)
effect any capital reorganization, reclassification, consolidation or merger,
(e) effect the voluntary or involuntary dissolution, liquidation or winding-up
of the Company or (f) make a tender offer or exchange offer with respect to the
Common Stock, the Company shall within 10 days send to the Warrant Agent and the
Warrant Agent or the Initial Warrant Agent, as applicable, shall within 10 days
of its receipt thereof send the Holder a notice (in such form as shall be
furnished to the Warrant Agent or the Initial Warrant Agent, as applicable, by
the Company) of such proposed action or offer. Such notice shall be mailed by
the Warrant Agent or the Initial Warrant Agent, as applicable, to the Holders at
their addresses as they appear in the Certificate Register, which shall specify
the record date for the purposes of such dividend, distribution or rights, or
the date such issuance or event is to take place and the date of participation
therein by the holders of Common Stock, if any such date is to be fixed, and
shall briefly indicate the effect of such action on the Common Stock and on the
number and kind of any other shares of stock and on other property, if any, and
the number of shares of Common Stock and other property, if any, issuable upon
exercise of each Warrant and the Exercise Price after giving effect to any
adjustment pursuant to Article 4 which will be required as a result of such
action. Such notice shall be given as promptly as possible and (x) in the case
of any action covered by clause (a) or (b) above, at least 10 days prior to the
record date for determining holders of the Common Stock for purposes of such
action or (y) in the case of any other such action, at least 20 days prior to
the date of the taking of such proposed action or the date of participation
therein by the holders of Common Stock, whichever shall be the earlier.
SECTION 4.11. Adjustment to Warrant Certificate. The form of Warrant
Certificate need not be changed because of any adjustment made pursuant to this
Article 4, and Warrant Certificates issued after such adjustment may state the
same Exercise Price and the same number of shares of Common Stock issuable upon
exercise of the Warrants as are stated in the Warrant Certificates initially
issued pursuant to this Agreement. The Company, however, may at any time in its
sole discretion make any change in the form of Warrant Certificate that it may
deem appropriate to give effect to such adjustments and that does not affect the
substance of the Warrant Certificate, and any Warrant Certificate thereafter
issued or countersigned, whether in exchange or substitution for an outstanding
Warrant Certificate or otherwise, may be in the form as so changed.
SECTION 4.12. Exceptions to Antidilution Provisions. Without
limiting any other exception contained in this Article 4, and in addition
thereto, no adjustment need be made for:
(i) grants or exercises of rights granted to employees,
directors or consultants of the Company or any of its subsidiaries or
shares of Common Stock issued or granted to such persons under
equity-based incentive or corporation plans or otherwise, whether or not
upon the exercise, exchange or conversion of any such rights;
23
(ii) options, warrants or other agreements or rights to purchase
capital stock of the Company entered into prior to the date of the
issuance of the Warrants and any issuance of shares of Common Stock in
connection therewith;
(iii) rights to purchase shares of Common Stock pursuant to a
Company plan for reinvestment of dividends or interest;
(iv) a change in the par value of shares of Common Stock
(including a change from par value to no par value or vice versa);
(v) the consummation of the Holding Company Reorganization; and
(vi) bona fide public offerings or private placements pursuant
to Section 4(2) of the Securities Act, Regulation D thereunder or
Regulation S of any security trading on any national securities
exchange, the Nasdaq system or in the over the counter market, or of a
security directly or indirectly convertible or exchangeable for any such
security (the latter security being a "Reference Security"), involving
at least one investment bank of national reputation, if such security is
sold to investors at a price equal to the closing sale, bid or ask price
(whichever is customary)(less such discount, if any, as such investment
bank shall reasonably determine is necessary to permit the consummation
of such public offering or private placement) of such security or the
Reference Security on the date of the public offering or private
placement.
ARTICLE 5
Warrant Agent
SECTION 5.1. Appointment of Warrant Agent. The Company hereby
appoints (a) the Initial Warrant Agent to act as agent for the Company from the
date hereof until the Separation Date, (the "Initial Period"), and (b) the
Warrant Agent to act as agent for the Company from the Separation Date until the
Expiration Date, both in accordance with the express provisions of this
Agreement and the Initial Warrant Agent and Warrant Agent hereby accept such
appointments. For purposes of this Article 5, the term "Warrant Agent" shall
refer to both the Initial Warrant Agent with respect to the Initial Period and
the Warrant Agent with respect to subsequent to the Initial Period. Upon the
Separation Date, the Initial Warrant Agent shall transfer to the Warrant Agent
the Certificate Register and such other documents as the Warrant Agent shall
reasonably request.
