AMENDED AND RESTATED WARRANT AGREEMENT
THIS AMENDED AND RESTATED WARRANT AGREEMENT (this "Agreement") is dated
as of June 18, 2001 and entered into by and between UBIQUITEL INC. (f/k/a
Ubiquitel Holdings, Inc.), a Delaware corporation (the "Company"), and
PARIBAS NORTH AMERICA, INC., a Delaware corporation (the "Purchaser"). This
Agreement replaces and supersedes in its entirety that certain Warrant
Agreement, dated as of December 28, 1999, by and between the Company and the
Purchaser (the "Original Agreement"), which Original Agreement shall have no
further force and effect.
W I T N E S S E T H:
WHEREAS, on December 28, 1999, the Company and the Purchaser entered
into the Original Agreement;
WHEREAS, the Company, Ubiquitel LLC, a Delaware limited liability
company and wholly owned subsidiary of the Company ("Ubiquitel"), Paribas, as
agent, and the other institutions from time to time party thereto are party
to a Credit Agreement (as amended, amended and restated, supplemented,
restructured or otherwise modified from time to time (in whole or in part
and without limitation as to terms, conditions or covenants and without
regard to the principal amount thereof) and in effect, including all related
notes, collateral documents, guaranties, instruments and agreements entered
into in connection therewith, and any successive restructurings, renewals,
extensions or refundings thereof, the "Credit Agreement"), dated as of
December 28, 1999, pursuant to which Paribas and such other institutions have
agreed to provide certain credit facilities to Ubiquitel on the terms and
conditions set forth therein;
WHEREAS, as a material inducement to the Banks (as defined below) for
entering into the Credit Agreement, the Company agreed to issue and sell to
the Purchaser on December 28, 1999, common stock purchase warrants (the
"Warrants") to purchase 574,402 shares of non-voting Common Stock, which
represented 2.25% of the fully diluted equity of the Company on December 28,
1999; and
WHEREAS, the Company and the Purchaser desire to amend and restate the
Original Agreement solely for the purpose of eliminating the rights granted
to the Purchaser pursuant to Section 11 of the Original Agreement and the
rights granted to the Company pursuant to Section 12 of the Original
Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
SECTION 1.
DEFINED TERMS
(a) The following terms when used in this Agreement, including its
preamble and recitals, shall have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended.
"Additional Shares" shall mean any shares of Common Stock issued after
the date hereof except (i) Common Stock issued upon the exercise of any
Warrant, (ii) securities issued by the Company on or prior to the Closing
Date (and securities issued upon the direct or indirect conversion or
exercise of any securities issued by the Company on or prior to the Closing
Date), (iii) shares of Common Stock (including shares issuable upon the
exercise or exchange of warrants or options to acquire shares of Common
Stock) issued solely to the Company's (or any of its subsidiaries') employees
or directors pursuant to a stock option or ownership plan or program or any
stock issuance arrangement adopted by the Company's Board of Directors on or
prior to December 28, 1999 up to, and including, five percent (5%) of the
Company's total common equity determined on a Fully Diluted Basis as of
December 28, 1999; (iv) Equity Securities issued pursuant to Section 10 of
this Agreement and (v) shares to be issued by the Company in connection with
its initial public offering.
"Affiliate" shall mean, as applied to any Person, any other Person
directly or indirectly controlling (including, but not limited to, all
directors and officers of such Person), controlled by, or under direct or
indirect common control with, such Person and shall include, for purposes of
determining whether a Person is an Affiliate of the Company, any Person that
directly or indirectly (including through limited partner or general partner
interests) owns more than 5% of any class of the capital stock of such
Person; PROVIDED, HOWEVER, that for purposes of Section 12(d), none of the
"Agent", the "Collateral Agent" or any "Bank" (such terms being used herein
as defined in the Credit Agreement) or any Affiliate of such Person, shall be
considered an Affiliate of the Company. A Person shall be deemed to
"control" another Person if such Person possesses, directly or indirectly,
the power to direct or cause the direction of the management and policies of
such other Person, whether through the ownership of voting securities, by
contract or otherwise.
"Agreement" shall have the meaning provided in the preamble of this
Agreement.
"Applicable Law" shall mean all provisions of laws, statutes,
ordinances, rules, regulations, permits or certificates of any Governmental
Authority applicable to such Person or any of its assets or property, and all
judgments, injunctions, orders and decrees of all courts, arbitrators or
Governmental Authorities in proceedings or actions in which such Person is a
party or by which any of its assets or properties are bound.
"Bank" shall have the meaning provided in the Credit Agreement.
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"BET" shall mean BET Associates, L.P.
"Business Day" shall mean any day except Saturday, Sunday and any day
which in New York shall be a legal holiday or a day on which banking
institutions are authorized or required by law or other government action to
close.
"Certificate" shall mean the Certificate of Incorporation of the
Company, as amended through the date hereof.
"Change of Control" shall have the meaning provided in the Credit
Agreement as in effect on the date hereof.
"Closing Date" shall mean the initial date of issuance of the Warrants
under this Agreement.
"Commission" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the 1933 Act.
"Common Stock" shall mean, collectively, the voting common stock of the
Company, par value $.001 per share and the non-voting common stock of the
Company, par value $.001 per share.
"Common Stock Per Share Market Value" shall mean the price per share of
Common Stock obtained by dividing (A) the Market Value by (B) the number of
shares of Common Stock outstanding (on a Fully-Diluted Basis) at the time of
determination.
"Company" shall have the meaning provided in the preamble of this
Agreement.
"Co-Sale Agreement" shall mean that certain Co-Sale Agreement, dated as
of November 23, 1999, by and among the Company and the shareholders party
thereto, as the same may be amended from time to time.
"Credit Agreement" shall have the meaning provided in the first recital
of this Agreement.
"Equity Securities" shall mean all shares of capital stock of the
Company, all securities convertible into or exchangeable for shares of
capital stock of the Company, and all options, warrants, and other rights to
purchase or otherwise acquire from the Company shares of such capital stock,
or securities convertible into or exchangeable for shares of such capital
stock.
"Equivalent Nonvoting Security" shall mean, with respect to any security
issued or to be issued by any Person, a security of such Person that is
identical in rights and benefits to such security, except that (a) the
equivalent security shall not be entitled to vote on any matter on which
holders of voting securities of such Person are entitled to vote, other than
as required by Applicable Law or with respect to any amendment or repeal of
any provision of the Organizational Documents of such Person or any other
agreement or instrument pursuant to which the equivalent security was issued
which provision specifically affects such equivalent
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security, (b) subject to such reasonable restrictions as any affected
Regulated Holder may request (including any restriction necessary to prevent
the violation by such Regulated Holder of any provision of Applicable Law
with respect to its ownership of voting securities), the equivalent security
shall be convertible in a one-to-one ratio into the first security and (c)
the terms of the equivalent security shall include such provisions requested
by any affected Regulated Holder as are reasonable and equitable to ensure
that (i) the equivalent security is treated comparably to the first security
with respect to dividends, distributions, stock splits, reclassifications,
capital reorganizations, mergers, consolidations and other similar events and
transactions, (ii) the conversion right provided in clause (b) above is
equitably protected and (iii) the acquisition of the equivalent security will
not cause such Regulated Holder to violate Applicable Law.
"Exercise Price" shall have the meaning provided in Section 5.
"Expiration Date" shall have the meaning provided in Section 5.
"Fully Diluted Basis" shall mean, as applied to the calculation of the
total number of shares of Common Stock outstanding at any time, after giving
effect to (a) all shares of Common Stock outstanding at the time of
determination and (b) without duplication, all shares of Common Stock
issuable upon the exercise, exchange or conversion of Equity Securities to
purchase or exchangeable or convertible into Common Stock which are
outstanding at the time of determination and then so convertible or
exchangeable at a conversion or exchange price equal to or less than the
Market Price at such time.
