Exhibit 4.4
DIGITAL MICROWAVE CORPORATION
FORM OF COMMON STOCK WARRANT AGREEMENT
COMMON STOCK WARRANT AGREEMENT dated as of _________________, ____,
between Digital Microwave Corporation, a Delaware corporation (hereinafter
called the "Company"), and ___________________________ having a corporate trust
office in _______________________________, as warrant agent (hereinafter called
the "Warrant Agent").
WHEREAS, the Company proposes to issue [Class __] Purchase Warrants (hereinafter
called the "Warrants") entitling the holders thereof to purchase an aggregate of
_________ shares of Common Stock of the Company (par value $0.01 per share)
(hereinafter called the "Shares") at an initial cash purchase price of $______
per Share at any time [after _________________ and] prior to 3:30 p.m., New York
City time, on __________________, ____ (hereinafter called the "expiration
date") (unless extended as provided in Section 9A hereof); and
[IF WARRANTS ARE ATTACHED TO OTHER SECURITIES, INSERT --
WHEREAS, the Warrants will be offered in Units, each of which consists of
_______________________ and Warrants to purchase _________ Shares; and]
WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company,
and the Warrant Agent is willing so to act, in connection with the issuance,
registration, transfer, exchange and exercise of Warrants to be issued from time
to time by the Company,
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereto agree as follows:
Section 1. Appointment of Warrant Agent. The Company hereby appoints the Warrant
Agent to act as agent for the Company in accordance with the instructions
hereinafter in this Agreement set forth, and the Warrant Agent hereby accepts
such appointment.
Section 2. Form of Warrant. The text of the Warrants and the form of election to
purchase Shares to be set forth on the reverse thereof shall be substantially as
set forth in Exhibit A attached hereto. Each Warrant shall, subject to the terms
of this Warrant Agreement, entitle the registered holder thereof to initially
purchase the number of Shares specified therein at an initial exercise price of
$______ per Share; provided, however, that the warrant exercise price and the
number of Shares issuable upon exercise of Warrants are subject to adjustment
upon the occurrence of certain events, all as hereinafter provided. The Warrants
shall be executed on behalf of the Company by the manual or facsimile signature
of the present or any future Chairman of the Board, President or Vice President
of the Company, under its seal, affixed or in facsimile, and by the manual or
facsimile signature of the present or any future Secretary or Assistant
Secretary of the Company.
The Company shall promptly notify the Warrant Agent from time to time in writing
of the number of Warrants to be issued and furnish written instructions in
connection therewith signed by an executive officer of the Company; such
notification and instructions may, but need not be, in the form of a general or
continuing authorization to the Warrant Agent.
The Warrants shall be dated by the Warrant Agent as of the date of each initial
issuance, and as of the date of issuance thereof upon any transfer or exchange
thereof.
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Section 3. Countersignature and Registration. The Warrant Agent shall maintain
books for the transfer and registration of the Warrants. Upon the initial
issuance of the Warrants, the Warrant Agent shall issue and register the
Warrants in the names of the respective registered holders thereof. The Warrants
shall be countersigned by the Warrant Agent (or by any successor to the Warrant
Agent then acting as warrant agent under this Agreement) and shall not be valid
for any purpose unless so countersigned. Such Warrants may be so countersigned,
however, by the Warrant Agent (or by its successor as warrant agent) and be
delivered by the Warrant Agent, notwithstanding that the persons whose manual or
facsimile signatures appear thereon as proper officers of the Company shall have
ceased to be such officers at the time of such countersignature or delivery.
Upon issuance of any Warrant, the Company will present the same, or cause the
same to be presented, to the Warrant Agent for countersignature of such Warrant.
Section 4. Transfers and Exchanges. The Warrant Agent shall transfer, from time
to time, any outstanding Warrants upon the books to be maintained by the Warrant
Agent for that purpose, upon the surrender thereof for transfer properly
endorsed or accompanied by appropriate instructions for transfer. Upon any such
transfer, a new Warrant of like tenor shall be issued to the transferee and the
surrendered Warrant shall be cancelled by the Warrant Agent. All such Warrants
so cancelled shall be delivered by the Warrant Agent to the Company from time to
time. The Warrants may be exchanged at the option of the holder thereof, when
surrendered at the office in ______________________________________ of the
Warrant Agent, for another Warrant, or other Warrants of different
denominations, of like tenor and representing in the aggregate the right to
purchase a like number of Shares. The Warrant Agent is hereby irrevocably
authorized to countersign and deliver, in accordance with the provisions of this
Section and Section 3 of this Agreement, such new Warrants required pursuant to
the provisions of this Section, and the Company, whenever required by the
Warrant Agent, will supply the Warrant Agent with Warrants duly executed on
behalf of the Company for such purpose.
[IF THE WARRANTS ARE ATTACHED TO OTHER SECURITIES, INSERT --
Notwithstanding the foregoing, until __________________, the Warrants shall not
be transferable apart from the _____________ to which they are attached, any
transfer of the _____________ shall be deemed a transfer of the Warrants
attached thereto, and any attempt to transfer the Warrants apart from the
___________________ shall be void and of no effect. Each Warrant shall contain a
legend to the foregoing effect.]
