EXHIBIT 2.22
ROYALTY WARRANT
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. NEITHER
THIS WARRANT NOR ANY SECURITIES ISSUED HEREUNDER MAY BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT
WITH RESPECT TO THE WARRANT OR SUCH SECURITIES UNDER SUCH ACT OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.
No. W-R Warrant to Purchase 1,000,000 Shares of Common
Stock (subject to adjustment)
WARRANT TO PURCHASE COMMON STOCK
of
CSG SYSTEMS INTERNATIONAL, INC.
VOID AFTER SEPTEMBER 19, 2002
This certifies that, for value received, TCI Technology Ventures, Inc., a
Delaware corporation ("TCI"), or its registered assigns ("Holder") is entitled,
subject to the terms and conditions set forth below, to purchase from CSG
Systems International, Inc. (the "Company"), a Delaware corporation, the
principal office of which is located at 0000 X. Xxxxxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxxxx, Xxxxxxxx, One Million (1,000,000) shares of the Common Stock of the
Company, $.01 par value per share (the "Common Stock"), as constituted on the
date hereof (the "Warrant Issue Date"), upon surrender hereof (subject to the
last sentence of Section 3(c) below), at the principal office of the Company
referred to above, with the Notice of Exercise attached hereto duly executed,
and simultaneous payment therefor in lawful money of the United States or
otherwise as hereinafter provided, at the Exercise Price as set forth in Section
2 below. The number, character and Exercise Price of such shares of Common
Stock are subject to adjustment as provided below. The term "Warrant" as used
herein shall include this Warrant and any warrants delivered in substitution or
exchange therefor as provided herein.
This Warrant is issued pursuant to the terms of an Asset Purchase Agreement
dated as of August 10, 1997 between the Company, TCI SUMMITRAK of Texas, Inc., a
Colorado corporation, TCI SUMMITrak, L.L.C., a Delaware limited liability
company, and TCI.
1. Term of Warrant. Subject to the terms and conditions set forth herein,
this Warrant shall expire at 5 p.m., Denver time, on September 19, 2002.
2. Exercise Price. The Exercise Price at which this Warrant may be
exercised shall be $24.00 per share of Common Stock, as adjusted from time to
time pursuant to Section 12 hereof.
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3. Exercise of Warrant.
(a) Subject to the conditions upon exercise provided in Section 3(b)
below, the purchase rights represented by this Warrant are exercisable by the
Holder in whole or in part, at any time, and from time to time, in increments of
not less that 100,000 shares at a time, during the term hereof as described in
Section 1 above, by the surrender of this Warrant (subject to the last sentence
of Section 3(c) below) and the Notice of Exercise annexed hereto duly completed
and executed on behalf of the Holder, at the office of the Company, upon payment
in cash to the Company, or by wire transfer to an account designated by the
Company, of the purchase price of the shares to be purchased.
(b) Exercise Condition. Notwithstanding any provision in this Warrant
to the contrary, this Warrant shall not be exercisable unless and until such
time as the Company or its subsidiaries process at least 13 million wireline
video subscribers of TCI Cable Management Corporation, a Colorado corporation
(the "Customer") which is affiliated with TCI, and its "Affiliates" (as such
term is defined in the Restated and Amended CSG Master Subscriber Management
System Agreement dated as of August 10, 1997 between CSG Systems, Inc., a
Delaware corporation and a wholly-owned subsidiary of the Company, and Customer)
(the "Master Agreement"). All such 13 million wireline video subscribers must be
processed by the Company or its subsidiaries on the same terms and conditions of
the Master Agreement in order for the exercise condition to be satisfied.
(c) This Warrant shall be deemed to have been exercised immediately
prior to the close of business on the date of its surrender for exercise as
provided above, and the person entitled to receive the shares of Common Stock
issuable upon such exercise shall be treated for all purposes as the holder of
record of such shares as of the close of business on such date. As promptly as
practicable on or after such date and in any event within ten (10) days
thereafter, the Company at its expense shall issue and deliver to the person or
persons entitled to receive the same a certificate or certificates for the
number of shares issuable upon such exercise. In the event that this Warrant is
exercised in part, the Company at its expense will execute and deliver a new
Warrant of like tenor exercisable for the number of shares for which this
Warrant may then be exercised.
4. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. In lieu of any fractional share to which the Holder would otherwise be
entitled, the Company shall make a cash payment equal to the Exercise Price
multiplied by such fraction.
5. Replacement of Warrant. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and substance to the Company
or, in the case of mutilation, on surrender and cancellation of this Warrant,
the Company at its expense shall execute and deliver, in lieu of this Warrant, a
new warrant of like tenor and amount.
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6. No Stockholder Rights. The Holder shall not be entitled to vote or
receive dividends or be deemed the holder of Common Stock or any other
securities of the Company that may at any time be issuable on the exercise
hereof for any purpose, nor shall anything contained herein be construed to
confer upon the Holder, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold consent
to any corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, change of par value, or change of stock to no par
value, consolidation, merger, conveyance, or otherwise) or to receive notice of
meetings, or to receive dividends or subscription rights or otherwise until the
Warrant shall have been exercised as provided herein.
7. Compliance with Securities Laws. The Holder of this Warrant, by
acceptance hereof, acknowledges that this Warrant and the shares of Common Stock
to be issued upon exercise hereof are being acquired solely for the Holder's own
account and not as a nominee for any other party, and for investment and not
with a view to the distribution or resale of this Warrant or the shares of
Common Stock to be issued upon exercise hereof. The Holder will not offer, sell
or otherwise dispose of the shares of Common Stock to be issued upon exercise
hereof except under circumstances that will not result in a violation of the
Securities Act of 1933, as amended (the "Securities Act") or any state
securities laws. The Holder of this Warrant, by acceptance hereof, further
acknowledges that the Holder is an accredited investor within the meaning of
Rule 501 of Regulation D under the Securities Act. The Holder further
acknowledges that the Company is subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Holder
has had access to all reports filed under the Exchange Act by the Company. Upon
exercise of this Warrant, the Holder shall, if requested by the Company, affirm
in writing, in a form reasonably satisfactory to the Company, the
acknowledgements and agreements set forth in this Section 7.
8. Transfer.
(a) Restrictions on Transfer. The Holder shall not sell, transfer,
pledge, hypothecate or otherwise dispose of this Warrant to or in favor of any
person or entity without the prior written consent of the Company; provided,
however, that the Holder may assign this Warrant to an entity that controls, is
controlled by, or is under common control with the Holder subject to the
requirements set forth in this Section 8. This Warrant and the shares issuable
upon the exercise hereof have not been registered under the Securities Act, or
under any state securities laws, and unless so registered, may not be
transferred, sold, pledged, hypothecated or otherwise disposed of unless an
exemption from such registration is available. In the event the Holder desires
to transfer this Warrant or any of the shares issued upon exercise hereof, the
Holder must give the Company prior written notice of such proposed transfer
including the name and address of the proposed transferee. Such transfer may be
made only (i) upon receipt by the Company of an opinion of counsel reasonably
satisfactory to the Company to the effect that the proposed transfer will not
violate the provisions of the Securities Act or applicable state securities
laws, or the rules and regulations promulgated thereunder; or (ii) if this
Warrant or the shares to be sold or transferred have been registered under the
Securities Act and there is in effect a current prospectus meeting the
requirements of Subsection 10(a) of the Securities Act, which is being or will
be delivered to the purchaser or transferee at or prior to the time of delivery
of this Warrant or the certificates
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evidencing the shares to be sold or transferred. Any assignment, transfer,
pledge, hypothecation, or other disposition of this Warrant or any of the shares
issued upon exercise hereof attempted contrary to the provisions of this Warrant
shall be null and void and without effect.
(b) Conditions to Transfer. Prior to any such proposed transfer, and
as a condition thereto, if such transfer is not made pursuant to an effective
registration statement under the Securities Act, the Holder will, if requested
by the Company, deliver to the Company (i) written confirmation from the
proposed transferee that this Warrant or the shares to be transferred, as
applicable, are being acquired solely for the proposed transferee's own account
and not as a nominee for any other party, for investment, and not with a view
toward distribution or resale, (ii) an agreement by any transferee of shares
issued upon exercise hereof to the impression of the restrictive investment
legend set forth in Section 8(c) below on the certificate or certificates
representing the shares acquired by such transferee and (iii) an agreement by
such transferee that the Company may place a "stop transfer order" with its
transfer agent or registrar, if any.