"Governmental Authority" shall mean any federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality, or any court, in each case whether of the United States of
America or foreign.
"Holder" shall mean the Purchaser (so long as it holds any Warrants or
Warrant Shares) and any other registered holder of any of the Warrants or
Warrant Shares.
"Independent Financial Expert" shall mean a nationally recognized
investment banking firm (a) that does not (and whose directors, officers,
employees and Affiliates do not) have a direct or indirect material financial
interest in the Company, (b) that has not been, and, at the time it is called
upon to serve as an Independent Financial Expert under this Agreement is not
(and none of whose directors, officers, employees or Affiliates is) a
promoter, director or officer of the Company, (c) that has not been retained
during the preceding two years by the Company for any purpose, and (d) that
is otherwise qualified to serve as an independent financial advisor. Any
such Person may receive customary compensation and indemnification by the
Company for opinions or services it provides as an Independent Financial
Expert.
"Market Price" shall mean, with respect to a share of Common Stock on
any Business Day:
(a) if the Common Stock is Publicly Traded at the time of
determination, the average of the closing prices on such day of the
Common Stock on all domestic securities exchanges on which the Common
Stock is then listed, or, if there have been no sales on
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any such exchange on such day, the average of the highest bid and lowest
asked prices on all such exchanges at the end of such day or, if on any
such day the Common Stock is not so listed, the average of the
representative bid and asked prices quoted on NASDAQ as of 4:00 P.M.,
New York time, on such day, or if on any day such security is not quoted
on NASDAQ, the average of the highest bid and lowest asked prices on
such day in the domestic over-the-counter market as reported by the
National Quotation Bureau, Incorporated, or any similar successor
organization, in each such case averaged over a period of 20 days
consisting of the day as of which "Market Price" is being determined and
the nineteen consecutive Business Days prior to such day, PROVIDED that,
if Market Price is being determined as of the date of a Qualified Public
Offering, Market Price as of such date shall be the offering price for
the Common Stock subject to such Qualified Public Offering; or
(b) if the Common Stock is not Publicly Traded at the time of
determination, the Common Stock Per Share Market Value.
"Market Value" shall mean the price that would be paid for the entire
common equity of the Company on a going-concern basis in an arm's-length
transaction between a willing buyer and a willing seller (neither acting
under compulsion), using valuation techniques then prevailing in the
securities industry (but without giving effect to any discount in respect of
a minority interest and giving effect to any value attributed to the rights
of the Holders to receive dividends and distributions as provided in Section
10 hereof) and determined in accordance with the Valuation Procedure, and
assuming full disclosure and understanding of all relevant information and a
reasonable period of time for effectuating such sale. For the purposes of
determining the Market Value, (a) the exercise price of options or warrants
to acquire Common Stock which are deemed to have been exercised for the
purpose of determining the number of shares of Common Stock outstanding on a
Fully-Diluted Basis, shall be deemed to have been received by the Company and
(b)(i) the liquidation preference or indebtedness, as the case may be,
represented by securities which are deemed exercised for or converted into
Common Stock for the purpose of determining the number of shares of Common
Stock outstanding on a Fully-Diluted Basis and (ii) any contractual
limitation in respect of the shares of Common Stock relating to voting
rights, shall be deemed to have been eliminated or canceled.
"NASDAQ" shall mean the National Association of Securities Dealers,
Inc., Automated Quotation System.
"Organizational Documents" shall mean, with respect to any Person, each
instrument or other document that (a) defines the existence of such Person,
including its articles or certificate of incorporation, as filed or recorded
with an applicable Governmental Authority or (b) governs the internal affairs
of such Person, including its bylaws, in each case as amended, supplemented
or restated.
"Original Agreement" shall have the meaning provided in the preamble of
this Agreement.
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"Permitted Transferee" shall mean any Affiliate of any Holder, any
officer, director, partner, member or employee of any Holder or any Bank who
may become a party to the Credit Agreement from time to time.
"Person" or "Persons" shall mean any individual, general partnership,
limited partnership, limited liability company, limited liability
partnership, joint venture, firm, corporation, association, trust, or other
enterprise or any governmental or political subdivision or any agency,
department or instrumentality thereof.
"Preferred Stock Purchase Agreement" shall mean that certain Series A
Preferred Stock Purchase Agreement, dated as of November 23, 1999, by and
among the Company and the investors named therein.
"Publicly Traded" shall mean, with respect to any security, that such
security is (a) listed on a domestic securities exchange, (b) quoted on
NASDAQ or (c) traded in the domestic over-the-counter market, which trades
are reported by the National Quotation Bureau, Incorporated.
"Purchaser" shall have the meaning provided in the preamble of this
Agreement.
"Qualified Public Offering" shall mean any widely distributed sale of
the Common Stock of the Company to the public pursuant to an offering
registered under the 1933 Act pursuant to which the Company realizes gross
sale proceeds of at least $30,000,000.
"Registration Rights Agreement" shall mean that certain Rights
Agreement, dated as of November 23, 1999, by and among the Company and the
shareholders party thereto, as the same may be amended from time to time.
"Regulated Holder" shall have the meaning provided in Section 8.
"Regulation Y" shall have the meaning provided in Section 8.
"Reorganization" shall have the meaning provided in Section 9(g).
"Requisite Holders" shall mean Holders holding Warrants and/or Warrant
Shares representing at least a majority of all Warrant Shares issued or
issuable upon exercise of Warrants outstanding on the date of determination.
"Section 12(e) Transaction" shall have the meaning provided in Section
12(e).
"Series A Preferred Stock" shall have the meaning provided in Section
11(b).
"Subsidiary" shall have the meaning provided in the Credit Agreement.
"Ubiquitel" shall have the meaning provided in the first recital of this
Agreement.
"Valuation Procedure" shall mean, with respect to the determination of
any amount or value required to be determined in accordance with such
procedure, a determination (which shall
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be final and binding on the Company and the Holders) made (i) by agreement
among the Company and the Requisite Holders within twenty (20) days following
the event requiring such determination or (ii) in the absence of such an
agreement, by an Independent Financial Expert selected in accordance with the
further provisions of this definition. If required, an Independent Financial
Expert shall be selected within five (5) days following the expiration of the
20-day period referred to above, either by agreement among the Company and
the Requisite Holders or, in the absence of such agreement, by lot from a
list of four potential Independent Financial Experts remaining after the
Company nominates three, the Requisite Holders nominate three, and each side
eliminates one potential Independent Financial Expert. The Independent
Financial Expert shall be instructed by the Company and the Requisite Holders
to make its determination within 20 days of its selection. The fees and
expenses of an Independent Financial Expert selected hereunder shall be paid
by the Company.
"Warrant Certificates" shall have the meaning provided in Section 2.
"Warrant Documents" shall mean this Agreement, the Warrant Certificates,
the Certificate, the Co-Sale Agreement and the Registration Rights Agreement.
"Warrant Number" shall have the meaning provided in Section 9.
"Warrant Shares" shall mean (a) the shares of non-voting Common Stock
issued or issuable upon exercise of a Warrant in accordance with Section 5 or
upon exchange of a Warrant in accordance with Section 5, (b) all other
securities or other property issued or issuable upon any such exercise or
exchange in accordance with this Agreement and (c) any securities of the
Company distributed with respect to, or issued upon the conversion of, the
securities referred to in the preceding clauses (a) and (b).
"Warrants" shall have the meaning provided in the recitals of this
Agreement.
SECTION 2.
