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EXHIBIT 4.5
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS
SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER AGREES THAT (1) IT WILL
NOT, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") THAT IS TWO
YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, RESELL OR OTHERWISE TRANSFER
THIS SECURITY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) INSIDE
THE UNITED STATES TO AN ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER,
FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE
COMPANY A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH
LETTER CAN BE OBTAINED FROM THE COMPANY), (C) OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE ACT, (D) PURSUANT TO
THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE ACT (IF
AVAILABLE) OR (E) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT
AND (2) WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF
THIS SECURITY PRIOR TO THE RESALE RESTRICTION TERMINATION DATE, IF THE PROPOSED
TRANSFEREE IS AN ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION
AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM OR IN A TRANSACTION NOT SUBJECT TO THE
REGISTRATION REQUIREMENTS OF THE ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM
BY REGULATION S UNDER THE ACT. THIS SECURITY IS SUBJECT TO THE TERMS OF A
STOCKHOLDER AGREEMENT, DATED AS OF SEPTEMBER 15, 1999, AMONG XXXXXX
COMMUNICATIONS CORPORATION, NATIONAL BROADCASTING COMPANY, INC. AND THE OTHER
PARTIES NAMED THEREIN (THE "STOCKHOLDER AGREEMENT").
Class A Common Stock Purchase Warrant
Date of Issuance: September 15, 1999
Warrant No. 1999-B
XXXXXX COMMUNICATIONS CORPORATION
Warrant Certificate
Xxxxxx Communications Corporation (the "Company"), for value received,
hereby certifies that NBC Palm Beach Investment II, Inc., a wholly-owned
subsidiary of National Broadcasting Company, Inc. (the "Investor"), or
registered assigns (the "Holder"), is entitled, subject to the terms of this
Warrant (the "Warrant") as set forth below, to purchase from the Company, during
the Exercise Period (as defined in Section 1), a maximum of 18,966,620 shares
(the "Warrant Shares") of Class A Common Stock of the Company, par value $.001
per share (the "Class A Common Stock") at a price per share equal to the
Exercise Price (as defined in Section 1(b)). The number of Warrant Shares and
the Exercise Price are subject to adjustment from time to time as hereinafter
provided.
The Warrant is issued under and in accordance with that certain
Investment Agreement between the Company and the Investor, dated September 15,
1999 (the "Investment Agreement"), and is subject to the terms and provisions
contained in the Investment Agreement, which are incorporated herein by
reference and made a part hereof. The Warrant and the Warrant Shares are
entitled to the benefits of that certain Registration Rights Agreement, dated
September 15, 1999,
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between the Company and the Investor (the "Registration Rights Agreement").
Copies of the Investment Agreement, the Stockholder Agreement and the
Registration Rights Agreement may be obtained for inspection by the Holder at
the principal office of the Company upon prior written request to the Company.
Section 1. Exercise. Subject to the terms hereof, the Holder shall have
the right, which may be exercised at any time during the period (the "Exercise
Period") commencing as of September 15, 1999 (the "Issue Date") and continuing
until the earlier of (i) the termination of the Investor Rights (as defined in
the Investment Agreement), and (ii) 5:00 p.m., New York City time, on September
15, 2009 (the "Expiration Date"), to purchase 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 the Warrant and payment of the Exercise Price
then in effect for such Warrant Shares. Notwithstanding the foregoing, if in the
written opinion of counsel to the Company reasonably acceptable to the Holder
approval of the Federal Communications Commission (the "FCC") is required before
the Company may issue Warrant Shares upon the exercise of the Warrant, the
Company may defer the issuance of such Warrant Shares until such time as
approval of the FCC is obtained or is no longer required. The Company shall
promptly notify the Holder in writing of any event which requires it to suspend
exercise of the Warrant pursuant to the preceding sentence and of the
termination of any such suspension. To the extent the Warrant is not exercised
prior to the Expiration Date, it shall become void and all rights hereunder
shall cease as of such time.
(a) Procedures; Limitations on Exercise. The Warrant may be
exercised, in whole or in part, at the election of the Holder, upon surrender at
the principal office of the Company of the certificate or certificates
evidencing the Warrant with the form of election to purchase attached as Exhibit
A duly completed and signed ("Purchase Form"), and upon payment to the Company
of the Exercise Price, as it may be adjusted as herein provided, for the number
of Warrant Shares in respect of which the Warrant is then exercised; provided
that the Warrant shall be exercisable in part only for a minimum of 2,500,000
Warrant Shares per exercise, or if less, the entire number of Warrant Shares
which the Holder is entitled to purchase hereunder. Payment of the aggregate
Exercise Price shall be made by wire transfer of immediately available funds to
such account as the Company may specify.
Subject to the provisions of Section 4 hereof, upon surrender of the
Warrant 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 a certificate or certificates for the number of Warrant Shares issuable
upon the exercise of the Warrant together with cash as provided in Section 10.
