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EXHIBIT 4.24
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WARRANT AGREEMENT
Dated as of November 26, 1997
between
PLD TELEKOM INC.
and
THE BANK OF NEW YORK,
as Warrant Agent
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WARRANT AGREEMENT
TABLE OF CONTENTS*
PAGE
SECTION 1. Appointment of Warrant Agent, etc.......................................... 2
SECTION 2. Issuance of Warrants....................................................... 2
(a) Initial Warrants........................................................... 2
(b) Additional Warrants........................................................ 2
(c) Default Warrants........................................................... 3
SECTION 2A. Reset of Exercise Price of Initial Warrants................................ 3
(a) Series A Warrants.......................................................... 3
(b) Series B Warrants.......................................................... 3
SECTION 3. Warrant Certificates....................................................... 4
SECTION 4. Execution of Warrant Certificates.......................................... 4
SECTION 5. Restrictions on Transfer................................................... 5
(a) Transfers of Warrants...................................................... 5
(b) Transfers of Common Shares................................................. 6
SECTION 6. Registration and Countersignature.......................................... 6
SECTION 7. Transfer and Exchange...................................................... 6
(a) Registration of Transfers and Exchanges.................................... 6
(b) Special Transfer Provisions................................................ 7
SECTION 8. Terms of Warrants; Exercise of Warrants.................................... 8
SECTION 9. Reports.................................................................... 10
SECTION 10. Payment of Taxes........................................................... 11
SECTION 11. Mutilated or Missing Warrant Certificates.................................. 11
SECTION 12. Reservation of Warrant Shares.............................................. 11
SECTION 13. Obtaining Stock Exchange Listings.......................................... 12
SECTION 14. Consolidation.............................................................. 12
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SECTION 15. Adjustment of Exercise Price......................................... 13
SECTION 16. [INTENTIONALLY NOT USED] ........................................... 21
SECTION 17. Fractional Interests................................................. 21
SECTION 18. Notices to Warrant Holders........................................... 22
SECTION 19. Warrant Agent........................................................ 23
SECTION 20. Merger, Consolidation or Change of Name of Warrant Agent............. 25
SECTION 21. Change of Warrant Agent.............................................. 26
SECTION 22. Notices to the Company and Warrant Agent............................. 26
SECTION 23. Supplements and Amendments........................................... 27
SECTION 24. Successors........................................................... 27
SECTION 25. Termination.......................................................... 27
SECTION 26. Governing Law; Jurisdiction.......................................... 28
SECTION 27. Benefits of This Agreement........................................... 28
SECTION 28. Counterparts......................................................... 28
SECTION 29. Further Assurances................................................... 29
EXHIBIT A-1 Form of Series A Warrant Certificate
EXHIBIT A-2 Form of Series B Warrant Certificate
EXHIBIT A-3 Form of Default Warrant Certificates
EXHIBIT B Form of Warrant Shares Legend
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* This Table of Contents does not constitute a part of this Agreement or
have any bearing upon the interpretation of any of its terms or
provisions.
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WARRANT AGREEMENT ("this Agreement") dated as of November 26, 1997
between PLD Telekom Inc., (the "Company"), and The Bank of New York, a New York
banking corporation, as Warrant Agent (the "Warrant Agent").
R E C I T A L S:
A. The Company has entered into a Revolving Credit Note and Warrant
Agreement, dated as of the date hereof (the "Revolving Credit Agreement"), with
The Travelers Insurance Company and The Travelers Indemnity Company
(collectively, the "Lenders") providing, among other things, for (i) the
commitment of the Lenders to make Series A Revolving Credit Loans from time to
time to the Company in an aggregate principal amount not exceeding $12,400,000
(the "Series A Revolving Credit Loans") and Series B Revolving Credit Loans from
time to time to the Company in an aggregate principal amount not exceeding
$3,100,000 (the "Series B Revolving Credit Loans" and, together with the Series
A Revolving Credit Loans, the "Revolving Credit Loans"), (ii) the issuance and
delivery by the Company to the Lenders of the Company's 12% Series A Revolving
Credit Notes due December 31, 1998 in the aggregate principal amount of
$12,400,000 to evidence the obligation of the Company to repay Series A
Revolving Credit Loans from time to time outstanding in accordance therewith
(such notes, including all notes issued in substitution or exchange therefor
pursuant to the Revolving Credit Agreement, being referred to herein as the
"Series A Notes") and its 12% Series B Revolving Credit Notes due September 30,
1998 in the aggregate principal amount of $3,100,000 to evidence the obligation
of the Company to repay Series B Revolving Credit Loans from time to time
outstanding in accordance therewith (such notes, including all notes issued in
substitution or exchange therefor pursuant to the Revolving Credit Agreement,
being referred to herein as the "Series B Notes " and, together with the Series
A Notes, the "Notes"), and (iii) the issuance by the Company to the Lenders of
the Company's (x) warrants (the "Series A Warrants") to purchase up to an
aggregate of 315,000 shares of common stock, par value $0.01 per share of the
Company (the "Common Shares") and (y) warrants (the "Series B Warrants" and,
together with the Series A Warrants, the "Initial Warrants") to purchase up to
an aggregate of 108,000 Common Shares. Each Initial Warrant entitles the holder
thereof, upon exercise, to purchase one (1) fully-paid and nonassessable Common
Share at an initial exercise price per share of $8.625 and with an expiration
date of December 31, 2008. The Notes will be entitled to the benefit of the
terms of, and the collateral held by The Bank of New York, as trustee (together
with its successors as trustee, the "Trustee"), pursuant to the terms of, a
Trust Agreement, dated as of the date hereof (the "Trust Agreement"), by and
between the Company and the Trustee.
B. Pursuant to the Revolving Credit Agreement, (i) the Company has
agreed to deposit in escrow with the Trustee the Company's warrants (the
"Additional Warrants") to purchase up to an aggregate of 182,000 Common Shares
of which (x) up to 150,000 Additional Warrants are issuable to holders of Series
A Notes and (y) up to 32,000 Additional Warrants are issuable to holders of
Series B Notes, in each case with an initial exercise price of $8.625, and with
an expiration date of December 31, 2008, and (ii) the Additional Warrants are
required to be released
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from escrow and delivered to holders of Notes to the extent, in the manner and
under the circumstances provided in Section 5 of the Trust Agreement.
C. Pursuant to the Revolving Credit Agreement, the Company has also
agreed to issue and deliver to the holders of the Series A Notes and the Series
B Notes certain warrants of the Company ("Default Warrants", and, together with
the Initial Warrants and the Additional Warrants, the "Warrants") to purchase
certain numbers of Common Shares, at an exercise price of $.01 and with an
expiration date on the date ten years from the date of issuance of such Default
Warrants, to the extent and under the circumstances provided in Section 2(c)
hereof (the initial exercise price for any Warrants, as reset pursuant to
Section 2A hereof, is herein called, in respect of such Warrants, the "Exercise
Price" therefor).
D. The Exercise Price for the Warrants is subject to resetting in
certain circumstances as provided in Section 2A hereof, and such Exercise Price
and the number of Common Shares issuable upon exercise of the Warrants are both
subject to adjustment under certain circumstances as provided in Section 15
hereof. The Common Shares issuable upon exercise of the Warrants are referred to
herein as "Warrant Shares".
E. The Warrants shall bear the legend (the "Warrant Legend") set forth
on the appropriate form of Warrant Certificate annexed hereto, subject, however,
to the terms of this Agreement. Unless registered under the Securities Act of
1933, as amended (the "Securities Act"), and any applicable state securities
laws, the Warrant Shares shall bear the legend set forth in Exhibit B attached
hereto (the "Warrant Shares Legend").
F. 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 of Warrant Certificates and other matters as provided herein.
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, etc. The Company hereby
appoints the Warrant Agent to act as agent for the Company in accordance with
the instructions set forth hereinafter in this Agreement, and the Warrant Agent
hereby accepts such appointment. Concurrently with the execution and delivery
hereof, the Company has furnished to the Warrant Agent true and correct copies
of the Revolving Credit Agreement and the Trust Agreement.
SECTION 2. Issuance of Warrants.
(a) Initial Warrants. The Initial Warrants shall be originally issued in
connection with the issuance of the Notes and shall be separately transferable
from the Notes immediately upon issuance.
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(b) Additional Warrants. Concurrently with the execution and delivery
hereof, the Company has deposited the Additional Warrants, registered in the
name of the Trustee, with the Trustee for possible future delivery to holders of
Notes as herein and in the Trust Agreement and the Revolving Credit Agreement
provided. As promptly as practicable following each delivery of Warrant
Certificates to the Warrant Agent by the Trustee in accordance with Section 5(d)
of the Trust Agreement, accompanied by a written statement setting forth the
names of the holders of Notes in which such Additional Warrant Certificates are
to be registered pursuant to Section 5 of the Trust Agreement and their
respective addresses and directing the Warrant Agent to register the transfer of
such Warrant Certificates to such holders, the Warrant Agent will, without
further act on the part of the Company, the Trustee or any such holder and
notwithstanding any provision of this Warrant Agreement to the contrary, effect
such registration of transfer to such holders and issue new Additional Warrant
Certificates of the same tenor to such holders in accordance with Section 7.
Upon such issuance, such new Additional Warrant Certificates shall be delivered
by reputable overnight courier by the Warrant Agent to the respective addresses
specified for such holders in the written statement received from the Trustee
requesting such registration of transfer.
(c) Default Warrants. If the Series B Notes (including all accrued and
unpaid interest and fees thereon) are not paid in full on or prior to September
30, 1998, then commencing on September 30, 1998 and on the last day of each
calendar month thereafter until such time as the Series B Notes shall have been
so paid in full, the Company will deliver to the holders of the Series B Notes
Default Warrants for 32,000 Common Shares. If the Series A Notes (including all
accrued and unpaid interest and fees thereon) are not paid in full on or prior
to December 31, 1998, then commencing on December 31, 1998 and on the last day
of each calendar month thereafter until such time as the Series A Notes shall
have been so paid in full, the Company will deliver to the holders of the Series
A Notes Default Warrants for 70,000 Common Shares.
SECTION 2A. Reset of Exercise Price of Initial Warrants.
(a) Series A Warrants. If the Series A Notes are not repaid in full by
December 31, 1998, or upon the earlier occurrence of an Event of Default (as
defined in the Revolving Credit Agreement) either (i) described in clause (a) or
clause (b) of Section 11 of the Revolving Credit Agreement or (ii) described in
clause (c) of Section 11 of the Revolving Credit Agreement and resulting from a
default by the Company under Section 9.8, 9.9, 9.10 or 10.1 of the Revolving
Credit Agreement, the Exercise Price of the Series A Warrants will be reset to
become $.01.
(b) Series B Warrants. If the Series B Notes are not repaid in full by
September 30, 1998, or upon the earlier occurrence of an Event of Default (as
defined in the Revolving Credit Agreement) either (i) described in clause (a) or
clause (b) of Section 11 of the Revolving Credit Agreement or (ii) described in
clause (c) of Section 11 of the Revolving Credit Agreement and resulting from a
default by the Company under Section 9.8, 9.9, 9.10 or 10.1 of the Revolving
Credit Agreement, the Exercise Price of the Series B Warrants will be reset to
become $.01.
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(c) Additional Warrants. If the Exercise Price of Series A Warrants
shall at any time be required to be reset in accordance with clause (a) of this
Section, the Exercise Price of all Additional Warrants then or theretofore
delivered to holders of Series A Notes pursuant to the Trust Agreement shall be
concurrently reset, and the Exercise Price of all Additional Warrants which
shall thereafter be required to be delivered to holders of Series A Notes
pursuant thereto shall be reset simultaneously with such delivery, to become, in
each case, $.01. If the Exercise Price of Series B Warrants shall at any time be
required to be reset in accordance with clause (b) of this Section, the Exercise
Price of all Additional Warrants then or theretofore delivered to holders of
Series B Notes pursuant to the Trust Agreement shall be concurrently reset, and
the Exercise Price of all Additional Warrants which shall thereafter be required
to be delivered to holders of Series B Notes pursuant thereto shall be reset
simultaneously with such delivery, to become, in each case, $.01.
SECTION 3. Warrant Certificates.
(a) The certificates evidencing the Series A Warrants (the "Series A
Warrant Certificates") shall be substantially in the form annexed hereto as
Exhibit A-1.
(b) The certificates evidencing the Series B Warrants (the "Series B
Warrant Certificates") shall be substantially in the form annexed hereto as
Exhibit A-2.
(c) The certificates representing the Additional Warrants (the
"Additional Warrant Certificates") shall be substantially in the form annexed
hereto as Exhibit A-1 (in the case of Warrant Certificates issued to the holders
of Series A Notes) or Exhibit A-2 (in the case of Warrant Certificates issued to
the holders of Series B Notes).
(d) The certificates representing the Default Warrants (the "Default
Warrant Certificates", and, together with the Series A Warrant Certificates,
Series B Warrant Certificates and Additional Warrant Certificates, the "Warrant
Certificates") shall be substantially in the form annexed hereto as Exhibit A-3.
