L&W DRAFT 1/13/97
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ADVANCED RADIO TELECOM CORP.
125,000 Units Consisting of
$125,000,000 Aggregate Principal Amount of
___% Senior Notes due 2007
and
Warrants to Purchase 1,128,011 Shares of Common Stock
WARRANT AGREEMENT
Dated as of __________, 1997
CONTINENTAL STOCK TRANSFER AND TRUST COMPANY
Warrant Agent
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WARRANT AGREEMENT dated as of _________, ___, 1997 between Advanced Radio
Telecom Corp., a Delaware corporation (the "COMPANY"), and Continental Stock
Transfer and Trust Company, a New York limited purpose trust company, as Warrant
Agent (the "WARRANT AGENT").
WHEREAS, the Company proposes to issue warrants (the "WARRANTS") to
initially purchase up to an aggregate of 1,128,011 shares of Common Stock, par
value $.001 per share (the "COMMON STOCK"), of the Company (the Common Stock
issuable on exercise of the Warrants being referred to herein as the "WARRANT
SHARES"), in connection with the offering (the "OFFERING") by the Company of
125,000 Units, each consisting of $1,000 principal amount of the Company's ___%
Senior Notes due 2007 (the "NOTES") and one Warrant to purchase 9.024 Warrant
Shares.
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing so to act, in connection with the
issuance of Warrant Certificates (as defined) and other matters as provided
herein;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereto agree as follows:
SECTION 1. APPOINTMENT OF WARRANT AGENT. The Company hereby appoints
the Warrant Agent to act as agent for the Company in accordance with the
instructions set forth hereinafter in this Agreement, and the Warrant Agent
hereby accepts such appointment.
SECTION 2. WARRANT CERTIFICATES. The certificates evidencing the
Warrants (the "WARRANT CERTIFICATES") to be delivered pursuant to this Agreement
shall be in registered form only and shall be substantially in the form set
forth in Exhibit A attached hereto and shall, prior to the Separation Date (as
defined), bear the legend set forth in Exhibit B attached hereto.
SECTION 3. EXECUTION OF WARRANT CERTIFICATES. (a) Warrant Certificates
shall be signed on behalf of the Company by its Chairman of the Board, Chief
Executive Officer, its President or a Vice President and by its Secretary or an
Assistant Secretary under its corporate seal. Each such signature upon the
Warrant Certificates may be in the form of a facsimile signature of the present
or any future Chairman of the Board, Chief Executive Officer, President, Vice
President, Secretary or Assistant Secretary and may be imprinted or otherwise
reproduced on the Warrant Certificates and for that purpose the Company may
adopt and use the facsimile signature of any person who shall have been Chairman
of the Board, Chief Executive Officer, President, Vice President, Secretary or
Assistant Secretary, notwithstanding the fact that at the time the Warrant
Certificates shall be countersigned and delivered or disposed of he shall have
ceased to hold such office. The seal of the Company may be in the form of a
facsimile thereof and may be impressed, affixed, imprinted or otherwise
reproduced on the Warrant Certificates.
(b) In case any officer of the Company who shall have signed any of the
Warrant Certificates shall cease to be such officer before the Warrant
Certificates so signed shall have been countersigned by the Warrant Agent, or
disposed of by the Company, such Warrant Certificates nevertheless may be
countersigned and delivered or disposed of as though such person had not ceased
to be such officer of the Company; and any Warrant Certificate may be signed on
behalf of the Company by any person who, at the actual date of the execution of
such Warrant Certificate, shall be a proper officer of the Company to sign such
Warrant Certificate, although at the date of the execution of this Warrant
Agreement any such person was not such officer.
(c) Warrant Certificates shall be dated the date of countersignature by
the Warrant Agent.
SECTION 4. REGISTRATION AND COUNTERSIGNATURE. (a) The Warrant Agent,
on behalf of the Company, shall number and register the Warrant Certificates in
a register as they are issued by the Company.
(b) Warrant Certificates shall be manually countersigned by the Warrant
Agent and shall not be valid for any purpose unless so countersigned. The
Warrant Agent shall, upon written instructions of the Chairman of the Board, the
Chief Executive Officer, the President, a Vice President, the Treasurer or the
Controller of the Company, initially countersign, issue and deliver Warrants
entitling the holders thereof to purchase not more than the number of Warrant
Shares referred to above in the first recital hereof and shall countersign and
deliver Warrants as otherwise provided in this Agreement.
(c) The Company and the Warrant Agent may deem and treat the registered
holder(s) of the Warrant Certificates as the absolute owner(s) thereof
(notwithstanding any notation of ownership or other writing thereon made by
anyone) for all purposes, and neither the Company nor the Warrant Agent shall be
affected by any notice to the contrary.
SECTION 5. REGISTRATION OF TRANSFERS AND EXCHANGES. (a) The Warrant
Agent shall from time to time, subject to the limitations of Section 6 hereof,
register the transfer of any outstanding Warrant Certificates upon the records
to be maintained by it for that purpose, upon surrender thereof accompanied (if
so required by it) by a written instrument or instruments of transfer in form
satisfactory to the Warrant Agent, duly executed by the registered holder or
holders thereof or by the duly appointed legal representative thereof or by a
duly authorized attorney. Upon any such registration of transfer, a new Warrant
Certificate shall be issued to the transferee(s) and the surrendered Warrant
Certificate shall be cancelled by the Warrant Agent. Cancelled Warrant
Certificates shall thereafter be disposed of in a manner satisfactory to the
Company.
(b) The Warrant holders agree that prior to any proposed transfer of the
Warrant Shares, if such transfer is not made pursuant to an effective
Registration Statement under the Securities Act of 1933, as amended (the
"SECURITIES ACT"), or an opinion of counsel, reasonably satisfactory in form and
substance to the Company, that the Warrant Shares may be sold publicly without
registration under the Securities Act, the Warrant holder will, if requested by
the Company, deliver to the Company:
(i) an investment covenant reasonably satisfactory to the Company
signed by the proposed transferee;
(ii) an agreement by such transferee to the impression of the
restrictive investment legend set forth below on the Warrant Shares;
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(iii) an agreement by such transferee that the Company may place a
notation in the stock books of the Company or a "stop transfer order" with
any transfer agent or registrar with respect to the Warrant Shares; and
(iv) an agreement by such transferee to be bound by the provisions
of this Section 5 relating to the transfer of such Warrant Shares.
(c) Warrant Certificates may be exchanged at the option of the holder(s)
thereof, when surrendered to the Warrant Agent at its office for another Warrant
Certificate or other Warrant Certificates of like tenor and representing in the
aggregate a like number of Warrants. Warrant Certificates surrendered for
exchange shall be cancelled by the Warrant Agent. Such cancelled Warrant
Certificates shall then be disposed of by such Warrant Agent in a manner
satisfactory to the Company.
(d) The Warrant Agent is hereby authorized to countersign, in accordance
with the provisions of this Section 5 and of Section 4 hereof, the new Warrant
Certificates required pursuant to the provisions of this Section 5.