(c) Legend and Stop Transfer Orders. Unless the shares issuable upon
exercise hereof have been registered under the Securities Act, or the Company
shall have received an opinion of counsel reasonably satisfactory to the Company
to the effect that it is not required, upon exercise of the Warrant and the
issuance of any of the shares of Common Stock covered by this Warrant, the
Company shall instruct its transfer agent, if any, to enter stop transfer orders
with respect to such shares, and all certificates representing such shares shall
bear on the face thereof substantially the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR APPLICABLE
STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR IN A TRANSACTION WHICH, IN THE
OPINION OF COUNSEL TO THE HOLDER HEREOF IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO COUNSEL TO THE COMPANY, IS EXEMPT FROM REGISTRATION UNDER
THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS."
9. Registration Rights.
TCI has been granted certain registration rights with respect to the stock
underlying this Warrant as more fully described in the Registration Rights
Agreement of even date herewith between TCI and the Company.
10. Amendments.
(a) This Warrant may be amended only by the written consent of the
Company and the Holder.
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(b) No waivers of, or exceptions to, any term, condition or provision
of this Warrant in any one or more instances, shall be deemed to be, or
construed as, a further or continuing waiver of any such term, condition or
provision. Any waiver of a provision of this Warrant must be in writing and
signed by a duly authorized representative of the party waiving such provision.
11. Adjustments. The Exercise Price and the number of shares purchasable
hereunder are subject to adjustment from time to time as follows:
(a) Split, Subdivision or Combination of Shares. If the Company at
any time while this Warrant remains outstanding and unexpired shall split,
subdivide or combine the securities as to which purchase rights under this
Warrant exist, into a different number of securities of the same class, the
Exercise Price for such securities shall be decreased in the case of a split or
subdivision or increased in the case of a combination in proportion to such
increase or decrease of outstanding shares and the maximum number of shares of
Common Stock purchasable upon exercise of this Warrant shall also increase or
decrease in proportion to any increase or decrease in the number of outstanding
shares.
(b) Adjustments for Dividends in Stock or Other Securities or
Property. If while this Warrant remains outstanding and unexpired the holders
of the securities as to which purchase rights under this Warrant exist at the
time shall have received, or, on or after the record date fixed for the
determination of eligible stockholders, shall have become entitled to receive,
without payment therefor, other or additional stock or other securities or
property (other than cash) of the Company by way of dividend, then and in each
case, this Warrant shall represent the right to acquire, in addition to the
number of shares of the security receivable upon exercise of this Warrant, and
without payment of any additional consideration therefor, the amount of such
other or additional stock or other securities or property (other than cash) of
the Company that such holder would hold on the date of such exercise had it been
the holder of record of the security receivable upon exercise of this Warrant on
the date hereof and had thereafter, during the period from the date hereof to
and including the date of such exercise, retained such shares and/or all other
additional stock available by it as aforesaid during such period, giving effect
to all adjustments called for during such period by the provisions of this
Section 11.
(c) Reclassification. If the Company, at any time while this Warrant
remains outstanding and unexpired by reclassification of securities or
otherwise, shall change any of the securities as to which purchase rights under
this Warrant exist into the same or a different number of securities of any
other class or classes, this Warrant shall thereafter represent the right to
acquire such number and kind of securities as would have been issuable as the
result of such change with respect to the securities that were subject to the
purchase rights under this Warrant immediately prior to such reclassification or
other change and the Exercise Price therefor shall be appropriately adjusted,
all subject to further adjustment as provided in this Section 11.