Section 5. Exercise of Warrants. The registered holder of each Warrant shall
have the right, which may be exercised as in such Warrant expressed, to purchase
from the Company (and the Company shall issue and sell to such registered
holder) the number of Shares specified in such Warrants, upon surrender to the
Company, at the office in _____________________________ of the Warrant Agent of
such Warrant, with the form of election to purchase on the reverse thereof duly
filled in and signed, and upon payment to the Warrant Agent for the account of
the Company of the warrant exercise price, determined in accordance with the
provisions of Section 9 of this Agreement, for the number of Shares in respect
of which such Warrant is then exercised. Payment of such warrant exercise price
may be made in cash, or by certified check or bank draft or postal or express
money order, payable in United States dollars, to the order of the Warrant
Agent. No adjustment shall be made for any dividends on any Shares issuable upon
exercise of any Warrant. Subject to Section 6, upon such surrender of Warrants,
and payment of the warrant exercise price as aforesaid, the Company shall issue
and cause to be delivered with all reasonable dispatch to or upon the written
order of the registered holder of such Warrants, and in such name or names as
such registered holder may designate, a certificate or certificates for the
number of full Shares so purchased upon the exercise of such Warrants, together
with cash, as provided in Section 9 of this Agreement, in respect of any
fraction of a Share otherwise issuable upon such surrender. 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
Shares as of the date of the surrender of such Warrants and payment of the
warrant exercise price as aforesaid; provided, however, that if, at the date of
surrender of such Warrants and payment of such warrant exercise price, the
transfer books for the Shares purchasable upon the
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exercise of such Warrants shall be closed, no such surrender of such Warrants
and no such payment of such warrant exercise price shall be effective to
constitute the person so designated to be named therein as the holder of record
of such Shares on such date, but shall be effective to constitute such person as
the holder of record of such Shares for all purposes at the opening of business
on the next succeeding day on which the transfer books for the Shares
purchasable upon the exercise of such Warrants shall be opened, and the
certificates for the Shares in respect of which such Warrants are then exercised
shall be issuable as of the date on which such books shall next be opened, and
until such date the Company shall be under no duty to deliver any certificate
for such Shares. The rights of purchase represented by the Warrants shall be
exercisable, at the election of the registered holders thereof, either as an
entirety or from time to time for part only of the Shares specified therein and,
in the event that any Warrant is exercised in respect of less than all of the
Shares specified therein at any time prior to the date of expiration of the
Warrants, a new Warrant or Warrants of like tenor will be issued for the
remaining number of Shares specified in the Warrant so surrendered, and the
Warrant Agent is hereby irrevocably authorized to countersign and to deliver the
required new Warrants pursuant to the provisions of this Section and of Section
3 of this Agreement, and the Company, whenever required by the Warrant Agent,
will supply the Warrant Agent with Warrants duly executed on behalf of the
Company for such purpose.
Section 6. Payment of Taxes. The Company will pay any documentary stamp taxes
attributable to the initial issuance of Shares issuable upon the exercise of
Warrants; provided, however, that the Company shall not be required to pay any
tax or taxes which may be payable in respect of any transfer involved in the
issue or delivery of any certificates for Shares in a name other than that of
the registered holder of Warrants in respect of which such Shares are issued and
the Company shall not be required to issue and deliver the certificates for such
Shares unless and until the holder has paid to the Company the amount of any tax
which may be payable in respect of any transfer involved in such issuance or
shall establish to the satisfaction of the Company that such tax has been paid.
Section 7. Mutilated or Missing Warrants. In case any of the Warrants shall be
mutilated, lost, stolen or destroyed, the Company will issue and the Warrant
Agent will countersign and deliver in exchange and substitution for and upon
cancellation of the mutilated Warrant, or in lieu of and substitution for the
Warrant lost, stolen or destroyed, a new Warrant of like tenor and representing
an equivalent right or interest, but only upon receipt of evidence satisfactory
to the Company and the Warrant Agent of such loss, theft or destruction of such
Warrants and indemnity, if requested, also satisfactory to them. Applicants for
such substitute Warrants shall also comply with such other reasonable
regulations and pay such other reasonable charges as the Company or the Warrant
Agent may prescribe. Any such new Warrant shall constitute an original
contractual obligation of the Company whether or not the allegedly lost, stolen,
mutilated or destroyed Warrant shall be at any time enforceable by anyone.
Section 8. Reservation of Shares, etc. Prior to the issuance of any Warrants
there shall have been reserved, and the Company shall at all times through the
expiration date keep reserved, out of its authorized and unissued Common Stock,
a number of Shares sufficient to provide for the exercise of the rights of
purchase represented by the Warrants, and the Transfer Agent for the Shares and
every subsequent Transfer Agent for the Shares issuable upon the exercise of any
of the rights of purchase aforesaid are hereby irrevocably authorized and
directed at all times to reserve such number of authorized and unissued Shares
as shall be requisite for such purpose. The Company will keep a copy of this
Agreement on file with the Transfer Agent for the Shares and with every
subsequent Transfer Agent for the Shares issuable upon the exercise of the
rights of purchase represented by the Warrants. The Warrant Agent is hereby
irrevocably authorized to requisition from time to time from such Transfer Agent
certificates required to honor outstanding Warrants that have been exercised.
The Company will supply such Transfer Agent with duly executed certificates for
such purpose and will itself provide or otherwise make available any cash which
may be issuable as provided in Section 9 of this Agreement. All Warrants
surrendered in the exercise of the rights thereby evidenced or surrendered for
transfer, exchange or partial exercise shall be cancelled by the Warrant Agent
and shall thereafter be delivered to the Company.
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Section 9. Warrant Price; Adjustments.
A. The warrant price per share at which Shares shall be purchasable upon
exercise of Warrants (herein called the "warrant exercise price") to and
including the expiration date (unless the expiration date is extended as
provided below in this Section 9A) shall be $______ per share, or, if adjusted
as provided in this Section, shall be such price as so adjusted. The Warrants
will not be exercisable prior to [the close of business on the date of any
initial issuance thereof] [_____________________] and will expire at 3:30 p.m.,
New York City time, on the expiration date; provided that the Company reserves
the right to, and may, in its sole discretion, at any time and from time to
time, at such time or times as the Company so determines, extend the expiration
date of the Warrants for such periods of time as it chooses; further provided
that in no case may the expiration date of the Warrants (as extended) be
extended beyond five years from the expiration date set forth above. Whenever
the expiration date of the Warrants is so extended, the Company shall at least
20 days prior to the then expiration date cause to be mailed to the Warrant
Agent and the registered holders of the Warrants in accordance with the
provisions of Section 17 hereof a notice stating that the expiration date has
been extended and setting forth the new expiration date.