SECTION 6. SEPARATION OF WARRANTS; TERMS OF WARRANTS; EXERCISE OF
WARRANTS.(a) The Notes and Warrants will not be separately transferable prior to
the close of business of the earlier of (i) ____________, 1997, (ii) a Change
in Control (as defined in the indenture relating to the Notes) with respect to
the Company and (iii) such date as the underwriters in the Unit Offering may, in
their discretion, deem appropriate (the "SEPARATION DATE"), at which time such
Warrants shall become separately transferable. Subject to the terms of this
Agreement, each Warrant holder shall have the right, which may be exercised,
subject to the effectiveness of the Registration Statement (as defined),
commencing at the opening of business on ________, 1997 and until 5:00 p.m., New
York City time on _______, 2007 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. In the alternative, each holder
may exercise its right, during the Exercise Period, to receive Warrant Shares on
a net basis, such that, without the exchange of any funds, the holder receives
that number of Warrant Shares otherwise issuable (or payable) upon exercise of
its Warrants less that number of Warrant Shares having an aggregate fair market
value (as defined) at the time of exercise equal to the aggregate Exercise Price
that would otherwise have been paid by the holder of the Warrant Shares. For
purposes of the foregoing sentence, "FAIR MARKET VALUE" of the Warrant Shares
will be determined in good faith by the Board of Directors of the Company as of
the date of any such exercise. Each Warrant not exercised prior to 5:00 p.m.,
New York City time, on _______, 2007 shall become void and all rights thereunder
and all rights in respect thereof under this agreement shall cease as of such
time. No adjustments as to dividends will be made upon exercise of the
Warrants.
(b) A Warrant may be exercised upon surrender to the Company at the
principal office of the Warrant Agent of the certificate or certificates
evidencing the Warrants to be exercised with the form of election to purchase on
the reverse thereof duly filled in and signed, which signature shall be
medallion guaranteed by an institution which is a member of a Securities
Transfer
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Association recognized signature guarantee program, and upon payment to the
Warrant Agent for the account of the Company of the exercise price (the
"EXERCISE PRICE"), which is set forth in the form of Warrant Certificate
attached hereto as Exhibit A, as adjusted as herein provided, for the number of
Warrant Shares in respect of which such Warrants are then exercised. Payment of
the aggregate Exercise Price shall be made (i) in cash or by certified or
official bank check payable to the order of the Company, (ii) through the
surrender of debt or preferred equity securities of the Company having a
principal amount or liquidation preference, as the case may be, equal to the
aggregate Exercise Price to be paid (the Company will pay the accrued interest
or dividends on such surrendered debt or preferred equity securities in cash at
the time of surrender notwithstanding the stated terms thereof) or (iii) in the
manner provided in Section 6(a) hereof.
(c) Subject to the provisions of Section 7 hereof, 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 the Warrant holder may designate, a
certificate or certificates for the number of full Warrant Shares issuable upon
the exercise of such Warrants together with cash as provided in Section 12
hereof; PROVIDED, HOWEVER, that if any consolidation, merger or lease or sale of
assets is proposed to be effected by the Company as described in Section 11(m)
hereof, or a tender offer or an exchange offer for shares of Common Stock of the
Company shall be made, upon such surrender of Warrants and payment of the
Exercise Price as aforesaid, the Company shall, as soon as possible, but in any
event not later than two business days thereafter, issue and cause to be
delivered the full number of Warrant Shares issuable upon the exercise of such
Warrants in the manner described in this sentence together with cash as provided
in Section 12 hereof. Such certificate or certificates shall be deemed to have
been issued and any person so designated to be named therein shall be deemed to
have become a holder of record of such Warrant Shares as of the date of the
surrender of such Warrants and payment of the Exercise Price.
(d) The Warrants shall be exercisable, at the election of the holders
thereof, either in full or from time to time in part and, in the event that a
certificate evidencing Warrants 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 the Warrant Agent is hereby irrevocably
authorized to countersign and to deliver the required new Warrant Certificate or
Certificates pursuant to the provisions of this Section and of Section 3 hereof,
and the Company, whenever required by the Warrant Agent, will supply the Warrant
Agent with Warrant Certificates duly executed on behalf of the Company for such
purpose.
(e) All Warrant Certificates surrendered upon exercise of Warrants shall
be cancelled by the Warrant Agent. Such cancelled Warrant Certificates shall
then be disposed of by the Warrant Agent in a manner satisfactory to the
Company. The Warrant Agent shall account promptly to the Company with respect to
Warrants exercised and concurrently pay to the Company all monies received by
the Warrant Agent for the purchase of the Warrant Shares through the exercise of
such Warrants.
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(f) The Warrant Agent 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. The Company shall supply the Warrant Agent
from time to time with such numbers of copies of this Agreement as the Warrant
Agent may request.
SECTION 7. PAYMENT OF TAXES. The Company will pay all documentary stamp
taxes attributable to the initial issuance of Warrant Shares upon the exercise
of Warrants; PROVIDED, HOWEVER, that the Company shall not be required to pay
any tax or taxes which may be payable in respect of any transfer involved in the
issue 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 8. MUTILATED OR MISSING WARRANT CERTIFICATES. In case any of
the Warrant Certificates shall be mutilated, lost, stolen or destroyed, the
Company may in its discretion issue and the Warrant Agent may countersign, in
exchange and substitution for and upon cancellation of the mutilated Warrant
Certificate, or in lieu of and substitution for the Warrant Certificate lost,
stolen or destroyed, a new Warrant Certificate of like tenor and representing an
equivalent number of Warrants, but only upon receipt of evidence satisfactory to
the Company and the Warrant Agent of such loss, theft or destruction of such
Warrant Certificate and indemnity, if requested, also satisfactory to them.
Applicants for such substitute Warrant Certificates shall also comply with such
other reasonable regulations and pay such other reasonable charges as the
Company or the Warrant Agent may prescribe.
SECTION 9. RESERVATION OF WARRANT SHARES. (a) The Company will at all
times reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued Common Stock or its authorized and
issued Common Stock held in its treasury, for the purpose of enabling it to
satisfy any obligation to issue Warrant Shares upon exercise of Warrants, the
maximum number of shares of Common Stock which may then be deliverable upon the
exercise of all outstanding Warrants.
(b) The Company or, if appointed, the transfer agent for the Common Stock
(the "TRANSFER AGENT") and every subsequent transfer agent for any shares of the
Company's capital stock issuable upon the exercise of any of the rights of
purchase aforesaid 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 Agreement 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 rights of purchase represented by the
Warrants. The Warrant Agent is hereby irrevocably authorized to requisition
from time to time from such Transfer Agent the stock certificates required to
honor outstanding Warrants upon exercise thereof in accordance with the terms of
this Agreement. The Company will supply such Transfer Agent with duly executed
certificates for such purposes and will provide or otherwise make available any
cash which may be payable as provided in Section 12 hereof. The Company will
furnish such Transfer
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Agent a copy of all notices of adjustments, and certificates related thereto,
transmitted to each holder pursuant to Section 14 hereof.