SECTION 4. Execution of Warrant Certificates. Warrant Certificates shall
be signed on behalf of the Company by any two of the following officers: its
Chairman of the Board, Chief Executive Officer, Chief Financial Officer,
President, any Vice President, Secretary or an Assistant Secretary, under its
corporate seal. Each such signature upon the Warrant Certificates may be in the
form of a facsimile signature of the present or any future Chairman of the
Board, Chief Executive Officer, Chief Financial Officer, President or any Vice
President and Secretary or Assistant Secretary and may be imprinted or otherwise
reproduced on the Warrant Certificates and for that purpose the Company may
adopt and use the facsimile signature of any person who shall have been Chairman
of the Board, Chief Executive Officer, Chief Financial Officer, President, any
Vice President, Secretary or Assistant Secretary, notwithstanding the fact that
at the time the Warrant Certificates shall be countersigned and delivered or
disposed of he or she
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shall have ceased to hold such office. The seal of the Company may be in the
form of a facsimile thereof and may be impressed, affixed, imprinted or
otherwise reproduced on the Warrant Certificates.
In case any officer of the Company who shall have signed any of the
Warrant Certificates shall cease to be such officer before the Warrant
Certificates so signed shall have been countersigned by the Warrant Agent, or
disposed of by the Company, such Warrant Certificates nevertheless may be
countersigned and delivered or disposed of as though such person had not ceased
to be such officer of the Company; and any Warrant Certificate may be signed on
behalf of the Company by any person who, at the actual date of the execution of
such Warrant Certificate, shall be a proper officer of the Company to sign such
Warrant Certificate, although at the date of the execution of this Agreement any
such person was not such officer.
Warrant Certificates shall be dated the date of countersignature by the
Warrant Agent.
In the event that there is a reset of the Exercise Price of the Series A
Warrants or the Series B Warrants or the Additional Warrants pursuant to Section
2A hereof, the Company may instruct the Warrant Agent to issue new Series A
Warrant Certificates or Series B Warrant Certificates or Additional Warrant
Certificates, as the case may be, with the new Exercise Price in replacement of
the applicable Warrant Certificates issued prior to the date of any such
resetting.
SECTION 5. Restrictions on Transfer.
(a) Transfers of Warrants. Notwithstanding the provisions of Section 7
hereof, the registered holder of a Warrant Certificate containing a Warrant
Legend may surrender such Warrant Certificate accompanied by a written
instrument or instruments of transfer in form satisfactory to the Warrant Agent,
duly executed by the registered holder or holders thereof or by the duly
appointed legal representative thereof or by a duly authorized attorney to the
Warrant Agent, at its address specified in Section 22 hereof (the "Warrant Agent
Office") for the exchange of such Warrant Certificate containing a Warrant
Legend, in whole or in part, for a new Warrant Certificate or Certificates. In
connection with the foregoing, each Warrant Certificate will bear a legend in
substantially the following form:
THE WARRANTS REPRESENTED HEREBY AND THE COMMON SHARES (THE "COMMON
SHARES") FOR WHICH THIS WARRANT IS EXERCISABLE MAY NOT BE OFFERED OR
SOLD IN THE UNITED STATES ABSENT REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), AND ANY APPLICABLE STATE SECURITIES
LAWS OR AN APPLICABLE EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.
ACCORDINGLY, NO WARRANT HOLDER SHALL BE ENTITLED TO EXERCISE SUCH
HOLDER'S WARRANTS AT ANY TIME UNLESS, AT THE TIME OF EXERCISE, (I) A
REGISTRATION STATEMENT UNDER THE ACT COVERING THE OFFER AND SALE OF THE
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COMMON SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT (THE "WARRANT
SHARES") HAS BEEN FILED WITH, AND DECLARED EFFECTIVE BY, THE SECURITIES
AND EXCHANGE COMMISSION (THE "SEC"), AND NO STOP ORDER SUSPENDING THE
EFFECTIVENESS OF SUCH REGISTRATION STATEMENT HAS BEEN ISSUED BY THE SEC
OR (II) THE OFFER AND SALE OF THE WARRANT SHARES TO THE WARRANT HOLDERS
ARE EXEMPT FROM REGISTRATION UNDER THE ACT AND THE WARRANT HOLDER, IF SO
REQUESTED BY THE COMPANY, HAS DELIVERED TO THE COMPANY AN OPINION OF
COUNSEL TO SUCH EFFECT.
(b) Transfers of Common Shares. Except as otherwise permitted under
Section 7(b), each certificate for Common Shares issued upon the exercise of any
Warrant, and each certificate issued upon the direct or indirect transfer of any
such Common Shares, shall be stamped or otherwise imprinted with a legend in
substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND
MAY NOT BE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION THEREFROM UNDER THE SECURITIES ACT, EXCEPT UNDER CIRCUMSTANCES
WHERE NEITHER SUCH REGISTRATION NOR SUCH AN EXEMPTION IS REQUIRED BY
LAW.
SECTION 6. Registration and Countersignature. The Warrant Agent, on
behalf of the Company, shall number and register the Warrant Certificates in a
register as they are issued by the Company.
Warrant Certificates shall be manually countersigned by the Warrant
Agent and shall not be valid for any purpose unless so countersigned. The
Warrant Agent shall, upon written instructions of the Chairman of the Board,
Chief Executive Officer, Chief Financial Officer, President, a Senior Vice
President or Secretary of the Company, initially countersign and deliver Initial
Warrant Certificates and Additional Warrant Certificates entitling the holders
thereof to purchase not more than the number of Warrant Shares referred to above
in, as the case may be, Recital A or Recital B and shall countersign and deliver
Warrant Certificates as otherwise provided in this Agreement. Such written
instructions shall specify the amount of the Warrants to be countersigned and
the date of countersignature.
The Company and the Warrant Agent may deem and treat the registered
holder(s) of the Warrant Certificates as the absolute owner(s) thereof
(notwithstanding any notation of ownership or other writing thereon made by
anyone), for all purposes, and neither the Company nor the Warrant Agent shall
be affected by any notice to the contrary.
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SECTION 7. Transfer and Exchange.
(a) Registration of Transfers and Exchanges. In accordance with this
Section 7, the Warrant Agent shall from time to time register the transfer of
any outstanding Warrant Certificates upon the records to be maintained by it for
that purpose, upon surrender thereof accompanied by a written instrument or
instruments of transfer in form satisfactory to the Warrant Agent, duly executed
by the registered holder or holders thereof or by the duly appointed legal
representative thereof or by a duly authorized attorney. Upon any such
registration of transfer, a new Warrant Certificate of the same tenor shall be
issued to the transferee(s) and the surrendered Warrant Certificate shall be
canceled by the Warrant Agent. Canceled Warrant Certificates shall thereafter be
disposed of by the Warrant Agent in a manner consistent with the Warrant Agent's
customary procedure and in accordance with applicable law.
Warrant Certificates may be exchanged at the option of the holder(s)
thereof, when surrendered to the Warrant Agent at its office, for another
Warrant Certificate or other Warrant Certificates of like tenor and representing
in the aggregate a like number of Warrants. Warrant Certificates surrendered for
exchange shall be canceled by the Warrant Agent. Such canceled Warrant
Certificates shall then be disposed of by the Warrant Agent in a manner
consistent with the Warrant Agent's customary procedure and in accordance with
applicable law.
No service charge shall be made for any transfer or exchange of Warrant
Certificates or any issuance of Warrant Certificates, but the Company may
require payment of a sum sufficient to cover any stamp or other governmental
charge or tax that may be imposed in connection with any such transfer or
exchange.
The Warrant Agent is hereby authorized to countersign, in accordance
with the provisions of this Section 7 and Section 5, the new Warrant
Certificates required pursuant to the provisions of this Section 7.
(b) Special Transfer Provisions.
(i) Transfers to QIBs. The Warrant Agent shall register the
transfer of any Warrant being transferred if such transfer is being made by a
proposed transferor who has checked the box provided for on the form of Warrant
stating, or has otherwise advised the Company and the Warrant Agent in writing,
that the sale has been made in compliance with the provisions of Rule 144A to a
transferee who has signed the certification provided for on the form of Warrant
stating, or has otherwise advised the Company and the Warrant Agent in writing,
that it is purchasing the Warrant for its own account or an account with respect
to which it exercises sole investment discretion and that it and any such
account is a QIB within the meaning of Rule 144A, and is aware that the sale to
it is being made in reliance on Rule 144A and acknowledges that it has received
such information regarding the Company as it has requested pursuant to Rule 144A
or has determined not to request such information and that it is aware that the
transferor is relying
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upon its foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
(ii) Transfers of Additional Warrants to Lenders. Notwithstanding
any provision of this Section 7 to the contrary, the Warrant Agent will register
the transfer to any Lender or any other institutional investor which is the
holder of a Note of any Warrant evidenced by an Additional Warrant Certificate
delivered to the Warrant Agent by the Trustee for the purpose as contemplated by
Section 5(d) of the Trust Agreement which Additional Warrant Certificate is
accompanied by the written statement of the Trustee described in the second
sentence of said Section 5(d).
(iii) Warrant Legend. Upon the transfer, exchange or replacement
of Warrant Certificates not bearing the Warrant Legend, the Warrant Agent shall
deliver Warrant Certificates that do not bear the Warrant Legend. Upon the
transfer, exchange or replacement of Warrant Certificates bearing the Warrant
Legend, the Warrant Agent shall deliver only Warrant Certificates that bear the
Warrant Legend unless there is delivered to the Warrant Agent an opinion of
counsel reasonably satisfactory to the Company and the Warrant Agent to the
effect that neither such legend nor the related restrictions on transfer are
required in order to maintain compliance with the provisions of the Securities
Act.
(iv) General. The provisions hereof shall be qualified in their
entirety by any applicable securities laws of the United States and any other
applicable jurisdiction and by the procedures of any applicable clearing agency,
in each case as in effect from time to time, and all such laws and clearing
procedures shall be deemed to be incorporated herein by reference. By its
acceptance of any Warrant Certificate bearing the Warrant Legend, each holder of
such a Warrant Certificate shall be deemed to acknowledge the restrictions on
transfer of such Warrant Certificate set forth in this Warrant Agreement and in
the Warrant Legend and agrees that it will transfer such Warrant Certificate
only as provided in this Warrant Agreement. The Warrant Agent shall not register
a transfer of any Warrant Certificate unless such transfer complies with the
restrictions on transfer of such Warrant Certificate set forth in this Warrant
Agreement. In connection with any transfer of Warrant Certificates, each Warrant
holder agrees by its acceptance of the Warrant Certificates to furnish the
Warrant Agent or the Company such certifications, legal opinions or other
information as either of them may reasonably require to confirm that such
transfer is being made pursuant to an exemption from, or a transaction not
subject to, the registration requirements of the Securities Act; provided that
the Warrant Agent shall not be required to determine (but may rely on a
determination made by the Company with respect to) the sufficiency of any such
certifications, legal opinions or other information.
SECTION 8. Terms of Warrants; Exercise of Warrants. Subject to the terms
of this Agreement, each Warrant holder shall have the right, which may be
exercised at any time from the date of original issuance thereof and on or prior
to the close of business on (i) in the case of the Series A Warrants, the Series
B Warrants and the Additional Warrants, December 31, 2008,
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and (ii) in the case of Default Warrants, if any, a date ten years following the
issue date thereof (in each case, the "Expiration Date") to exercise each
Warrant and receive from the Company the number of fully-paid and nonassessable
Warrant Shares which the holder may at the time be entitled to receive on
exercise of such Warrants and payment of the Exercise Price then in effect for
such Warrant; provided that no Warrant holder shall be entitled to exercise such
holder's Warrants at any time unless, at the time of exercise, (A) a
registration statement under the Securities Act covering the offer and sale of
the Warrant Shares has been filed with, and declared effective by, the
Securities and Exchange Commission (the "SEC"), and no stop order suspending the
effectiveness of such registration statement has been issued by the SEC or (B)
the offer and sale of the Warrant Shares to the Warrant holder are exempt from
registration under the Securities Act and the holder of the Warrants, if so
requested by the Company, has delivered to the Company an opinion of counsel
reasonably satisfactory to the Company and the Warrant Agent to such effect.
Each Warrant, when exercised, will entitle the holder thereof to purchase one
(1) fully-paid and nonassessable Common Share at the Exercise Price then in
effect for such Warrant. The Exercise Price and the number of shares are both
subject to adjustment under certain circumstances as provided in Section 2A and
Section 15. Each Warrant not exercised prior to the applicable Expiration Date
shall become void and all rights thereunder and all rights in respect thereof
under this Agreement shall cease as of such time.
A Warrant may be exercised at any time on or after the date of original
issuance thereof upon surrender to the Company at the principal office of the
Warrant Agent of the Warrant Certificate or Certificates to be exercised with
the form of election to purchase on the reverse thereof duly filled in and
signed, which signature shall be guaranteed by an "eligible guarantor" as
defined in the regulations promulgated under the Exchange Act, and upon payment
to the Warrant Agent for the account of the Company of the Exercise Price, as
adjusted as herein provided, for each Warrant then exercised. Upon exercise of
any Warrants by a holder of any Note, such holder may, at its option, surrender
such Note to the Company, together with written instructions from such holder to
apply all or any part of the unpaid principal amount of such Note or Notes plus
accrued and unpaid interest on the amount so applied through the date of such
application against the cash payment required upon such exercise, in which case
the Company will accept such specified principal amount plus accrued and unpaid
interest thereon through the date of such application in satisfaction of a like
amount of such payment. Upon any partial application of the unpaid principal of
a Note plus accrued and unpaid interest thereon, the Company, at its expense,
shall forthwith issue and deliver to or upon the order of the holder thereof a
new Note or Notes in principal amount equal to the unpaid principal amount of
such surrendered Note which has not been applied against such payment, such new
Note or Notes to be dated and to bear interest on such unpaid principal amount
from the date to which such interest has been paid on such surrendered Note.