B. The above provision is, however, subject to the following:
(1) The warrant purchase price, the number of Shares purchasable upon exercise
of each Warrant and the number of Warrants outstanding shall be subject to
adjustment as follows:
(a) In case the Company shall at any time after the date of this Agreement (i)
pay a dividend, or make a distribution, on the Common Stock which is payable in
shares of its capital stock (whether shares of Common Stock or of capital stock
of any other class), (ii) subdivide or reclassify its outstanding shares of
Common Stock into a greater number of securities (including shares of Common
Stock), or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares (including shares of Common Stock), the number
of shares purchasable upon exercise of each Warrant immediately prior to the
occurrence of such event shall be adjusted so that the holder of each Warrant
shall be entitled to receive upon payment of the warrant purchase price the
aggregate number of shares of the Company which, if such Warrant had been
exercised immediately prior to the occurrence of such event, such holder would
have owned or have been entitled to receive immediately after the occurrence of
such event. An adjustment made pursuant to this subparagraph (a) shall become
effective immediately after the record date in the case of a dividend and shall
become effective immediately after the effective date in the case of a
subdivision or combination. If, as a result of an adjustment made pursuant to
this subparagraph (a), the holder of any Warrant thereafter exercised shall
become entitled to receive shares of two or more classes of capital stock of the
Company, the Board of Directors of the Company (whose determination shall be
conclusive) shall determine the allocation between or among shares of such
classes of capital stock.
In the event that at any time, as a result of an adjustment made pursuant to
this subparagraph (a), the holder of any Warrant thereafter exercised shall
become entitled to receive any shares or other securities of the Company other
than shares of Common Stock, thereafter the number of such other shares so
received upon exercise of any Warrant shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the shares of Common Stock contained in this
paragraph, and other provisions of this paragraph 9B(1) with respect to the
shares of Common Stock shall apply on like terms to any such other shares or
other securities.
[(b) In case the Company shall fix a record date for the issuance of rights or
warrants to all holders of its Common Stock entitling them (for a period
expiring within 45 days after such record date) to subscribe for or purchase
Common Stock at a price per share less than the current market price per share
of Common Stock (as defined in subparagraph (e) below) at such record date, the
warrant purchase price shall be determined by
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multiplying the warrant purchase price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of Shares
of Common Stock outstanding on such record date plus the number of Shares of
Common Stock which the aggregate offering price of the total number of Shares so
offered would purchase at such current market price, and the denominator of
which shall be the number of Shares of Common Stock outstanding on such record
date plus the number of additional Shares of Common Stock offered for
subscription or purchase. Such adjustment shall be made successively whenever
such a record date is fixed, and shall become effective immediately after such
record date. In determining whether any rights or warrants entitle the holders
to subscribe for or purchase Shares of Common Stock at less than such current
market price, and in determining the aggregate offering price of such shares,
there shall be taken into account any consideration received by the Company for
such rights or warrants, the value of such consideration, if other than cash, to
be determined by the Board of Directors of the Company. Common Stock owned by or
held for the account of the Company or any majority owned subsidiary shall not
be deemed outstanding for the purpose of any adjustment required under this
subparagraph (b).]
[(c) In case the Company shall fix a record date for making a distribution to
all holders of its Common Stock of evidences of its indebtedness or assets
(excluding regular quarterly or other periodic or recurring cash dividends or
distributions and cash dividends or distributions paid from retained earnings or
referred to in subparagraph (a) above) or rights or warrants to subscribe or
warrants to purchase (excluding those referred to in subparagraph (b) above),
then in each such case the warrant purchase price shall be determined by
multiplying the warrant purchase price in effect immediately prior to such
record date by a fraction (x) the numerator of which shall be such current
market price (as defined in subparagraph (e) below) per Share of Common Stock on
such record date, less the then fair market value (as determined in good faith
by the Board of Directors, whose determination shall be conclusive) of the
portion of the assets or evidences of indebtedness so distributed or of such
subscription rights or warrants applicable to one share of the Common Stock and
(y) the denominator of which shall be the current market price per share of the
Common Stock on such record date. Such adjustment shall be made successively
whenever such a record date is fixed and shall become effective immediately
after such record date. Notwithstanding the foregoing, in the event that the
Company shall distribute any rights or warrants to acquire capital stock
("Rights") pursuant to this subparagraph (c), the distribution of separate
certificates representing such Rights subsequent to their initial distribution
(whether or not such distribution shall have occurred prior to the date of the
issuance of such Warrants) shall be deemed to be the distribution of such Rights
for purposes of this subparagraph (c), provided that the Company may, in lieu of
making any adjustment pursuant to this subparagraph (c) upon a distribution of
separate certificates representing such Rights, make proper provision so that
each holder of such Warrants who exercises such Warrants (or any portion
thereof) (A) before the record date for such distribution of separate
certificates shall be entitled to receive upon such exercise shares of Common
Stock issued with Rights and (B) after such record date and prior to the
expiration, redemption or termination of such Rights shall be entitled to
receive upon such exercise, in addition to the shares of Common Stock issuable
upon such exercise, the same number of such Rights as would a holder of the
number of shares of Common Stock that such Warrants so exercised would have
entitled the holder thereof to purchase in accordance with the terms and
provisions of and applicable to the Rights if such Warrants were exercised
immediately prior to the record date for such distribution. Common Stock owned
by or held for the account of the Company or any majority owned subsidiary shall
not be deemed outstanding for the purpose of any adjustment required under this
subparagraph (c).]
(d) After each adjustment of the number of shares purchasable upon exercise of
each Warrant pursuant to subparagraph 9B(1)(a), the warrant exercise price shall
be adjusted by multiplying such warrant exercise price immediately prior to such
adjustment by a fraction of which the numerator shall be the number of Shares
purchasable upon exercise of each Warrant immediately prior to such adjustment,
and the denominator of which shall be the number of Shares so purchasable
immediately thereafter. [After each adjustment of the warrant exercise price
pursuant to subparagraph 9B(1)(b) or (c), the total number of Shares or
fractional part thereof purchasable upon the exercise of each Warrant shall be
proportionately adjusted to such number of shares or fractional parts thereof as
the aggregate warrant exercise price of the number of shares or
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fractional part thereof purchasable immediately prior to such adjustment will
buy at the adjusted warrant exercise price.]