(d) Merger, Sale of Assets, etc. If at any time while this Warrant
is outstanding and unexpired there shall be (i) a reorganization (other than a
combination, reclassification, exchange or subdivision of shares otherwise
provided for herein), (ii) a merger or consolidation of the Company with or into
another corporation in which the Company is not the surviving entity, or
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a reverse triangular merger in which the Company is the surviving entity but the
shares of the Company's capital stock outstanding immediately prior to the
merger are converted by virtue of the merger into other property, whether in the
form of securities, cash, or otherwise, or (iii) a sale or transfer of the
Company's properties and assets as, or substantially as, an entirety to any
other person, then, as a part of such reorganization, merger, consolidation,
sale or transfer, lawful provision shall be made so that the holder of this
Warrant shall thereafter be entitled to receive upon exercise of this Warrant,
during the period specified herein and upon payment of the Exercise Price then
in effect, the number of shares of stock or other securities or property of the
successor corporation resulting from such reorganization, merger, consolidation,
sale or transfer that a holder of the shares deliverable upon exercise of this
Warrant would have been entitled to receive in such reorganization,
consolidation, merger, sale or transfer if this Warrant had been exercised
immediately before such reorganization, merger, consolidation, sale or transfer,
all subject to further adjustment as provided in this Section 11. The foregoing
provisions of this Section 11.4 shall similarly apply to successive
reorganizations, consolidations, mergers, sales and transfers and to the stock
or securities of any other corporation that are at the time receivable upon the
exercise of this Warrant. If the per-share consideration payable to the holder
hereof for shares in connection with any such transaction is in a form other
than cash or marketable securities, then the value of such consideration shall
be determined in good faith by the Company's Board of Directors. In all events,
appropriate adjustment (as determined in good faith by the Company's Board of
Directors) shall be made in the application of the provisions of this Warrant
with respect to the rights and interests of the Holder after the transaction, to
the end that the provisions of this Warrant shall be applicable after that
event, as near as reasonably may be, in relation to any shares or other property
deliverable after that event upon exercise of this Warrant.
(e) Reservation of Stock Issuable Upon Exercise. The Company shall
at all times reserve and keep available out of its authorized but unissued
shares of Common Stock solely for the purpose of effecting the exercise of this
Warrant such number of shares of Common Stock as shall from time to time be
sufficient to effect the exercise of this Warrant; and if at any time the number
of authorized but unissued shares of Common Stock shall not be sufficient to
effect the purchase by the Holder of the maximum number of shares of Common
Stock purchasable upon exercise of this Warrant, in addition to such other
remedies as shall be available to the Holder of this Warrant, the Company will
use its best efforts to take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such purposes.
12. Notices of Adjustments. Whenever the Exercise Price or number of
shares purchasable hereunder shall be adjusted pursuant to Section 11 hereof,
the Company shall issue a certificate signed by its Chief Financial Officer
setting forth, in reasonable detail, the event requiring the adjustment, the
amount of the adjustment, the method by which such adjustment was calculated,
and the Exercise Price and number of shares purchasable hereunder after giving
effect to such adjustment, and shall cause a copy of such certificate to be
given to the Holder of this Warrant.
13. Assignment. Subject to the restrictions on transfer described in
Section 8, the rights and obligations of the Company and Holder of this Warrant
shall be binding upon and benefit the successors and permitted assigns of the
parties. TCI may assign its rights hereunder (i) to a direct
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or indirect wholly owned subsidiary, (ii) to an entity that owns, directly or
indirectly, the entire equity interest of TCI, or (iii) to an entity the entire
equity interest of which is owned, directly or indirectly, by an entity that
owns, directly or indirectly, the entire equity interest of TCI.
14. Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of Delaware, excluding that body of law relating to
conflict of laws.
15. Delivery of Notices. Any notice, request or other communication
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given if personally delivered or if mailed by registered or certified
mail, postage prepaid, at the respective addresses of the parties as set forth
herein. Any party hereto may by notice so given change its address for future
notice hereunder. Notice shall conclusively be determined to have been given
when personally delivered or when deposited in the mail or telegraphed in the
manner set forth above and shall be deemed to have been received when delivered.
16. Headings; References. All headings used herein are used for
convenience only and shall not be used to construe or interpret this Warrant.
Except where otherwise indicated, all references herein to sections refer to
sections hereof.
IN WITNESS WHEREOF, CSG Systems International, Inc. has caused this Warrant
to be executed by an officer thereunto duly authorized this 19th day of
September, 1997.
CSG SYSTEMS INTERNATIONAL, INC.
By: /s/ Xxxx X. Xxxxx
--------------------------------
Name: Xxxx X. Xxxxx
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Title: Executive Vice President
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AGREED TO AND ACCEPTED AS OF THE DATE HEREOF:
Name of Initial Holder: TCI Technology Ventures, Inc.
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
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Title: President
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Address of Initial Holder: 0000 XXX Xxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