Subject to the provisions of Section 9 hereof, upon such surrender of
Warrants and payment of the Exercise Price therefor, the Company shall issue and
cause to be delivered with all reasonable dispatch to or upon the written order
of the Warrant holder and in such name or
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names as the Warrant holder may designate, a certificate or certificates for the
number of whole Warrant Shares issuable upon the exercise of such Warrants
together with any cash which may be payable as provided in Section 17 hereof;
provided that if any consolidation, merger or lease or sale of assets is
proposed to be effected by the Company as described in Section 14 hereof, or a
tender offer or an exchange offer for Common Shares of the Company shall be
made, upon such surrender of Warrants and payment of the Exercise Price as
aforesaid, the Company shall, as soon as possible, but in any event not later
than two Business Days thereafter, issue and cause to be delivered to the
registered holder thereof or any person so designated to be named therein the
full number of Warrant Shares issuable upon the exercise of such Warrants in the
manner described in this sentence together with any cash which may be payable as
provided in Section 17 hereof. 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 Warrants and payment of the aggregate Exercise Price
therefor.
The Warrants shall be exercisable at any time on or after the date of
original issuance thereof at the election of the holders thereof, either in full
or from time to time in part (in whole shares) and, in the event that a Warrant
Certificate is exercised in respect of fewer than all of the Warrant Shares
issuable on such exercise at any time prior to the Expiration Date, a new
Warrant Certificate evidencing the remaining Warrant or Warrants will be issued,
and the Warrant Agent is hereby irrevocably authorized to countersign and to
deliver the required new Warrant Certificate or Certificates pursuant to the
provisions of this Section and of Section 4 hereof, and the Company, whenever
required by the Warrant Agent, will supply the Warrant Agent with Warrant
Certificates duly executed on behalf of the Company for such purpose.
All Warrant Certificates surrendered upon exercise of Warrants shall be
canceled by the Warrant Agent. Such canceled Warrant Certificates shall then be
disposed of by the Company in accordance with applicable law. The Warrant Agent
shall account promptly to the Company with respect to Warrants exercised and
concurrently pay to the Company all monies received by the Warrant Agent for the
purchase of the Warrant Shares through the exercise of such Warrants.
The Warrant Agent shall keep copies of this Agreement and the Trust
Agreement and any notices given or received hereunder available for inspection
by the Warrant holders during normal business hours at its office. The Company
shall supply the Warrant Agent from time to time with such number of copies of
this Agreement as the Warrant Agent may request.
SECTION 9. Reports. So long as any of the Warrants remain outstanding,
the Company shall cause copies of all quarterly and annual financial reports and
of the information, documents and other reports (or copies of such portions of
any of the foregoing as the SEC may by rules and regulations prescribe) that the
Company is required to file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act ("SEC Reports") to be filed with the Warrant Agent and mailed to
the holders of Warrants, in each case, within 15 days after filing with the SEC.
If the Company
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14
is not subject to the requirements of Section 13 or 15(d) of the Exchange Act,
the Company shall nevertheless continue to cause reports, comparable to those
that it would be required to file pursuant to Section 13 or 15(d) of the
Exchange Act if it were then subject to the requirements of either such Section,
to be so filed with the SEC for public availability (unless the SEC will not
accept such a filing) and with the Warrant Agent and mailed to the holders of
Warrants, in each case, within the same time periods as would have applied
(including under the preceding sentence) had the Company then been subject to
the requirements of Section 13 or 15(d) of the Exchange Act. The Company shall
make available to investors and prospective investors of the Warrants
information that satisfies the requirements of Rule 144A(d)(4) under the
Securities Act.
SECTION 10. Payment of Taxes. No service charge shall be made to any
holder of a Warrant for any exercise, exchange or registration of transfer of
Warrant Certificates, and the Company will pay all documentary stamp taxes
attributable to the initial issuance of Warrant Shares upon the exercise of
Warrants; provided 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 of
any Warrant Certificates or any certificates for Warrant Shares in a name other
than that of the registered holder of a Warrant Certificate surrendered upon the
exercise of a Warrant, and the Company shall not be required to issue or deliver
such Warrant Certificates unless or until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
SECTION 11. Mutilated or Missing Warrant Certificates. If any of the
Warrant Certificates shall be mutilated, lost, stolen or destroyed, the Company
may in its discretion issue and the Warrant Agent may countersign, in exchange
and substitution for and upon cancellation of the mutilated Warrant Certificate,
or in lieu of and substitution for the Warrant Certificate lost, stolen or
destroyed, a new Warrant Certificate of like tenor and representing an
equivalent number of Warrants, but only upon receipt of evidence satisfactory to
the Company and the Warrant Agent of such loss, theft or destruction of such
Warrant Certificate and indemnity and security therefor, if requested, also
satisfactory to them; provided that, (i) a written statement signed on behalf of
the Trustee, or on behalf of a Lender or another institutional investor which is
the registered holder of a Warrant, to the effect that a Warrant Certificate has
been lost, stolen, destroyed or mutilated shall in any event constitute
sufficient evidence thereof and (ii) in the case of any Warrant Certificate held
by the Trustee or by any Lender or other institutional investor with a minimum
net worth of at least $50,000,000, an unsecured indemnity agreement of the
Trustee or such Lender or other institutional investor shall constitute
sufficient indemnity and security. Applicants for such substitute Warrant
Certificates shall also comply with such other reasonable regulations and (in
the case of applicants other than the Trustee, any Lender or any other
institutional investor which is the registered holder of a Warrant) pay such
other reasonable charges as the Company or the Warrant Agent may prescribe.
SECTION 12. Reservation of Warrant Shares. In respect of the Initial
Warrants and the Additional Warrants, the Company will at all times reserve and
keep available, free of preemptive
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15
rights and free from all taxes, liens, charges and security interests with
respect to the issuance thereof, out of the aggregate of its authorized but
unissued Common Shares, for the purpose of enabling it to satisfy any obligation
to issue Warrant Shares upon exercise of the Initial Warrants and the Additional
Warrants, the maximum number of Common Shares which may then be deliverable upon
the exercise of all outstanding Initial Warrants and Additional Warrants. In
respect of Default Warrants, the Company will initially reserve 1,000,000 Common
Shares, and agrees to authorize additional Common Shares as needed in order to
satisfy its obligations as set forth in Section 2(c) hereof.
The Company will keep a copy of this Agreement on file with the transfer
agent for the Common Shares (the "Transfer Agent") and with every subsequent
transfer agent for any shares of the Company's capital stock 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 the
Company or from such Transfer Agent the stock certificates required to honor
outstanding Warrants upon exercise thereof in accordance with the terms of this
Agreement. The Company will supply such Transfer Agent with duly executed
certificates for such purposes and will provide or otherwise make available to
the Warrant Agent any cash which may be payable as provided in Section 17
hereof. The Company will furnish such Transfer Agent a copy of all notices of
adjustments and certificates related thereto transmitted to each holder pursuant
to Section 18 hereof.
Before taking any action which would cause an adjustment pursuant to
Section 15 hereof to reduce the applicable Exercise Price below the then par
value (if any) of the Warrant Shares, the Company will take all corporate action
necessary, in the opinion of its counsel (which may be counsel employed by the
Company), in order that the Company may validly and legally issue fully paid and
nonassessable Warrant Shares at the applicable Exercise Price as so adjusted.
The Company covenants that all Warrant Shares will be, upon payment of
the Exercise Price therefor and issuance thereof, duly and validly issued,
fully-paid, nonassessable, free of preemptive rights and free from all taxes,
liens, charges and security interests with respect to the issuance thereof.
SECTION 13. Obtaining Stock Exchange Listings. The Company shall from
time to time take all action necessary so that the Warrant Shares, immediately
upon their issuance upon the exercise of Warrants, will be listed on the
principal securities exchanges and interdealer quotation systems and markets, if
any, on which any Common Shares are then listed or quoted.
SECTION 14. Consolidation. In the event the Company consolidates with,
merges with or into, or sells all or substantially all of its property and
assets to another Person, each Warrant thereafter shall entitle the holder
thereof to receive upon exercise thereof the number of shares of capital stock
or other securities or property which the holder of a Common Share is entitled
to receive upon completion of such consolidation, merger or sale of assets. If
the Company merges
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16
or consolidates with, or sells all or substantially all of its property and
assets to, another Person and, in connection therewith, consideration to the
holders of Common Shares in exchange for their shares is payable solely in cash,
or in the event of the dissolution, liquidation or winding-up of the Company,
then the holders of the Warrants will be entitled to receive distributions on an
equal basis with the holders of Common Shares or other securities issuable upon
exercise of the warrants, as if the Warrants had been exercised immediately
prior to such event, less the applicable Exercise Price. Upon receipt of the
full amount of such payment, if any, by the holders of any Warrants, such
Warrants will expire and the rights of the holders thereof will cease.
In case of any such merger, consolidation or sale of assets, 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 the funds or other consideration, if any, necessary to pay the
holders of the Warrants. After such funds and the surrendered Warrant
Certificate are received, the Warrant Agent shall make payment by delivering a
check in such amount as is appropriate (or, in the case of consideration other
than cash, shall transfer 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 15. Adjustment of Exercise Price.
(a) In case the Company shall make a dividend or other distribution on
the Common Shares exclusively in Common Shares (other than a distribution
referred to in paragraph (c) of this Section), the Exercise Price applicable to
any particular Warrant and in effect at the opening of business on the day
following the date fixed for the determination of shareholders entitled to
receive such dividend or other distribution shall be reduced by multiplying such
Exercise Price by a fraction of which the numerator shall be the number of
shares of Common Shares outstanding at the close of business on the date fixed
for such determination and the denominator shall be the sum of such number of
shares and the total number of shares constituting such dividend or other
distribution, such reduction to become effective immediately after the opening
of business on the day following the date fixed for such determination. In case
the Company shall make a dividend or other distribution on the Common Shares in
shares of its capital stock other than Common Shares, and such dividend or
distribution would not otherwise require reduction of the Exercise Price
applicable to any particular Warrant pursuant to paragraph (d), then such
Exercise Price and the number and kind of shares of capital stock of the Company
issuable upon the exercise of such Warrant (as in effect immediately prior to
such dividend or distribution) shall be proportionately adjusted so that the
holder of any such Warrant thereafter exercised may receive the aggregate number
and kind of shares of capital stock of the Company that such holder would have
owned immediately following such dividend or distribution if such Warrant had
been exercised immediately prior thereto. For the purpose of this paragraph (a),
the number of Common Shares at any time outstanding shall not include shares
held in the treasury of the Company but shall include shares issuable in respect
of scrip certificates issued in lieu of fractions of Common
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17
Shares. The Company shall not pay any dividend or make any distribution on
Common Shares held in the treasury of the Company.
(b) Subject to the last sentence of paragraph (g) of this Section, in
case the Company shall make a dividend or other distribution on the Common
Shares consisting exclusively of, or shall otherwise issue to all holders of the
Common Shares, rights, options or warrants entitling the holders thereof to
subscribe for or purchase Common Shares or securities convertible into or
exchangeable for Common Shares at a price per share (determined on an
as-converted or as-exercised basis if the rights, options or warrants pertain
to securities convertible into or exchangeable for Common Shares) less than the
Current Market Price (determined as provided in paragraph (h) of this Section)
on the date fixed for the determination of shareholders entitled to receive such
rights, options or warrants, the Exercise Price applicable to any particular
Warrant and in effect at the opening of business on the day following the date
fixed for such determination shall be reduced by multiplying such Exercise Price
by a fraction of which the numerator shall be the number of Common Shares
outstanding at the close of business on the date fixed for such determination
plus the number of Common Shares which the aggregate of the offering price
(including the minimum consideration payable upon exercise or exchange of
securities convertible into or exchangeable for Common Shares) of the total
number of Common Shares so offered for subscription or purchase would purchase
at such Current Market Price and the denominator shall be the number of Common
Shares outstanding at the close of business on the date fixed for such
determination plus the number of Common Shares so offered for subscription or
purchase, such reduction to become effective immediately after the opening of
business on the day following the date fixed for such determination. For the
purposes of this paragraph (b), the number of Common Shares at any time
outstanding shall not include shares held in the treasury of the Company but
shall include shares issuable in respect of scrip certificates issued in lieu of
fractions of Common Shares. The Company shall not issue any rights, options or
warrants in respect of Common Shares held in the treasury of the Company.
(c) In case outstanding Common Shares shall be subdivided into a greater
number of Common Shares, the Exercise Price applicable to any particular Warrant
and in effect at the opening of business on the day following the day upon which
such subdivision becomes effective shall be proportionately reduced, and,
conversely, in case outstanding Common Shares shall be combined into a smaller
number of Common Shares, the Exercise Price applicable to any particular Warrant
and in effect at the opening of business on the day following the day upon which
such combination becomes effective shall be proportionately increased, such
reduction or increase, as the case may be, to become effective immediately after
the opening of business on the day following the day upon which such subdivision
or combination becomes effective.