(c) Before taking any action which would cause an adjustment pursuant to
Section 11 hereof to reduce the Exercise Price below the then par value (if any)
of the Warrant Shares, the Company will take any corporate action which may, in
the opinion of its counsel (which may be counsel employed by the Company), be
necessary in order that the Company may validly and legally issue fully paid and
nonassessable Warrant Shares at the Exercise Price as so adjusted.
(d) The Company covenants that all Warrant Shares which may be issued upon
exercise of Warrants will, upon issue, be fully paid, nonassessable, free of
preemptive rights and free from all taxes, liens, charges and security interests
with respect to the issuance thereof.
SECTION 10. 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 Warrants, will be listed on
the principal securities exchanges and markets within the United States of
America, if any, on which other shares of Common Stock are then listed.
SECTION 11. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES
ISSUABLE. The Exercise Price and the number of Warrant Shares issuable upon the
exercise of each Warrant are subject to adjustment from time to time upon the
occurrence of the events enumerated in this Section 11. For purposes of this
Section 11, "COMMON STOCK" means shares now or hereafter authorized of any class
of common stock of the Company and any other stock of the Company, however
designated, that has the right (subject to any prior rights of any class or
series of preferred stock) to participate in any distribution of the assets or
earnings of the Company without limit as to per share amount.
(a) ADJUSTMENT FOR CHANGE IN CAPITAL STOCK. If the Company (i) pays a
dividend or makes a distribution on its Common Stock in shares of its Common
Stock,(ii) subdivides its outstanding shares of Common Stock into a greater
number of shares,(iii) combines its outstanding shares of Common Stock into a
smaller number of shares,(iv) makes a distribution on its Common Stock in shares
of its capital stock other than Common Stock or (v) issues by reclassification
of its Common Stock any shares of its capital stock; then the Exercise Price in
effect immediately prior to such action shall be proportionately 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 he 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 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. If, after an
adjustment, a holder of a Warrant upon exercise of it may receive shares of two
or more classes of capital stock of the Company, the Company shall determine the
allocation of the adjusted Exercise Price between the classes of capital stock.
After such allocation, the exercise privilege and the Exercise Price of each
class of capital stock shall
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thereafter be subject to adjustment on terms comparable to those applicable to
Common Stock in this Section 11. Such adjustment shall be made successively
whenever any event listed above shall occur.
(b) ADJUSTMENT FOR RIGHTS ISSUE. If the Company distributes any
rights, options or warrants to all holders of its Common Stock entitling them
for a period expiring within 60 days after the record date mentioned below to
purchase shares of Common Stock at a price per share less than the current
market price per share on that record date, the Exercise Price shall be adjusted
in accordance with the formula:
O + N X P
-----
E' = E x M
--------------------
O + N
where:
E' = the adjusted Exercise Price.
E = the current Exercise Price.
O = the number of shares of Common Stock outstanding on the
record date.
N = the number of additional shares of Common Stock offered.
P = the offering price per share of the additional shares.
M = the current market price per share of Common Stock on the
record date.
The adjustment shall be made successively whenever any such rights, options
or warrants are issued 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 such rights,
options or warrants are exercisable, not all rights, options or warrants shall
have been exercised, the Exercise Price 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 Common Stock any of its assets or debt securities or any rights
or warrants to purchase debt securities, assets or other securities of the
Company, the Exercise Price shall be adjusted in accordance with the formula:
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E' = E x M - F
-----------
M
where:
E' = the adjusted Exercise Price.
E = the current Exercise Price.
M = the current market price per share of Common Stock on the
record date mentioned below.
F = the fair market value on the record date of the assets,
securities, rights or warrants to be distributed in respect
of to one share of Common Stock. The Board of Directors
shall determine the fair market value.
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.
This Section 11(c) does not apply to cash dividends or cash distributions
paid out of consolidated current or retained earnings as shown on the books of
the Company prepared in accordance with generally accepted accounting
principles. Also, this Section 11(c) does not apply to rights, options or
warrants referred to in Section 11(b) hereof.
(d) ADJUSTMENT FOR COMMON STOCK ISSUE. If the Company issues shares of
Common Stock for a consideration per share less than the current market price
per share on the date the Company fixes the offering price of such additional
shares, the Exercise Price shall be adjusted in accordance with the formula:
P
---
E' = E x O + M
-----------
A
where:
E' = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares outstanding immediately prior to the
issuance of such additional shares.
P = the aggregate consideration received for the issuance of such
additional shares.
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M = the current market price per share on the date of issuance of
such additional shares.
A = the number of shares outstanding immediately after the
issuance of such additional shares.
The adjustment shall be made successively whenever any such issuance is
made, and shall become effective immediately after such issuance.
This Section 11(d) does not apply to:
(i) any of the transactions described in Sections 11(b) and (c);
(ii) the exercise of Warrants, or the conversion or exchange of
other securities convertible or exchangeable for Common Stock;
(iii) Common Stock issued to the Company's employees under bona
fide employee benefit plans adopted by the Board of Directors and approved
by the holders of Common Stock when required by law, if such Common Stock
would otherwise be covered by this Section 11(d) (but only to the extent
that the aggregate number of shares excluded hereby and issued after the
date of this Warrant Agreement shall not exceed 5% of the Common Stock
outstanding at the time of the adoption of each such plan, exclusive of
antidilution adjustments thereunder);
(iv) Common Stock upon the exercise of rights or warrants issued
to the holders of Common Stock;
(v) Common Stock issued to stockholders of any person which
merges into the Company in proportion to their stock holdings of such
person immediately prior to such merger, upon such merger;
(vi) Common Stock issued in a bona fide public offering pursuant
to a firm commitment underwriting; or
(vii) Common Stock issued in a bona fide private placement through
a placement agent which is a member firm of the National Association of
Securities Dealers, Inc. ("NASD") (except to the extent that any discount
from the current market price attributable to restrictions on
transferability of the Common Stock, as determined in good faith by the
Board of Directors of the Company (the "BOARD") and described in a Board
resolution which shall be filed with the Trustee, shall exceed 20%).
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(e) ADJUSTMENT FOR CONVERTIBLE SECURITIES ISSUE. If the Company issues
any securities convertible into or exchangeable for Common Stock (other than
securities issued in transactions described in Sections 11(b) and (c) hereof)
for a consideration per share of Common Stock initially deliverable upon
conversion or exchange of such securities less than the current market price per
share on the date of issuance of such securities, the Exercise Price shall be
adjusted in accordance with this formula:
P
---
E' = E x O + M
----------
O + D
where:
E' = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares outstanding immediately prior to the
issuance of such securities.
P = the aggregate consideration received for the issuance of such
securities.
M = the current market price per share on the date of issuance of
such securities.
D = the maximum number of shares deliverable upon conversion or
in exchange for such securities at the initial conversion or
exchange rate.
The adjustment shall be made successively whenever any such issuance is
made, and shall become effective immediately after such issuance.
