FOCAL COMMUNICATIONS CORPORATION
and
COMPUTERSHARE TRUST COMPANY OF NEW YORK,
as Warrant Agent
------------------------------------
WARRANT AGREEMENT
Dated as of October 26, 2001
WARRANT AGREEMENT
TABLE OF CONTENTS
Page
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SECTION 1. Certain Definitions................................................................1
SECTION 2. Issuance, Form, Execution, Delivery and Registration of Warrant Certificates.......4
2.1 Issuance of Warrants...............................................................4
2.2 Form of Warrant Certificates.......................................................4
2.3 Execution of Warrant Certificates..................................................5
2.4 Countersignature and Delivery......................................................5
2.5 Temporary Warrant Certificates.....................................................6
2.6 Intentionally Omitted..............................................................6
2.7 Registration.......................................................................6
2.8 Registration of Transfers and Exchanges............................................7
2.9 Lost, Stolen, Destroyed, Defaced or Mutilated Warrant Certificates.................9
2.10 Offices for Exercise, etc.........................................................10
SECTION 3. Terms of Warrants; Exercise of Warrants...........................................10
SECTION 4. Payment of Taxes..................................................................12
SECTION 5. Reservation of Warrant Shares.....................................................13
SECTION 6. Obtaining Stock Exchange Listings.................................................13
SECTION 7. Adjustment of Exercise Price and Number of Warrant Shares Issuable................14
SECTION 8. Statement on Warrants.............................................................20
SECTION 9. Fractional Interests..............................................................20
SECTION 10. When Adjustment Not Required.....................................................20
SECTION 11. Escrow of Warrant Stock..........................................................21
SECTION 12. Challenge to Good Faith Determination............................................21
SECTION 13. Treasury Stock...................................................................21
SECTION 14. Notices to Warrant Holders.......................................................21
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SECTION 15. Merger, Consolidation or Change of Name of Warrant Agent.........................22
SECTION 16. Warrant Agent....................................................................22
SECTION 17. Resignation and Removal of Warrant Agent; Appointment of Successor...............25
SECTION 18. Registration Rights..............................................................26
18.1 Warrant Registration Statement...................................................26
18.2 Registration Expenses............................................................27
18.3 Transfer Agent; Listing of Warrant Shares........................................27
18.4 Blue Sky Laws....................................................................27
18.5 Delay Periods....................................................................28
SECTION 19. Reports..........................................................................28
SECTION 20. Notices to Company and Warrant Agent.............................................28
SECTION 21. Supplements and Amendments.......................................................29
SECTION 22. Severability.....................................................................30
SECTION 23. Successors.......................................................................30
SECTION 24. Termination......................................................................30
SECTION 25. Governing Law....................................................................30
SECTION 26. Benefits of This Agreement.......................................................30
SECTION 27. Entire Agreement.................................................................31
SECTION 28. Counterparts.....................................................................31
EXHIBIT A.......................................................................................................A-1
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WARRANT AGREEMENT dated as of October 26, 2001 (the "Agreement") between
Focal Communications Corporation, a Delaware corporation (the "COMPANY"), and
Computershare Trust Company of
New York, a
New York limited purpose trust
company, as warrant agent (in such capacity, the "Warrant Agent").
WHEREAS, the Company proposes within 60 days after the date of this
Agreement to issue to the Company's Record Stockholders (as defined below)
through a pro rata distribution of common stock purchase warrants (as
hereinafter described, the "WARRANTS") to purchase up to an aggregate of
9,732,355 shares of the Company's Common Stock (as defined below).
WHEREAS, the Company is entering into this Agreement and agreeing to issue
the Warrants in connection with, and as a condition to, certain transactions
(the "RECAPITALIZATION TRANSACTIONS"), which are closing on the date of this
Agreement, and which include: (i) the sale of 50,000 shares of newly-created
Series A Redeemable Voting Convertible Preferred Stock (the "PREFERRED STOCK")
for $50.0 million in cash to certain investors (the "NEW INVESTORS"), (ii) the
incurrence by the Company of $100.0 million in borrowings pursuant to
convertible loans made by the New Investors (the "LOANS"), (iii) the issuance of
shares of Common Stock in exchange for a portion of the Company's outstanding
12.125% Senior Discount Notes due 2008 and 11.875% Senior Notes due 2010, in
accordance with the terms of exchange agreements entered into between the
Company and the holders of such notes, and (iv) the amendment and restatement of
the Company's existing senior credit facility.
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 below) and other matters as
provided herein;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, and for the purpose of defining the respective rights and
obligations of the Company, the Warrant Agent and the Holders (as defined
below), the parties hereto agree as follows:
SECTION 1. CERTAIN DEFINITIONS. Capitalized terms used but not defined
herein have the meanings set forth in the Indenture. In addition, the following
terms shall have the following respective meanings:
"AFFILIATE" of any Person means any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such Person. For purposes of this definition, "control" when used with respect
to any Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and Friday
that is not a day on which the
New York Stock Exchange or banking institutions
in the City of
New York,
New York or in the City of Chicago, Illinois are authorized or obligated by law,
executive order or regulation to close.
"CAPITAL STOCK" means any and all shares, interests, participations,
warrants, options, rights or other equivalents of or interests in (however
designated and whether voting or non-voting) corporate stock of a corporation
and any and all equivalent ownership interests in a Person (other than a
corporation), in each case whether outstanding on the Issue Date or thereafter
issued, including any preferred stock.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" of any Person means Capital Stock of such Person that does
not rank prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding up
of such Person, to shares of Capital Stock of any other class of such Person.