(d) (i) Subject to the last sentence of this paragraph (d)(i) and the
last sentence of paragraph (g) of this Section, in case the Company shall, by
dividend or otherwise, distribute to all holders of the Common Shares evidences
of its indebtedness, shares of any class of its capital stock, cash or other
assets (including securities, but excluding any rights, options or warrants
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18
referred to in paragraph (b) of this Section, excluding any dividend or
distribution paid exclusively in cash out of consolidated current or retained
earnings as shown on the books of the Company prepared in accordance with GAAP
(other than any Extraordinary Cash Dividend (as hereinafter defined)) and
excluding any dividend or distribution referred to in paragraph (a) or (c) of
this Section), the Exercise Price applicable to any particular Warrant shall be
reduced by multiplying such Exercise Price as in effect immediately prior to the
close of business on the date fixed for the determination of shareholders
entitled to such distribution by a fraction of which the numerator shall be the
Current Market Price (determined as provided in paragraph (h) of this Section)
on such date less the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a resolution
of the Board of Directors) on such date of the portion of the evidences of
indebtedness, shares of capital stock, cash and other assets to be distributed
applicable to one Common Share and the denominator shall be such Current Market
Price, such reduction to become effective immediately prior to the opening of
business on the day following such date. If the Board of Directors determines
the fair market value of any distribution for purposes of this paragraph (d)(i)
by reference to the actual or when- issued trading market for any securities
comprising part or all of such distribution, it must in doing so consider the
prices in such market over the same period used in computing the Current Market
Price pursuant to paragraph (h) of this Section, to the extent possible. For
purposes of this paragraph (d)(i), an "Extraordinary Cash Dividend" shall be
that portion, if any, of the aggregate amount of all cash dividends paid in any
fiscal year which exceed $25,000,000. For purposes of this paragraph (d), any
dividend or distribution that includes Common Shares, rights, options or
warrants to subscribe for or purchase Common Shares or securities convertible
into or exchangeable for Common Shares shall be deemed to be (x) a dividend or
distribution of the evidences of indebtedness, cash, assets or shares of capital
stock other than such Common Shares, such rights, options or warrants or such
convertible or exchangeable securities (making any Exercise Price reduction
required by this paragraph (d)(i)) immediately followed by (y) in the case of
such Common Shares or such rights, options or warrants, a dividend or
distribution thereof (making any further Exercise Price reduction required by
paragraph (a) and (b) of this Section, except any Common Shares included in such
dividend or distribution shall not be deemed "outstanding at the close of
business on the date fixed for such determination" within the meaning of
paragraph (a) of this Section), or (z) in the case of such convertible or
exchangeable securities, a dividend or distribution of the number of Common
Shares as would then be issuable upon the exercise or exchange thereof, whether
or not the exercise or exchange of such securities is subject to any conditions
(making any further Exercise Price reduction required by paragraph (a) of this
Section, except the shares deemed to constitute such dividend or distribution
shall not be deemed "outstanding at the close of business on the date fixed for
such determination" within the meaning of paragraph (a) of this Section).
(ii) In case the Company shall issue Common Shares for a
consideration per share less than the Current Market Price (determined as
provided in paragraph (h) of this Section), the Exercise Price applicable to any
particular Warrant shall be reduced by multiplying such Exercise Price in effect
immediately prior to the close of business on the date on which the Company
fixes the offering price of such additional shares by a fraction of which the
numerator
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shall be the number of Common Shares outstanding at the close of business on the
date fixed for such determination plus a fraction equal to the aggregate
consideration received by the Company from the issuance of such additional
Common Shares over the Current Market Price on the date on which the Company
fixes the offering price of such additional shares (determined as provided in
paragraph (h) of this Section), and the denominator of which shall be the number
of Common Shares outstanding immediately after giving effect to such issuance.
The reduction in such Exercise Price provided for in the preceding sentence
shall not apply to (A) securities issued in transactions described in paragraphs
(a), (b), (c), (d)(i), (d)(iii) or (f) of this Section or pursuant to the
exercise or exchange of any such securities (to the extent applicable); (B) the
exercise or exchange of securities (including options) convertible or
exchangeable for Common Shares outstanding on the date of this Warrant
Agreement, or issuable pursuant to binding agreements in effect on the date of
this Warrant Agreement; (C) Common Shares issued and issuable upon the exercise
of options issued to the Company's directors, officers and employees under bona
fide employee benefit plans adopted by the Board of Directors and approved by
the holders of Common Shares when required by law or otherwise where such
issuances have been approved by the Board of Directors (but only to the extent
that the aggregate number of shares excluded hereby and issued after the date of
this Warrant Agreement shall not exceed 1% of the Common Shares outstanding at
the time of issuance of the Notes); (D) Common Shares issued to shareholders of
any person that merges into the Company in proportion to their stock holdings of
such person immediately prior to such merger, upon such merger; (E) Common
Shares issued in a bona fide underwritten public offering; (F) Common Shares
issued in a bona fide private placement through a placement agent that is a
member firm of the National Association of Securities Dealers, Inc. (except to
the extent that any discount from the Current Market Price (determined as
provided in paragraph (h) of this Section) attributable to restrictions on
transferability of the Common Shares, as determined in good faith by the Board
of Directors and described in a resolution thereof which shall be filed with the
Warrant Agent, shall exceed 20%), or issuable pursuant to a binding agreement in
effect on the date of this Warrant Agreement; or (G) Common Shares issued as a
dividend on any securities outstanding on the date of this Warrant Agreement
required to be made pursuant to the certificate of designation pertaining to
such securities in effect at the time such securities were issued.
(iii) In case the Company shall issue any securities convertible
into or exchangeable for Common Shares for a consideration per Common Share
(including the minimum consideration per share payable upon exercise or exchange
of any securities convertible into or exchangeable for Common Shares) of Common
Shares initially deliverable upon exercise or exchange of such securities less
than the Current Market Price (determined as provided in paragraph (h) of this
Section), the Exercise Price applicable in respect of any particular Warrant
shall be reduced by multiplying such Exercise Price as in effect immediately
prior to the close of business on the date on which the Company fixes the
offering price of such additional shares by a fraction of which the numerator
shall be the number of Common Shares outstanding immediately prior to the
issuance of such securities plus a fraction equal to the aggregate consideration
received for the issuance of such securities (including the minimum
consideration per share
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20
payable upon exercise or exchange of any securities convertible into or
exchangeable for Common Shares) over the Current Market Price on the date on
which the Company fixes the offering price of such additional shares (determined
as provided in paragraph (h) of this Section) and the denominator of which shall
be the number of shares outstanding immediately prior to the issuance of such
securities plus the maximum number of shares deliverable upon exercise of or in
exchange for such securities at the initial exercise or exchange rate. The
reduction in the Exercise Price provided for in the preceding sentence shall not
apply to (A) securities issued in transactions described in paragraphs (a), (b),
(d)(i) or (d)(ii) of this Section; (B) convertible securities issued to
shareholders of any person that merges into the Company, or with a Subsidiary of
the Company, in proportion to their stock holdings of such person immediately
prior to such merger, upon such merger; (C) convertible securities issued in a
bona fide underwritten public offering; (D) convertible securities issued in a
bona fide private placement through a placement agent that is a member firm of
the National Association of Securities Dealers, Inc. (except to the extent that
any discount from the Current Market Price (determined as provided in paragraph
(h) of this Section) attributable to restrictions on transferability of Common
Shares issuable upon exercise, as determined in good faith by the Board of
Directors and described in a resolution thereof which shall be filed with the
Warrant Agent, shall exceed 20% of the then Current Market Price, or issuable
pursuant to a binding agreement in effect on the date of this Warrant Agreement;
or (E) stock options issued to the Company's directors, officers or employees.
(e) In case the Company shall, by dividend or otherwise, at any time
distribute to all holders of the Common Shares cash (excluding any cash that is
distributed as part of a distribution referred to in paragraph (d)(i) of this
Section or in connection with a transaction to which Section 14 applies) in an
aggregate amount that, together with (i) the aggregate amount of any other
distributions to all holders of the Common Shares made exclusively in cash
within the 12 months preceding the date fixed for the determination of
shareholders entitled to such distribution and in respect of which no Exercise
Price adjustment pursuant to paragraph (d)(i) or this paragraph (e) has been
made previously and (ii) the aggregate of any cash plus the fair market value
(as determined by the Board of Directors, whose determination shall be
conclusive and described in a resolution of the Board of Directors) as of such
date of determination of consideration payable in respect of any tender offer by
the Company or a Subsidiary for all or any portion of the Common Shares, and any
purchase by the Company of Common Shares in the open market, consummated within
the 12 months preceding such date of determination and in respect of which no
Exercise Price adjustment pursuant to paragraph (f) of this Section has been
made previously, exceeds 12.5% of the product of the Current Market Price
(determined as provided in paragraph (h) of this Section) on such date of
determination times the number of Common Shares outstanding on such date, the
Exercise Price applicable in respect of any particular Warrant shall be reduced
by multiplying such Exercise Price as in effect immediately prior to the close
of business on such date of determination by a fraction of which the numerator
shall be the Current Market Price (determined as provided in paragraph (h) of
this Section) on such date less the amount of cash to be distributed at such
time applicable to one Common Share and the
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denominator shall be such Current Market Price, such reduction to become
effective immediately prior to the opening of business on the day after such
date.
(f) In case a tender or exchange offer made by the Company or any
subsidiary for all or any portion of the Common Shares shall be consummated, or
in case the Company shall purchase Common Shares in the open market, the
Exercise Price applicable in respect of any particular Warrant shall be reduced
by multiplying such Exercise Price as in effect immediately prior to the
Expiration Time by a fraction of which the numerator shall be the product of (x)
the Current Market Price (determined as provided in paragraph (h) of this
Section) multiplied by (y) the number of Common Shares outstanding (including
any tendered or exchanged shares) at the Expiration Time and the denominator
shall be the sum of (A) the fair market value (determined as aforesaid) of the
aggregate consideration payable to shareholders upon consummation of such tender
or exchange offer, or upon such purchase, and (B) the product of such Current
Market Price times such number of outstanding shares at the Expiration Time
minus the number of shares accepted for payment in such tender or exchange
offer, or so purchased (the "Purchased Shares"). For the purpose of this
paragraph, "Expiration Time" means either the last time that tenders may be made
pursuant to a tender offer or exchanges may be made pursuant to an exchange
offer, or the time of an agreement to purchase shares in the open market, as the
case may be. Any reduction in the Exercise Price pursuant to this paragraph
shall be made immediately following the close of business on the last trading
day used to compute Current Market Price; provided, that, such reduction shall
be deemed to have become effective immediately prior to the opening of business
on the day following the Expiration Time. To the extent that a Holder exercises
Warrants prior to the conclusion of the period for which Current Market Price is
to be calculated, any adjustment in the number of Common Shares issuable upon
exercise of such Warrant shall inure to the benefit of the holder of record of
such Warrant at the close of business on the first Trading Day following the
Expiration Time.
(g) The reclassification of Common Shares into securities which include
securities other than Common Shares (other than any reclassification upon a
consolidation or merger to which Section 14 applies) shall be deemed to involve
(i) a distribution of such securities other than Common Shares to all holders of
Common Shares (and the effective date of such reclassification shall be deemed
to be "the date fixed for the determination of shareholders entitled to such
distribution" within the meaning of paragraph (d)(i) of this Section), and (ii)
a subdivision or combination, as the case may be, of the number of Common Shares
outstanding prior to such reclassification into the number of Common Shares
outstanding immediately thereafter (and the effective date of such
reclassification shall be deemed to be "the day upon which such subdivision
becomes effective" or "the day upon which such combination becomes effective",
as the case may be, and "the day upon which such subdivision or combination
becomes effective" within the meaning of paragraph (c) of this Section). Rights,
options or warrants issued by the Company to all holders of the Common Shares
entitling the holders thereof to subscribe for or purchase Common Shares (either
initially or under certain circumstances), which rights, options or warrants (A)
are deemed to be transferred with such Common Shares, (B) are not exercisable
and (C) are
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22
also issued in respect of future issuances of Common Shares, in each case in
clauses (A) through (C) until or upon the occurrence of a specified event or
events ("Trigger Event"), shall for purposes of this Section 15 not be deemed
issued until the occurrence of the earliest Trigger Event.
(h) For the purpose of any computation under this paragraph and
paragraphs (b), (d) and (e) of this Section, the current market price per share
of Common Shares (the "Current Market Price") on any date shall be deemed to be
the average of the daily Closing Prices for the 30 consecutive trading days
commencing 45 trading days before the date in question. For the purpose of any
computation under paragraph (f) of this Section, the Current Market Price on any
date shall be deemed to be the average of the daily closing prices for the five
consecutive trading days commencing on the first trading day immediately
following the expiration time. Notwithstanding anything to the contrary
contained in this paragraph, (i) if the "ex" date for any event (other than the
issuance or distribution requiring such computation) that requires an adjustment
to the applicable Exercise Price pursuant to paragraph (a), (b), (c), (d) or (e)
above occurs on or after the 15th trading day prior to the date in question and
prior to the "ex" date for the issuance or distribution requiring such
computation, the closing price for each trading day prior to the "ex" date for
such other event shall be adjusted by multiplying such closing price by the same
fraction by which such Exercise Price is so required to be adjusted as a result
of such other event, (ii) if the "ex" date for any event (other than the
issuance or distribution requiring such computation) that requires an adjustment
to the applicable Exercise Price pursuant to paragraph (a), (b), (c), (d), (e)
or (f) above occurs on or after the "ex" date for the issuance or distribution
requiring such computation and on or prior to the date in question, the closing
price for each trading day on and after the "ex" date for such other event shall
be adjusted by multiplying such closing price by the reciprocal of the fraction
by which such Exercise Price is so required to be adjusted as a result of such
other event, and (iii) if the "ex" date for the issuance or distribution
requiring such computation is on or prior to the date in question, after taking
into account any adjustment required pursuant to clause (ii) of this proviso,
the closing price for each trading day on or after such "ex" date shall be
adjusted by adding thereto the amount of any cash and the fair market value on
the date in question (as determined by the Board of Directors in a manner
consistent with any determination of such value for the purposes of paragraph
(d) or (e) of this Section, whose determination shall be conclusive and
described in a resolution of the Board of Directors) of the evidences of
indebtedness, shares of Capital Stock or assets being distributed applicable to
one share of common stock of the Company, no par value ("Common Stock"), as of
the close of business on the day before such "ex" date.