[(e) For the purpose of any computation under subparagraphs 9B(1)(b) and (c)
above, the current market price per Share of Common Stock at any date shall be
deemed to be the average of the daily closing prices for the 30 consecutive
business days commencing 45 business days before the day in question. The
closing price for each day shall be (i) if the Common Stock is listed or
admitted for trading on the Nasdaq National Market ("NASDAQ"), the last sale
price (regular way), or the average of the closing bid and ask prices (regular
way), if no sale occurred, of Common Stock, or, if the Common Stock is not
listed or admitted to trading on the Nasdaq National Market, on the principal
national securities exchange on which the Common Stock is listed or admitted to
trading or, if not listed or admitted to trading on any national securities
exchange, on NASDAQ or, (ii) if not listed or quoted as described in (i), the
mean between the closing high bid and low asked quotations of Common Stock
reported by NASDAQ, or any similar system for automated dissemination of
quotations of securities prices then in common use, if so quoted, or (iii) if
not quoted as described in clause (ii), the mean between the high bid and low
asked quotations for Common Stock as reported by the National Quotation Bureau
Incorporated if at least two securities dealers have inserted both bid and asked
quotations for Common Stock on at least 5 of the 10 preceding days. If none of
the conditions set forth above is met, the closing price of Common Stock on any
day or the average of such closing prices for any period shall be the fair
market value of Common Stock as determined by a member firm of the New York
Stock Exchange selected by the Company.]
(f) (A) Nothing contained herein shall be construed to require an adjustment as
a result of the issuance of Common Stock pursuant to, or the granting or
exercise of any rights under, the Company's [List employee and shareholder
plans, if any, that might otherwise result in adjustments].
(B) In addition, no adjustment in the warrant exercise price shall be required
unless and until the earlier of the following shall have occurred: (x) such
adjustment would require an increase or decrease of at least 1% in the warrant
exercise price or (y) a period of 3 years shall have elapsed from the date of
the occurrence of any event requiring any such adjustment pursuant to
subparagraphs 9B(1)(a)[, (b) or (c)] above. All adjustments shall be made to the
nearest one hundredth of a Share and the nearest cent, and any adjustments which
by reason of this subparagraph (f) are not required to be made shall be carried
forward cumulatively and taken into account in any subsequent adjustment which
(including such carry-forward) is required to be made under this subparagraph
(f).
(g) In any case in which this subparagraph 9B(1) shall require that an
adjustment be made retroactively immediately following a record date, the
Company may elect to defer (but only until five business days following the
mailing of the notice described in subparagraph 9B(5) below) issuing to the
holder of any Warrant exercised after such record date the Shares of the Company
issuable upon such exercise over and above the Shares issuable upon such
exercise only on the basis of the warrant exercise price prior to adjustment.
(h) The Company may, at its option, at any time until the expiration date,
reduce the then current warrant exercise price to any amount deemed appropriate
by the Board of Directors of the Company for any period not exceeding twenty
(20) consecutive days (as evidenced in a resolution adopted by such Board of
Directors), but only upon giving the notices required by subparagraph 9(B)(5)
twenty (20) days prior to taking such action.
(i) Except as herein otherwise expressly provided, no adjustment in the warrant
exercise price shall be made by reason of the issuance of Shares, or securities
convertible into or exchangeable for Shares, or securities carrying the right to
purchase any of the foregoing or for any other reason whatsoever.
(j) Irrespective of any of the adjustments in the warrant exercise price or the
number of Shares, Warrant Certificates theretofore issued may continue to
express the same prices and number of shares as are stated in a
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similar Warrant Certificate issuable initially, or at some subsequent time,
pursuant to this Agreement and such number of Shares specified therein shall be
deemed to have been so adjusted.
(2) No fractional Shares of Common Stock shall be issued upon the exercise of
Warrants. If more than one Warrant shall be exercised at one time by the same
holder, the number of full Shares which shall be issuable upon such exercise
shall be computed on the basis of the aggregate number of Shares purchased
pursuant to the Warrants so exercised. Instead of any fractional Share of Common
Stock which would otherwise be issuable upon exercise of any Warrant, the
Company shall pay a cash adjustment in respect of such fraction in an amount
equal to the same fraction of the last sales price (or bid price if there were
no sales) per Share of Common Stock, in either case as reported on NASDAQ on the
business day which next precedes the day of exercise or, if the Common Stock is
not then listed or admitted to trading on NASDAQ, an amount equal to the same
fraction of the market price per share of Common Stock (as determined in a
manner described by the Board of Directors of the Company) at the close of
business on the business day which next precedes the day of exercise.
(3) In case any of the following shall occur while any Warrants are outstanding:
(a) any reclassification or change of the outstanding Shares of Common Stock
(other than a change in par value, or from par value to no par value, or from no
par value to par value); or (b) any consolidation or merger to which the Company
is a party (other than a consolidation or a merger in which the Company is the
continuing corporation and which does not result in any reclassification of, or
change in, the outstanding shares of Common Stock issuable upon exercise of the
Warrants); or (c) any sale or conveyance to another corporation of the property
of the Company as an entirety or substantially as an entirety; then the Company,
or such successor or purchasing corporation, as the case may be, shall make
appropriate provision by amendment of this Agreement or otherwise so that the
holders of the Warrants then outstanding shall have the right at any time
thereafter, upon exercise of such Warrants, to purchase the kind and amount of
shares of stock and other securities and property receivable upon such
reclassification, change, consolidation, merger, sale or conveyance as would be
received by a holder of the number of shares of Common Stock issuable upon
exercise of such Warrant immediately prior to such reclassification, change,
consolidation, merger, sale or conveyance. Such provision shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 9. The above provisions of this
subparagraph 9B(3) shall similarly apply to successive reclassifications,
changes, consolidations, mergers, sales or conveyances.