WARRANT CERTIFICATES
The Company hereby agrees to issue to the Purchaser and hereby agrees to
accept from the Company, for good and valuable consideration received,
subject to the conditions and restrictions contained in this Agreement and
in reliance on the representations and warranties of the Company contained
herein (including those representations and warranties of the Company
contained herein by reference), 574,402 Warrants to initially purchase
574,402 shares of non-voting Common Stock. The Company represents and
warrants to the Purchaser that the total number of Warrants issuable to the
Purchaser pursuant hereto shall equal, when exercised, a number of shares of
non-voting Common Stock of the Company equal to two and one quarter percent
(2.25%) of the total equity of the Company on December 28, 1999 (including,
after giving effect to the issuance of the Warrants hereunder, the issuance
of common stock purchase warrants to BET and the issuance of additional
shares of Series A Preferred Stock pursuant to the Preferred Stock Purchase
Agreement, on December 28, 1999) computed on a Fully Diluted Basis. The
Company shall issue and deliver a certificate or certificates to the
Purchaser
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evidencing the Warrants in the form of EXHIBIT A attached hereto ("Warrant
Certificates") concurrently with the Purchaser's execution of this Agreement.
Warrant Certificates shall be dated the date of issuance by the Company.
SECTION 3.
EXECUTION OF WARRANT CERTIFICATES;
MUTILATED OR MISSING WARRANT CERTIFICATES
Warrant Certificates shall be signed on behalf of the Company by its
Chairman of the Board or its President or a Vice President of the Company.
Each Warrant Certificate shall also be manually signed on behalf of the
Company by its Secretary or an Assistant Secretary of the Company.
In case any of the Warrant Certificates shall be mutilated, lost, stolen
or destroyed, the Company shall, upon request of the Holder of any such
Warrant Certificate, issue, 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 reasonably satisfactory to the
Company of such loss, theft or destruction of such Warrant Certificate and
indemnity, if requested, also reasonably satisfactory to the Company.
SECTION 4.
REGISTRATION/RESERVATION OF WARRANT SHARES
The Company shall number and register the Warrant Certificates in a
register as they are issued. The Company may deem and treat the registered
Holders of the Warrant Certificates as the absolute owners thereof
(notwithstanding any notation of ownership or other writing thereon made by
anyone) for all purposes and shall not be affected by any notice to the
contrary. The Warrants shall be registered initially in such name or names as
the Purchaser shall designate.
The Company shall at all times reserve and keep available, free from
preemptive rights, out of the aggregate of its authorized but unissued Common
Stock, for the purpose of enabling it to satisfy any obligation to issue
Warrant Shares upon exercise of Warrants and the subsequent conversion of
such Warrant Shares, the maximum number of shares of Common Stock which may
then be deliverable upon the exercise of all outstanding options, warrants
(including the Warrants) or other securities, directly or indirectly,
convertible into or exchangeable for Common Stock.
The Company covenants that all Warrant Shares and other capital stock
issued upon exercise of Warrants or upon conversion of Warrant Shares will,
upon payment of the Exercise Price therefor (in the case of an exercise of
Warrants) and issuance thereof, be validly authorized and issued, fully paid,
nonassessable, free of preemptive rights (except as may be granted by this
Agreement) and free from all taxes, liens, charges and security interests
with respect to the issue thereof.
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If and so long as the outstanding Common Stock may be listed on any
securities exchange in the United States, the Company shall use its best
efforts to cause all reserved Warrant Shares to be listed on each such
exchange upon official notice of issuance upon such exercise.
SECTION 5.
WARRANTS; EXERCISE OF WARRANTS
Subject to the terms of this Agreement, each Holder shall have the
right, which may be exercised at any time or from time to time until 5:00
p.m., New York time, on December 28, 2009 (the "Expiration Date") to 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
Shares. Each Warrant not exercised prior to 5:00 p.m., New York time, on the
Expiration Date shall become void and all rights thereunder and all rights in
respect thereof under this Agreement shall cease as of such time; PROVIDED
that the occurrence of the Expiration Date shall not relieve the Company of
any obligation to any Holder which arose pursuant to the terms of this
Agreement prior to such date.
The price at which each Warrant shall be exercisable (as such price may
be adjusted from time to time, in accordance with the terms hereof, the
"Exercise Price") shall initially be $.01 per share. The Common Stock shall
have a par value of no greater than $.001 per share.
A Warrant may be exercised upon surrender to the Company at its address
set forth on the signature pages hereto of the Warrant Certificate or Warrant
Certificates to be exercised with the form of election to purchase attached
thereto duly completed and signed, and upon payment to the Company of the
Exercise Price for the number of Warrant Shares in respect of which such
Warrants are then exercised. Payment of the aggregate Exercise Price may be
made, at the option of the applicable Holder, (i) by cash, certified or bank
cashier's check or wire transfer, (ii) by surrendering to the Company the
number of Warrants which, when exercised, would entitle the Holder thereof to
that number of Warrant Shares which is equal to (A) such aggregate Exercise
Price divided by (B) the Market Price, (iii) by surrendering to the Company
the number of shares of Common Stock which is equal to (A) such aggregate
Exercise Price divided by (B) the Market Price or (iv) any combination of the
foregoing.
Subject to the provisions of Section 6, upon such surrender of Warrants
and payment of the Exercise Price the Company shall issue and cause to be
delivered with all reasonable dispatch to or upon the written order of the
Holder and in such name or names as such Holder may designate a certificate
or certificates for the number of full Warrant Shares issuable upon the
exercise of such Warrants (and such other consideration as may be deliverable
upon exercise of such Warrants) together with, at the sole option of the
Company, cash for fractional Warrant Shares as provided in Section 7. Such
certificate or certificates shall be deemed to have been issued and the
Person so 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
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Exercise Price, irrespective of the date of delivery of such certificate or
certificates for Warrant Shares.
Each Warrant shall be exercisable, at the election of the Holder
thereof, either in full or from time to time in part 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 date of expiration
of the Warrants, a new certificate evidencing the remaining Warrant or
Warrants will be issued and delivered pursuant to the provisions of this
Section 5 and of Section 2.
All Warrant Certificates surrendered upon exercise of Warrants shall be
canceled and disposed of by the Company. The Company shall keep copies of
this Agreement and any notices given or received hereunder available for
inspection by the Holders during normal business hours at its office.
SECTION 6.
PAYMENT OF TAXES
The Company will pay all taxes and other governmental charges (including
all documentary stamp taxes, but excluding all foreign, federal, state or
local income taxes payable by a Holder) in connection with the issuance or
delivery of the Warrants hereunder, including all such taxes attributable to
the initial issuance or delivery of Warrant Shares upon the exercise of
Warrants and payment of the Exercise Price. The Company shall not, however,
be required to pay any tax that may be payable in respect of any subsequent
transfer of the Warrants or any transfer involved in the issuance and
delivery of Warrant Shares in a name other than that in which the Warrants to
which such issuance relates were registered, and, if any such tax would
otherwise be payable by the Company, no such issuance or delivery shall be
made unless and until the Person requesting such issuance has paid to the
Company the amount of any such tax, or it is established to the reasonable
satisfaction of the Company that any such tax has been paid.
SECTION 7.
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 7, be issuable on the
exercise of any Warrants (or specified portion thereof), the Company shall,
at its sole option, pay an amount in cash equal to the Market Price of the
Warrant Share so issuable multiplied by such fraction.
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SECTION 8.