(i) (i) If any event shall occur as to which the other provisions of
this Section 15 are not strictly applicable but the failure to make any
adjustment would have the effect of depriving holders of the benefit of all or a
portion of the exercise rights in respect of any Warrant in accordance with the
essential intent and principles of this Section 15, then, in each such case, the
Company shall appoint an Independent Financial Expert, which shall give its
opinion upon the adjustment, if any, on a basis consistent with the essential
intent and principles established in this
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23
Section 15 necessary to preserve, without dilution, such exercise rights. Upon
receipt of such opinion, the Company will promptly mail a copy thereof to the
holders and shall make the adjustments described therein. As used herein, an
"Independent Financial Expert" is a firm (A) which does not, and whose
directors, officers and employees or affiliates do not have a direct or indirect
financial interest in the Company and (B) which, in the judgment of the Board of
Directors, is otherwise independent and qualified to perform the task for which
it is to be engaged.
(ii) The Company will not, by amendment of its certificate of
incorporation or bylaws or through any consolidation, merger, reorganization,
transfer of assets, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of the Warrants, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the Holders thereof
against dilution or other impairment. Without limiting the generality of the
foregoing, the Company (A) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully-paid
and nonassessable Common Shares on the exercise of the Warrants from time to
time outstanding and (B) will not take any action which results in any
adjustment of the Exercise Price applicable in respect of any Warrant if the
total number of Common Shares issuable after the action upon the exercise of all
of the Warrants would exceed the total number of Common Shares then authorized
by the Company's certificate of incorporation and available for the purposes of
issue upon such exercise.
(j) The Company may, but shall not be obligated to, make such reductions
in the Exercise Price, in addition to those required by paragraphs (a), (b),
(c), (d), (e), (f) and (g) of this Section, as it considers to be advisable in
order that any event treated for United States federal income tax purposes as a
dividend of stock or stock rights shall not be taxable to the recipients or if
that is not possible, to diminish any income taxes that are otherwise payable
because of such event.
(k) No adjustment in the Exercise Price applicable to any Warrant shall
be required unless such adjustment (plus any other adjustments not previously
made by reason of this paragraph (k)) would require an increase or decrease of
at least 1% in such Exercise Price; provided, however, that any adjustments
which by reason of this paragraph (k) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment.
(l) In any case in which this Section 15 shall require that an
adjustment in the applicable Exercise Price be made effective as of or
immediately after a record date for a specified event, the Company may elect to
defer until the occurrence of such event (i) issuing to the holder of any
Warrant exercised after such record date the Common Shares and other capital
stock of the Company, if any, issuable upon such exercise over and above the
Common Shares and other capital stock of the Company, if any, issuable upon such
exercise on the basis of such Exercise Price prior to such adjustment and (ii)
paying to such holder any amount in cash in lieu of a fractional share pursuant
to Section 17 hereof; provided that the Company shall deliver to such
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24
holder a due xxxx or other appropriate instrument evidencing such holder's right
to receive such additional Common Shares, other capital stock and cash upon the
occurrence of the event requiring such adjustment.
(m) (i) No adjustment need be made for a transaction referred to in
subsections (a), (b), (c), (e) or (f) of this Section 15 if all holders of
Warrants are to participate in the transaction on a basis and with notice that
the Board of Directors determines to be fair and appropriate in light of the
basis and notice on which holders of Common Shares of the Company participate in
the transaction.
(ii) No adjustment need be made for (x) a transaction referred to
in subsections (b), (d)(ii) or (d)(iii) of this Section 15 if the below market
portion of such issuances, taken together with the below market portion of all
other below market issuances and with the above market portion of all above
market tender or exchange offers described in clause (y) of this paragraph made
on and after the date of this Warrant Agreement, is less than 2.0% of the Total
Market Capitalization of the Company (determined by reference to the sum of the
percentages of Total Market Capitalization of the Company attributable to each
such transaction on the date thereof) and (y) a transaction referred to in
subsection (f) of this Section 15 if the above market portion of such tender or
exchange offers, taken together with the above market portion of all other above
market tender or exchange offers and with the below market portion of all below
market issuances described in clause (x) of this paragraph made on or after the
date of this Warrant Agreement, is less than 2.0% of the Total Market
Capitalization of the Company (determined by reference to the sum of the
percentages of Total Market Capitalization of the Company attributable to each
such transaction on the date thereof). For purposes hereof, the "Total Market
Capitalization" of any person means, as of any day of determination, the sum of
(A) the consolidated indebtedness of such person and its Subsidiaries on such
day, plus (B) the product of (1) the aggregate number of outstanding primary
shares of Common Stock of such person on such day (which shall not include any
option or warrants on, or securities convertible or exchangeable into, shares of
Common Stock of such person other than, in the case of the Company, any share of
preferred stock of the Company, that, as of the day of determination, cannot,
pursuant to the terms thereof as in effect on the date hereof, be required to be
redeemed by the Company in cash), and (2) the average Closing Price of such
Common Stock over the 20 consecutive Trading Days immediately preceding such
day, plus (C) the liquidation value of any outstanding shares of preferred stock
of such person on such day. If no such Closing Price exists with respect to
shares of any such class, the value of such shares for purposes of clause (b) of
the preceding sentence shall be determined by the Company's Board of Directors
in good faith and evidenced by a written opinion as to such value issued by an
Independent Financial Expert.
(iii) No adjustment need be made for a change in the par value,
or from par value to no par value, or from no par value to par value, of the
Common Shares.
SECTION 16. [INTENTIONALLY NOT USED]
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25
SECTION 17. Fractional Interests. The Company shall not be required to
issue fractional Warrant Shares on the exercise of Warrants. If more than one
Warrant shall be presented for exercise in full at the same time by the same
holder, the number of full Warrant Shares which shall be issuable upon the
exercise thereof shall be computed on the basis of the aggregate number of
Warrant Shares purchasable on exercise of the Warrants so presented. If any
fraction of a Warrant Share would, except for the provisions of this Section 17,
be issuable on the exercise of any Warrants (or specified portion thereof), the
Company shall notify the Warrant Agent in writing of the amount to be paid in
lieu of the fraction of a Warrant Share and concurrently pay or provide to the
Warrant Agent for payment to the Warrant holder an amount in cash equal to the
product of (i) such fraction of a Warrant Share multiplied by (ii) the
difference of the current market price of a Common Share on the trading day
immediately preceding the date the Warrant is presented for exercise over the
Exercise Price of such Warrant, computed to the nearest whole cent.
SECTION 18. Notices to Warrant Holders.
(a) Whenever the Exercise Price applicable to any Warrant is adjusted as
herein provided:
(i) The Company shall compute such adjusted Exercise Price in
accordance with Section 15 and shall prepare a certificate signed by the
Treasurer or Chief Financial Officer of the Company setting forth such adjusted
Exercise Price and showing in reasonable detail the facts upon which such
adjustment is based,and such certificate shall forthwith be filed (with a copy
to the Trustee) at each office or agency maintained for the purpose of exercise
of Warrants pursuant to this Agreement; and
(ii) a notice stating that such Exercise Price has been adjusted
and setting forth such adjusted Exercise Price shall forthwith be prepared, and
as soon as practicable after it is prepared, such notice shall be furnished by
the Company to the Trustee and mailed by the Company at its expense to all
registered holders at their last addresses as they shall appear in the Warrant
register.
(b) In case:
(i) the Company shall declare a dividend (or any other
distribution) on its Common Shares payable (A) otherwise than exclusively in
cash or (B) exclusively in cash in an amount that would require an Exercise
Price adjustment pursuant to paragraph (e) of Section 15; or
(ii) the Company shall authorize the granting to the holders of
its Common Shares of rights, options or warrants to subscribe for or purchase
any shares of Capital Shares of any class or of any other rights (excluding
shares of Capital Shares or options for Capital Shares issued pursuant to a
benefit plan for employees, officers or directors of the Company); or
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26
(iii) of any reclassification of the Common Shares of the Company
(other than a subdivision or combination of the outstanding shares of such
Common Shares), or of any consolidation, merger or share exchange to which the
Company is a party and for which approval of any shareholders of the Company is
required, or of the sale or transfer of all or substantially all of the assets
of the Company; or
(iv) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(v) the Company or any subsidiary shall commence a tender or
exchange offer (other than an exchange offer contemplated by clause (iii) above)
for all or a portion of the outstanding shares of Common Shares (or shall amend
any such tender or exchange offer to change the maximum number of shares being
sought or the amount or type of consideration being offered (including by
exchange) therefor);
then the Company shall cause to be filed at each office or agency maintained
pursuant to this Agreement, and shall cause to be mailed to all registered
holders of Warrants at their last addresses as they shall appear in the Warrant
register, at least 21 days (or 11 days in any case specified in clause (i), (ii)
or (v) above) prior to the applicable record, effective or expiration date
hereinafter specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution or granting of rights,
options or warrants, or, if a record is not to be taken, the date as of which
the holders of its Common Shares of record who will be entitled to such
dividend, distribution, rights, options or warrants are to be determined, (y)
the date on which such reclassification, consolidation, merger, share exchange,
sale, transfer, dissolution, liquidation or winding up is expected to become
effective, and the date as of which it is expected that holders of its Common
Shares of record shall be entitled to exchange their Common Shares, for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, share exchange, sale, transfer, dissolution, liquidation
or winding up, or (z) the date on which such tender or exchange offer (other
than an exchange offer contemplated by clause (y) above) commenced, the date on
which such tender or exchange offer is scheduled to expire unless extended, the
consideration offered and the other material terms thereof (or the material
terms of any amendment thereto). Neither the failure to give any such notice nor
any defect therein shall affect the legality or validity of any action described
in clauses (b)(i) through (b)(v) of this Section 18.
SECTION 19. 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 Warrant Certificates
shall be taken as statements of the Company. 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.
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27
The Warrant Agent assumes no responsibility with respect to the distribution of
the Warrant Certificates 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 Warrant Certificates to be complied with by the Company.
(c) 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
Certificate 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.
(d) The Warrant Agent shall incur no liability or responsibility to the
Company or to any holder of any Warrant Certificate for any action taken in
reliance on any Warrant Certificate, certificate of shares, 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. The Warrant Agent shall not be bound by any notice or
demand, or any waiver, modification, termination or revision of this Agreement
or any of the terms hereof, unless evidenced by a writing between the Company
and the Warrant Agent.
(e) The Company agrees to pay to the Warrant Agent such compensation
from time to time as agreed between the Company and the Warrant Agent for all
services rendered by the Warrant Agent hereunder and in connection with the
execution of this Agreement, to reimburse the Warrant Agent for all expenses,
taxes (including withholding taxes and the reasonable fees and expenses of its
counsel and agents) and governmental charges and other charges of any kind and
nature incurred by the Warrant Agent in the execution, delivery and performance
of its responsibilities under this Agreement and to indemnify the Warrant Agent
and its directors, officers and agents and save them harmless against any and
all liabilities, including judgments, costs and counsel fees, for anything done
or omitted by the Warrant Agent and its directors, officers and agents in the
execution, delivery and performance of its responsibilities under this Agreement
except as a result of its gross negligence or bad faith. The provisions of this
Section 19(e) shall survive termination of this Agreement and the resignation or
removal of the Warrant Agent.
(f) 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 Warrant
Certificates 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 it 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
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28
of the Warrant Certificates 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.
(g) Except as required 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 become pecuniarily
interested in any transaction in which the Company may be interested, or
contract with or lend money to the Company 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.
(h) The Warrant Agent shall act hereunder solely as agent for the
Company, 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.
(i) The Warrant Agent shall not at any time be under any duty or
responsibility to any holder of any Warrant Certificate to make or cause to be
made any adjustment of any Exercise Price or number of the Warrant Shares or
other securities or property deliverable as provided in this Agreement, or to
determine whether any facts exist which may require any of such adjustments, or
with respect to the nature or extent of any such adjustments, when made, or with
respect to the method employed in making the same. The Warrant Agent shall not
be accountable with respect to the validity or value or the kind or amount of
any Warrant Shares or of any securities or property which may at any time be
issued or delivered upon the exercise of any Warrant or with respect to whether
any such Warrant Shares or other securities will when issued be validly issued
and fully-paid and nonassessable, and makes no representation with respect
thereto.