Such certificate or certificates shall be deemed to have been issued and the
Holder shall be deemed to have become a holder of record of such Warrant Shares
as of the date of the surrender of the Warrant and payment of the Exercise
Price.
In the event that this Warrant 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 certificate evidencing the remaining Warrant or Warrants
will be issued, and the Company shall countersign and deliver the required new
Warrant Certificate or Certificates. When surrendered upon exercise of the
Warrant, this Warrant Certificate shall be cancelled and disposed of by the
Company.
Notwithstanding anything to the contrary contained herein, the exercise
of the Warrant, in whole or in part, is subject to the following restrictions:
(i) The Warrant may not be exercised, in whole or in
part, until that certain Warrant 1999-A issued by the Company to the
Investor, or registered assigns, dated September 15, 1999 ("Warrant
A"), has been exercised with respect to the full number of shares of
Class A Common Stock issuable under such warrant.
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(ii) Prior to February 1, 2002, the Warrant shall not
be exercisable to the extent that, after giving effect to such
exercise, Xxxxxx X. Xxxxxx ("Xx. Xxxxxx") or any of his affiliates
(including members of his family) would not constitute the FCC Single
Majority Stockholder of the Company (as defined in the Stockholder
Agreement). The restrictions set forth in this clause (ii) shall not
apply in the event of an Accelerated Buyout (as defined in the
Investment Agreement).
(iii) After February 1, 2002, the Warrant shall not
be exercisable to the extent that, after giving effect to such
exercise, Xx. Xxxxxx or any of his affiliates (including members of his
family) would not constitute the FCC Single Majority Stockholder of the
Company, unless the Warrant is exercised for the full number of Warrant
Shares and concurrently with such exercise the Investor or its
permitted assignee has exercised the Call Right with respect to all of
the Call Shares (as such terms are defined in the Call Agreement, dated
September 15, 1999, among the Call Stockholders named therein and the
Investor).
(iv) If this Warrant is transferred in whole or in
part (except for transfers to affiliates of the Investor who are
domestic subsidiaries of the Investor's ultimate parent corporation
("Control Group Affiliates"), it shall expire to the extent of the
transferred portion 30 days after the later of (A) the date of such
transfer and (B) the date on which this Warrant first became
exercisable with respect to the transferred portion hereof. This
Warrant shall not be exercisable by the Investor and its affiliates
during any Involuntary Redemption Period or Default Redemption Period,
as such terms are defined in the Investment Agreement, or from and
after the date the Investor elects to cause the Company to effectuate a
Company Sale pursuant to Section 9.5 of the Investment Agreement.
Should a Holder which is a Control Group Affiliate determine, in its
sole discretion, that it is prevented under applicable laws and regulations of
the FCC from holding shares of Class A Common Stock issuable upon exercise of
this Warrant, then, subject to adoption and approval of the stockholder proposal
described in clause (iii) of the definition of "Stockholder Proposal" in the
Stockholder Agreement, such Holder shall have the option to acquire shares of
non-voting common stock of the Company upon exercise of this Warrant, on the
same terms and conditions of exercise as are applicable to Class A Common Stock
hereunder.
(b) Exercise Price. The "Exercise Price" on any date shall
mean the arithmetic average of the Closing Price of the Class A Common Stock for
the 45 consecutive trading days ending on the trading day immediately preceding
the Exercise Date; provided, that, the Exercise Price shall not be less than the
Minimum Exercise Price nor greater than the Maximum Exercise Price; and provided
further, that, for any Exercise Date from the Issue Date through and including
the third anniversary of the Issue Date, the Exercise Price shall not be less
than $22.50 per share. The Exercise Price shall be subject to adjustment as
provided in Section 9.
The "Exercise Date" shall mean the date of delivery of the Purchase
Form and payment of the Exercise Price to the Company; provided, that, if FCC
approval of the issuance of Warrant Shares is required, the Exercise Date shall
be the date of delivery of the Purchase Form.
The "Closing Price" on any date shall mean the last sale price for the
Class A Common Stock, regular way, or, in case no such sale takes place on such
date, the average of the closing bid and asked prices, regular way, for the
Class A Common Stock in either case as reported in the principal consolidated
transaction reporting system with respect to the principal securities exchange
on which the Class A Common Stock is listed or admitted to trading or, if the
Class A Common Stock is not listed or admitted to trading on any securities
exchange, the last quoted price, or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the
principal automated quotation system that may then be in use or, if the Class A
Common Stock is
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not quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the Class
A Common Stock selected by the Board of Directors of the Company or, in the
event that no trading price is available for the Class A Common Stock, the fair
market value of the Class A Common Stock, as determined in good faith by the
Board of Directors of the Company.
The "Minimum Exercise Price" shall be equal to the product of (i) the
arithmetic average of the Closing Price of the Class A Common Stock for each
trading day occurring during the six month period ending on the trading date
immediately preceding the Exercise Date and (ii) .825.