LIMITATIONS ON CERTAIN HOLDERS
Notwithstanding anything in this Agreement or any Warrant Certificate to
the contrary, no Holder which is subject to the provisions of Regulation Y
promulgated by the Board of Governors of the Federal Reserve, or any
successor regulation thereto ("Regulation Y"), or which is affiliated with
any entity subject to the provisions of Regulation Y (if such Affiliate holds
securities of the Company (any such Holder being referred to herein as a
"Regulated Holder")) and no transferee of such Regulated Holder, may exercise
the Warrants for a number of Warrant Shares which would permit such Regulated
Holder, together with its Affiliates and transferees, to own or control a
number of Warrant Shares greater than that permitted by Applicable Law
including, without limitation, Regulation Y.
SECTION 9.
ADJUSTMENT OF NUMBER OF WARRANT SHARES ISSUABLE
AND EXERCISE PRICE
The number of shares of non-voting Common Stock issuable upon the
exercise of each Warrant (the "Warrant Number") is initially one. The
Warrant Number is subject to adjustment from time to time upon the occurrence
of any event enumerated in, or as otherwise provided in this Section 9.
(a) ADJUSTMENT FOR CHANGE IN CAPITAL STOCK. If the Company:
(i) subdivides or reclassifies its outstanding shares of Common
Stock into a greater number of shares or declares a stock dividend payable in
shares of Common Stock;
(ii) combines or reclassifies its outstanding shares of Common
Stock into a smaller number of shares; or
(iii) issues by reclassification of its Common Stock any shares of
its capital stock;
then the Warrant Number in effect immediately prior to such action shall be
adjusted so that the Holder of any Warrant thereafter exercised may receive
the aggregate number and kind of shares of capital stock of the Company which
it would have owned immediately following such action if such Warrant had
been exercised immediately prior to such action. The adjustment shall become
effective immediately after the effective date thereof. Such adjustment
shall be made successively whenever any event listed above shall occur.
(b) ADDITIONAL ISSUANCE. If the Company at any time shall issue any
Additional Shares at a price less than the Market Price or any other Equity
Securities which are exercisable or convertible for, exchangeable into or
otherwise providing the right to acquire Additional Shares at an exercise or
conversion, exchange or other effective price less than the Market Price, the
Warrant Number after such issuance shall be determined by multiplying the
Warrant Number by
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a fraction, (i) the denominator of which shall be the number of shares of
Common Stock on a Fully Diluted Basis immediately prior to such issuance plus
the number of shares that the aggregate consideration to be received by the
Company for the total number of such Additional Shares issued or to be issued
in connection with the conversion or exercise of other Equity Securities
(including the issue price of any such other Equity Securities) would
purchase at the Market Price and (ii) the numerator of which shall be the
number of shares of Common Stock on a Fully Diluted Basis immediately after
such issuance. Shares of Common Stock owned by or held for the account of
the Company or any Subsidiary of the Company on such date shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall
be effective immediately after such issuance. Such adjustment shall be made
successively whenever any such event shall occur. If the Company at any time
shall issue two or more securities as a unit and one or more of such
securities shall be Additional Shares or other Equity Securities subject to
this sub-section (b), the consideration allocated to each such security shall
be determined in good faith by the Board of Directors of the Company.
(c) DISTRIBUTION OF EVIDENCES OF INDEBTEDNESS OR ASSETS. If the
Company at any time shall fix a record date for the making of a distribution
to any holder of its Common Stock or other class of common stock (including
any such distribution to be made in connection with a consolidation or merger
in which the Company is to be the continuing corporation) of evidences of its
indebtedness or assets (excluding dividends paid in or distributions of
Company capital stock for which the Warrant Number shall have been adjusted
pursuant to subsection (a) of this Section 9 or dividends or distributions
which have been paid to the Holder pursuant to Section 10) the Warrant Number
after such record date shall be determined by multiplying the Warrant Number
immediately prior to such record date by a fraction, of which the denominator
shall be the Market Price per share of Common Stock on such record date, less
the fair market value (as determined in accordance with the Valuation
Procedure and described in a statement mailed by certified mail to each
Holder) of the portion of the assets or evidences of indebtedness to be
distributed to a holder of one share of Common Stock, and the numerator shall
be such Market Price. Such adjustment shall become effective immediately
after such record date. Such adjustment shall be made whenever such a record
date is fixed, and in the event that such distribution is not so made, the
number of Warrant Shares purchasable hereunder shall again be adjusted to be
the number that was in effect immediately prior to such record date.
(d) CONSIDERATION RECEIVED. For purposes of any computation respecting
consideration received pursuant to subsections (b) and (c) of this Section 9,
the following shall apply:
(i) in the case of an issuance of shares of Common Stock for
cash, the consideration shall be the amount of such cash (without any
deduction being made for any commissions, discounts or other expenses
incurred by the Company for any underwriting of the issue or otherwise in
connection therewith);
(ii) in the case of the issuance of shares of Common Stock for a
consideration in whole or in part other than cash, the consideration other
than cash shall be deemed to be the
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fair market value thereof (irrespective of the accounting treatment thereof)
as determined in accordance with the Valuation Procedure; and
(iii) in the case of the issuance of other Equity Securities, the
aggregate consideration received therefor shall be deemed to be the
consideration received by the Company for the issuance of such securities
plus the additional minimum consideration, to be received by the Company upon
the conversion, exchange or exercise thereof (the consideration in each case
to be determined in the same manner as provided in clauses (i) and (ii) of
this subsection).
(e) WHEN DE MINIMIS ADJUSTMENT DEFERRED. No adjustment in the Warrant
Number need be made unless the adjustment would require an increase or
decrease of at least one-tenth of one percent in the Warrant Number. Any
adjustments that are not made shall be carried forward and taken into account
in any subsequent adjustment, provided that no such adjustment shall be
deferred beyond the date on which a Warrant is exercised. All calculations
under this Section 9 shall be made to the nearest 1/10th of a share.
(f) NOTICE OF ADJUSTMENT. Whenever the Warrant Number is adjusted, the
Company shall provide the notices required by subsection 12(a) hereof.
Whenever the Warrant Number is required to be adjusted, as herein provided,
the Company shall mail by first class, postage prepaid, to each Holder,
notice of such adjustment or adjustments and a certificate of a firm of
nationally recognized independent public accountants selected by the board of
directors of the Company (who may be the regular accountants employed by the
Company) setting forth the Warrant Number after such adjustment, setting
forth a brief statement of the facts requiring such adjustment and setting
forth the computation by which such adjustment was made.
(g) REORGANIZATIONS. In case of any capital reorganization, other than
in the cases referred to in subsections 9(a), (b) or (c) hereof, or the
consolidation or merger of the Company with or into another Person (other
than a merger or consolidation in which the Company is the surviving entity
and which does not result in any reclassification of the outstanding shares
of Common Stock into shares of other stock or other securities or property),
or the sale of the property of the Company as an entirety or substantially as
an entirety other than in the cases referred to in Subsections 9(a), (b) or
(c) hereof (collectively, such actions being hereinafter referred to as
"Reorganizations"), there shall thereafter be deliverable upon exercise of
any Warrant (in lieu of the number of shares of Securities theretofore
deliverable) the number of shares of stock or other securities or property to
which a holder, of the number of shares of Common Stock that would otherwise
have been deliverable upon the exercise of such Warrant, would have been
entitled upon such Reorganization if such Warrant had been exercised in full
immediately prior to such Reorganization. In case of any Reorganization,
appropriate adjustment, as determined in good faith by the board of directors
of the Company, whose determination shall be described in a duly adopted
resolution certified by the Company's Secretary or Assistant Secretary, shall
be made in the application of the provisions herein set forth with respect to
the rights and interests of Holders so that the provisions set forth herein
shall thereafter be applicable, as nearly as possible, in relation to any
shares or other property thereafter deliverable upon exercise of Warrants.