If all of the Common Stock deliverable upon conversion or exchange of such
securities have not been issued when such securities are no longer outstanding,
then the Exercise Price shall promptly be readjusted to the Exercise Price which
would then be in effect had the adjustment upon the issuance of such securities
been made on the basis of the actual number of shares of Common Stock issued
upon conversion or exchange of such securities.
This Section 11(e) does not apply to:
(i) convertible securities issued to stockholders of any person
which merges into the Company, or with a subsidiary of the Company, in
proportion to their stock holdings of such person immediately prior to such
merger, upon such merger,
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(ii) convertible securities issued in a bona fide public offering
pursuant to a firm commitment underwriting or
(iii) convertible securities issued in a bona fide private
placement through a placement agent which is a member firm of the NASD
(except to the extent that any discount from the current market price
attributable to restrictions on transferability of Common Stock issuable
upon conversion, as determined in good faith by the Board of Directors and
described in a Board resolution which shall be filed with the Trustee,
shall exceed 20% of the then current market price).
(f) CURRENT MARKET PRICE. In Sections 11(b), (c), (d) and (e) hereof, the
current market price per share of Common Stock on any date is the average of the
Quoted Prices of the Common Stock for 30 consecutive trading days commencing 45
trading days prior to the date in question. The "QUOTED PRICE" of the Common
Stock is the last reported sales price of the Common Stock as reported by the
Nasdaq National Market or, if the Common Stock is listed on a securities
exchange, the last reported sales price of the Common Stock on such exchange
which shall be for consolidated trading if applicable to such exchange, or, if
neither so reported or listed, the last reported bid price of the Common Stock.
In the absence of one or more such quotations, the Board of Directors of the
Company shall determine the current market price on the basis of such quotations
as it in good faith considers appropriate.
(g) CONSIDERATION RECEIVED. For purposes of any computation respecting
consideration received pursuant to Sections 11(d) and (e), the following shall
apply:
(i) in the case of the issuance of shares of Common Stock for
cash, the consideration shall be the amount of such cash, PROVIDED that in
no case shall any deduction be 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 fair market value thereof as determined
in good faith by the Board of Directors (irrespective of the accounting
treatment thereof), whose determination shall be conclusive, and described
in a Board resolution which shall be filed with the Warrant Agent; and
(iii) in the case of the issuance of securities convertible into or
exchangeable for shares, 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, if
any, to be received by the Company upon the conversion or exchange thereof
(the consideration in each case to be determined in the same manner as
provided in clauses (i) and (ii) of this subsection).
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(h) WHEN DE MINIMIS ADJUSTMENT MAY BE DEFERRED. No adjustment in the
Exercise Price need be made unless the adjustment would require an increase or
decrease of at least 1% in the Exercise Price. Any adjustments that are not
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the nearest
cent or to the nearest 1/100th of a share, as the case may be.
(i) WHEN NO ADJUSTMENT REQUIRED. No adjustment need be made for a
transaction referred to Section 11(a), (b), (c), (d) or (e) hereof, if Warrant
holders are to participate in the transaction on a basis and with notice that
the Board of Directors determines to be fair and appropriate in light of the
basis and notice on which holders of Common Stock participate in the
transaction. No adjustment need be made for (i) rights to purchase Common Stock
pursuant to a Company plan for reinvestment of dividends or interest, (ii) a
change in the par value or no par value of the Common Stock, (iii) the issuance
by the Company of 6,000,000 shares of Common Stock to CommcoCCC, Inc. in
connection with the acquisition of certain assets therefrom, or (iv) the
issuance by the Company of warrants to CIBC to purchase Common Stock in
accordance with CIBC Agreements (as defined in a certain Purchase Agreement
relating to the Unit Offering). To the extent the Warrants become convertible
into cash, no adjustment need be made thereafter as to the cash. Interest will
not accrue on the cash.
(j) NOTICE OF ADJUSTMENT. Whenever the Exercise Price is adjusted, the
Company shall provide the notices required by Section 13 hereof.
(k) VOLUNTARY REDUCTION. The Company from time to time may reduce the
Exercise Price by any amount for any period of time, if the period is at least
20 days and if the reduction is irrevocable during the period; PROVIDED,
HOWEVER, that in no event may the Exercise Price be less than the par value of a
share of Common Stock. Whenever the Exercise Price is reduced, the Company
shall mail to Warrant holders a notice of the reduction. The Company shall mail
the notice at least 15 days before the date the reduced Exercise Price takes
effect. The notice shall state the reduced Exercise Price and the period in
which it will be in effect. A reduction of the Exercise Price does not change
or adjust the Exercise Price otherwise in effect for purposes of Sections 11(a),
(b), (c), (d) and (e) hereof.
(l) NOTICE OF CERTAIN TRANSACTIONS. If (i) the Company takes any action
that would require an adjustment in the Exercise Price pursuant to Section
11(a), (b), (c), (d) or (e) hereof and if the Company does not arrange for
Warrant holders to participate pursuant to Section 11(i) hereof,(ii) the Company
takes any action that would require a supplemental Warrant Agreement pursuant to
Section 11(m) hereof or (iii) there is a liquidation or dissolution of the
Company, then the Company shall mail to Warrant holders a notice stating the
proposed record date for a dividend or distribution or the proposed effective
date of a subdivision, combination, reclassification, consolidation, merger,
transfer, lease, liquidation or dissolution. The Company shall mail the notice
at least 15 days before such date. Failure to mail the notice or any defect in
it shall not affect the validity of the transaction.
12
(m) REORGANIZATION OF COMPANY. If the Company consolidates or merges with
or into, or transfers or leases all or substantially all its assets to, any
person, upon consummation of such transaction the Warrants shall automatically
become exercisable for the kind and amount of securities, cash or other assets
which the holder of a Warrant would have owned immediately after the
consolidation, merger, transfer or lease if the holder had exercised the Warrant
immediately before the effective date of the transaction. Concurrently with the
consummation of such transaction, the corporation formed by or surviving any
such consolidation or merger if other than the Company, or the person to which
such sale or conveyance shall have been made, shall enter into a supplemental
Warrant Agreement so providing and further providing for adjustments which shall
be as nearly equivalent as may be practical to the adjustments provided for in
this Section. The successor Company shall mail to Warrant holders a notice
describing the supplemental Warrant Agreement. If the issuer of securities
deliverable upon exercise of Warrants under the supplemental Warrant Agreement
is an affiliate of the formed, surviving, transferee or lessee corporation, that
issuer shall join in the supplemental Warrant Agreement. If this Section 11(m)
applies, Sections 11(a), (b), (c), (d) and (e) hereof do not apply.
(n) COMPANY DETERMINATION FINAL. Any determination that the Company or
the Board of Directors must make pursuant to Section 11(a), (c), (d), (e), (f),
(g) or (i) hereof is conclusive.
(o) WARRANT AGENT'S DISCLAIMER. The Warrant Agent has no duty to
determine when an adjustment under this Section 11 should be made, how it should
be made or what it should be. The Warrant Agent has no duty to determine
whether any provisions of a supplemental Warrant Agreement under Section 11(m)
hereof are correct. The Warrant Agent makes no representation as to the
validity or value of any securities or assets issued upon exercise of Warrants.