(4) Before taking any action which would cause an adjustment decreasing the
warrant exercise price so that the warrant exercise price is below the then par
value of the shares of Common Stock, the Company will take any 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 warrant exercise price as so adjusted.
(5) Whenever the warrant exercise price then in effect is adjusted as herein
provided, the Company shall mail to each holder of the Warrants at such holder's
address as it shall appear on the books of the Company a statement setting forth
the adjusted warrant exercise price then and thereafter effective under the
provisions hereof, together with the facts, in reasonable detail, upon which
such adjustment is based.
(6) In case (i) the Company shall declare a dividend (or any other distribution)
on its Common Stock payable otherwise than in cash out of its current or
retained earnings, or (ii) the Company shall authorize the granting to the
holders of its Common Stock of rights to subscribe for or purchase any shares of
capital stock of any class or of any other rights, or (iii) there is to be any
reclassification of the Common Stock of the Company (other than a subdivision or
combination of its outstanding shares of Common Stock), or any consolidation or
merger to which the Company is a party and for which approval of any
shareholders of the Company is required, or (iv) any distribution is to be made
on or in respect of the Common Stock in connection with the dissolution,
liquidation or winding up of the Company, then the Company shall mail to each
holder of Warrants at such holder's address as it shall appear on the books of
the Company, at least twenty days (or ten days in any case
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specified in clause (i) or (ii) above) prior to the applicable record date
hereinafter specified, a notice stating (x) the record date for such dividend,
distribution or rights, or, if a record is not to be taken, the date as of which
the holders of Common Stock of record to be entitled to such dividend,
distribution or rights are to be determined, or (y) the date on which such
reclassification, consolidation, merger, dissolution, liquidation or winding up
is expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities or other property deliverable upon such
reclassification, consolidation, merger, dissolution, liquidation or winding up.
No failure to mail such notice nor any defect therein or in the mailing thereof
shall affect any such transaction or any adjustment in the warrant exercise
price required by this Section 9.
Section 10. Notice to Warrantholders. Nothing contained in this Agreement or in
any of the Warrants shall be construed as conferring upon the holders thereof
the right to vote or to consent or to receive notice as shareholders in respect
of the meetings of shareholders or the election of directors of the Company or
any other matter, or any rights whatsoever as shareholders of the Company.
Section 11. Certain Covenants of the Company.
A. So long as any unexpired Warrants remain outstanding and if required in order
to comply with the Securities Act of 1933, as amended (the "Act"), the Company
covenants and agrees that it will file such post-effective amendments to the
registration statement filed pursuant to the Act with respect to the Warrants
(File No. 33-_____) (or such other registration statements or post-effective
amendments or supplements) as may be necessary to permit the Company to deliver
to each person exercising a Warrant a prospectus meeting the requirements of
Section 10(a)(3) of the Act and otherwise complying therewith, and will deliver
such a prospectus to each such person. The Company further covenants and agrees
that it will obtain and keep effective all permits, consents and approvals of
governmental agencies and authorities, and will use its best efforts to take all
action which may be necessary to qualify the Shares for sale under the
securities laws of such of the United States, as may be necessary to permit the
free exercise of the Warrants, and the issuance, sale, transfer and delivery of
the Shares issued upon exercise of the Warrants, and to maintain such
qualifications during the entire period in which the Warrants are exercisable.
B. The Company covenants and agrees that it shall take all such action as may be
necessary to ensure that all Shares will at the time of delivery of certificates
for such Shares (subject to payment of the warrant exercise price) be duly and
validly authorized and issued and fully paid and nonassessable Shares, free from
any preemptive rights and taxes, liens, charges and security interests created
by or imposed upon the Company.
C. The Company covenants and agrees that it will take all action which may be
necessary to cause the Shares to be duly listed on the Nasdaq National Market or
any securities exchange on which the other shares of Common Stock of the Company
are listed.
Section 12. Disposition of Proceeds, etc.
A. The Warrant Agent shall account promptly to the Company with respect to
Warrants exercised and concurrently pay to the Company all moneys received by
the Warrant Agent for the purchase of Shares through the exercise of such
Warrants.
B. The Warrant Agent shall keep copies of this Agreement available for
inspection by holders of Warrants during normal business hours at its principal
office in the City of __________, __________.
Section 13. Merger or Consolidation or Change of Name of Warrant Agent. Any
corporation into which the Warrant Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which the Warrant Agent shall be a party, or any corporation succeeding to the
8
corporate trust business of the Warrant Agent, shall be the successor to the
Warrant Agent hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Warrant Agent under
the provisions of (S)15 of this Agreement. In case at the time such successor to
the Warrant Agent shall succeed to the agency created by this Agreement, and if
any of the Warrants shall have been countersigned but not delivered, any such
successor to the Warrant Agent may adopt the countersignature of the original
Warrant Agent and deliver such Warrants so countersigned; and in case at that
time any of the Warrants shall not have been countersigned, any successor to the
Warrant Agent may countersign such Warrants either in the name of the
predecessor Warrant Agent or in the name of the successor Warrant Agent; and in
all such cases such Warrant shall have the full force provided in the Warrants
and in this Agreement.
In case at any time the name of the Warrant Agent shall be changed and at such
time any of the Warrants shall have been countersigned but not delivered, the
Warrant Agent may adopt the countersignature under its prior name and deliver
Warrants so countersigned; and in case at that time any of the Warrants shall
not have been countersigned, the Warrant Agent may countersign such Warrants
either in its prior name or in its changed name; and in all such cases such
Warrants shall have the full force provided in the Warrants and in this
Agreement.
Section 14. Duties of Warrant Agent. The Warrant Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions,
by all of which the Company and the holders of Warrants, by their acceptance
thereof, shall be bound:
A. The statements contained herein and in the Warrants shall be taken as
statements of the Company, and the Warrant Agent assumes no responsibility for
the correctness of any of the same except such as describe the Warrant Agent or
action taken or to be taken by it. The Warrant Agent assumes no responsibility
with respect to the distribution of the Warrants except as herein otherwise
provided.