SECTION 5.2. Right and Duties of Warrant Agent. (a) In acting under
this Warrant Agreement and in connection with the Warrant Certificates, the
Warrant Agent is acting solely as agent for the Company and does not assume any
obligation or relationship of agency or trust for or with any of the holders of
Warrant Certificates or beneficial owners of Warrants.
24
(b) The Warrant Agent may consult with counsel satisfactory to it
(who may be counsel to the Company), and the advice of such counsel shall be
full and complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in accordance with the
advice of such counsel.
(c) The Warrant Agent shall be protected and shall incur no
liability for or in respect of any action taken or thing suffered by it in
reliance upon any Warrant Certificate, notice, direction, consent, certificate,
affidavit, statement, opinion or other paper or document reasonably believed by
it to be genuine and to have been presented or signed by the proper parties.
(d) The Warrant Agent shall be obligated to perform only such duties
as are specifically set forth herein and in the Warrant Certificates, and no
implied duties or obligations of the Warrant Agent shall be read into this
Agreement or the Warrant Certificates. The Warrant Agent shall not be
accountable or under any duty or responsibility for the use by the Company of
any of the Warrant Certificates countersigned by the Warrant Agent and delivered
by it to the Holders or on behalf of the Holders pursuant to this Agreement or
for the application by the Company of the proceeds of the Warrants. The Warrant
Agent shall have no duty or responsibility in case of any default by the Company
in the performance of its covenants or agreements contained herein or in the
Warrant Certificates or in the case of the receipt of any written demand from a
Holder with respect to such default, including any duty or responsibility to
initiate or attempt to initiate any proceedings at law or otherwise.
(e) The Warrant Agent shall not at any time be under any duty or
responsibility to any Holder to determine whether any facts exist that may
require an adjustment of the number of shares of Common Stock issuable upon
exercise of each Warrant or the Exercise Price, or with respect to the nature or
extent of any adjustment when made or with respect to the method employed or
provided to be employed herein or in any supplemental agreement in making the
same. The Warrant Agent shall not be accountable with respect to the validity or
value of any shares of Common Stock or of any securities or property which may
at any time be issued or delivered upon the exercise of any Warrant or upon any
adjustment pursuant to Article 4, and it makes no representation with respect
thereto. The Warrant Agent shall not be responsible for any failure of the
Company to make any cash payment or to issue, transfer or deliver any shares of
Common Stock or stock certificates upon the surrender of any Warrant Certificate
for the purpose of exercise or upon any adjustment pursuant to Article 4, or to
comply with any of the covenants of the Company contained in Article 4.
(f) The Warrant Agent may perform any of its duties through agents
and shall have no liability for the acts or omissions of such agents appointed
with due care.
SECTION 5.3. Individual Rights of Warrant Agent. Except as may be
prohibited by law, the Warrant Agent and any stockholder, director, officer or
employee of the Warrant Agent may buy, sell or deal in any of the Warrants or
other securities of the Company or its affiliates or become pecuniarily
interested in transactions in which the Company or its affiliates may be
interested, or contract with or lend money to the Company or its affiliates or
otherwise act as fully and freely as though it were not the Warrant Agent under
this Agreement. Nothing herein
25
shall preclude the Warrant Agent from acting in any other capacity for the
Company or for any other legal entity.
SECTION 5.4. Warrant Agent's Disclaimer. The Warrant Agent shall not
be responsible for and makes no representation as to the validity or adequacy of
this Agreement or the Warrant Certificates and it shall not be responsible for
any statement in this Agreement or the Warrant Certificates other than its
countersignature thereon.