The Warrant Agent shall not be responsible for the Company's failure to comply
with this Section 11.
(p) WHEN ISSUANCE OR PAYMENT MAY BE DEFERRED. In any case in which this
Section 11 shall require that an adjustment in the Exercise Price 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 Price and (ii) paying to such holder
any amount in cash in lieu of a fractional share pursuant to Section 12 hereof;
PROVIDED, HOWEVER, that the Company shall deliver to such holder a due bill 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.
(q) ADJUSTMENT IN NUMBER OF SHARES. Upon each adjustment of the Exercise
Price pursuant to this Section 11, each Warrant outstanding prior to the making
of the adjustment in the Exercise Price shall thereafter evidence the right to
receive upon payment of the adjusted Exercise Price that number of shares of
Common Stock (calculated to the nearest hundredth) obtained from the following
formula:
13
N' = N x E
-----
E'
where:
N' = the adjusted number of Warrant Shares issuable upon exercise
of a Warrant by payment of the adjusted Exercise Price.
N = the number or Warrant Shares previously issuable upon
exercise of a Warrant by payment of the Exercise Price prior
to adjustment.
E' = the adjusted Exercise Price.
E = the Exercise Price prior to adjustment.
(r) FORM OF WARRANTS. Irrespective of any adjustments in the Exercise
Price or 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 Warrants initially
issuable pursuant to this Agreement.
SECTION 12. 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 12,
be issuable on the exercise of any Warrants (or specified portion thereof), the
Company shall pay an amount in cash equal to the Exercise Price on the day
immediately preceding the date the Warrant is presented for exercise, multiplied
by such fraction.
SECTION 13. NOTICES TO WARRANT HOLDERS. (a) Upon any adjustment of the
Exercise Price pursuant to Section 11 hereof, the Company shall promptly
thereafter (i) cause to be filed with the Warrant Agent a certificate of a firm
of independent public accountants of recognized standing selected by the Board
of Directors of the Company (who may be the regular auditors of the Company)
setting forth the Exercise Price after such adjustment and setting forth in
reasonable detail the method of calculation and the facts upon which such
calculations are based and setting forth the number of Warrant Shares (or
portion thereof) issuable after such adjustment in the Exercise Price, upon
exercise of a Warrant and payment of the adjusted Exercise Price, which
certificate shall be conclusive evidence of the correctness of the matters set
forth therein, and (ii) cause to be given to each of the registered holders of
the Warrant Certificates at his address appearing on the Warrant register
written notice of such adjustments by first-class mail, postage prepaid. Where
appropriate, such notice may be given in advance and included as a part of the
notice required to be mailed under the other provisions of this Section 13.
14
(b) In case:
(i) the Company shall authorize the issuance to all holders of
shares of Common Stock of rights, options or warrants to subscribe for or
purchase shares of Common Stock or of any other subscription rights or
warrants;
(ii) the Company shall authorize the distribution to all holders
of shares of Common Stock of evidences of its indebtedness or assets (other
than cash dividends or cash distributions payable out of consolidated
earnings or earned surplus or dividends payable in shares of Common Stock
or distributions referred to in subsection (a) of Section 11 hereof);
(iii) 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 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 Common Stock;
(iv) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(v) the Company proposes to take any action (other than actions
of the character described in Section 11(a) hereof) which would require an
adjustment of the Exercise Price pursuant to Section 11 hereof;
then the Company shall cause to be filed with the Warrant Agent and shall cause
to be given to each of the registered holders of the Warrant Certificates at his
address appearing on the Warrant register, at least 20 days (or 10 days in any
case specified in clauses (i) or (ii) above) prior to the applicable record date
hereinafter specified, or promptly in the case of events for which there is no
record date, by first-class mail, postage prepaid, a written notice stating (x)
the date as of which the holders of record of shares of Common Stock to be
entitled to receive any such rights, options, warrants or distribution are to be
determined, (y) the initial expiration date set forth in any tender offer or
exchange offer for shares of Common Stock, or (z) the date on which any such
consolidation, merger, 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 shares of 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 to give the notice required
by this Section 13 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.
15
(c) Nothing contained in this Agreement or in any of the Warrant
Certificates shall be construed as conferring upon the holders thereof the right
to vote or to consent or to receive notice as stockholders in respect of the
meetings of stockholders or the election of directors of the Company or any
other matter, or any rights whatsoever as stockholders of the Company.
SECTION 14. MERGER, CONSOLIDATION OR CHANGE OF NAME OF WARRANT AGENT. (a)
Any corporation into which the Warrant Agent may be merged or with which it may
be consolidated, or any corporation resulting from any merger or consolidation
to which the Warrant Agent shall be a party, or any corporation succeeding to
the business of the Warrant Agent, shall be the successor to the Warrant Agent
hereunder without the execution or filing of any paper or any further act on the
part of any of the parties hereto, PROVIDED that such corporation would be
eligible for appointment as a successor warrant agent under the provisions of
Section 16 hereof. In case at the time such successor to the Warrant Agent
shall succeed to the agency created by this Agreement, and in case at that time
any of the Warrant Certificates shall have been countersigned but not delivered,
any such successor to the Warrant Agent may adopt the countersignature of the
original Warrant Agent; and in case at that time any of the Warrant Certificates
shall not have been countersigned, any successor to the Warrant Agent may
countersign such Warrant Certificates either in the name of the predecessor
Warrant Agent or in the name of the successor to the Warrant Agent; and in all
such cases such Warrant Certificates shall have the full force and effect
provided in the Warrant Certificates and in this Agreement.
(b) In case at any time the name of the Warrant Agent shall be changed and
at such time any of the Warrant Certificates shall have been countersigned but
not delivered, the Warrant Agent whose name has been changed may adopt the
countersignature under its prior name, and in case at that time any of the
Warrant Certificates shall not have been countersigned, the Warrant Agent may
countersign such Warrant Certificates either in its prior name or in its changed
name, and in all such cases such Warrant Certificates shall have the full force
and effect provided in the Warrant Certificates and in this Agreement.
SECTION 15. WARRANT AGENT. The Warrant Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions,
by all of which the Company and the holders of Warrants, by their acceptance
thereof, shall be bound:
(a) The statements contained herein and in the Warrant Certificates shall
be taken as statements of the Company and the Warrant Agent assumes no
responsibility for the correctness of any of the same except such as describe
the Warrant Agent or action taken or to be taken by it. The Warrant Agent
assumes no responsibility with respect to the distribution of the Warrant
Certificates except as herein otherwise provided.
(b) The Warrant Agent shall not be responsible for any failure of the
Company to comply with any of the covenants contained in this Agreement or in
the Warrant Certificates to be complied with by the Company.
(c) The Warrant Agent may consult at any time with counsel satisfactory to
it (who may be counsel for the Company) and the Warrant Agent shall incur no
liability or responsibility
16
to the Company or to any holder of any Warrant Certificate in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
accordance with the opinion or the advice of such counsel.