The Company shall not effect or permit any such Reorganization unless (i) the
successor entity resulting from such Reorganization or the
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Person purchasing such assets is a corporation duly organized and validly
existing under the laws of a state of the United States and (ii) prior to or
simultaneously with the consummation of such Reorganization the successor
entity (if other than the Company) resulting from such Reorganization or the
Person purchasing such assets shall expressly assume, by a supplemental
Warrant Agreement or other acknowledgment executed and delivered to the
Holder(s) in form and substance satisfactory to the Requisite Holders, the
obligation to deliver to each such Holder such shares of stock, securities or
assets as, in accordance with the foregoing provisions, such Holder may be
entitled to purchase, and all other obligations and liabilities under this
Agreement.
(h) FORM OF WARRANTS. Irrespective of any adjustments in the number or
kind of shares purchasable upon the exercise of the Warrants, Warrants
theretofore or thereafter issued may continue to express the same price and
number and kind of shares as are stated in the Warrant Certificates initially
issuable pursuant to this Agreement.
(i) ADJUSTMENTS IN OTHER SECURITIES. If as a result of any event or
for any other reason, any adjustment is made which increases the number of
shares of Common Stock issuable upon conversion, exercise or exchange of, or
in the conversion or exercise price or exchange ratio applicable to, any
Equity Securities outstanding on the Closing Date, then a corresponding
adjustment shall be made hereunder to adjust the number of shares of Common
Stock issuable upon exercise of the Warrants, but only to the extent that no
such adjustment has been made pursuant to subsection 9(a), (b) or (c) with
respect to such event or for such other reason.
(j) OTHER DILUTIVE EVENTS. If any corporate action shall occur as to
which the provisions of this Section 9 are not strictly applicable but as to
which the failure to make any adjustment would adversely affect the purchase
rights or value represented by the Warrants in accordance with the essential
intent and principles of this Section 9 (which are to place the Holder in a
position as nearly equal as possible to the position the Holder would have
occupied had the Holder purchased shares of Common Stock on the date hereof)
then, in each such case, the Company shall appoint a firm of independent
certified public accountants of recognized national standing (which may be
the regular auditors of the Company) to give their opinion upon the
adjustment, if any, on a basis consistent with the essential intent and
principles established in this Section 9, necessary to preserve, without
dilution, the purchase rights represented by Warrants. Upon receipt of such
opinion, the Company will promptly mail a copy thereof to Holders and will
make the adjustments described therein.
(k) EXERCISE PRICE ADJUSTMENT. Whenever the Warrant Number is adjusted
as herein provided, the Exercise Price payable upon exercise of this Warrant
shall be adjusted by multiplying such Exercise Price immediately prior to
such adjustment by a fraction, the numerator of which shall be the Warrant
Number immediately prior to such adjustment, and the denominator of which
shall be the Warrant Number immediately thereafter.
(l) DISSOLUTION, LIQUIDATION OR WINDING UP. Notwithstanding any other
provision of this Agreement, in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Company, each Holder shall be
entitled to share, with respect to the Warrant Shares
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issuable upon exercise of the Holder's Warrants, equally and ratably in any
cash or non-cash distributions payable to holders of Common Stock, less the
aggregate Exercise Price payable upon the exercise of such Warrants. The
Company shall give notice to each Holder at the earliest practicable time
(and, in any event, not less than twenty (20) days before the date of such
dissolution, liquidation or winding-up, as the case may be) and each Holder
of outstanding Warrants shall be entitled to share equally and ratably in any
cash or noncash distributions payable to holders of Common Stock. In case of
any such voluntary or involuntary dissolution, liquidation or winding up of
the Company, the Company shall hold in escrow any funds or other property
which a Holder is entitled to receive in respect of such Holder's Warrant
Shares at the time of any distribution. No such Holder will be entitled to
receive payment of any such distribution until such Holder has surrendered
the Warrant Certificates evidencing such Warrant to the Company. From and
after such voluntary or involuntary dissolution, liquidation or winding up
with respect to the Company, all rights of the Holders, except the right to
receive such distribution, without interest, upon the surrender of the
Warrant Certificates, shall cease and terminate and such Warrants shall not
thereafter be transferred (except with the consent of the Company) and such
Warrants shall not be deemed to be outstanding for any other purpose
whatsoever. For the purposes of this Agreement, neither the voluntary sale,
lease, conveyance, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all the property
or assets of the Company, nor the consolidation or merger of the Company with
one or more other corporations, shall be deemed to be a liquidation,
dissolution or winding up, voluntary or involuntary, with respect to the
Company.
(m) MISCELLANEOUS. In the event that at any time, as a result of an
adjustment made pursuant to this Section 9, the Holders shall become entitled
to purchase any securities of the Company other than, or in addition to,
shares of Common Stock, thereafter the number or amount of such other
securities so purchasable upon exercise of each Warrant shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Warrant Shares contained in
this Section 9, and the provisions of Sections 5, 6, 7 and 8 with respect to
the Warrant Shares or the Common Stock shall apply on like terms to any such
other securities.
(n) REGULATED HOLDERS. If, in the written opinion of counsel to any
Regulated Holder (which may be its internal counsel), the receipt by such
Regulated Holder of Warrant Shares (or any security included therein) upon
any exercise or exchange pursuant to this Section 9 or the receipt of any
dividend or distribution pursuant to Section 10 would cause such Regulated
Holder to violate any provision of Applicable Law with respect to its
ownership of securities of the Company, then the Company will use its best
efforts (including using its best efforts to cause its Organizational
Documents to be amended) to create an Equivalent Nonvoting Security with
respect to Warrant Shares (or any such security included therein) or any
security received by such Regulated Holder in connection with such dividend
or distribution which would not cause the Holder to violate any provision of
Applicable Law, and such Regulated Holder shall be entitled to receive upon
such exercise or exchange or dividend or distribution, in lieu of such number
(as it shall specify) of shares or other units of Warrant Shares (or any such
security included therein) or other securities otherwise receivable by such
Regulated Holder, the same number of shares or other units of such Equivalent
Nonvoting Security.
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SECTION 10.
PAYMENTS IN RESPECT OF DIVIDENDS AND DISTRIBUTIONS
If the Company pays any dividend or makes any distribution (whether in
cash, property or securities of the Company) on its capital stock, then the
Company shall simultaneously pay to each Holder of Warrants, other than to
any Holder of Warrants delivering a written legal opinion to the Company in
accordance with Section 9(n) hereof within ten (10) Business Days of the
notice delivered to such Holder pursuant to Section 12 hereof, an amount
equal to the dividend or distribution which would have been paid to such
Holder on the Warrant Shares receivable upon the exercise in full of such
Warrant had such Warrant been fully exercised immediately prior to the record
date for such dividend or distribution or, if no record is taken, the date as
of which the record holders of shares of Common Stock entitled to such
dividend or distribution are to be determined; PROVIDED HOWEVER, that in the
event the receipt by any Holder of any such asset distribution would result
in a violation of Applicable Law applicable to such Holder, such Holder shall
be entitled to receive an amount of cash in lieu of such asset distribution
equal to the value (determined in accordance with the Valuation Procedure) of
the asset distribution which would other wise would be received by such
Holder.
SECTION 11.