SECTION 5.5. Compensation and Indemnity. The Company and the Warrant
Agent have entered into an agreement pursuant to which the Company agrees to pay
the Warrant Agent from time to time compensation for its services and to
reimburse the Warrant Agent upon request for all reasonable out-of-pocket
expenses incurred by it, including the reasonable compensation and expenses of
the Warrant Agent and its directors, officers, agents and counsel. The Company
shall indemnify the Warrant Agent and its directors, officers, agents and
counsel against any and all loss, liability, damage, claim or expense (including
agents' and attorneys' fees and expenses) incurred by the Warrant Agent without
negligence, bad faith or willful misconduct on its part arising out of or in
connection with the acceptance or performance of its duties under this
Agreement. The Warrant Agent shall notify the Company promptly of any claim for
which it may seek indemnity. The Company need not reimburse any expense or
indemnify against any loss or liability incurred by the Warrant Agent through
wilful misconduct, negligence or bad faith. The Company's payment obligations
pursuant to this Section 6.5 shall survive the termination of this Agreement and
the resignation or removal of the Warrant Agent.
To secure the Company's payment obligations under this Agreement,
the Warrant Agent shall have a lien prior to the Holders on all money or
property held or collected by the Warrant Agent.
SECTION 5.6. Successor Warrant Agent. The Company agrees for the
benefit of the Holders that there shall at all times be a Warrant Agent
hereunder until all the Warrants have been exercised or are no longer
exercisable.
(a) The Warrant Agent may at any time resign by giving written
notice to the Company of such intention on its part, specifying the date on
which its desired resignation shall become effective; provided, however, that
such date shall not be less than 60 days after the date on which such notice is
given unless the Company otherwise agrees. The Warrant Agent hereunder may be
removed at any time by the filing with it of an instrument in writing signed by
or on behalf of the Company and specifying such removal and the date when it
shall become effective, which date shall not be less than 60 days after such
notice is given unless the Warrant Agent otherwise agrees. Any removal under
this Section 6.6 shall take effect upon the appointment by the Company as
hereinafter provided of a successor Warrant Agent (which shall be a bank or
trust company authorized under the laws of the jurisdiction of its organization
to exercise corporate trust powers) and the acceptance of such appointment by
such successor Warrant Agent. If a successor Warrant Agent does not take office
within 60 days after the retiring Warrant Agent resigns or is removed, the
retiring Warrant Agent or the Holders of 10% of the
26
Warrants may petition, at the expense of the Company, any court of competent
jurisdiction for the appointment of a successor.
(b) In the event that at any time the Warrant Agent shall resign, or
shall be removed, or shall become incapable of acting, or shall be adjudged a
bankrupt or insolvent, or shall commence a voluntary case under Federal
bankruptcy laws, as now or hereafter constituted, or under any other applicable
Federal or state bankruptcy, insolvency or similar law, or shall consent to the
appointment of or taking possession by a receiver, custodian, liquidator,
assignee, trustee, sequestrator (or other similar official) of the Warrant Agent
or its property or affairs, or shall make an assignment for the benefit of
creditors, or shall admit in writing its inability to pay its debts generally as
they become due, or shall take corporate action in furtherance of any such
action, or a decree or order for relief by a court having jurisdiction in the
premises shall have been entered in respect of the Warrant Agent in an
involuntary case under the Federal bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal or State bankruptcy, insolvency or
similar law, or a decree or order by a court having jurisdiction in the premises
shall have been entered for the appointment of a receiver, custodian,
liquidator, assignee, trustee, sequestrator (or similar official) of the Warrant
Agent or of its property or affairs, or any public officer shall take charge or
control of the Warrant Agent or of its property or affairs for the purpose of
rehabilitation, conservation, winding up or liquidation, a successor Warrant
Agent, qualified as aforesaid, shall be appointed by the Company by an
instrument in writing filed with the successor Warrant Agent. Upon the
appointment as aforesaid of a successor Warrant Agent and acceptance by the
successor Warrant Agent of such appointment, the Warrant Agent shall cease to be
the Warrant Agent hereunder; provided, however, that in the event of the
resignation of the Warrant Agent hereunder, such resignation shall be effective
on the earlier of (i) the date specified in the Warrant Agent's notice of
resignation and (ii) the appointment and acceptance of a successor Warrant Agent
hereunder.