B. The Warrant Agent shall not be responsible for any failure of the Company to
comply with any of the covenants contained in this Agreement or in the Warrants
to be complied with by the Company.
C. The Warrant Agent may execute and exercise any of the rights or powers hereby
vested in it or perform any duty hereunder either itself or by or through its
attorneys, agents or employees, and the Warrant Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys,
agents or employees or for any loss to the Company resulting from such neglect
or misconduct, provided reasonable care shall have been exercised in the
selection and continued employment thereof.
D. The Warrant Agent may consult at any time with counsel satisfactory to it
(who may be counsel for the Company), and the Warrant Agent shall incur no
liability or responsibility to the Company or to any holder of any Warrant in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in accordance with the opinion or the advice of such counsel.
E. The Warrant Agent shall incur no liability or responsibility to the Company
or to any holder of any Warrant for any action taken in reliance on any notice,
resolution, waiver, consent, order, certificate, or other paper, document or
instrument believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties.
F. The Company agrees to pay to the Warrant Agent agreed upon compensation for
all services rendered by the Warrant Agent in the execution of this Agreement,
to reimburse the Warrant Agent for all expenses, taxes and governmental charges
and other charges of any kind and nature incurred by the Warrant Agent in the
execution of this Agreement and to indemnify the Warrant Agent and save it
harmless against any and all liabilities, including judgments, costs and
reasonable counsel fees, for anything done or omitted by the Warrant
9
Agent in the execution of this Agreement except as a result of the Warrant
Agent's negligence, bad faith or willful misconduct.
G. The Warrant Agent shall be under no obligation to institute any action, suit
or legal proceeding or to take any other action likely to involve expense unless
the Company or one or more registered holders of Warrants shall furnish the
Warrant Agent with reasonable security and indemnity for any costs and expenses
which may be incurred, but this provision shall not affect the power of the
Warrant Agent to take such action as the Warrant Agent may consider proper,
whether with or without any such security or indemnity. All rights of action
under this Agreement or under any of the Warrants may be enforced by the Warrant
Agent without the possession of any of the Warrants or the production thereof at
any trial or other proceeding relative thereto, and any such action, suit or
proceeding instituted by the Warrant Agent shall be brought in its name as
Warrant Agent, and any recovery of judgment shall be for the ratable benefit of
the registered holders of the Warrants, as their respective rights or interests
may appear.
H. The Warrant Agent and any shareholder, 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 become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to or otherwise act as
fully and freely as though it were not Warrant Agent under this Agreement.
Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.
I. The Warrant Agent shall act hereunder solely as agent and not in a
ministerial capacity, and its duties shall be determined solely by the
provisions hereof. The Warrant Agent shall not be liable for anything which it
may do or refrain from doing in connection with this Agreement except for its
own gross negligence or bad faith.
Section 15. Change of Warrant Agent. The Warrant Agent may resign and be
discharged from its duties under this Agreement by giving to the Company notice
in writing, and to the holders of the Warrants notice by publication, of such
resignation, specifying a date when such resignation shall take effect, which
notice shall be published at the expense of the Company at least once a week for
two consecutive weeks in a newspaper of general circulation in the City of New
York prior to the date so specified. The Warrant Agent may be removed by the
Company by like notice from the Company to the Warrant Agent and the holders of
Warrants at the expense of the Company. If the Warrant Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Warrant Agent. If the Company shall fail to make such
appointment within a period of 30 days after such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Warrant Agent or by the registered holder of a Warrant (who shall,
with such notice, submit his Warrant for inspection by the Company), then, at
the expense of the Company, the Warrant Agent or the registered holder of any
Warrant may apply to any court of competent jurisdiction for the appointment of
a successor to the Warrant Agent. Any successor Warrant Agent, whether appointed
by the Company or by such a court, shall be a bank or trust company, in good
standing, incorporated under the laws of any State or of the United States of
America, having at the time of its appointment as Warrant Agent a combined
capital and surplus of at least $50,000,000. After appointment the successor
Warrant Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Warrant Agent without
further act or deed; but the former Warrant Agent shall deliver and transfer to
the successor Warrant Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Failure to file or publish any notice provided for in this Section,
however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Warrant Agent or the appointment of the successor
Warrant Agent, as the case may be.
Section 16. Identity of Transfer Agent. Forthwith upon the appointment of any
Transfer Agent for the Shares or of any subsequent Transfer Agent for Shares
issuable upon the exercise of the rights of purchase represented
10
by the Warrants, the Company will file with the Warrant Agent a statement
setting forth the name and address of such Transfer Agent.
Section 17. Notices. Any notice pursuant to this Agreement to be given or made
by the Warrant Agent or by the registered holder of any Warrant to or on the
Company shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing by the Company
with the Warrant Agent) as follows:
Digital Microwave Corporation 000 Xxxx Xxxxxxx Xxx, Xxx Xxxx, Xxxxxxxxxx 00000
Attn: Chief Financial Officer
Any notice pursuant to this Agreement to be given or made by the Company or by
the registered holder of any Warrant to or on the Warrant Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing by the Warrant Agent with
the Company) as follows:
Any notice pursuant to this Agreement to be given or made by the Company or the
Warrant Agent to the registered holder of any Warrant shall be sufficiently
given or made (unless otherwise specifically provided for herein) if sent by
first-class mail, postage prepaid, addressed to said registered holder at his
address appearing on the Warrant register.
Section 18. Supplements and Amendments. The parties hereto may from time to time
supplement or amend this Agreement without the approval of any holders of
Warrants in order to cure any ambiguity or to correct or supplement any
provision contained herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions in regard to matters or
questions arising hereunder which the Company and the Warrant Agent may deem
necessary or desirable and which will not materially adversely affect the
interest of the registered holders of the Warrants. The parties hereto may also
modify or amend this Agreement and the terms of the Warrants with the consent of
the holders of not less than a majority in number of the then outstanding
unexercised Warrants affected thereby; provided that no such modification or
amendment that accelerates the expiration date, increases the exercise price,
reduces the number of outstanding Warrants the consent of the holders of which
is required for any such modification or amendment, or otherwise materially
adversely affects the rights of the holders of the Warrants, may be made without
the consent of each holder affected thereby.