(d) The Warrant Agent shall incur no liability or responsibility to the
Company or to any holder of any Warrant Certificate for any action taken in
reliance on any Warrant Certificate, certificate of shares, notice, resolution,
waiver, consent, order, certificate, or other paper, document or instrument
believed by it to be genuine and to have been signed, sent or presented by the
proper party or parties.
(e) The Company agrees to pay to the Warrant Agent reasonable compensation
for all services rendered by the Warrant Agent in the execution of this
Agreement, to reimburse the Warrant Agent for all expenses, taxes and
governmental charges and other charges of any kind and nature incurred by the
Warrant Agent in the execution of this Agreement and to indemnify the Warrant
Agent and save it harmless against any and all liabilities, including judgments,
costs and counsel fees, for anything done or omitted by the Warrant Agent in the
execution of this Agreement except as a result of its negligence or bad faith.
(f) The Warrant Agent shall be under no obligation to institute any
action, suit or legal proceeding or to take any other action likely to involve
expense unless the Company or one or more registered holders of Warrant
Certificates shall furnish the Warrant Agent with reasonable security and
indemnity for any costs and expenses which may be incurred, but this provision
shall not affect the power of the Warrant Agent to take such action as it may
consider proper, whether with or without any such security or indemnity. All
rights of action under this Agreement or under any of the Warrants may be
enforced by the Warrant Agent without the possession of any of the Warrant
Certificates or the production thereof at any trial or other proceeding relative
thereto, and any such action, suit or proceeding instituted by the Warrant Agent
shall be brought in its name as Warrant Agent and any recovery of judgment shall
be for the ratable benefit of the registered holders of the Warrants, as their
respective rights or interests may appear.
(g) The Warrant Agent, and any stockholder, director, officer or employee
of it, may buy, sell or deal in any of the Warrants or other securities of the
Company or become pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the Company or otherwise
act as fully and freely as though it were not Warrant Agent under this
Agreement. Nothing herein shall preclude the Warrant Agent from acting in any
other capacity for the Company or for any other legal entity.
(h) The Warrant Agent shall act hereunder solely as agent for the Company,
and its duties shall be determined solely by the provisions hereof. The Warrant
Agent shall not be liable for anything which it may do or refrain from doing in
connection with this Agreement except for its own negligence or bad faith.
(i) The Warrant Agent shall not at any time be under any duty or
responsibility to any holder of any Warrant Certificate to make or cause to be
made any adjustment of the Exercise Price or number of the Warrant Shares or
other securities or property deliverable as provided in
17
this Agreement, or to determine whether any facts exist which may require any of
such adjustments, or with respect to the nature or extent of any such
adjustments, when made, or with respect to the method employed in making the
same. The Warrant Agent shall not be accountable with respect to the validity
or value or the kind or amount of any Warrant Shares or of any securities or
property which may at any time be issued or delivered upon the exercise of any
Warrant or with respect to whether any such Warrant Shares or other securities
will when issued be validly issued and fully paid and nonassessable, and makes
no representation with respect thereto.
SECTION 16. CHANGE OF WARRANT AGENT. If the Warrant Agent shall become
incapable of acting as Warrant Agent, the Company shall appoint a successor to
such Warrant Agent. If the Company shall fail to make such appointment within a
period of 30 days after it has been notified in writing of such incapacity by
the Warrant Agent or by the registered holder of a Warrant Certificate, then the
registered holder of any Warrant Certificate may apply to any court of competent
jurisdiction for the appointment of a successor to the Warrant Agent. Pending
appointment of a successor to such Warrant Agent, either by the Company or by
such a court, the duties of the Warrant Agent shall be carried out by the
Company. The holders of a majority of the unexercised Warrants shall be
entitled at any time to remove the Warrant Agent and appoint a successor to such
Warrant Agent. Such successor to the Warrant Agent need not be approved by the
Company or the former Warrant Agent. After appointment the successor to the
Warrant Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Warrant Agent without
further act or deed; PROVIDED that the former Warrant Agent shall deliver and
transfer to the successor to the Warrant Agent any property at the time held by
it hereunder and execute and deliver any further assurance, conveyance, act or
deed necessary for the purpose. Failure to give any notice provided for in this
Section 16, however, or any defect therein, shall not affect the legality or
validity of the appointment of a successor to the Warrant Agent.
SECTION 17. REGISTRATION. (a) The Company shall prepare and cause to be
filed with the Securities and Exchange Commission (the "COMMISSION") pursuant to
Rule 415 under the Securities Act a shelf registration statement on the
appropriate form relating to the offer and sale by the Company of the Warrant
Shares to the holders of Warrants upon exercise of the Warrants and resales of
the Warrant Shares by the holders thereof (the "REGISTRATION STATEMENT").
(b) The Company shall use its best efforts to cause such Registration
Statement to be declared effective by the Commission on or prior to the earlier
to occur of (i) the Separation Date and (ii) 45 days after the date upon which
(A) a Change in Control (as such term is defined in the indenture relating to
the Notes) occurs or (B) the Warrants otherwise become exercisable.
(c) The Company shall use its best efforts to keep the Registration
Statement continuously effective under the Securities Act in order to permit the
prospectus included therein to be lawfully delivered by the Company to the
holders exercising the Warrants until the Expiration Date or such shorter period
that will terminate when all the Warrants have been exercised; PROVIDED that,
except as provided below with respect to any Black Out Period (as defined), the
Company shall be deemed not to have used its best efforts to keep the
Registration Statement
18
effective during the requisite period if it voluntarily takes any action that
would result in it not being able to offer and sell the Warrant Shares upon
exercise of the Warrants during that period, unless such action is required by
applicable law. Notwithstanding the foregoing, the Company shall not be
required to amend or supplement the Registration Statement, any related
prospectus or any document incorporated therein by reference, for a period (a
"BLACK OUT PERIOD") not to exceed, for so long as this Agreement is in effect,
an aggregate of 45 days in any calendar year, in the event that (i) an event
occurs and is continuing as a result of which the Registration Statement, any
related prospectus or any document incorporated therein by reference as then
amended or supplemented would, in the Company's good faith judgment, contain an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, and (ii)(A) the Company determines in its
good faith judgment that the disclosure of such event at such time would have a
material adverse effect on the business, operations or prospects of the Company
or (B) the disclosure otherwise relates to a material business transaction which
has not yet been publicly disclosed; PROVIDED that no Black Out Period may be in
effect during the six months prior to the Expiration Date.
(d) The Company shall cause the Registration Statement and the related
prospectus and any amendment or supplement thereto, as of the effective date of
the Registration Statement, amendment or supplement, (i) to comply in all
material respects with the applicable requirements of the Securities Act and the
rules and regulations of the Commission and (ii) not to contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(e) The Company shall give prompt written notice to the holders of the
Warrants and the Warrant Agent of (i) the effectiveness of the Registration
Statement or any post-effective amendment thereto,(ii) the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the initiation or threatening of any proceedings for that
purpose,(iii) the receipt by the Company or its legal counsel of any
notification with respect to the suspension of the qualification of the Warrant
Shares for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose,(iv) the happening of any event that requires the
Company to make changes in the Registration Statement or the prospectus in order
to make the statements therein not misleading and (v) the commencement and
termination of any Black Out Period.