SECTION 20. Merger, 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 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
Section 21 hereof. To the extent practicable, the Warrant Agent shall provide
prior written notice to the Company of any such merger, consolidation,
succession or similar change with respect to the Warrant Agent; provided,
however, that the failure to deliver such notice will not affect the rights of
any of the parties hereto. In case at the time such successor to the Warrant
Agent shall succeed to the agency created by this Agreement, and in case at that
time any of the Warrant Certificates shall
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29
have been countersigned but not delivered, any such successor to the Warrant
Agent may adopt the countersignature of the original Warrant Agent; and in case
at that time any of the Warrant Certificates shall not have been countersigned,
any successor to the Warrant Agent may countersign such Warrant Certificates
either in the name of the predecessor Warrant Agent or in the name of the
successor to the Warrant Agent; and in all such cases such Warrant Certificates
shall have the full force and effect provided in the Warrant Certificates 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 Warrant Certificates shall have been countersigned but
not delivered, the Warrant Agent whose name has been changed may adopt the
countersignature under its prior name, and in case at that time any of the
Warrant Certificates shall not have been countersigned, the Warrant Agent may
countersign such Warrant Certificates either in its prior name or in its changed
name, and in all such cases such Warrant Certificates shall have the full force
and effect provided in the Warrant Certificates and in this Agreement.
SECTION 21. Change of Warrant Agent. If the Warrant Agent shall become
incapable of acting as Warrant Agent or shall resign as provided below, the
Company shall appoint a successor to such Warrant Agent. If the Company shall
fail to make such appointment within a period of 30 days after it has been
notified in writing of such incapacity by the Warrant Agent or by the registered
holders of a majority of the then-outstanding Warrants, then the registered
holder of any Warrant Certificate may apply to any court of competent
jurisdiction for the appointment of a successor to the Warrant Agent. Pending
appointment of a successor to such Warrant Agent, either by the Company or by
such a court, the duties of the Warrant Agent shall be carried out by the
Company. The holders of a majority of the unexercised Warrants shall be entitled
at any time to remove the Warrant Agent and appoint a successor to such Warrant
Agent. Such successor to the Warrant Agent need not be approved by the Company
or the former Warrant Agent. After appointment the successor to the 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 to the
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 give any notice provided for in this Section 21, however, or
any defect therein, shall not affect the legality or validity of the appointment
of a successor to the Warrant Agent.
The Warrant Agent may resign at any time and be discharged from the
obligations hereby created by so notifying the Company in writing at least 30
days in advance of the proposed effective date of its resignation. If no
successor Warrant Agent accepts the engagement hereunder by such time, the
Company shall act as Warrant Agent.
SECTION 22. Notices to the Company and Warrant Agent. Any notice or
demand authorized by this Agreement to be given or made by the Warrant Agent or
by the registered holder of any Warrant Certificate to or on the Company shall
be sufficiently given or made when
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30
and if deposited in the mail, first class or registered, postage prepaid,
addressed (until another address is filed in writing by the Company with the
Warrant Agent), as follows:
PLD Telekom Inc.
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Vice President, Administration
with a copy to:
Xxxxxx, Xxxxx & Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: H. Xxxxxxxx Xxxxxxx, Xx., Esq.
Any notice pursuant to this Agreement to be given by the Company or by
the registered holder(s) of any Warrant Certificate to the Warrant Agent shall
be sufficiently given when and if deposited in the mail, first-class or
registered, postage prepaid, addressed (until another address is filed in
writing by the Warrant Agent with the Company) to the Warrant Agent as follows:
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Corporate Trust Department
Fax: (000) 000-0000
Notice may also be given by facsimile transmission (effective when
receipt is acknowledged) (effective at the time of delivery) or by overnight
delivery service (effective the next business day).
SECTION 23. Supplements and Amendments. The Company and the Warrant
Agent may from time to time, supplement or amend this Agreement without the
consent of any holders of Warrant Certificates 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 shall not in any way
materially adversely affect the interests of the holders of Warrant
Certificates. Any amendment or supplement to this Agreement that has a material
adverse effect on the interests of holders shall require the written consent of
registered holders of a majority of the then outstanding Warrants. The consent
of each holder of a Warrant affected shall be required for any amendment
pursuant to which the Exercise Price applicable in respect of such Warrant would
be increased or the
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31
number of Warrant Shares purchasable upon exercise of Warrants would be
decreased (other than in accordance with Section 15 or 17 hereof). In executing
any amendment or supplement, the Warrant Agent shall be entitled to receive an
opinion of counsel to the effect that such amendment or supplement is authorized
and permitted by this Agreement.
SECTION 24. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Warrant Agent shall bind
(without limiting Section 28 hereof) and inure to the benefit of their
respective successors and assigns hereunder.
SECTION 25. Termination. This Agreement shall terminate at 5:00 p.m.,
New York, New York time on December 31, 2008; provided, however, that if no
Default Warrants have become issuable in accordance with the terms hereof, this
Agreement shall terminate on the earlier of the date on which all Initial
Warrants and Additional Warrants have been exercised and January 1, 2009;
provided, further, that (a) if the Company shall become obligated to issue any
Default Warrants pursuant to the Revolving Credit Agreement or Section 2(c)
hereof, this Agreement shall not in any event terminate for so long as the
Company shall remain so obligated, and (b) if the Company shall have issued any
Default Warrants pursuant to the Revolving Credit Agreement or Section 2(c)
hereof, this Agreement shall terminate on the earlier of (i) 5:00 p.m., New
York, New York time, on the date which is the tenth anniversary of the latest
date of issuance of any such Default Warrant and (ii) the date on which all
Warrants have been exercised. The provisions of Section 19 hereof shall survive
any such termination.
SECTION 26. Governing Law; Jurisdiction. This Agreement and each Warrant
Certificate shall be governed by and construed in accordance with the laws of
the State of New York applicable to contracts made and to be performed in the
State of New York. The Company irrevocably consents to the jurisdiction of any
United States or State Court located in the State of New York in any suit or
proceeding based on or arising under this Agreement or the Warrant Certificates
and irrevocably agrees that all claims in respect of such suit or proceeding may
be determined in any such court. The Company irrevocably waives the defense of
an inconvenient forum to the maintenance of such suit or proceeding. The Company
hereby agrees that if it ceases to have an office located in the State of New
York, it will promptly designate and appoint CT Corporation System, 0000
Xxxxxxxx, Xxx Xxxx, XX 00000 as an agent upon whom process may be served in any
suit or proceeding based on or arising under this Agreement and notify the
holders of the Warrants of such appointment. The Company further agrees that
service of process upon the Company, or upon an agent appointed pursuant to the
preceding sentence accompanied with written notice of said service to the
Company, as the case may be, mailed by first class mail shall be deemed in every
respect effective service of process upon the Company in any such suit or
proceeding. Nothing herein shall affect the Warrant Agent's or any Warrant
holder's right to serve process in any other manner permitted by law. The
Company agrees that a final non-appealable judgment in any such suit or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on such judgment or in any other lawful manner.
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32
SECTION 27. Benefits of This Agreement. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company, the
Warrant Agent and the registered holders of the Warrant Certificates 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, the Warrant Agent
and the registered holders of the Warrant Certificates.
SECTION 28. 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.
SECTION 29. Further Assurances. From time to time on and after the date
hereof, the Company shall deliver or cause to be delivered to the Warrant Agent
such further documents and instruments and shall do and cause to be done such
further acts as the Warrant Agent shall reasonably request (it being understood
that the Warrant Agent shall have no obligation to make such request) to carry
out more effectively the provisions and purposes of this Agreement, to evidence
compliance herewith or to assure itself that it is protected hereunder.
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33
IN WITNESS WHEREOF, the parties here to have caused this Agreement to be
duly executed, as of the day and year first above written.
PLD TELEKOM INC.
By: /s/ E. Xxxxx Xxxxxxxx
------------------------------------
Name: E. Xxxxx Xxxxxxxx
Title: Senior Vice President
THE BANK OF NEW YORK
By: /s/ Xxxx X. Xxxxxx
------------------------------------
------------------------------------
Name: Xxxx X. Xxxxxx
Title: Assistant Vice President
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34
EXHIBIT A-1
FORM OF SERIES A WARRANT CERTIFICATE
EXERCISABLE ON OR AFTER NOVEMBER 26, 1997
AND ON OR BEFORE DECEMBER 31, 2008
No. WA-[ ]
Private Placement Number 69340T 2* 0
Series A Warrant Certificate
PLD TELEKOM INC.
This Series A Warrant Certificate ("this Warrant Certificate")
certifies that _______________, or registered assigns, is the registered holder
of _______ warrants expiring December 31, 2008 (the "Warrants") to purchase
Common Shares (the "Common Shares"), of PLD Telekom Inc., a Delaware corporation
("the Company"). Each Warrant entitles the holder upon exercise to receive from
the Company, at any time on or after 9:00 a.m., New York, New York time on
November 26, 1997 and on or prior to the close of business on December 31, 2008
(the "Expiration Date"), one (1) fully paid and nonassessable Common Share (each
a "Warrant Share") at the initial exercise price (the "Exercise Price") of
$8.625 per share payable either in the form of cash or certified check, official
bank check or bank cashier's check payable to the order of the Company or as
otherwise provided in the Warrant Agreement referred to herein, upon surrender
of this Warrant Certificate and payment of the aggregate Exercise Price at the
office or agency of the Warrant Agent, but only subject to the conditions set
forth herein and in the Warrant Agreement. The Exercise Price is subject to
being reset, and the Exercise Price and, in some cases, the number of Warrant
Shares issuable upon exercise of the Warrants are subject to adjustment, upon
the occurrence of certain events set forth in the Warrant Agreement. All
capitalized terms not defined herein shall have the meaning assigned to such
terms in the Warrant Agreement.
No Warrant may be exercised after 5:00 pm., New York, New York
time on the Expiration Date and to the extent not exercised by such time such
Warrants shall become void.
Reference is hereby made to the further provisions of this
Warrant Certificate set forth following the signature page hereof and such
further provisions shall for all purposes have the same effect as though fully
set forth at this place.
This Warrant Certificate shall not be valid unless countersigned
by the Warrant Agent, as such term is used in the Warrant Agreement.
35
This Warrant Certificate shall be governed and construed in
accordance with the internal laws of the State of New York.
IN WITNESS WHEREOF, PLD Telekom Inc. has caused this Warrant
Certificate to be signed by its Chief Executive Officer and by its Secretary,
each by a facsimile of his signature, and has caused a facsimile of its
corporate seal to be affixed hereunto or imprinted hereon.
Dated: November __, 1997
PLD TELEKOM INC.
By:____________________________
Chief Executive Officer
By:_____________________________
Secretary
(seal)
Countersigned:
The Bank of New York as Warrant Agent
By:___________________________________
Authorized Signatory
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36
THE WARRANTS REPRESENTED HEREBY AND, AS OF THE DATE THIS WARRANT
CERTIFICATE WAS ORIGINALLY ISSUED, THE COMMON SHARES PURCHASABLE UPON
THEIR EXERCISE, HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT
BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT ("RULE
144A") IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, OR (2)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND
(B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF
THE UNITED STATES.
THE COMMON SHARES (THE "COMMON SHARES") FOR WHICH THIS WARRANT IS
EXERCISABLE MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
AND ANY APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION FROM
SUCH REGISTRATION REQUIREMENTS. ACCORDINGLY, NO WARRANT HOLDER SHALL BE
ENTITLED TO EXERCISE SUCH HOLDER'S WARRANTS AT ANY TIME UNLESS, AT THE
TIME OF EXERCISE, (I) A REGISTRATION STATEMENT UNDER THE ACT COVERING
THE OFFER AND SALE OF THE COMMON SHARES ISSUABLE UPON THE EXERCISE OF
THIS WARRANT (THE "WARRANT SHARES") HAS BEEN FILED WITH, AND DECLARED
EFFECTIVE BY, THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC"), AND NO
STOP ORDER SUSPENDING THE EFFECTIVENESS OF SUCH REGISTRATION STATEMENT
HAS BEEN ISSUED BY THE SEC OR (II) THE OFFER AND SALE OF THE WARRANT
SHARES TO THE WARRANT HOLDERS ARE EXEMPT FROM REGISTRATION UNDER THE ACT
AND THE WARRANT HOLDER, IF SO REQUESTED BY THE COMPANY, HAS DELIVERED TO
THE COMPANY AN OPINION OF COUNSEL TO SUCH EFFECT.
TRANSFERS OF THE WARRANTS REPRESENTED HEREBY SHALL BE MADE
IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE WARRANT
AGREEMENT.
By accepting a Warrant Certificate bearing the legend above, each
holder shall be bound by all of the terms and provisions of the Warrant
Agreement (a copy of which is available on request to the Company or the Warrant
Agent) as fully and effectively as if such holder had signed the same.
The Warrants evidenced by this Warrant Certificate are part of a
duly authorized issue of Warrants expiring on the Expiration Date, entitling the
holder upon exercise to receive Common Shares of the Company (the "Common
Shares"), and are issued or to be issued pursuant
-3-
37
to a Warrant Agreement, dated as of November 26, 1997 (the "Warrant Agreement"),
duly executed and delivered by the Company to The Bank of New York, as Warrant
Agent (the "Warrant Agent"), which Warrant Agreement is hereby incorporated by
reference in and made a part of this instrument and is hereby referred to for a
description of the rights, limitation of rights, obligations, duties and
immunities thereunder of the Warrant Agent, the Company and the holders (the
words "holders" or "holder" meaning the registered holders or registered holder)
of the Warrants.
Warrants may be exercised at any time on or after 9:00 a.m., New
York, New York time on November 26, 1997 and on or prior to the close of
business on the Expiration Date. The holder of Warrants evidenced by this
Warrant Certificate may exercise them by surrendering this Warrant Certificate,
with the form of election to purchase set forth hereon properly completed and
executed, together with payment of the Exercise Price in the form of cash or
certified or official bank check or official bank cashier's check payable to the
order of the Company or as otherwise provided in the Warrant Agreement, at the
office of the Warrant Agent. In the event that upon any exercise of Warrants
evidenced hereby the number of Warrants exercised shall be less than the total
number of Warrants evidenced hereby, there shall be issued to the holder hereof
or such holder's assignee a new Warrant Certificate evidencing the number of
Warrants not exercised.