The "Maximum Exercise Price" shall be equal to the product of (i) the
arithmetic average of the Closing Price of the Class A Common Stock for the each
trading day occurring during the six month period ending on the trading day
immediately preceding the Exercise Date and (ii) 1.175.
Section 2. Registration. The Company shall number and register the
Warrant Certificate on the books of the Company maintained at its principal
office. Warrant Certificates shall be manually countersigned by the Company by a
duly authorized officer and shall not be valid for any purpose unless so
countersigned. The Company may deem and treat the Holders of the Warrant
Certificate as the absolute owners thereof (notwithstanding any notation of
ownership or other writing thereon made by anyone) for all purposes, and the
Company shall not be affected by any notice to the contrary.
Section 3. Transfer and Exchange of Warrants. THIS WARRANT IS SUBJECT
TO RESTRICTIONS ON TRANSFERABILITY SET FORTH IN THE STOCKHOLDER AGREEMENT, AND
MAY BE TRANSFERRED ONLY IN COMPLIANCE WITH THE PROVISIONS THEREOF. Subject to
the foregoing and the limitations of Section 4, the Company shall from time to
time register the transfer of the Warrant upon the records to be maintained by
it for that purpose, upon surrender of this Warrant Certificate duly endorsed or
accompanied (if so required by it) by a written instrument or instruments of
transfer in form satisfactory to it, duly executed by the registered Holder or
by the duly appointed legal representative thereof or by a duly authorized
attorney; provided that this Warrant may be transferred only with respect to a
minimum of 2,500,000 Warrant Shares per transfer. Subject to the terms hereof,
this Certificate may be exchanged for another certificate or certificates
entitling the Holder to purchase a like aggregate number of Warrant Shares as
the Certificate surrendered then entitles the Holder to purchase; provided that
each such new certificate shall be in minimum denominations of 2,500,000 Warrant
Shares. A Holder desiring to exchange this Certificate shall make such request
in writing delivered to the Company, and shall surrender, duly endorsed or
accompanied (if so required by the Company) by a written instrument or
instruments of transfer in form satisfactory to the Company, this Warrant
Certificate to be so exchanged.
Upon registration of transfer, the Company shall issue to the
transferees and countersign a new Warrant Certificate or Certificates and
deliver by certified mail such new Warrant Certificate or Certificates to the
persons entitled thereto. No service charge shall be made for any exchange or
registration of transfer of Warrant Certificates, but the Company may require
payment of a sum sufficient to cover any stamp or other tax or other
governmental charge that is imposed in connection with any such exchange or
registration of transfer.
Section 4. Registration of Transfers and Exchanges. Subject to Section
3 hereof, when Warrants represented by this Certificate are presented to the
Company with a request to register the transfer of the Warrants, or to exchange
such Warrants for an equal number of Warrants of other authorized denominations,
the Company shall register the transfer or make the exchange as requested if the
requirements set forth in Section 3 and the following requirements are
satisfied:
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(I) the Certificate shall be duly endorsed or accompanied by a
written instrument of transfer in form satisfactory to the
Company, duly executed by the Holder or his attorney duly
authorized in writing; and
(II) if the offer and sale of the Warrants have not been registered
pursuant to an effective Registration Statement under the
Securities Act of 1933, as amended (the "Securities Act"), the
Certificate shall be accompanied by the following additional
information and documents, as applicable:
(A) if such Warrants are being delivered to the Company
by a Holder for registration in the name of such
Holder, without transfer, a certification from such
Holder to that effect (in substantially the form of
Exhibit B hereto); or
(B) if such Warrants are being transferred pursuant to an
exemption from registration in accordance with Rule
144 ("Rule 144") or Regulation S ("Regulation S"), in
each case, under the Securities Act, a certification
to that effect (in substantially the form of Exhibit
B hereto); or
(C) if such Warrants are being transferred to an
institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities
Act (an "Institutional Accredited Investor")),
delivery of a certification to that effect (in
substantially the form of Exhibit B hereto) and a
Transferee Certificate for Institutional Accredited
Investors in substantially the form of Exhibit C
hereto and an opinion of counsel and/or other
information satisfactory to the Company to the effect
that such transfer is in compliance with the
Securities Act; or
(D) if such Warrants are being transferred in reliance on
another exemption from the registration requirements
of the Securities Act, a certification to that effect
(in substantially the form of Exhibit B hereto) and
an opinion of counsel reasonably satisfactory to the
Company to the effect that such transfer is in
compliance with the Securities Act.