(c) Any successor Warrant Agent appointed hereunder shall execute,
acknowledge and deliver to its predecessor and to the Company an instrument
accepting such appointment hereunder, and thereupon such successor Warrant
Agent, without any further act, deed or conveyance, shall become vested with all
the rights and obligations of such predecessor with like effect as if originally
named as Warrant Agent hereunder, and such predecessor, upon payment of its
charges and disbursements then unpaid, shall thereupon become obligated to
transfer, deliver and pay over, and such successor Warrant Agent shall be
entitled to receive, all monies, securities and other property on deposit with
or held by such predecessor, as Warrant Agent hereunder.
(d) Any corporation into which the Warrant Agent hereunder may be
merged or consolidated, or any corporation resulting from any merger or
consolidation to which the Warrant Agent shall be a party, or any corporation to
which the Warrant Agent shall sell or otherwise transfer all or substantially
all the corporate trust or stock transfer assets and business of the Warrant
Agent, provided that it shall be qualified as aforesaid, shall be the successor
Warrant Agent under this Agreement without the execution or filing of any paper
or any further act on the part of any of the parties hereto.
27
ARTICLE 6
Miscellaneous
SECTION 6.1. Financial Statements and Reports of the Company. The
Company agrees (a) to file with the Warrant Agent or Initial Warrant Agent, as
applicable, and to provide to each Holder, upon written request of such Holder
to the Company, without cost to such Holder, copies of the annual and quarterly
reports and documents that the Company files with the Securities and Exchange
Commission (to the extent such filings are accepted by the Commission and
whether or not the Company has a class of securities registered under the
Exchange Act or that the Company would be required to file were it subject to
Section 13 or 15 of the Exchange Act, within 15 days after the date of such
filing or the date on which the Company would be required to file such reports
or documents, and all such annual or quarterly reports shall include the
geographic segment financial information as has heretofore been disclosed by the
Company in its public filings with the Securities and Exchange Commission, and
(b) if filing such reports and documents is not accepted by the Securities and
Exchange Commission or is prohibited under the Exchange Act, to supply at the
Company's expense copies of such reports and documents to any prospective Holder
promptly upon request.
SECTION 6.2. Third-Party Beneficiaries. The Holders shall be
third-party beneficiaries to the agreements made hereunder between the Company,
on the one hand, and the Warrant Agent or the Initial Warrant Agent, as
applicable, on the other hand, and each Holder shall have the right to enforce
such agreements directly to the extent it deems such enforcement necessary or
advisable to protect its rights or the rights of Holders hereunder.
SECTION 6.3. Rights of Holders. Holders of unexercised Warrants are
not entitled to (i) receive dividends or other distributions, (ii) receive
notice of or vote at any meeting of the stockholders, (iii) consent to any
action of the stockholders, (iv) receive notice as stockholders of any other
proceedings of the Company, (v) exercise any preemptive rights or (vi) exercise
any other rights whatsoever as stockholders of the Company.
SECTION 6.4. Amendment. This Agreement may be amended by the parties
hereto without the consent of any Holder for the purpose of curing any
ambiguity, or of curing, correcting or supplementing any defective provision
contained herein or adding or changing any other provisions with respect to
matters or questions arising under this Agreement as the Company and the Warrant
Agent or the Initial Warrant Agent, as applicable, may deem necessary or
desirable (including without limitation any addition or modification to provide
for compliance with the transfer restrictions set forth herein); provided,
however, that such action shall not adversely affect the rights of any of the
Holders in any material respect. Any amendment or supplement to this Agreement
that has a material adverse effect on the interests of the Holders shall require
the written consent of the Holders of a majority of the then outstanding
Warrants. The consent of each Holder affected shall be required for any
amendment pursuant to which the Exercise Price would be increased or the number
of Warrant Shares issuable upon exercise of Warrants would be decreased (other
than pursuant to adjustments provided herein) or the exercise period with
respect to the Warrants would be shortened. In determining whether the Holders
of
28
the required number of Warrants have concurred in any direction, waiver or
consent, Warrants owned by the Company or by any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company shall be disregarded and deemed not to be outstanding, except that, for
the purpose of determining whether the Warrant Agent or the Initial Warrant
Agent, as applicable, shall be protected in relying on any such direction,
waiver or consent, only Warrants which the Warrant Agent or the Initial Warrant
Agent, as applicable, actually knows are so owned shall be so disregarded. Also,
subject to the foregoing, only Warrants outstanding at the time shall be
considered in any such determination.