The Warrant Agreement provides that upon the occurrence of
certain events the Exercise Price set forth on the face hereof may, subject to
certain conditions, be reset or otherwise adjusted. If the Exercise Price is
adjusted, the Warrant Agreement generally provides that the number of Common
Shares issuable upon the exercise of each Warrant shall be adjusted. No
fractions of a Common Share will be issued upon the exercise of any Warrant, but
the Company will pay the cash value thereof determined as provided in the
Warrant Agreement.
The Holder of this Warrant Certificate is entitled to the
registration rights as provided in the Registration Rights Agreement, dated as
of November 26, 1997, among the Company, certain institutional investors
identified therein and the Warrant Agent, relating to registration of the
Warrants evidenced hereby and the Common Shares issuable upon exercise of the
Warrants.
Warrant Certificates, when surrendered at the office of the
Warrant Agent by the registered holder thereof in person or by a legal
representative or attorney duly authorized in writing, may be exchanged, in the
manner and subject to the limitations provided in the Warrant Agreement, but
without payment of any service charge, for another Warrant Certificate or
Warrant Certificates of like tenor evidencing in the aggregate a like number of
Warrants.
Upon due presentation for registration of transfer of this
Warrant Certificate at the office of the Warrant Agent a new Warrant Certificate
or Warrant Certificates of like tenor and evidencing in the aggregate a like
number of Warrants shall be issued to the transferee(s) in exchange for this
Warrant Certificate, subject to the limitations provided in the Warrant Agree-
-4-
38
ment, without charge except for any tax or other governmental charge imposed in
connection therewith.
The Company and the Warrant Agent may deem and treat the
registered holder(s) thereof as the absolute owner(s) of this Warrant
Certificate (notwithstanding any notation of ownership or other writing hereon
made by anyone), for the purpose of any exercise hereof, of any distribution to
the holder(s) hereof, and for all other purposes, and neither the Company nor
the Warrant Agent shall be affected by any notice to the contrary. Neither the
Warrants nor this Warrant Certificate entitles any holder hereof to any rights
of a stockholder of the Company.
-5-
39
Form of Election to Purchase
(To Be Executed Upon Exercise Of Warrant)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to receive __________ Common Shares and
herewith tenders payment for such shares to the order of PLD Telekom Inc. in the
amount of $____ in accordance with the terms hereof.
The undersigned requests that a certificate for such shares be
registered in the name of _____________________, whose address is
______________________ and that such shares be delivered to ________________
whose address is ___________.
If said number of shares is less than all of the Common Shares
purchasable hereunder, the undersigned requests that a new Warrant Certificate
representing the remaining balance of such shares be registered in the name of
_________________, whose address is ______________, and that such Warrant
Certificate be delivered to _______________, whose address is
___________________.
Date: ____________
Your Signature:___________________
(Sign exactly as your name appears on the face of this Warrant):
FORM OF TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered holder hereby
sells, assigns and transfers unto
Name:_______________________________________________
Taxpayer Identification No.:________________________
Address:____________________________________________
the within Warrant Certificate and all rights thereunder, hereby irrevocably
constituting and appointing _______________________________________ attorney to
transfer the Warrants evidenced by said Warrant Certificate (the "Warrants") on
the books of the Company with full power of substitution in the premises.
In connection with any transfer of the Warrants occurring prior
to the date which is the earlier of (i) the date of an effective Registration or
(ii) two years after the later of the original issuance of the Warrants or the
last date on which the Warrants were held by an affiliate
40
of the Company, the undersigned confirms, that without utilizing any general
solicitation or general advertising:
Check One
(a) [ ] the Warrants are being transferred in compliance with the
exemption from registration under the Securities Act of 1933, as
amended, provided by Rule 144A thereunder.
or
(b) [ ] the Warrants are being transferred other than in accordance
with (a) above and documents are being furnished which comply
with the conditions of transfer set forth in this Warrant
Certificate and the Warrant Agreement.
If none of the foregoing boxes is checked, the Warrant Agent shall not be
obligated to register the Warrants in the name of any Person other than the
holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 7(b) of the Warrant Agreement shall
have been satisfied.
Date:___________________ ______________________________________
NOTICE: The signature to
this assignment must correspond with
the name as written upon the face of
the within-mentioned instrument in
every particular, without alteration
or any change whatsoever.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing
this Warrant for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, as amended, and is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as the undersigned has requested pursuant to
Rule 144A or has determined not to request such information and that it is aware
that the transferor is relying upon the undersigned's foregoing representations
in order to claim the exemption from registration provided by Rule 144A.
Dated:__________________ ________________________________________
(To be executed by an executive officer)
41
EXHIBIT A-2
FORM OF SERIES B WARRANT CERTIFICATE
EXERCISABLE ON OR AFTER NOVEMBER 26, 1997
AND ON OR BEFORE DECEMBER 31, 2008
No. WB-[ ]
Private Placement Number 69340T 3* 9
Series B Warrant Certificate
PLD TELEKOM INC.
This Series B Warrant Certificate ("this Warrant Certificate")
certifies that _______________, or registered assigns, is the registered holder
of _______ warrants expiring December 31, 2008 (the "Warrants") to purchase
Common Shares (the "Common Shares"), of PLD Telekom Inc., a Delaware corporation
("the Company"). Each Warrant entitles the holder upon exercise to receive from
the Company, at any time on or after 9:00 a.m., New York, New York time on
November 26, 1997 and on or prior to the close of business on December 31, 2008
(the "Expiration Date"), one (1) fully paid and nonassessable Common Share (each
a "Warrant Share") at the initial exercise price (the "Exercise Price") of
$8.625 per share payable either in the form of cash or certified check, official
bank check or bank cashier's check payable to the order of the Company or as
otherwise provided in the Warrant Agreement referred to herein, upon surrender
of this Warrant Certificate and payment of the aggregate Exercise Price at the
office or agency of the Warrant Agent, but only subject to the conditions set
forth herein and in the Warrant Agreement. The Exercise Price is subject to
being reset, and the Exercise Price and, in some cases, the number of Warrant
Shares issuable upon exercise of the Warrants are subject to adjustment, upon
the occurrence of certain events set forth in the Warrant Agreement. All
capitalized terms not defined herein shall have the meaning assigned to such
terms in the Warrant Agreement.
No Warrant may be exercised after 5:00 pm., New York, New York
time on the Expiration Date and to the extent not exercised by such time such
Warrants shall become void.
Reference is hereby made to the further provisions of this
Warrant Certificate set forth after the signature page hereof and such further
provisions shall for all purposes have the same effect as though fully set forth
at this place.
This Warrant Certificate shall not be valid unless countersigned
by the Warrant Agent, as such term is used in the Warrant Agreement.
42
This Warrant Certificate shall be governed and construed in
accordance with the internal laws of the State of New York.
IN WITNESS WHEREOF, PLD Telekom Inc. has caused this Warrant
Certificate to be signed by its Chief Executive Officer and by its Secretary,
each by a facsimile of his signature, and has caused a facsimile of its
corporate seal to be affixed hereunto or imprinted hereon.
Dated: November __, 1997
PLD TELEKOM INC.
By:____________________________
Chief Executive Officer
By:_____________________________
Secretary
(seal)
Countersigned:
The Bank of New York as Warrant Agent
By:___________________________________
Authorized Signatory
-2-
43
THE WARRANTS REPRESENTED HEREBY AND, AS OF THE DATE THIS WARRANT
CERTIFICATE WAS ORIGINALLY ISSUED, THE COMMON SHARES PURCHASABLE
UPON THEIR EXERCISE, HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT (A)(1) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
UNDER THE SECURITIES ACT ("RULE 144A") IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, OR (2) PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT AND (B) IN ACCORDANCE
WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES.
THE COMMON SHARES (THE "COMMON SHARES") FOR WHICH THIS WARRANT IS
EXERCISABLE MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES
ABSENT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), AND ANY APPLICABLE STATE SECURITIES LAWS OR AN
APPLICABLE EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.
ACCORDINGLY, NO WARRANT HOLDER SHALL BE ENTITLED TO EXERCISE SUCH
HOLDER'S WARRANTS AT ANY TIME UNLESS, AT THE TIME OF EXERCISE,
(I) A REGISTRATION STATEMENT UNDER THE ACT COVERING THE OFFER AND
SALE OF THE COMMON SHARES ISSUABLE UPON THE EXERCISE OF THIS
WARRANT (THE "WARRANT SHARES") HAS BEEN FILED WITH, AND DECLARED
EFFECTIVE BY, THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC"),
AND NO STOP ORDER SUSPENDING THE EFFECTIVENESS OF SUCH
REGISTRATION STATEMENT HAS BEEN ISSUED BY THE SEC OR (II) THE
OFFER AND SALE OF THE WARRANT SHARES TO THE WARRANT HOLDERS ARE
EXEMPT FROM REGISTRATION UNDER THE ACT AND THE WARRANT HOLDER, IF
SO REQUESTED BY THE COMPANY, HAS DELIVERED TO THE COMPANY AN
OPINION OF COUNSEL TO SUCH EFFECT.
TRANSFERS OF THE WARRANTS REPRESENTED HEREBY SHALL BE
MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
WARRANT AGREEMENT.
By accepting a Warrant Certificate bearing the legend above, each
holder shall be bound by all of the terms and provisions of the Warrant
Agreement (a copy of which is available on request to the Company or the Warrant
Agent) as fully and effectively as if such holder had signed the same.
-3-
44
The Warrants evidenced by this Warrant Certificate are part of a
duly authorized issue of Warrants expiring on the Expiration Date, entitling the
holder upon exercise to receive Common Shares of the Company (the "Common
Shares"), and are issued or to be issued pursuant to a Warrant Agreement, dated
as of November 26, 1997 (the "Warrant Agreement"), duly executed and delivered
by the Company to The Bank of New York, as Warrant Agent (the "Warrant Agent"),
which Warrant Agreement is hereby incorporated by reference in and made a part
of this instrument and is hereby referred to for a description of the rights,
limitation of rights, obligations, duties and immunities thereunder of the
Warrant Agent, the Company and the holders (the words "holders" or "holder"
meaning the registered holders or registered holder) of the Warrants.
Warrants may be exercised at any time on or after 9:00 a.m., New
York, New York time on November 26, 1997 and on or prior to the close of
business on the Expiration Date. The holder of Warrants evidenced by this
Warrant Certificate may exercise them by surrendering this Warrant Certificate,
with the form of election to purchase set forth hereafter properly completed and
executed, together with payment of the Exercise Price in the form of cash or
certified or official bank check or official bank cashier's check payable to the
order of the Company or as otherwise provided in the Warrant Agreement, at the
office of the Warrant Agent. In the event that upon any exercise of Warrants
evidenced hereby the number of Warrants exercised shall be less than the total
number of Warrants evidenced hereby, there shall be issued to the holder hereof
or such holder's assignee a new Warrant Certificate evidencing the number of
Warrants not exercised.
The Warrant Agreement provides that upon the occurrence of
certain events the Exercise Price set forth on the face hereof may, subject to
certain conditions, be reset or otherwise adjusted. If the Exercise Price is
adjusted, the Warrant Agreement generally provides that the number of Common
Shares issuable upon the exercise of each Warrant shall be adjusted. No
fractions of a Common Share will be issued upon the exercise of any Warrant, but
the Company will pay the cash value thereof determined as provided in the
Warrant Agreement.
The Holder of this Warrant Certificate is entitled to the
registration rights as provided in the Registration Rights Agreement, dated as
of November 26, 1997, among the Company, certain institutional investors
identified therein and the Warrant Agent, relating to registration of the
Warrants evidenced hereby and the Common Shares issuable upon exercise of the
Warrants.
Warrant Certificates, when surrendered at the office of the
Warrant Agent by the registered holder thereof in person or by a legal
representative or attorney duly authorized in writing, may be exchanged, in the
manner and subject to the limitations provided in the Warrant Agreement, but
without payment of any service charge, for another Warrant Certificate or
Warrant Certificates of like tenor evidencing in the aggregate a like number of
Warrants.
-4-
45
Upon due presentation for registration of transfer of this
Warrant Certificate at the office of the Warrant Agent a new Warrant Certificate
or Warrant Certificates of like tenor and evidencing in the aggregate a like
number of Warrants shall be issued to the transferee(s) in exchange for this
Warrant Certificate, subject to the limitations provided in the Warrant
Agreement, without charge except for any tax or other governmental charge
imposed in connection therewith.
The Company and the Warrant Agent may deem and treat the
registered holder(s) thereof as the absolute owner(s) of this Warrant
Certificate (notwithstanding any notation of ownership or other writing hereon
made by anyone), for the purpose of any exercise hereof, of any distribution to
the holder(s) hereof, and for all other purposes, and neither the Company nor
the Warrant Agent shall be affected by any notice to the contrary. Neither the
Warrants nor this Warrant Certificate entitles any holder hereof to any rights
of a stockholder of the Company.
-5-
46
Form of Election to Purchase
(To Be Executed Upon Exercise Of Warrant)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to receive __________ Common Shares and
herewith tenders payment for such shares to the order of PLD Telekom Inc. in the
amount of $____ in accordance with the terms hereof.