Section 5. Payment of Taxes. The Company will pay all documentary stamp
taxes attributable to the initial issuance of Warrant Shares upon the exercise
of the Warrant; provided, however, that the Company shall not be required to pay
any tax or taxes which may be payable in respect of any transfer involved in the
issue 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 6. Mutilated or Missing Warrant Certificate. In case this
Warrant Certificate shall be mutilated, lost, stolen or destroyed, the Company
will issue and 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 of such
loss, theft or destruction of the Warrant Certificate and an indemnification
agreement satisfactory to the Company with respect to such loss, theft or
destruction. Applicants for such substitute Warrant Certificate(s) shall also
comply with such other reasonable regulations and pay such other reasonable
charges as the Company may prescribe.
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Section 7. Reservation of Warrant Shares. The Company will at all times
reserve and keep available, free from preemptive rights, out of the aggregate of
its authorized but unissued Class A Common Stock or its authorized and issued
Class A Common Stock held in its treasury, for the purpose of enabling it to
satisfy any obligation to issue Warrant Shares upon exercise of the Warrant, the
maximum number of shares of Class A Common Stock which may then be deliverable
upon the exercise of the Warrant. Following approval of the Stockholder
Proposal, the Company will at all times reserve and keep available, free from
preemptive rights, out of the aggregate of its authorized but unissued
non-voting common stock for the purpose of enabling it to satisfy any obligation
to issue such non-voting common stock upon exercise of the Warrant, the maximum
number of shares of non-voting common stock which may then be deliverable upon
the exercise of the Warrant.
The transfer agent for the Class A Common Stock (the "Transfer Agent")
and every subsequent transfer agent for any shares of the Company's capital
stock issuable upon the exercise of the Warrant will be irrevocably authorized
and directed at all times to reserve such number of authorized shares as shall
be required for such purpose. The Company will keep a copy of this Warrant
Certificate on file with the Transfer Agent and with every subsequent transfer
agent for any shares of the Company's capital stock issuable upon the exercise
of the Warrant. The Company will supply such Transfer Agent with duly executed
certificates for such purposes and will provide or otherwise make available any
cash which may be payable as provided in Section 10. 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 11 hereof.
The Company covenants that all Warrant Shares which may be issued upon
exercise of the Warrant in accordance with the terms of the Warrant Certificate
will, upon payment of the Exercise Price therefor and issue, be validly
authorized and issued, fully paid, nonassessable, free of preemptive rights and
free from all taxes, liens, charges and security interests with respect to the
issuance thereof. The Company will take no action to increase the par value of
the Class A Common Stock to an amount in excess of the Exercise Price, and the
Company will not enter into any agreements inconsistent with the rights of the
Holder hereunder. The Company will use its best efforts to obtain all such
authorizations, exemptions or consents from any public regulatory body having
jurisdiction thereof as may be necessary to enable the Company to perform its
obligations hereunder. The Company shall not take any action reasonably within
its control, including the hiring of a broker to solicit exercises, which would
render unavailable an exemption from registration under the Securities Act which
might otherwise be available with respect to the issuance of Warrant Shares upon
exercise of the Warrant.
Section 8. Obtaining Stock Exchange Listings. The Company will from
time to time take all action which may be necessary so that the Warrant Shares,
immediately upon their issuance upon the exercise of the Warrant, will be listed
on the principal securities exchanges and markets within the United States of
America on which other shares of Class A Common Stock are then listed. In the
event that, at any time during the period in which the Warrant is exercisable,
the Class A Common Stock is not listed on any principal securities exchanges or
markets within the United States of America, the Company will use its best
efforts to permit the Warrant Shares to be designated PORTAL securities in
accordance with the rules and regulations adopted by the National Association of
Securities Dealers, Inc. relating to trading in the Private Offering, Resales
and Trading through Automated Linkages market.
Section 9. Adjustment of Number of Warrant Shares Issuable and Exercise
Price. The number of shares of Class A Common Stock issuable upon the exercise
of the Warrant (the "Exercise Rate") and the Exercise Price are subject to
adjustment from time to time upon the occurrence of the events enumerated in
this Section 9.
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(a) Adjustment for Change in Capital Stock. If the Company (1)
pays a dividend or makes a distribution on its Class A Common Stock in shares of
its Class A Common Stock; (2) subdivides its outstanding shares of Class A
Common Stock into a greater number of shares; (3) combines its outstanding
shares of Class A Common Stock into a smaller number of shares; or (4) issues,
by reclassification of its shares of Class A Common Stock, any shares of its
capital stock; then and in each such case the Exercise Rate in effect
immediately prior to such action shall be adjusted so that the holder of any
Warrant thereafter exercised shall be entitled to receive, upon exercise of the
Warrant, the number of shares of Class A Common Stock or other securities of the
Company which such holder would have owned immediately following such action if
the Warrant had been exercised immediately prior to such action; provided,
however, that notwithstanding the foregoing, upon the occurrence of an event
described in clause (1) above which otherwise would have given rise to an
adjustment, no adjustment shall be made if the Company includes the Holder in
such distribution pro rata according to the number of shares of Common Stock
issued and outstanding as if the Warrant Shares were issued and outstanding.