(f) The Company shall use its best efforts to prevent the issuance or
obtain the withdrawal of any order suspending the effectiveness of the
Registration Statement at the earliest possible time.
(g) Upon the occurrence of any event contemplated by Section 17(e)(iv) or
(v) hereof (subject to the last sentence of Section 17(c) hereof) the Company
shall promptly prepare a post-effective amendment to the Registration Statement
or a supplement to the related prospectus or file any other required document
so that, as thereafter delivered to holders of the Warrants, the prospectus
will not contain an untrue statement of a material fact or omit to state any
material fact
19
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading and will contain the current information
required by the Securities Act.
(h) Not later than the effective date of the Registration Statement, the
Company will provide a CUSIP number for the Warrant Shares and provide the
Warrant Agent with printed certificates for the Warrant Shares in a form
eligible for deposit with the Depository Trust Company.
(i) The Company will comply with all rules and regulations of the
Commission to the extent and so long as they are applicable to the Shelf
Registration and will make generally available to its securities holders (or
otherwise provide in accordance with Section 11(a) of the Securities Act) an
earnings statement satisfying the provisions of Section 11(a) of the Securities
Act, no later than 45 days (plus any extension permitted by Rule 12b-25 under
the Exchange Act) after the end of a 12-month period (or 90 days, if such period
is a fiscal year (plus any extension permitted by Rule 12b-25 under the Exchange
Act)) beginning with the first month of the Company's first fiscal quarter
commencing after the effective date of the Registration Statement, which
statement shall cover shall 12-month period.
(j) The Company shall register or qualify or cooperate with the holders in
connection with the registration or qualification of the Warrant Shares for
offer and sale by the Company upon exercise of the Warrants under the securities
or blue sky laws of such states of the United States as any holder reasonably
requests and do any and all other acts or things necessary or advisable to
enable such offer and sale in such jurisdictions; PROVIDED that the Company
shall not be required to (i) qualify to do business as a broker-dealer in any
jurisdiction in which it is not then so qualified or (ii) take any action which
would subject it to general service of process or to taxation in any
jurisdiction in which it is not then so subject.
(k) The Company shall bear all expenses incurred by it in connection with
the performance of its obligations under this Section 17.
(l) The Company acknowledges and agrees that any remedy at law for breach
of any provision of this Section 17 will be inadequate and that, in addition to
any other remedies that the holder may have, the holders shall be entitled to
the remedy of specific performance to ensure the Company performs its
obligations under this Section 17. The election of any one or more remedies by
the holders hereunder shall not constitute a waiver of the right to pursue other
available remedies.
(m) No person is entitled to include any securities of the Company held by
such person in, or to have such securities registered under, the Registration
Statement.
SECTION 18. NOTICES TO COMPANY AND WARRANT AGENT. Any notice or demand
authorized by this Agreement to be given or made by the Warrant Agent or by the
registered holder of any Warrant Certificate to or on the Company shall be
sufficiently given or made when and if deposited in the mail, first class or
registered, postage prepaid, addressed (until another address is filed in
writing by the Company with the Warrant Agent) as follows:
20
Advanced Radio Telecom Corp.
000 000xx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Chief Financial Officer
In case the Company shall fail to maintain such office or agency or shall
fail to give such notice of the location or of any change in the location
thereof, presentations may be made and notices and demands may be served at the
principal office of the Warrant Agent.
Any notice pursuant to this Agreement to be given by the Company or by the
registered holder(s) of any Warrant Certificate to the Warrant Agent shall be
sufficiently given when and if deposited in the mail, first-class or registered,
postage prepaid, addressed (until another address is filed in writing by the
Warrant Agent with the Company) to the Warrant Agent as follows:
Continental Stock Transfer and Trust Company
0 Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxx
SECTION 19. SUPPLEMENTS AND AMENDMENTS. The Company and the Warrant
Agent may from time to time supplement or amend this Agreement without the
approval of any holders of Warrant Certificates in order to cure any ambiguity
or to correct or supplement any provision contained herein which may be
defective or inconsistent with any other provision herein, or to make any other
provisions in regard to matters or questions arising hereunder which the Company
and the Warrant Agent may deem necessary or desirable and which shall not in any
way adversely affect the interests of the holders of Warrant Certificates.
SECTION 20. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Warrant Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
SECTION 21. TERMINATION. This Agreement shall terminate at 5:00 p.m.,
New York City time on _________, 2007. Notwithstanding the foregoing, this
Agreement will terminate on any earlier date if all Warrants have been
exercised. The provisions of Section 15 shall survive such termination.
SECTION 22. GOVERNING LAW. This Agreement and each Warrant Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of New York and for all purposes shall be construed in accordance with the
internal laws of said State.
SECTION 23. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company, the
Warrant Agent and the registered holders of the Warrant Certificates any legal
or equitable right, remedy or claim under this
21
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, the Warrant Agent and the registered holders of the Warrant
Certificates.
SECTION 24. COUNTERPARTS. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
[Signature Page Follows]
22
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
ADVANCED RADIO TELECOM CORP.
By _________________________________
Name:
Title:
[Seal]
Attest: ______________________
Secretary
CONTINENTAL STOCK TRANSFER AND TRUST COMPANY,
as Warrant Agent
By _________________________________
Name:
Title:
[Seal]
Attest: _______________________
Secretary
23
EXHIBIT A
[Face of Warrant Certificate]
THE WARRANTS EVIDENCED BY THIS CERTIFICATE ARE NOT TRANSFERABLE SEPARATELY FROM
THE SENIOR NOTES ORIGINALLY SOLD AS A UNIT WITH SUCH WARRANTS UNTIL THE EARLIER
OF (I) ____________, 1997 (II) A CHANGE IN CONTROL (AS DEFINED IN THE INDENTURE
RELATING TO SUCH NOTES) AND (III) SUCH DATE AS THE UNDERWRITERS IN THE UNIT
OFFERING HEREOF MAY, IN THEIR DISCRETION, DEEM APPROPRIATE). PRIOR TO SUCH
DATE, THE WARRANTS EVIDENCED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN
INTEGRAL MULTIPLES OF ONE WARRANT AND ONLY WITH THE SIMULTANEOUS TRANSFER TO THE
TRANSFEREE OF $1,000 PRINCIPAL AMOUNT OF NOTES FOR EACH WARRANT SO TRANSFERRED.
EXERCISABLE ON OR AFTER _____________, 1997.
No. _____ __________Warrants
Warrant Certificate
ADVANCED RADIO TELECOM CORP.
This Warrant Certificate certifies that ______________, or registered
assigns, is the registered holder of Warrants expiring __________, 2007 (the
"WARRANTS") to purchase common stock, par value $.001 per share (the "COMMON
STOCK"), of Advanced Radio Telecom Corp, a Delaware corporation (the "COMPANY").