The undersigned requests that a certificate for such shares be
registered in the name of _____________________, whose address is
______________________ and that such shares be delivered to ________________
whose address is ___________.
If said number of shares is less than all of the Common Shares
purchasable hereunder, the undersigned requests that a new Warrant Certificate
representing the remaining balance of such shares be registered in the name of
_________________, whose address is ______________, and that such Warrant
Certificate be delivered to _______________, whose address is
___________________.
Date: ____________
Your Signature:___________________
(Sign exactly as your name appears on the face of this Warrant):
FORM OF TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered holder hereby
sells, assigns and transfers unto
Name:__________________________________________________
Taxpayer Identification No.:___________________________
Address:_______________________________________________
the within Warrant Certificate and all rights thereunder, hereby irrevocably
constituting and appointing _______________________________________ attorney to
transfer the Warrants evidenced by said Warrant Certificate (the "Warrants") on
the books of the Company with full power of substitution in the premises.
In connection with any transfer of the Warrants occurring prior
to the date which is the earlier of (i) the date of an effective Registration or
(ii) two years after the later of the original issuance of the Warrants or the
last date on which the Warrants were held by an affiliate
47
of the Company, the undersigned confirms, that without utilizing any general
solicitation or general advertising:
Check One
(a) [ ] the Warrants are being transferred in compliance with the
exemption from registration under the Securities Act of 1933, as
amended, provided by Rule 144A thereunder.
or
(b) [ ] the Warrants are being transferred other than in accordance
with (a) above and documents are being furnished which comply
with the conditions of transfer set forth in this Warrant
Certificate and the Warrant Agreement.
If none of the foregoing boxes is checked, the Warrant Agent shall not be
obligated to register the Warrants in the name of any Person other than the
holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 7(b) of the Warrant Agreement shall
have been satisfied.
Date:____________________ ______________________________________
NOTICE: The signature to
this assignment must correspond with
the name as written upon the face of
the within-mentioned instrument in
every particular, without alteration
or any change whatsoever.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing
this Warrant for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, as amended, and is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as the undersigned has requested pursuant to
Rule 144A or has determined not to request such information and that it is aware
that the transferor is relying upon the undersigned's foregoing representations
in order to claim the exemption from registration provided by Rule 144A.
Dated:___________________ ________________________________________
(To be executed by an executive officer)
48
EXHIBIT A-3
FORM OF DEFAULT WARRANT CERTIFICATE
EXERCISABLE ON OR AFTER NOVEMBER 26, 1997
AND ON OR BEFORE [ * ]
No. WD-[ ]
Private Placement Number 69340T 4* 8
Default Warrant Certificate
PLD TELEKOM INC.
This Default Warrant Certificate ("this Warrant Certificate")
certifies that _______________, or registered assigns, is the registered holder
of _______ warrants expiring [ * ] (the "Warrants") to purchase Common Shares
(the "Common Shares"), of PLD Telekom Inc., a Delaware corporation ("the
Company"). Each Warrant entitles the holder upon exercise to receive from the
Company, at any time on or after 9:00 a.m., New York, New York time on November
26, 1997 and on or prior to the close of business on [ * ] (the "Expiration
Date"), one (1) fully paid and nonassessable Common Share (each a "Warrant
Share") at the initial exercise price (the "Exercise Price") of $0.01 per share
payable either in the form of cash or certified check, official bank check or
bank cashier's check payable to the order of the Company or as otherwise
provided in the Warrant Agreement referred to herein, upon surrender of this
Warrant Certificate and payment of the aggregate Exercise Price at the office or
agency of the Warrant Agent, but only subject to the conditions set forth herein
and in the Warrant Agreement. The Exercise Price is subject to being reset, and
the Exercise Price and, in some cases, the number of Warrant Shares issuable
upon exercise of the Warrants are subject to adjustment, upon the occurrence of
certain events set forth in the Warrant Agreement. All capitalized terms not
defined herein shall have the meaning assigned to such terms in the Warrant
Agreement.
No Warrant may be exercised after 5:00 pm., New York, New York
time on the Expiration Date and to the extent not exercised by such time such
Warrants shall become void.
Reference is hereby made to the further provisions of this
Warrant Certificate set forth after the signature page hereof and such further
provisions shall for all purposes have the same effect as though fully set forth
at this place.
--------
* Insert date which is tenth anniversary of date of issuance.
49
This Warrant Certificate shall not be valid unless countersigned
by the Warrant Agent, as such term is used in the Warrant Agreement.
This Warrant Certificate shall be governed and construed in
accordance with the internal laws of the State of New York.
IN WITNESS WHEREOF, PLD Telekom Inc. has caused this Warrant
Certificate to be signed by its Chief Executive Officer and by its Secretary,
each by a facsimile of his signature, and has caused a facsimile of its
corporate seal to be affixed hereunto or imprinted hereon.
Dated: November __, 1997
PLD TELEKOM INC.
By:_____________________________
Chief Executive Officer
By:_____________________________
Secretary
(seal)
Countersigned:
The Bank of New York as Warrant Agent
By:___________________________________
Authorized Signatory
-2-
50
THE WARRANTS REPRESENTED HEREBY AND, AS OF THE DATE THIS WARRANT
CERTIFICATE WAS ORIGINALLY ISSUED, THE COMMON SHARES PURCHASABLE
UPON THEIR EXERCISE, HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT (A)(1) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
UNDER THE SECURITIES ACT ("RULE 144A") IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, OR (2) PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT AND (B) IN ACCORDANCE
WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES.
THE COMMON SHARES (THE "COMMON SHARES") FOR WHICH THIS WARRANT IS
EXERCISABLE MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES
ABSENT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), AND ANY APPLICABLE STATE SECURITIES LAWS OR AN
APPLICABLE EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.
ACCORDINGLY, NO WARRANT HOLDER SHALL BE ENTITLED TO EXERCISE SUCH
HOLDER'S WARRANTS AT ANY TIME UNLESS, AT THE TIME OF EXERCISE,
(I) A REGISTRATION STATEMENT UNDER THE ACT COVERING THE OFFER AND
SALE OF THE COMMON SHARES ISSUABLE UPON THE EXERCISE OF THIS
WARRANT (THE "WARRANT SHARES") HAS BEEN FILED WITH, AND DECLARED
EFFECTIVE BY, THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC"),
AND NO STOP ORDER SUSPENDING THE EFFECTIVENESS OF SUCH
REGISTRATION STATEMENT HAS BEEN ISSUED BY THE SEC OR (II) THE
OFFER AND SALE OF THE WARRANT SHARES TO THE WARRANT HOLDERS ARE
EXEMPT FROM REGISTRATION UNDER THE ACT AND THE WARRANT HOLDER, IF
SO REQUESTED BY THE COMPANY, HAS DELIVERED TO THE COMPANY AN
OPINION OF COUNSEL TO SUCH EFFECT.
TRANSFERS OF THE WARRANTS REPRESENTED HEREBY SHALL BE
MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
WARRANT AGREEMENT.
By accepting a Warrant Certificate bearing the legend above, each
holder shall be bound by all of the terms and provisions of the Warrant
Agreement (a copy of which is available on request to the Company or the Warrant
Agent) as fully and effectively as if such holder had signed the same.
-3-
51
The Warrants evidenced by this Warrant Certificate are part of a
duly authorized issue of Warrants expiring on the Expiration Date, entitling the
holder upon exercise to receive Common Shares of the Company (the "Common
Shares"), and are issued or to be issued pursuant to a Warrant Agreement, dated
as of November 26, 1997 (the "Warrant Agreement"), duly executed and delivered
by the Company to The Bank of New York, as Warrant Agent (the "Warrant Agent"),
which Warrant Agreement is hereby incorporated by reference in and made a part
of this instrument and is hereby referred to for a description of the rights,
limitation of rights, obligations, duties and immunities thereunder of the
Warrant Agent, the Company and the holders (the words "holders" or "holder"
meaning the registered holders or registered holder) of the Warrants.
Warrants may be exercised at any time on or after 9:00 a.m., New
York, New York time on November 26, 1997 and on or prior to the close of
business on the Expiration Date. The holder of Warrants evidenced by this
Warrant Certificate may exercise them by surrendering this Warrant Certificate,
with the form of election to purchase set forth hereafter properly completed and
executed, together with payment of the Exercise Price in the form of cash or
certified or official bank check or official bank cashier's check payable to the
order of the Company or as otherwise provided in the Warrant Agreement, at the
office of the Warrant Agent. In the event that upon any exercise of Warrants
evidenced hereby the number of Warrants exercised shall be less than the total
number of Warrants evidenced hereby, there shall be issued to the holder hereof
or such holder's assignee a new Warrant Certificate evidencing the number of
Warrants not exercised.
The Warrant Agreement provides that upon the occurrence of
certain events the Exercise Price set forth on the face hereof may, subject to
certain conditions, be reset or otherwise adjusted. If the Exercise Price is
adjusted, the Warrant Agreement generally provides that the number of Common
Shares issuable upon the exercise of each Warrant shall be adjusted. No
fractions of a Common Share will be issued upon the exercise of any Warrant, but
the Company will pay the cash value thereof determined as provided in the
Warrant Agreement.
The Holder of this Warrant Certificate is entitled to the
registration rights as provided in the Registration Rights Agreement, dated as
of November 26, 1997, among the Company, certain institutional investors
identified therein and the Warrant Agent, relating to registration of the
Warrants evidenced hereby and the Common Shares issuable upon exercise of the
Warrants.
Warrant Certificates, when surrendered at the office of the
Warrant Agent by the registered holder thereof in person or by a legal
representative or attorney duly authorized in writing, may be exchanged, in the
manner and subject to the limitations provided in the Warrant Agreement, but
without payment of any service charge, for another Warrant Certificate or
Warrant Certificates of like tenor evidencing in the aggregate a like number of
Warrants.
-4-
52
Upon due presentation for registration of transfer of this
Warrant Certificate at the office of the Warrant Agent a new Warrant Certificate
or Warrant Certificates of like tenor and evidencing in the aggregate a like
number of Warrants shall be issued to the transferee(s) in exchange for this
Warrant Certificate, subject to the limitations provided in the Warrant
Agreement, without charge except for any tax or other governmental charge
imposed in connection therewith.
The Company and the Warrant Agent may deem and treat the
registered holder(s) thereof as the absolute owner(s) of this Warrant
Certificate (notwithstanding any notation of ownership or other writing hereon
made by anyone), for the purpose of any exercise hereof, of any distribution to
the holder(s) hereof, and for all other purposes, and neither the Company nor
the Warrant Agent shall be affected by any notice to the contrary. Neither the
Warrants nor this Warrant Certificate entitles any holder hereof to any rights
of a stockholder of the Company.
-5-
53
Form of Election to Purchase
(To Be Executed Upon Exercise Of Warrant)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to receive __________ Common Shares and
herewith tenders payment for such shares to the order of PLD Telekom Inc. in the
amount of $____ in accordance with the terms hereof.
The undersigned requests that a certificate for such shares be
registered in the name of _____________________, whose address is
______________________ and that such shares be delivered to ________________
whose address is ___________.
If said number of shares is less than all of the Common Shares
purchasable hereunder, the undersigned requests that a new Warrant Certificate
representing the remaining balance of such shares be registered in the name of
_________________, whose address is ______________, and that such Warrant
Certificate be delivered to _______________, whose address is
___________________.
Date: ____________
Your Signature:___________________
(Sign exactly as your name appears on the face of this Warrant):
FORM OF TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered holder hereby
sells, assigns and transfers unto
Name:___________________________________________________
Taxpayer Identification No.:____________________________
Address:________________________________________________
the within Warrant Certificate and all rights thereunder, hereby irrevocably
constituting and appointing _______________________________________ attorney to
transfer the Warrants evidenced by said Warrant Certificate (the "Warrants") on
the books of the Company with full power of substitution in the premises.
In connection with any transfer of the Warrants occurring prior
to the date which is the earlier of (i) the date of an effective Registration or
(ii) two years after the later of the original issuance of the Warrants or the
last date on which the Warrants were held by an affiliate
54
of the Company, the undersigned confirms, that without utilizing any general
solicitation or general advertising:
Check One
(a) [ ] the Warrants are being transferred in compliance with the
exemption from registration under the Securities Act of 1933, as
amended, provided by Rule 144A thereunder.
or
(b) [ ] the Warrants are being transferred other than in accordance
with (a) above and documents are being furnished which comply
with the conditions of transfer set forth in this Warrant
Certificate and the Warrant Agreement.
If none of the foregoing boxes is checked, the Warrant Agent shall not be
obligated to register the Warrants in the name of any Person other than the
holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 7(b) of the Warrant Agreement shall
have been satisfied.
Date:_____________________ ______________________________________
NOTICE: The signature to
this assignment must correspond with
the name as written upon the face of
the within-mentioned instrument in
every particular, without alteration
or any change whatsoever.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing
this Warrant for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, as amended, and is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as the undersigned has requested pursuant to
Rule 144A or has determined not to request such information and that it is aware
that the transferor is relying upon the undersigned's foregoing representations
in order to claim the exemption from registration provided by Rule 144A.
Dated:____________________ ________________________________________
(To be executed by an executive officer)
55
EXHIBIT B
FORM OF WARRANT SHARES LEGEND
"THE SHARES REPRESENTED HEREBY HAVE NOT
BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT ("RULE
144A") IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, OR
(2) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND THE
PROVINCES OF CANADA".