Any adjustment hereunder shall become effective immediately after the
record date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or reclassification
(each such time, the "Time of Determination"). Such adjustment shall be made
successively whenever any event listed above shall occur.
If after an adjustment the Holder upon exercise of the Warrant may
receive shares of two or more classes of capital stock of the Company, the Board
of Directors of the Company shall determine the allocation of the adjusted
Exercise Price and Exercise Rate between the classes of capital stock. After
such allocation, the Exercise Price and Exercise Rate of each class of capital
stock shall thereafter be subject to adjustment on terms comparable to those
applicable to the Class A Common Stock in this Section.
(b) Adjustment for Certain Issuances of Class A Common Stock.
If the Company issues or distributes to all holders of its Class A Common Stock
any rights or warrants to purchase, acquire or subscribe for shares of Class A
Common Stock (including a right or warrant with respect to any security
convertible into or exchangeable for shares of Class A Common Stock) at a price
per share of Class A Common Stock less than the Common Stock Trading Price at
the Time of Determination, the Exercise Rate shall be adjusted in accordance
with the formula:
E' = E x O + N
-----
O + N x P
-----
M
where:
E' = the adjusted Exercise Rate.
E = the Exercise Rate immediately prior to the
Time of Determination for any such
distribution.
O = the number of Fully Diluted Shares (as
defined in Section 9(m)) outstanding at the
Time of Determination for any such issuance
or distribution.
N = the number of additional shares of the
Class A Common Stock issued or issuable upon
exercise of such rights, options or
warrants.
P = the sum of the consideration per share
received for the issuance of such rights,
options or warrants and the exercise price
per share of such rights, options or
warrants.
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M = the Common Stock Trading Price per share
of the Class A Common Stock at the Time of
Determination for any such issuance, sale or
distribution.
The adjustment shall be made successively whenever any such rights,
options or warrants are issued or distributed and shall become effective
immediately after the record date for the determination of stockholders entitled
to receive the rights, options or warrants. If at the end of the period during
which any such rights, options or warrants are exercisable, not all rights,
options or warrants shall have been exercised, the Exercise Rate shall be
immediately readjusted to what it would have been if "N" in the above formula
had been the number of shares actually issued.
(c) Adjustment for Other Distributions. If the Company
distributes to all holders of its Class A Common Stock (i) any securities of the
Company or rights, options or warrants to purchase or subscribe for securities
of the Company (other than those dividends and distributions referred to in
Sections 9(a) and 9(b) above), (ii) any evidences of indebtedness of the Company
or any other person, or (iii) any Extraordinary Cash Dividend, the Exercise Rate
shall be adjusted in accordance with the formula:
E' = E x M
---
M - F
where:
E' = the adjusted Exercise Rate.
E = the current Exercise Rate on the record date mentioned
below.
M = the Common Stock Trading Price per share of Class A
Common Stock on the record date mentioned below.
F = the fair market value on the record date mentioned below
of the indebtedness, assets (including the Extraordinary
Cash Dividend), rights, options or warrants distributable
with respect to one share of Class A Common Stock.
The adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of stockholders entitled to receive the distribution.
Notwithstanding the foregoing provisions of this Section 9(c), an event which
would otherwise give rise to an adjustment pursuant to this Section 9(c) shall
not give rise to such an adjustment if the Company includes the Holder in such
distribution pro rata to the number of shares of Class A Common Stock issued and
outstanding after giving effect to the Warrant Shares as if they were issued and
outstanding.
(d) Adjustment of Exercise Price. Whenever the number of
Warrant Shares purchasable upon the exercise of the Warrant is adjusted, as
herein provided, the Exercise Price per Warrant Share payable upon exercise of
the Warrant shall be adjusted (calculated to the nearest $.0001) so that it
shall equal the price determined by multiplying the Exercise Price immediately
prior to such adjustment by a fraction, the numerator of which shall be the
number of Warrant Shares purchasable upon the exercise of the Warrant
immediately prior to such adjustment, and the denominator of which shall be the
number of Warrant Shares so purchasable immediately thereafter.
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(e) Definitions.
"Common Stock Trading Price" on any date means, with respect to the
Class A Common Stock, the Closing Price for the Class A Common Stock on such
date.
"Extraordinary Cash Dividend" means cash dividends with respect to the
Class A Common Stock the aggregate amount of which in any fiscal year exceeds
10% of Adjusted EBITDA (as defined in the certificate of designation for the
Company's Series A Convertible Preferred Stock as in existence on the date
hereof) of the Company and its subsidiaries for the fiscal year immediately
preceding the payment of such dividend.
"Fair market value" of any consideration other than cash or of any
securities shall mean the amount which a willing buyer would pay to a willing
seller in an arm's length transaction as determined by an independent investment
banking or appraisal firm experienced in the valuation of such securities or
property selected in good faith by the Board of Directors of the Company or a
committee thereof.