Section 19. Successors. All the covenants and provisions of this Agreement by or
for the benefit of the Company or the Warrant Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.
Section 20. Law Governing Contract. This Agreement and each Warrant issued
hereunder shall be deemed to be a contract made under the laws of the State of
_____________ and for all purposes shall be construed in accordance with the
laws of said State.
Section 21. Benefits of This Agreement. Nothing in this Agreement shall be
construed to give to any person or entity other than the Company and the Warrant
Agent and the holders of Warrants any legal or equitable right, remedy or claim
under this Agreement, but this Agreement shall be for the sole and exclusive
benefit of the Company and the Warrant Agent and the holders of Warrants.
Section 22. Counterparts. This Agreement may be executed in any number of
counterparts, and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
11
[IF THE WARRANTS ARE SUBJECT TO ACCELERATION BY THE COMPANY, INSERT --
Section 23. Acceleration of Warrants by the Company.
A. At any time on or after __________________, the Company shall have the right
to accelerate any or all Warrants at any time by causing them to expire at the
close of business on the day next preceding a specified date (the "Acceleration
Date"), if the Market Price (as hereinafter defined) of the Common Stock equals
or exceeds ______ percent (___%) of the then effective warrant exercise price,
adjusted as if no changes in such warrant exercise price had been made pursuant
to subsection 9B, on any 20 Trading Days (as hereinafter defined) within a
period of 30 consecutive Trading Days ending no more than five Trading Days
prior to the date on which the Company gives notice to the Warrant Agent of its
election to accelerate the Warrants.
B. "Market Price" for each Trading Day shall be, if the Common Stock is listed
or admitted for trading on the New York Stock Exchange, the last reported sale
price, regular way (or, if no such price is reported, the average of the
reported closing bid and asked prices, regular way) of Common Stock, in either
case as reported on the New York Stock Exchange Composite Tape or, if the Common
Stock is not listed or admitted to trading on the New York Stock Exchange, on
the principal national securities exchange on which the Common Stock is listed
or admitted to trading or, if not listed or admitted to trading on any national
securities exchange, on the National Market System of NASDAQ or, if not listed
or admitted to trading on any national securities exchange or quoted on the
National Market System of NASDAQ, the average of the closing high bid and low
asked prices in the over-the-counter market, as reported by NASDAQ, or such
other system then in use, or if on any such date the Shares of Common Stock are
not quoted by any such organization, the average of the closing bid and asked
prices as furnished by any New York Stock Exchange firm selected from time to
time by the Company for the purpose. "Trading Day" shall be each Monday through
Friday, other than any day on which securities are not traded in the system or
on the exchange that is the principal market for the Common Stock, as determined
by the Board of Directors of the Company.
C. In the event of an acceleration of less than all of the Warrants, the Warrant
Agent shall select the Warrants to be accelerated by lot, pro rata or in such
other manner as it deems, in its discretion, to be fair and appropriate.
D. Notice of an acceleration specifying the Acceleration Date shall be sent by
mailing first class, postage prepaid, to each registered holder of a Warrant
Certificate representing a Warrant accelerated at such holder's address
appearing on the Warrant register not more than 60 days nor less than 30 days
before the Acceleration Date. Such notice of an acceleration also shall be given
no more than 20 days, and no less than 10 days, prior to the mailing of notice
to registered holders of Warrants pursuant to this Section, by publication at
least once in a newspaper of general circulation in the City of New York.
E. Any Warrant accelerated may be exercised until the 3:30 p.m., New York City
time, on the business day next preceding the Acceleration Date. The warrant
exercise price shall be payable as provided in Section 5.]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, all as of the day and year first above written.
DIGITAL MICROWAVE CORPORATION
By
-------------------------------------
Its
---------------------------------
Attest:
Warrant Agent
12
By
-------------------------------------
Its
---------------------------------
Attest:
13
[Form of Warrant]
Unless extended, Void After 3:30 P.M., New York City time, _______* _______,
____
[IF THE WARRANTS ARE ATTACHED TO OTHER SECURITIES, INSERT THE FOLLOWING --
[UNTIL ______________,] THE WARRANTS REPRESENTED BY THIS CERTIFICATE SHALL NOT
BE TRANSFERABLE APART FROM THE _____________ TO WHICH THEY ARE ATTACHED, ANY
TRANSFER OF THE _____________ SHALL BE DEEMED A TRANSFER OF THE WARRANTS
ATTACHED THERETO, AND ANY ATTEMPT OF TRANSFER THE WARRANTS APART FROM THE
_____________ SHALL BE VOID AND OF NO EFFECT.]
No. ___ Warrant to Purchase
____ Shares of Common Stock
CLASS __ WARRANT
DIGITAL MICROWAVE CORPORATION
FOR VALUE RECEIVED, Digital Microwave Corporation (the "Company"), upon the
surrender [after _______________] and prior to 3:30 P.M., New York City time,
________* _______, ____ (unless extended) of this Warrant for exercise, with the
exercise form on the reverse side hereof duly executed, at the office of
______________________, will sell and deliver or cause to be sold and delivered
to __________________ or assigns (the "Warrant Holder") a certificate or
certificates for the number of whole shares purchasable, as indicated above, of
fully paid and non-assessable shares of Common Stock ($1.00 par value) of the
Company (the "Shares"), for which this Warrant is exercised, at a price of
$_____ per Share (the "Warrant Price"), subject to all the terms, provisions and
conditions of a Common Stock Warrant Agreement dated as of ____________, ____
(the "Warrant Agreement"), executed by the Company and
_________________________________________________ (the "Warrant Agent"), which
Warrant Agreement is hereby incorporated herein by reference and made a part
hereof.