SECTION 6.5. Notices. Any notice or communication shall be in
writing and delivered in Person or mailed by first-class mail addressed as
follows:
if to the Company:
Metricom, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxx, Xxxxxxxxxx
Attention: Chief Financial Officer
Telecopy No.: 000-000-0000
With copies to:
Xxxxxx Godward LLP
0 Xxxxxxxx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Telecopy No.: 000-000-0000
If to the Initial Warrant Agent:
Bank One Trust Company, N.A.
Xxx Xxxxx Xxxxx Xxxxxx
0xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Telecopy No.: 000-000-0000
Attention: Corporate Trust Administration
If to the Warrant Agent:
EquiServe LP
------------------------------------------
------------------------------------------
Telecopy No.
------------------------------
Attention:
------------------------------
29
The Company or the Warrant Agent by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Holder shall be mailed to
the Holder at the Holder's address as it appears on the Certificate Register and
shall be sufficiently given if so mailed within the time prescribed.
Failure to mail a notice or communication to a Holder or any defect
in it shall not affect its sufficiency with respect to other Holders. If a
notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it; provided, however, that notice
to the Warrant Agent or the Initial Warrant Agent shall be effective only upon
receipt.
SECTION 6.6. Governing Law. The laws of the State of New York shall
govern this Agreement and the Warrants.
SECTION 6.7. Successors. All agreements of the Company in this
Agreement and the Warrant Certificates shall bind its successors. All agreements
of the Warrant Agent or the Initial Warrant Agent, in this Agreement shall bind
their respective successors.
SECTION 6.8. Multiple Originals. The parties may sign any number of
copies of this Agreement. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Agreement.
SECTION 6.9. Table of Contents. The table of contents and headings
of the Articles and Sections of this Agreement have been inserted for
convenience of reference only, are not intended to be considered a part hereof
and shall not modify or restrict any of the terms or provisions hereof.
SECTION 6.10. Severability. The provisions of this Agreement are
severable, and if any clause or provision shall be held invalid, illegal or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provision, or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of this
Agreement in any jurisdiction.
[Remainder of page intentionally left blank]
30
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed as of the date first written above.
METRICOM, INC.
by /s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: President and CEO
BANKBOSTON N.A.
as Warrant Agent
by /s/ Xxxxx Xxxxx
-----------------------------
Name: Xxxxx Xxxxx
Title: Managing Director
BANK ONE TRUST COMPANY, N.A.
as Initial Warrant Agent
by /s/ Xxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
A-1
31
EXHIBIT A
FORM OF FACE OF WARRANT CERTIFICATE
[UNTIL THE SEPARATION DATE (AS DEFINED), THIS WARRANT HAS BEEN
ISSUED AS, AND MUST BE TRANSFERRED AS, A UNIT TOGETHER WITH THE ASSOCIATED 13%
SENIOR NOTES DUE 2010 (THE "NOTES") OF METRICOM, INC. ("THE COMPANY"), AND
METRICOM FINANCE, INC. EACH UNIT CONSISTS OF $1,000 PRINCIPAL AMOUNT OF NOTES
AND A WARRANT TO PURCHASE 4.75 SHARES OF COMMON STOCK OF THE COMPANY, SUBJECT TO
ADJUSTMENT UNDER CERTAIN CIRCUMSTANCES. A COPY OF THE WARRANT AGREEMENT PURSUANT
TO WHICH THE WARRANTS HAVE BEEN ISSUED IS AVAILABLE FROM THE COMPANY UPON
REQUEST.](1)
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
WARRANT AGREEMENT REFERRED TO HEREIN.]
--------
(1) To be included on Warrants issued before the Separation Date.
A-1
32
No. Certificate for _____ Warrants
WARRANTS TO PURCHASE COMMON STOCK OF METRICOM, INC.
THIS CERTIFIES THAT __________, or its registered assigns, is the
registered holder of the number of Warrants set forth above (the "Warrants").