(g) When De Minimis Adjustment May Be Deferred. No adjustment
in the Exercise Rate need be made unless the adjustment would require an
increase or decrease of at least 1.0% in the Exercise Rate. Notwithstanding the
foregoing, 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 cent or to the
nearest 1/100th of a share, as the case may be.
(h) When No Adjustment Required. If an adjustment is made upon
the establishment of a record date for a distribution subject to subsections
(a), (b) or (c) hereof and such distribution is subsequently cancelled, the
Exercise Rate then in effect shall be readjusted, effective as of the date when
the Board of Directors determines to cancel such distribution, to that which
would have been in effect if such record date had not been fixed.
(i) Notice of Adjustment. Whenever the Exercise Rate or
Exercise Price is adjusted, the Company shall provide the notices required by
Section 11 hereof.
(j) When Issuance or Payment May Be Deferred. In any case in
which this Section 9 shall require that an adjustment in the Exercise Rate be
made effective as of 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 Warrant Shares and other capital
stock of the Company, if any, issuable upon such exercise over and above the
Warrant Shares and other capital stock of the Company, if any, issuable upon
such exercise on the basis of the Exercise Rate prior to such adjustment, and
(ii) paying to such Holder any amount in cash in lieu of a fractional share
pursuant to Section 10; provided, however, that the Company shall deliver to the
Holder a due xxxx or other appropriate instrument evidencing such Holder's right
to receive such additional Warrant Shares, other capital stock and cash upon the
occurrence of the event requiring such adjustment.
(k) Reorganizations. In the event of any capital
reorganization or reclassification of outstanding shares of Class A Common Stock
(other than in the cases referred to in Sections 9(a), (b) or (c) hereof), or in
case of any merger, consolidation or other corporate combination of the Company
with or into another corporation (other than a merger or consolidation in which
the Company is the continuing corporation and which does not result in any
reclassification of the outstanding shares of Class A Common Stock into shares
of stock or other securities or property), or in case of any sale or conveyance
to another corporation of the property of the Company as an entirety or
substantially as an entirety (each of the foregoing being referred to as a
"Reorganization"), there shall thereafter be deliverable upon exercise of the
Warrants (in lieu of the number of shares of Class A Common Stock
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theretofore deliverable) the number of shares of stock or other securities or
property to which a holder of the number of shares of Class A Common Stock that
would otherwise have been deliverable upon the exercise of the Warrants would
have been entitled upon such Reorganization if the Warrants 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 the Holder 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 the Warrants.
The Company shall not effect any such Reorganization unless prior to or
simultaneously with the consummation thereof the successor corporation (if other
than the Company) resulting from such Reorganization or the corporation
purchasing or leasing such assets or other appropriate corporation or entity
shall expressly assume the obligation to deliver to the Holder such shares of
stock, securities or assets as, in accordance with the foregoing provisions, the
Holder may be entitled to purchase, and all other obligations and liabilities
under the Warrant.
The foregoing provisions of this Section 9(k) shall apply to successive
Reorganization transactions.
(l) Form of Warrants. Irrespective of any adjustments in the
number or kind of shares purchasable upon the exercise of the Warrant, Warrants
theretofore or thereafter issued may continue to express the same price and
number and kind of shares as are stated in this Warrant as initially issued.
(m) Miscellaneous. For purposes of this Section 9 the term
"Class A Common Stock" shall mean (i) the shares of stock designated as the
Class A Common Stock, par value $.001 per share, of the Company as of the date
of this Warrant, and (ii) shares of any other class of stock resulting from
successive changes or reclassification of such shares consisting solely of
changes in par value, or from par value to no par value, or from no par value to
par value. For purposes of this Section 9 the term "Fully Diluted Shares" shall
mean (i) the shares of Class A Common Stock outstanding as of a specified date,
and (ii) shares of Class A Common Stock into or for which rights, options,
warrants or other securities outstanding as of such date are exercisable or
convertible (other than this Warrant and Warrant A). In the event that at any
time, as a result of an adjustment made pursuant to this Section 9, the Holder
shall become entitled to purchase any securities of the Company other than, or
in addition to, shares of Class A Common Stock, thereafter the number or amount
of such other securities so purchasable upon exercise of the Warrants 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 subsections (a) through (j) of this Section 9, inclusive, and the
provisions of Sections 1, 5, 7 and 10 with respect to the Warrant Shares or the
Class A Common Stock shall apply on like terms to any such other securities.
(n) Certain Events. If any change in the outstanding Common
Stock of the Company or any other event occurs as to which the provisions of
this Section 9 are not strictly applicable or, if strictly applicable, would not
fairly protect the purchase rights of the Holder in accordance with such
provisions, then the Board of Directors of the Company shall make such
adjustments to the Exercise Rate, the Exercise Price or the application of such
provisions as may be necessary to protect such purchase rights as aforesaid and
to assure that the Holder, upon exercise for the same aggregate Exercise Price,
shall receive the total number, class and kind of shares as it would have owned
had the Warrant been exercised prior to the event and had the Holder continued
to hold such shares until after the event requiring adjustment.