1. The Warrant Price shall be payable [in cash, certified check, bank draft,
postal or express money order or by bank wire transfer, in each case,] [by bank
wire transfer] in immediately available funds, payable in United States dollars,
to the order of the Warrant Agent. In certain events the Warrant Price and the
number of Shares deliverable on exercise of this Warrant are subject to
adjustments, as provided in the Warrant Agreement. No certificates for a
fractional Share will be issued. As to any fraction of a Share which would
otherwise be purchasable on the exercise of a Warrant, the Company shall pay the
cash value thereof determined as provided in the Warrant Agreement.
/*/The expiration date; see page 1 of the Warrant Agreement.
2. This Warrant is issued in accordance with the Warrant Agreement in which the
rights of the Warrant Holders and the terms, provisions and conditions upon
which this Warrant has been executed and delivered and may be exercised are more
fully set forth. Every Warrant Holder, by acceptance hereof, assents to all the
terms, provisions and conditions of the Warrant Agreement. A counterpart of the
Warrant Agreement is on file at the office of the Company in Minneapolis,
Minnesota, and at the office of the Warrant Agent in __________,
___________.
14
3. In the event this Warrant shall not be exercised on or before ________*
_______, ____, unless said date is extended as provided for in Section 9 of the
Warrant Agreement, this Warrant shall become void and all rights hereunder shall
cease.
Reference is made to the further provisions of this Warrant set forth on the
reverse hereof. Such further provisions shall for all purposes have the same
effect as though fully set forth at this place.
This Warrant shall not be valid for any purpose until it shall have been
countersigned by the Warrant Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed in its
name and on its behalf by the facsimile signatures of its duly authorized
officers and a facsimile of its seal.
Dated: ______________________
DIGITAL MICROWAVE CORPORATION
By
--
Its
---
Attest:
Countersigned:
Warrant Agent
By
--
Authorized Signature
[REVERSE OF WARRANT]
4. Subject to the provisions of paragraph 3 contained on the face of this
Warrant, (a) this Warrant, with or without other Warrants, upon surrender at the
office of the Warrant Agent, may be exchanged for another Warrant or Warrants of
like tenor in denominations entitling the Warrant Holder to purchase a like
aggregate number of Shares, but only to the extent provided in the Warrant
Agreement, or (b) this Warrant may be transferred at the office of the Warrant
Agent by the Warrant Holder or his assigns, in person or by attorney duly
authorized in writing, but only in the manner provided in the Warrant Agreement
and upon surrender of this Warrant. If this Warrant shall be exercised in part,
the Warrant Holder shall be entitled to receive, upon surrender hereof, another
Warrant or Warrants of like tenor for the number of whole Shares not purchased
upon such exercise.
5. No Warrant Holder shall be entitled to vote or receive dividends or be deemed
the holder of Shares of the Company for any purpose, nor shall anything
contained in the Warrant Agreement or herein be construed to confer upon the
Warrant Holder, as such, any of the rights of a shareholder of the Company or
any right to vote for the election of directors of the Company, or upon any
matter submitted to shareholders at any meeting thereof, or to give or withhold
consent to any action (whether upon any recapitalization, issue of securities,
reclassification of securities, consolidation, merger, conveyance or otherwise)
or to receive notice of meetings or other action affecting shareholders (except
for notices as provided for in the Warrant Agreement), or to receive dividends
or subscription rights or otherwise, until this Warrant shall have been
exercised and the Shares purchasable on the exercise hereof shall have become
deliverable as provided in the Warrant Agreement.
15
6. Every holder of a Warrant, by accepting this Warrant, consents and agrees
with the Company, the Warrant Agent and with every subsequent holder of this
Warrant that until this Warrant is transferred on the books of the Warrant
Agent, the Company and the Warrant Agent may treat the registered holder hereof
as the absolute owner hereof for all purposes notwithstanding any notice to the
contrary.
7. The Company represents and warrants that the Shares to be issued by it as
provided in the Warrant Agreement have been duly authorized and, when so issued
in accordance with the Warrant Agreement, will be validly issued, fully-paid and
non-assessable. The Company represents and warrants that it has authority to
execute and deliver the Warrant Agreement and the Warrants thereunder, but the
Warrant Agent makes no representation with respect thereto, or with respect to
the validity or sufficiency of the Warrants, the Warrant Agreement or the
Shares.
16
FORM OF EXERCISE
(Form of exercise to be executed by the Warrant Holder
at the time of exercise)
To
----------------------------
, Warrant
-----------------------
Agent:
The undersigned, holder of the within Warrant, (1) exercises his right to
purchase _________ of the Shares of Common Stock ($1.00 par value) of Digital
Microwave Corporation, which the undersigned is entitled to purchase under the
terms of the within Warrant, and (2) makes payment in full for the number of
Shares of Common Stock so purchased by payment of $_________ in cash.
Please issue the certificate for Shares of Common Stock (and any new Warrants in
the case of a partial exercise) as follows:
Print or Type Name
Social Security or other Identifying Number
Street Address
City State Zip Code
17
and deliver it (together with any new Warrants in the case of a partial
exercise) to the above address unless a different address is indicated below.
Dated:
-------------------
Signature
(Signature must conform in all respects to name of
holder as specified on the face of the Warrant)
To be used only for special instructions for delivery. Deliver to:
Print or Type Name
Street Address
City State Zip Code
18
ASSIGNMENT
(Form of assignment to be executed if
Warrant Holder desires to transfer Warrant)
FOR VALUE RECEIVED, _______________________ hereby sells, assigns and transfers
unto
Print or Type Name
Street Address
City State Zip Code
Social Security or other Identifying Number
the right represented by the within Warrant to purchase _________ Shares of
Common Stock ($1.00 par value) of Digital Microwave Corporation to which the
within Warrant relates and appoints _____________________ attorney to transfer
such right on the books of the Warrant Agent with full power of substitution in
the Premises.
Dated:
--------------------
Signature
(Signature must conform in all respects to name of
holder as specified on the face of the Warrant)
Signature Guaranteed
19