Each Warrant entitles the holder thereof (the "Holder"), at its option and
subject to the provisions contained herein and in the Warrant Agreement referred
to below, to purchase from Metricom, Inc., a Delaware corporation (the
"Company"), 4.75 shares of Common Stock, par value of $0.001 per share, of the
Company (the "Common Stock") at the per share exercise price of $87.00 (the
"Exercise Price"). This Warrant Certificate shall terminate and become void as
of the close of business on August 15, 2000 (the "Expiration Date") or upon the
exercise hereof as to all the shares of Common Stock subject hereto. The number
of shares issuable upon exercise of the Warrants and the Exercise Price per
share shall be subject to adjustment from time to time as set forth in the
Warrant Agreement.
Each Note will be transferable only along with the corresponding
Warrant forming a unit and will not become separately transferable until the
earliest to occur of (i) August 15, 2000, (ii) an Event of Default, as defined
in the Indenture, (iii) an Exercise Event, as defined herein, or (iv) such other
date, as Xxxxxx Brothers Inc. shall determine in its sole discretion (the
"Separation Date").
This Warrant Certificate is issued under and in accordance with
a Warrant Agreement dated as of February 7, 2000 (the "Warrant Agreement"),
between the Company, Bank One Trust Company, N.A. (the "Initial Warrant Agent")
and BankBoston N.A. (the "Warrant Agent," which term shall refer to the Initial
Warrant Agent from the date hereof up to and excluding the Separation Date, and
therefore, to the Warrant Agent, and includes any successor Warrant Agent under
the Warrant Agreement), and is subject to the terms and provisions contained in
the Warrant Agreement, to all of which terms and provisions the Holder of this
Warrant Certificate consents by acceptance hereof. The Warrant Agreement is
hereby incorporated herein by reference and made a part hereof. Reference is
hereby made to the Warrant Agreement for a full statement of the respective
rights, limitations of rights, duties and obligations of the Company, the
Warrant Agent and the Holders of the Warrants. Capitalized terms used but not
defined herein shall have the meanings ascribed thereto in the Warrant
Agreement. A copy of the Warrant Agreement may be obtained for inspection by the
Holder hereof upon written request prior to the Separation Date to the Initial
Warrant Agent at Bank One Trust Company, N.A., Xxx Xxxxx Xxxxx Xxxxxx, 0xx
Xxxxx, Xxxxxxx, Xxxxxxxx 00000, Telecopy No: 000-000-0000, Attention: Corporate
Trust Administration, and from the Separation Date, to the Warrant Agent at 000
Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000.
Subject to the terms of the Warrant Agreement, the Warrants may be
exercised in whole or in part by presentation of this Warrant Certificate with
the Election to Purchase attached hereto duly executed and with the simultaneous
payment of the Exercise Price in cash (subject to adjustment) to the Warrant
Agent for the account of the Company at the office of the Warrant
33
Agent. Payment of the Exercise Price in cash shall be made by certified or
official bank check payable to the order of the Company or by wire transfer of
funds to an account designated by the Company for such purpose.
This Warrant requires the Holder to comply with certain certification
and opinion delivery requirements under certain circumstances in order to
validly exercise the Warrant.
As provided in the Warrant Agreement and subject to the terms and
conditions therein set forth, the Warrants shall be exercisable at any time on
or after August 15, 2000, provided, however, that no Warrant shall be
exercisable after February 15, 2010.
In the event the Company enters into a Combination, the Holder
hereof will be entitled to receive upon exercise of the Warrants the kind and
amount of shares of capital stock or other securities or other property of such
surviving entity as the Holder would have been entitled to receive upon or as a
result of the Combination had the Holder exercised its Warrants immediately
prior to such Combination; provided, however, that in the event that, in
connection with such Combination, consideration to holders of Common Stock in
exchange for their shares is payable solely in cash or in the event of the
dissolution, liquidation or winding-up of the Company, the Holder hereof will be
entitled to receive such cash distributions as the Holder would have received
had the Holder exercised its Warrants immediately prior to such Combination,
less the Exercise Price.
As provided in the Warrant Agreement, the number of shares of Common
Stock issuable upon the exercise of the Warrants and the Exercise Price are
subject to adjustment upon the happening of certain events.