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Section 10. Fractional Interests. The Company shall not be required to
issue fractional Warrant Shares on the exercise of the Warrant. If more than one
Warrant Certificate 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 Warrant so presented. If any
fraction of a Warrant Share would, except for the provisions of this Section 10,
be issuable on the exercise of any Warrants (or specified portion thereof), the
Company shall pay an amount in cash equal to the Common Stock Trading Price on
the trading day immediately preceding the date the Warrant is presented for
exercise, multiplied by such fraction.
Section 11. Notices to Holder. Upon any adjustment pursuant to Section
9 hereof, the Company shall give prompt written notice of such adjustment to the
Holder at its address appearing on the records of the Company within ten days
after such adjustment, by first class mail, postage prepaid, and shall deliver
to the Holder a certificate of the Chief Financial Officer of the Company,
accompanied by the report thereon by a firm of independent public accountants
selected by the Board of Directors of the Company (who may be the regular
accountants for the Company), setting forth in reasonable detail (i) the number
of Warrant Shares purchasable upon the exercise of the Warrant and the Exercise
Price of the Warrant after such adjustment(s), (ii) a brief statement of the
facts requiring such adjustment(s) and (iii) the computation by which such
adjustment(s) was made. Where appropriate, such notice may be given in advance
and included as a part of the notice required under the other provisions of this
Section 11.
In case:
(a) the Company proposes to take any action that would require
an adjustment to the Exercise Rate or the Exercise Price pursuant to
Section 9 hereof; or
(b) of any consolidation or merger to which the Company is a
party and for which approval of any stockholders of the Company is
required, or of the conveyance or transfer of the properties and assets
of the Company substantially as an entirety, or of any reclassification
or change of Class A Common Stock issuable upon exercise of the
Warrants (other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a
subdivision or combination), or a tender offer or exchange offer for
shares of Class A Common Stock; or
(c) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company;
then the Company shall give prompt written notice to the Holder at its address
appearing on the records of the Company, at least 30 days (or 20 days in any
case specified in clause (a) above) prior to the applicable record date
hereinafter specified, or the date of the event in the case of events for which
there is no record date, by first-class mail, postage prepaid, stating (i) the
date as of which the holders of record of shares of Class A Common Stock to be
entitled to receive any such rights, options, warrants or distribution are to be
determined, or (ii) the initial expiration date set forth in any tender offer or
exchange offer for shares of Class A Common Stock, or (iii) the date on which
any such consolidation, merger, conveyance, transfer, dissolution, liquidation
or winding up is expected to become effective or be consummated, and the date as
of which it is expected that holders of record of shares of Class A Common Stock
shall be entitled to exchange such shares for securities or other property, if
any, deliverable upon such reclassification, consolidation, merger, conveyance,
transfer, dissolution, liquidation or winding up. The failure by the Company to
give such notice or any defect therein shall not affect the legality or validity
of any distribution, right, option, warrant, consolidation, merger, conveyance,
transfer, dissolution, liquidation or winding up, or the vote upon any action.
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The Company shall give prompt written notice to the Holder of any
determination to make a distribution or dividend to the holders of its Class A
Common Stock of any assets (including cash), debt securities, preferred stock,
or any rights or warrants to purchase debt securities, preferred stock, assets
or other securities (other than Class A Common Stock, or rights, options, or
warrants to purchase Class A Common Stock) of the Company, which notice shall
state the nature and amount of such planned dividend or distribution and the
record date therefor, and shall be received by the Holder at least 30 days prior
to such record date therefor.
Nothing contained in this Warrant Certificate shall be construed as
conferring upon the Holder the right to vote or to consent or to receive notice
as shareholders in respect of the meetings of shareholders or the election of
Directors of the Company or any other matter, or any rights whatsoever as
shareholders of the Company.
Section 12. Notices to the Company. Any notice or demand to be given or
made by the Holder to or on the Company shall be sufficiently given or made when
received at the office of the Company expressly designated by the Company as its
office for purposes of this Certificate, as follows:
Xxxxxx Communications Corporation
000 Xxxxxxxxxx Xxxx Xxxx
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Attention: General Counsel
Section 13. Supplements and Amendments. The Warrant may not be
supplemented or amended without the written approval of both the Holder and the
Company.
Section 14. Successors. All the covenants and provisions of this
Certificate by or for the benefit of the Company or the Holder shall bind and
inure to the benefit of their respective successors and assigns hereunder.
Section 15. Termination. This Certificate and the Warrants represented
hereby shall terminate on the Expiration Date. Notwithstanding the foregoing,
this Certificate will terminate on any earlier date if all Warrants have been
exercised pursuant hereto.