Each Warrant entitles the holder upon exercise to receive from the Company
commencing _____________, 1997 until 5:00 p.m. New York City Time on
_____________, 2007, 9.024 fully paid and nonassessable shares of Common Stock
(the "WARRANT SHARES") at the initial exercise price (the "EXERCISE PRICE") of
$______ payable in lawful money of the United States of America upon surrender
of this Warrant Certificate and payment of the Exercise Price at the office or
agency of the Warrant Agent, but only subject to the conditions set forth herein
and in the Warrant Agreement referred to on the reverse hereof. Notwithstanding
the foregoing, Warrants may be exercised without the exchange of funds pursuant
to the net exercise provisions of Section 6 of the Warrant Agreement. The
Exercise Price and number of Warrant Shares issuable upon exercise of the
Warrants are subject to adjustment upon the occurrence of certain events set
forth in the Warrant Agreement. No Warrant may be exercised after 5:00 p.m.,
New York City Time on _____________, 2007, and to the extent not exercised by
such time such Warrants shall become void. Reference is hereby made to the
further provisions of this Warrant Certificate set forth on the reverse hereof
and such further provisions shall for all purposes have the same effect as
though fully set forth at this place. This Warrant Certificate shall not be
valid unless countersigned by the Warrant Agent, as such term is used in the
Warrant Agreement. This Warrant Certificate shall be governed and construed in
accordance with the internal laws of the State of New York.
A-1
IN WITNESS WHEREOF, Advanced Radio Telecom Corp. has caused this Warrant
Certificate to be signed by its Chief Executive Officer and by its Secretary and
has caused its corporate seal to be affixed hereunto or imprinted hereon.
Dated: ___________ ,1997
ADVANCED RADIO TELECOM CORP.
By ________________________________
Name: Xxxxxx X. Xxxxxxxxxxxx
Title: Chief Executive Officer
By ________________________________
Name: X. Xxxxxxxx Xxxxxxx, Xx.
Title: Secretary
Countersigned:
CONTINENTAL STOCK TRANSFER AND TRUST COMPANY
as Warrant Agent
By ________________________________
Name:
Title:
A-2
[Reverse of Warrant Certificate]
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants expiring ____________, 2007 entitling the holder on
exercise to receive shares of Common Stock, par value $.001 per share, of the
Company (the "COMMON STOCK"), and are issued or to be issued pursuant to a
Warrant Agreement dated as of __________, 1997 (the "WARRANT AGREEMENT"), duly
executed and delivered by the Company to Continental Stock Transfer and Trust
Company, a New York limited purpose trust company, as warrant agent (the
"WARRANT AGENT"), which Warrant Agreement is hereby incorporated by reference in
and made a part of this instrument and is hereby referred to for a description
of the rights, limitation of rights, obligations, duties and immunities
thereunder of the Warrant Agent, the Company and the holders (the words
"holders" or "holder" meaning the registered holders or registered holder) of
the Warrants. A copy of the Warrant Agreement may be obtained by the holder
hereof upon written request to the Company.
Warrants may be exercised, subject to the effectiveness of the Registration
Statement (as defined) at any time on or after __________, 1997 and on or before
_____________, 2007. The holder of Warrants evidenced by this Warrant
Certificate may exercise them by surrendering this Warrant Certificate, with the
form of election to purchase set forth hereon properly completed and executed,
together with payment of the Exercise Price in cash at the office of the Warrant
Agent. In the event that upon any exercise of Warrants evidenced hereby the
number of Warrants exercised shall be less than the total number of Warrants
evidenced hereby, there shall be issued to the holder hereof or his assignee a
new Warrant Certificate evidencing the number of Warrants not exercised. No
adjustment shall be made for any dividends on any Common Stock issuable upon
exercise of this Warrant.
The Warrant Agreement provides that upon the occurrence of certain events
the Exercise Price set forth on the face hereof may, subject to certain
conditions, be adjusted. If the Exercise Price is adjusted, the Warrant
Agreement provides that the number of shares of Common Stock issuable upon the
exercise of each Warrant shall be adjusted. No fractions of a share of Common
Stock will be issued upon the exercise of any Warrant, but the Company will pay
the cash value thereof determined as provided in the Warrant Agreement.
The Company has agreed under the terms of the Warrant Agreement to file and
use its best efforts to make effective and (subject to Black Out Periods)
maintain effective until expiration or exercise of all Warrants a shelf
registration statement (the "REGISTRATION STATEMENT") on an appropriate form
under the Securities Act covering the issuance and sale of Warrant Shares upon
exercise of the Warrants.
Warrant Certificates, when surrendered at the office of the Warrant Agent
by the registered holder thereof in person or by legal representative or
attorney duly authorized in writing, may be exchanged, in the manner and subject
to the limitations provided in the Warrant Agreement, but without payment of any
service charge, for another Warrant Certificate or Warrant Certificates of like
tenor evidencing in the aggregate a like number of Warrants.
A-3
Upon due presentation for registration of transfer of this Warrant
Certificate at the office of the Warrant Agent a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided in the Warrant Agreement,
without charge except for any tax or other governmental charge imposed in
connection therewith.
The Company and the Warrant Agent may deem and treat the registered
holder(s) thereof as the absolute owner(s) of this Warrant Certificate
(notwithstanding any notation of ownership or other writing hereon made by
anyone), for the purpose of any exercise hereof, of any distribution to the
holder(s) hereof, and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary. Neither the
Warrants nor this Warrant Certificate entitles any holder hereof to any rights
of a stockholder of the Company.
A-4
Form of Election to Purchase
(To Be Executed Upon Exercise Of Warrant)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to receive __________ shares of Common
Stock and herewith tenders payment for such shares to the order of Advanced
Radio Telecom Corp. in the amount of $______ in accordance with the terms hereof
unless the holder is exercising Warrants pursuant to the net exercise provisions
of Section 6 of the Warrant Agreement. 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 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
__________________.
Date: ______________, ____
__________________________
(Signature)
__________________________
(Signature Guaranteed)
A-5
EXHIBIT B
[FORM OF TRANSFER LEGEND]
Each Certificate evidencing Warrants originally issued as part of a Unit of
Notes and Warrants issued by the Company (and each certificate evidencing
Warrants issued on registration of transfer thereof or in exchange or
substitution therefor prior to the close of business on the Separation Date (as
defined) shall bear a legend, which may be affixed by stamp or sticker, in
substantially the following form:
The warrants evidenced by this certificate are not transferable
separately from the senior notes originally sold as a unit with such
warrants until the earlier of (i) ____________, 1997 (ii) a Change in
Control (as defined in the indenture relating to such notes) and (iii)
such date as the underwriters in the offering hereof may, in their
discretion, deem appropriate. Prior to such date, the warrants
evidenced by this certificate may be transferred only in integral
multiples of one warrant and only with the simultaneous transfer to
the Transferee of $1,000 of principal amount of Notes for each warrant
so transferred.
B-1