The Company may require payment of a sum sufficient to pay all
taxes, assessments or other governmental charges in connection with the transfer
or exchange of the Warrant Certificates pursuant to Section 2.6 of the Warrant
Agreement, but not for any exchange or original issuance (not involving a
transfer) with respect to temporary Warrant Certificates, the exercise of the
Warrants or the issuance of the Warrant Shares.
Upon any partial exercise of the Warrants, there shall be
countersigned and issued to the Holder hereof a new Warrant Certificate
representing those Warrants which were not exercised. This Warrant Certificate
may be exchanged at the office of the Warrant Agent by presenting this Warrant
Certificate properly endorsed with a request to exchange this Warrant
Certificate for other Warrant Certificates evidencing an equal number of
Warrants. No fractional Warrant Shares will be issued upon the exercise of the
Warrants, but the Company shall pay an amount in cash equal to the Current
Market Value per Warrant Share on the day immediately preceding the date the
Warrant is exercised, multiplied by the fraction of a Warrant Share that would
be issuable on the exercise of any Warrant.
All shares of Common Stock issuable by the Company upon the exercise
of the Warrants shall, upon such issue, be duly and validly issued and fully
paid and non-assessable.
34
The holder in whose name the Warrant Certificate is registered may
be deemed and treated by the Company and the Warrant Agent as the absolute owner
of the Warrant Certificate for all purposes whatsoever and neither the Company
nor the Warrant Agent shall be affected by notice to the contrary.
The Warrants do not entitle any holder hereof to any of the rights
of a shareholder of the Company.
This Warrant shall be governed by the laws of the State of New York.
This Warrant Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Warrant Agent.
METRICOM, INC.
By
-----------------------------------
Name:
Title:
DATED:
Countersigned:
---------------------------
as Warrant Agent,
By:
Authorized Signatory
35
FORM OF ELECTION TO PURCHASE WARRANT SHARES
(to be executed only upon exercise of Warrants)
METRICOM, INC.
The undersigned hereby irrevocably elects to exercise Warrants at an
exercise price per Warrant (subject to adjustment) of $______ to acquire _____
shares of Common Stock, par value $0.001 per share, of Metricom, Inc. on the
terms and conditions specified within the Warrant Certificate and the Warrant
Agreement therein referred to, surrenders this Warrant Certificate and all
right, title and interest therein to Metricom, Inc. and directs that the shares
of Common Stock deliverable upon the exercise of such Warrants be registered or
placed in the name and at the address specified below and delivered thereto.
Date:____________, _____
------------------------------------------
(Signature of Owner)
------------------------------------------
(Street Address)
------------------------------------------
(City) (State) (Zip Code)
Signature Guaranteed by:
------------------------------------------
Signature must be guaranteed by an
eligible Guarantor Institution (generally,
banks, stock brokers, savings and
loan associations and credit
unions) with membership in an
approved guarantee medallion
program pursuant to Securities
and Exchange Commission
Rule 17Ad-5
--------------
The signature must correspond with the name as written upon the face of the
within Warrant Certificate in every particular, without alteration or
enlargement or any change whatsoever, and must be guaranteed.
36
Securities and/or check to be issued to:
Please insert social security or identifying number:
Name:____________________________________________
Street Address:__________________________________
City, State and Zip Code:________________________
Any unexercised Warrants represented by the Warrant Certificate to be issued to:
Please insert social security or identifying number:
Name:____________________________________________
Street Address:__________________________________
City, State and Zip Code:________________________
37
APPENDIX A
LIST OF FINANCIAL EXPERTS
----------------
BT Alex. Xxxxx
Bear, Xxxxxxx & Co., Inc.
Chase Securities Inc.
Credit Suisse First Boston Corporation
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation
ING Baring (U.S.) Securities Corporation
Xxxxxxx, Sachs & Co.
X.X. Xxxxxx Securities Inc.
Lazard Freres & Co.
Xxxxxx Brothers Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxx Xxxxxxx, Xxxx Xxxxxx & Co. Incorporated
Xxxxxxxxxxx & Co., Inc.
Prudential Securities Inc.
Xxxxxxx Xxxxx Xxxxxx Inc.
SBC Warburg Dillon Read Inc.