Section 16. Governing Law. The Warrant Certificate shall be deemed to
be a contract made under the laws of the State of New York.
Section 17. Benefits of This Certificate. Nothing in this Certificate
shall be construed to give to any person or corporation other than the Company
and the registered Holder any legal or equitable right, remedy or claim
hereunder; but this Certificate shall be for the sole and exclusive benefit of
the Company and the registered Holder.
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IN WITNESS WHEREOF, Xxxxxx Communications Corporation has
caused this Certificate to be duly executed by the undersigned.
Dated: September 15, 1999
XXXXXX COMMUNICATIONS CORPORATION
By:
-----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
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EXHIBIT A
[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 purchase _____ shares of Class A
Common Stock and herewith tenders payment for such shares to the order of Xxxxxx
Communications Corporation 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 shares of Class A Common Stock
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 ________________.
Signature:
Date:
Signature Guaranteed:
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EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF WARRANTS
Re: Warrants to purchase Class A
Common Stock (the "Securities")
of Xxxxxx Communications Corporation
This Certificate relates to _______ Securities held by ______ (the
"Transferor").
The Transferor has requested that the Company by written order exchange
or register the transfer of Warrants.
In connection with such request and in respect of each such Security,
the Transferor does hereby certify that the Transferor is familiar with the
Warrant Certificate relating to the above captioned Securities and the
restrictions on transfers thereof as provided in Sections 3 and 4 of such
Warrant Certificate, and that the transfer of these Securities does not require
registration under the Securities Act of 1933, as amended (the " Securities
Act") because*:
[ ] Such Security is being acquired for the Transferor's own
account, without transfer.
[ ] Such Security is being transferred pursuant to an
exemption from registration under the Securities Act in accordance with Rule 144
or Regulation S promulgated under the Securities Act.
[ ] Such Security is being transferred to an institutional
"accredited investor" (within the meaning of subparagraphs (a)(1), (2), (3) or
(7) of Rule 501 under the Securities Act).
[ ] Such Security is being transferred in reliance on and in
compliance with an exemption from the registration requirements of the
Securities Act other than Rule 144 or Regulation S under the Securities Act. An
opinion of counsel to the effect that such transfer does not require
registration under the Securities Act accompanies this certificate.
---------------------------------------
[INSERT NAME OF TRANSFEROR]
By:
------------------------------------
[Authorized Signatory]
Date:
*Check applicable box.
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EXHIBIT C
Form of Certificate To Be
Delivered in Connection with
Transfers to Institutional Accredited Investors
---------------, ----
First Union National Bank,
Charlotte, North Carolina
0000 Xxxx X.X. Xxxxxx Xxxx.
Xxxxxxxx 0X0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Corporate Trust Administration
Re: Xxxxxx Communications Corporation
(the "Company"), Warrants to Purchase
Class A Common Stock (the "Securities")
Ladies and Gentlemen:
In connection with our proposed purchase of the Securities, we confirm
that:
1. We understand that the Securities have not been registered
under the Securities Act of 1933, as amended (the "Securities Act")
and, unless so registered, may not be sold except as permitted in the
following sentence. We agree to offer, sell or otherwise transfer such
Securities while the offer and sale thereof have not been registered
under the Securities Act only (a) to the Company or any of its
subsidiaries, (b) pursuant to a registration statement which has been
declared effective under the Securities Act, (c) pursuant to an
exemption from registration under Rule 144 under the Securities Act;
(d) pursuant to offers and sales that occur outside the United States
within the meaning of Regulation S under the Securities Act, (e) to an
institutional "accredited investor" within the meaning of subparagraphs
(a)(1), (2), (3) or (7) of Rule 501 under the Securities Act that is
purchasing for his own account or for the account of such an
institutional "accredited investor," or (f) pursuant to any other
available exemption from the registration requirements of the
Securities Act. The foregoing restrictions on resale shall apply so
long as transfer of a Security is not permitted without registration
under the Securities Act. We understand that the Securities purchased
by us will bear a legend to the foregoing effect.
2. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act) and we are acquiring the Securities for investment purposes and
not with a view to, or for offer or sale in connection with, any
distribution in violation of the Securities Act and we have such
knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the
Securities, and we and any accounts for which we are acting are each
able to bear the economic risk of our or its investment for an
indefinite period.
3. We are acquiring the Securities purchased by us for our own
account.
4. You and your counsel are entitled to rely upon this letter
and you are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any
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administrative or legal proceeding or official inquiry with respect to
the matters covered hereby.
Very truly yours,
----------------------------------------
(Name of Purchaser)
By:
-----------------------------------
Date:
-----------------------------------
Upon transfer the Securities would be registered in the name of the new
beneficial owner as follows:
Name:
---------------------------
Address:
-----------------------
Taxpayer ID Number:
-------------------------
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