REPRESENTATIONS AND WARRANTIES
The Company hereby represents and warrants to the Holders the
following:
(a) the representations and warranties contained in the Credit
Agreement (including, without limitation, those representations and
warranties incorporated by reference therein as though specifically set forth
in therein) are incorporated by reference herein and are true and correct as
of the date hereof; and
(b) the capitalization of the Company, as of December 28, 1999 and
immediately prior to the execution and delivery of the Original Agreement,
the Credit Agreement and the transactions contemplated hereby and thereby,
was as follows: (i) 150,000,000 authorized shares of voting Common Stock, of
which 3,417,000 were issued and outstanding, (ii) 16,000,000 authorized
shares of non-voting Common Stock, of which 16,000,000 were issued and
outstanding and (iii) 17,008,500 shares of Series A Preferred Stock, par
value $.001 per share, of the Company (the "Series A Preferred Stock"), of
which 1,000,000 were issued and outstanding. After giving effect to the
transactions contemplated by the Warrant Documents, the issuance of common
stock purchase warrants to BET and the issuance of additional shares of
Series A Preferred Stock pursuant to the Preferred Stock Purchase Agreement,
on December 28, 1999, (y) all outstanding shares of capital stock of the
Company were held by the parties on such date and in the amounts set forth on
SCHEDULE I hereto and (z) assuming full conversion, exchange or exercise of
all Convertible Securities (as defined below), all outstanding shares of
Common Stock were held by the parties on such date and in the amounts set
forth on SCHEDULE I hereto. Except as set forth on SCHEDULE II hereto, on
December 28, 1999 there were no existing options, warrants (other than the
Warrants issued pursuant hereto), calls, subscriptions, puts, registration
rights, conversion rights, rights of exchange, preemptive rights, rights of
first refusal, rights of
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first offer, plans or other agreements, commitments, or claims of any
character obligating the Company to issue, transfer, sell, redeem or
otherwise acquire any shares of its (or any of its subsidiary's) capital
stock or any other securities convertible into or evidencing the right to
subscribe for any such shares (all of the foregoing, "Convertible
Securities"). Since the date of issuance thereof, except as set forth on
SCHEDULE II hereto, as of December 28, 1999 there had been no adjustment in
the number of shares of capital stock of the Company into which any
Convertible Security is exercisable, exchangeable or convertible pursuant to
the terms of such security, the Certificate or otherwise.
SECTION 12.
COVENANTS
(a) NOTICES OF CERTAIN ACTIONS. In the event that the Company:
(i) shall have authorized the issuance of rights or warrants to
subscribe for or purchase capital stock of the Company since the last notice
delivered pursuant to this Section 12(a)(i) or the date hereof, whichever is
later, or of any other subscription rights or warrants to purchase capital
stock to holders of any type of capital stock of the Company since the last
notice delivered pursuant to this Section 12(a)(i) or the date hereof,
whichever is later; or
(ii) shall authorize a dividend or other distribution of evidences
of its indebtedness, cash or other property or assets to holders of any type
of capital stock of the Company; or
(iii) proposes to become a party to any consolidation or merger for
which approval of any stockholders of the Company will be required, or to a
conveyance or transfer of the properties and assets of the Company
substantially as an entirety, or of any capital reorganization or
reclassification or change of any type of capital stock of the Company; or
(iv) commences a voluntary or involuntary dissolution, liquidation
or winding up; or
(v) commences a Qualified Public Offering; or
(vi) fails to comply with the provisions of this Agreement; or
(vii) proposes to take any other action which would require an
adjustment pursuant to Section 9; or
(viii) proposes any refinancing of the Credit Agreement; or
(ix) sends any notice or information to the holders of Common
Stock of the Company or the Company becomes aware of any potential Change of
Control;
then the Company shall provide a written notice to each Holder stating (i)
the date as of which the holders of record of capital stock to be entitled to
receive any such rights, warrants or
-17-
distribution are to be determined, (ii) the material terms of any such
consolidation or merger and the expected effective date thereof, (iii) the
material terms of any such conveyance or transfer, and the date on which any
such conveyance, transfer, dissolution, liquidation or winding up is expected
to become effective or consummated, and the date as of which it is expected
that holders of record of capital stock will be entitled to exchange their
shares for securities or other property, if any, deliverable upon such
reclassification, conveyance, transfer, dissolution, liquidation or winding
up, (iv) the material terms of any such Qualified Public Offering (including
a copy of any prospectus, registration statement or offering statement), the
expected effective date thereof and the expected price range of the shares to
be sold in such Qualified Public Offering, (v) the nature of the lack of
compliance, any corrective action taken and any rights or remedies which such
lack of compliance has bestowed on the Holders, (vi) a notice as is required
by Section 9(g), (vii) a copy of such notice sent to the holders of Common
Stock of the Company and (viii) the material terms of any refinancing of the
Credit Agreement (including delivery of the definitive credit documents to be
executed in connection therewith together with any other information
reasonably requested by any Holder of Warrants and/or Warrant Shares). Such
notice shall be given not later than ten (10) Days prior to the effective
date (or the applicable record date, if earlier) of such event. The failure
to give the notice required by this subsection 12(a) or any defect therein
shall not affect the legality or validity of any distribution, right,
warrant, consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding up, or the vote upon any action.
(b) FINANCIAL STATEMENTS AND REPORTS. At any time a Holder holds any
Warrants and/or Warrant Shares, the Company shall furnish to each such Holder
the information described in Section 8.01 of the Credit Agreement and such
other information relating to the Company and its Subsidiaries and their
operations and financial condition as any Holder shall reasonably request.
(c) INFORMATION RIGHTS AND ACCESS RIGHTS. Each Holder shall have the
right whether or not such Holder has exercised or exchanged any Warrants, to
receive lists of stockholders or other information respecting the Company, to
inspect the books and records of the Company and to visit the properties of
the Company. Nothing contained in this Agreement shall be construed as
conferring upon any Holder, prior to its exercise of any Warrant, the right
to vote or to consent or to receive notice as stockholders in respect of
meetings of stockholders or the election of directors of the Company or any
other matter, or any rights whatsoever as stockholders of the Company, except
as expressly provided hereunder or under Applicable Law.
(d) TRANSACTIONS WITH AFFILIATES. Other than (i) transactions
permitted pursuant to Section 9.07 of the Credit Agreement, as in effect on
the date hereof, and (ii) the issuance of stock options for shares of Common
Stock as described in clause (iii) of the definition of Additional Shares,
the Company agrees with each of the Holders that, until the performance of
all of its obligations hereunder, the Company will not, and will not permit
any of its subsidiaries to, enter into transactions with any Affiliate of the
Company other than transactions on terms and conditions substantially as
favorable to the Company as would be obtainable in a comparable arm's-length
transaction with a Person other than an Affiliate; PROVIDED, that in no event
shall the Company or any subsidiary of the Company engage in a merger,
business combination or sale of
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a material amount of its assets to an Affiliate nor will the Company issue
any capital stock to an Affiliate for a price which is below its fair market
value.
(e) REGULATED HOLDERS.
(i) Notwithstanding any other provision of this Agreement to the
contrary, except as provided in this subsection 12(e), without the prior
written consent of any Regulated Holder, the Company shall not, directly or
indirectly, redeem, purchase or otherwise acquire, convert or take any action
(including any amendment to the Certificate) with respect to the voting
rights of, or undertake any other action or transaction (including any
merger, consolidation or recapitalization) affecting, any shares of its
capital stock or other voting securities if the result of the foregoing would
be to cause the ownership of the capital stock of the Company by such
Regulated Holder, or the ownership of voting securities of the Company (or
any class thereof) by such Regulated Holder, to exceed the quantity of such
capital stock or voting securities (or any class thereof) that such Regulated
Holder is permitted under Applicable Law to own. Any action or transaction
referred to in the preceding sentence shall be referred to herein as a
"Section 12(e) Transaction". If the Company proposes to undertake any action
or transaction which could constitute a Section 12(e) Transaction, it shall
provide the Holders at least 15 days prior written notice thereof. If, in
the written opinion of counsel to any Regulated Holder (which may be internal
counsel) delivered within 10 days following receipt of such notice, such
action or transaction constitutes a Section 12(e) Transaction with respect to
such Regulated Holder, then the Company shall delay undertaking such Section
12(e) Transaction for the purpose of using its best efforts to agree on a
manner in which to restructure such action or transaction in a manner
reasonably satisfactory to the Company and such Regulated Holder so that it
no longer would constitute a Section 12(e) Transaction. If the Company and
such Regulated Holder are unable to agree, within 20 days of the delivery of
such written opinion, upon a manner in which to so restructure such Section
12(e) Transaction, and such Section 12(e) Transaction is a bona fide action
or transaction proposed by the Company in good faith, then the Company shall
be permitted to undertake such Section 12(e) Transaction if prior to or
concurrently with doing so, at the election of such Regulated Holder, the
number (specified by such Regulated Holder) of Warrant Shares sufficient in
the written opinion of counsel to such Regulated Holder (which may be
internal counsel) needed to prevent such Section 12(e) Transaction from
causing the ownership of the capital stock or voting securities of such
Regulated Holder to exceed the quantity of such capital stock as such
Regulated Holder is permitted under Applicable Law to own, (i) are promptly
purchased by the Company or the Company's designees, from such Regulated
Holder at a purchase price equal to the Market Price per share of Common
Stock, (ii) are exchanged for Equivalent Nonvoting Securities or (iii) if the
Regulated Holder would have received voting securities in connection with
such action or transaction, a number of shares or other units of voting
securities to be received by such Regulated Holder are exchanged for the same
number of shares or other units of Equivalent Nonvoting Securities.
(ii) If it becomes unlawful for any Regulated Holder to continue
to hold some or all of the Warrants or Warrant Shares held by it, or
restrictions are imposed on any Regulated Holder by Applicable Law which, in
the reasonable judgment of such Regulated Holder, make it
-19-
unduly burdensome to continue to hold such Warrants or Warrant Shares, the
Company shall (i) cooperate with such Regulated Holder in any efforts by such
Regulated Holder to dispose of some or all of such Warrants or Warrant Shares
in a prompt and orderly manner, including providing (and authorizing such
Regulated Holder to provide) financial and other information concerning the
Company to any prospective purchaser of such Warrants or Warrant Shares and
(ii) at the request of such Regulated Holder, take all steps (including using
its best efforts to cause its Articles of Incorporation to be amended)
necessary to create an Equivalent Nonvoting Security with respect to the
Warrant Shares then held by such Regulated Holder and permit such Regulated
Holder to exchange Warrant Shares for the same number of shares or other
units of such Equivalent Nonvoting Security; PROVIDED, that nothing in this
subsection 12(e) shall require the Company to register or qualify such
Warrants or Warrant Shares under any federal or state securities laws.
(f) CURRENT PUBLIC INFORMATION. At all times after the Company has
filed a registration statement with the Commission pursuant to the
requirements of either the 1933 Act or the 1934 Act, the Company will file
all reports required to be filed by it under the 1933 Act and the 1934 Act
and the rules and regulations adopted by the Commission thereunder, and will
take such further action as any Holder may reasonably request, all to the
extent required to enable such Holder to sell Warrant Shares pursuant to Rule
144 or Rule 144A adopted by the Commission under the 1933 Act. Upon request,
the Company will deliver to any such Holder a written statement as to whether
it has complied with such requirements.
(g) PUBLIC DISCLOSURES. The Company will not disclose any Holder's
name or identity as an investor in the Company in any press release or other
public announcement, unless such disclosure is required by Applicable Law or
governmental regulations or by order of a court of competent jurisdiction in
which case prior to making such disclosure the Company will give written
notice to such Holder describing in reasonable detail the proposed content of
such disclosure and will permit the Holder to review and comment upon the
form and substance of such disclosure.
(h) CERTAIN RESTRICTIONS. The Company will not without the consent of
the Requisite Holders, take any action, corporate or otherwise, the effect of
which would be to alter, impair or affect adversely either the rights of the
Holders or the duties and obligations of the Company under the Warrant
Documents.
(i) SPECIFIC PERFORMANCE. Each Holder shall have the right to specific
performance by the Company of the provisions of this Agreement, in addition
to any other remedies it may have at law or in equity. The Company hereby
irrevocably waives, to the extent that it may do so under Applicable Law, any
defense based on the adequacy of a remedy at law which may be asserted as a
bar to the remedy of specific performance in any action brought against the
Company for specific performance of this Agreement by any Holder of the
Warrants or Warrant Shares.
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SECTION 13.
AMENDMENTS AND WAIVERS
(a) CONSENT OF HOLDERS. No amendment, modification, termination or
waiver of any provision of this Agreement and the Warrant Certificates or
consent to any departure by the Company therefrom, shall in any event be
effective without the written concurrence of the Requisite Holders; PROVIDED,
HOWEVER, that without the consent of each Holder affected, no amendment,
modification, termination or waiver may:
(i) make any change to the definition of "Requisite Holders";
(ii) make any change to the transfer provisions of Section 14
that adversely affects the ability of a Holder to make any transfer described
therein; or
(iii) make any change in the foregoing amendment and waiver
provisions.
After an amendment, modification, termination or waiver under this
Section 13 becomes effective, the Company shall mail to the Holders affected
thereby a notice briefly describing such amendment, modification, termination
or waiver. Any failure of the Company to mail such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any
such amendment, modification, termination or waiver.
In connection with any amendment, modification, termination or waiver
under this Section 13, the Company may offer, but shall not be obligated to
offer, to any Holder who consents to such amendment, modification,
termination or waiver, consideration for such Holder's consent, so long as
such consideration is offered to all Holders.
(b) SOLICITATION OF HOLDERS. The Company will not effect any proposed
amendment, modification, termination or waiver of any of the provisions of
this Agreement or the Warrant Certificates unless each Holder (irrespective
of the amount of Warrants or Warrant Shares then owned by it) shall be
informed thereof by the Company prior to the effectuation thereof (but only
to the extent the Company has been provided with addresses for the Holders)
and shall be afforded the opportunity of considering the same and shall be
supplied by the Company with information which is sufficient in the Company's
reasonable discretion to enable such Holder to make an informed decision with
respect thereto. Executed or true and correct copies of any amendment,
modification, termination or waiver effected pursuant to the provisions of
this Section 13 shall be delivered by the Company to each Holder of
outstanding Warrants or Warrant Shares forthwith following the date on which
the same shall have been executed and delivered by the Holder or Holders of
the requisite percentage of outstanding Warrant Shares (but only to the
extent the Company has been provided with the addresses for the Holders).
(c) REVOCATION AND EFFECT OF CONSENTS. Until an amendment,
modification, termination or waiver becomes effective, a consent to it by a
Holder is a continuing consent by the Holder and every subsequent Holder of a
Warrant or Warrant Shares, even if notation of the consent is not made on any
Warrant Certificate or stock certificate. However, any such Holder or
subsequent Holder may revoke any such consent by notice to the Company
received before the
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date on which the Requisite Holders have consented (and not theretofore
revoked such consent) to such amendment, modification, termination or waiver.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
modification, termination or waiver, which record date shall be at least 10
days prior to the first solicitation of such consent. If a record date is
fixed, then notwithstanding the last sentence of the immediately preceding
paragraph, those Persons who were Holders at such record date (or their duly
designated proxies), and only those Persons, shall be entitled to revoke any
consent previously given, whether or not such Persons continue to be Holders
after such record date. No such consent shall be valid or effective for more
than 90 days after such record date.
SECTION 14.
TRANSFERS
(a) Each Holder, subject to the provisions of subsection 14(c) below
shall be permitted to transfer any Warrant or Warrant Share (and the rights
relating thereto under this Agreement and the other Warrant Documents) to any
Permitted Transferee.
(b) In addition to the rights of transfer under Section 14(a), each
Holder, subject to the provisions of subsection 14(c) below, shall be
permitted to transfer any Warrant or Warrant Share (and the rights relating
thereto under this Agreement and the other Warrant Documents) to any other
Person; PROVIDED that:
(i) such transfer is made pursuant to a registration statement
under the 1933 Act (it being acknowledged that the Company shall not be
obligated to assist in any manner in any such registration) or pursuant to an
exemption from the registration requirements of the 1933 Act;
(ii) if such transfer is being made pursuant to an exemption from
such registration requirements and if requested by the Company, counsel for
such Holder (which counsel may be internal counsel) furnishes to the Company
an opinion to the effect that such transfer is being made pursuant such an
exemption;
(iii) the applicable transferee (or, in the case of an account
manager, the managed account on behalf of which the account manager is
acting) is an "accredited investor" as defined in Regulation D promulgated
under the 1933 Act; and
(iv) such transferee represents to the Company in writing that it
is acquiring such Warrant or Warrant Share solely for its own account (or in
the case of account managers, on behalf of managed accounts) and not as
nominee or agent for any other Person (other than for such managed accounts,
if applicable) and not with a view to, or for offer or sale in connection
with, any distribution thereof (within the meaning of the 1933 Act), without
prejudice, however, to its right at all times to sell or otherwise dispose of
all or any part of said Warrant or Warrant Shares pursuant to a registration
statement under the 1933 Act or pursuant to an exemption from
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the registration requirements of the 1933 Act, and subject, nevertheless, to
the disposition of its property being at all times within its control.
(c) The Company shall promptly register the transfer of any outstanding
Warrants in the Warrant register and any outstanding Warrant Shares in a
Common Stock register to be maintained by the Company upon surrender thereof
accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company, 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 or Warrant Share, as the case may be, shall be issued and delivered
with all reasonable dispatch to the transferee(s) and such transferee(s)
shall be deemed to have become the Holder(s) of record of such Warrant or
Warrant Share, as the case may be, and the surrendered Warrant or Warrant
Share, as the case may be, shall be canceled and disposed of by the Company.
SECTION 15.
MISCELLANEOUS
(a) NOTICES. Unless otherwise specifically provided herein, any notice
or other communication herein required or permitted to be given shall be in
writing and shall be made by personal service, telecopy, United States mail
or reputable courier service:
(i) if to the Purchaser or subsequent Holder, at the address or
telecopy number set forth on the signature pages to this Agreement, or such
other address as shall be designated in a written notice delivered to the
Company; and
(ii) if to the Company, at the address or telecopy number set
forth on the signature pages to this Agreement, or such other address as
shall be designated in a written notice delivered to the other parties hereto.
Unless otherwise specifically provided herein, any notice or other
communication shall be deemed to have been given when delivered in person or
by courier service, upon receipt of telecopy, or three Business Days after
depositing it in the United States mail with postage prepaid and properly
addressed.
(b) FAILURE OR INDULGENCE NOT WAIVER: REMEDIES CUMULATIVE. No failure
or delay on the part of any Holder in the exercise of any power, right or
privilege hereunder or under any other Warrant Document shall impair such
power, right or privilege or be construed to be a waiver of any default or
acquiescence therein, nor shall any single or partial exercise of any such
power, right or privilege preclude other or further exercise thereof or of
any other power, right or privilege. All rights and remedies existing under
this Agreement and the other Warrant Documents are cumulative to, and not
exclusive of, any rights or remedies otherwise available.
(c) SEVERABILITY. In case any provision in or obligation under this
Agreement or the Warrant Certificates shall be invalid, illegal or
unenforceable in any jurisdiction, the validity,
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legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way
be affected or impaired thereby.
(d) HEADINGS. Section and subsection headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive
effect.
(e) APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
(f) SUCCESSORS AND ASSIGNS. This Agreement shall be binding on the
parties hereto and their respective successors and assigns and shall insure
to the benefit of the parties hereto and the successors and assigns and
Permitted Transferees of the Purchaser (including each Holder and its
successors and assigns and Permitted Transferees).
(g) COUNTERPARTS. This Agreement and any amendments, waivers, consents
or supplements hereto or in connection herewith may be executed in any number
of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but
all such counterparts together shall constitute but one and the same
instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.
(h) SURVIVAL OF REPRESENTATION AND WARRANTIES, ENTIRE AGREEMENT. All
representations and warranties contained herein or made in writing or on
behalf of the Company in connection herewith shall survive the execution and
delivery of this Agreement and the Warrant Shares and the transfer by the
Purchaser of any Warrant Shares or any portion thereof on interest therein,
and may be relied upon by the Purchaser regardless of any investigation made
at any time by or on behalf of any Purchaser. This Agreement and the Warrant
Certificates embody the entire agreement and understanding between the
parties hereto and supersede all prior agreements and understandings, if any,
relating to the subject matter hereof.
(i) ADDITIONAL AGREEMENT. The Company hereby covenants and agrees that
it will as soon as possible, but in any event, within the earlier of thirty
(30) days of the date hereof and the date on which the Purchaser exercises
any Warrant issued hereunder (w) cause the Co-Sale Agreement to be amended
and restated such that the Purchaser shall be granted co-sale rights with
respect to any sale of Founder Stock (as defined in the Co-Sale Agreement) by
any Founder (as defined in the Co-Sale Agreement) and any sale of shares of
Preferred Stock (as defined in the Co-Sale Agreement) by Xxxxxxxx
Communications, Spectrasite Communications, and Brookwood Ubiquitel
Investors, LLC and their respective officers, directors, employees, partners
and affiliates, on terms and conditions satisfactory to the Purchaser, (x)
cause the Registration Rights Agreement to be amended and restated in order
to grant the Purchaser the right to cause the Company to file one long-form
registration statement on its behalf after the initial public offering of the
Company and to provide the Purchaser with unlimited piggy-back registration
rights on all other registration statements filed by the Company, on terms
and conditions
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satisfactory to the Purchaser, (y) shall amend its Certificate of
Incorporation to increase the number of authorized shares of non-voting
Common Stock in order to allow the Purchaser to exercise the Warrants, and
(z) shall amend its Certificate of Incorporation to provide for the
conversion of the non-voting Common Stock issuable upon the exercise of the
Warrants into an equivalent number of shares of voting Common Stock on terms
satisfactory to the Purchaser. The Company acknowledges that its compliance
with each of the foregoing covenants is a material benefit to the Purchaser.
The parties hereby acknowledge and agree that it would be difficult to
determine the actual damages suffered by the Purchaser in the event the
Company fails to comply with the covenants set forth in clause (w) or (x)
above. Accordingly, in the event of any such breach, the Company shall
promptly pay to the Purchaser, as its non-exclusive remedy, the sum of one
million dollars ($1,000,000.00), which the parties agree is fair and
reasonable compensation for any such breach. The Company also acknowledges
and agrees that the payment of such fee shall be in addition to any other
remedies available to the Purchaser pursuant to this Agreement or at law or
in equity.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized as of
the day and year first above written.
NOTICE ADDRESS: UBIQUITEL INC.
Xxx Xxxx Xxx Xxxxxx By
Suite 400 --------------------------
Xxxxxxxxxxxx, XX 00000 Name:
Fax: (000) 000-0000 Title:
Attention: Xxxxxx X. Xxxxxx
NOTICE ADDRESS: PARIBAS NORTH AMERICA, INC.
Paribas North America, Inc. By
000 Xxxxxxx Xxxxxx --------------------------
Xxx Xxxx, Xxx Xxxx 00000 Name:
Fax: (000) 000-0000 Title:
Attention: Xxxx Aizenberg
with a copy to:
White & Case LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxx X. Xxxxx, Esq.