"COMPANY" means
Focal Communications Corporation, a Delaware corporation,
and its successors and assigns.
"CONVERTIBLE SECURITIES" mean any shares of stock or securities which are
convertible or exchangeable, either immediately or upon the occurrence of a
specified date or a specified event, for shares of Common Stock.
"DISTRIBUTION" has the meaning specified in Section 7(c).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended (or
any successor act), and the rules and regulations promulgated thereunder.
"EXERCISE PRICE" means the purchase price per share of Common Stock to be
paid upon the exercise of each Warrant in accordance with the terms hereof,
which price shall initially be $2.34245 per share, subject to adjustment from
time to time pursuant to Section 7 hereof.
"EXPIRATION DATE" means the date that is the sixth anniversary of the Issue
Date.
"EXPIRATION TIME" means the last time tenders or exchanges may be made
pursuant to a tender or exchange offer.
"HOLDER" means the registered holder of a Warrant.
"ISSUE DATE" means the date on which the Warrants are first distributed to
Record Stockholders.
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"MAJORITY HOLDERS" means the Holders of Warrants exercisable for in excess
of 50% of the aggregate number of shares of Common Stock then receivable upon
exercise of all Warrants, whether or not then exercisable.
"NASDAQ NATIONAL MARKET" means the National Market of the Nasdaq Stock
Market, Inc.
"OFFICERS' CERTIFICATE" means a certificate signed by (i) the President or
Chief Executive Officer and (ii) the Chief Accounting Officer, Chief Financial
Officer or the Treasurer, of the Company and delivered to the Warrant Agent,
which shall comply with the provisions of Section 16(j) hereof.
"OPINION OF COUNSEL" means a written opinion from legal counsel (who may be
counsel to the Company or the Warrant Agent) who is acceptable to the Warrant
Agent, which opinion shall comply with the provisions of Section 16(j) hereof.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof or any other entity.
"PURCHASED SHARES" has the meaning specified in Section 7(e).
"RECORD DATE" means the Business Day immediately prior to the date of this
Agreement.
"RECORD STOCKHOLDERS" means the stockholders of record of the Company's
outstanding Common Stock as of the close of business on the Record Date.
"SEC REPORTS" has the meaning specified in Section 19(a).
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"TIME OF DETERMINATION" has the meaning specified in Section 7(g).
"TRANSFER AGENT" has the meaning specified in Section 5.
"WARRANT AGENT" means Computershare Trust Company of
New York or the
successor or successors of such Warrant Agent appointed in accordance with the
terms hereof.
"WARRANT CERTIFICATES" means the certificates evidencing the Warrants to be
delivered pursuant to this Agreement, substantially in the form of Exhibit A
hereto.
"WARRANTS" shall mean the warrants issued pursuant to this Agreement and
all warrants issued upon transfer, division or combination of, or in
substitution for, any thereof. All Warrants shall at
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all times be identical as to terms and conditions and date, except as to the
number of shares of Common Stock for which they may be exercised.
"Warrant Registration Statement" has meaning specified in Section 18.1.
"WARRANT SHARES" has the meaning specified in Section 2.1 hereof.
SECTION 2. ISSUANCE, FORM, EXECUTION, DELIVERY AND REGISTRATION OF WARRANT
CERTIFICATES.
2.1 ISSUANCE OF WARRANTS. As soon as practicable after the effectiveness of
the Warrant Registration Statement (but in no event later than the 60th day
following the Record Date), the Company shall issue through the distribution to
the Record Stockholders (PRO RATA among such stockholders based on the number of
shares of the Company's Common Stock held of record by each such stockholder on
the Record Date) of Warrants to purchase up to an aggregate of 9,732,355 shares
of Common Stock. Each Record Stockholder shall receive a Warrant to purchase one
share of Common Stock for each 6.35200555261 shares of Common Stock held as of
the Record Date. No fractional Warrants will be issued in the distribution
contemplated by this Section 2.1. Instead, any fractional Warrants shall be
rounded to the next highest whole number in the case of fractional Warrants
equal to or greater than 0.5 and to the preceding whole number in the case of
fractional Warrants less than 0.5. The Warrants shall be distributed to the
Record Stockholders at no cost to such Record Stockholders.
Each Warrant Certificate shall evidence the number of Warrants specified
therein, and each Warrant evidenced thereby shall represent the right, subject
to the provisions contained herein and therein, to purchase from the Company
(and the Company shall issue and sell to such holder of the Warrant) one (1)
fully paid and non-assessable share of the Company's Common Stock (the shares
purchasable upon exercise of a Warrant being hereinafter referred to as the
"WARRANT SHARES" and, where appropriate, such term shall also mean the other
securities or property purchasable and deliverable upon exercise of a Warrant as
provided in Section 7 at the price specified herein and therein, in each case
subject to adjustment as provided herein and therein).
2.2 FORM OF WARRANT CERTIFICATES. The Warrant Certificates will initially
be issued either in global form (the "GLOBAL WARRANTS"), substantially in the
form of Exhibit A hereto or in registered form as definitive Warrant
Certificates (the "DEFINITIVE WARRANTS"). The Warrant Certificates evidencing
the Global Warrants or the Definitive Warrants to be delivered pursuant to this
Agreement shall be substantially in the form set forth in Exhibit A attached
hereto. Such Global Warrants shall represent such of the outstanding Warrants as
shall be specified therein and each shall provide that it shall represent the
aggregate amount of outstanding Warrants from time to time endorsed thereon and
that the aggregate amount of outstanding Warrants represented thereby may from
time to time be decreased or increased, as appropriate. Any endorsement of a
Global Warrant to reflect the amount of any increase or decrease in the amount
of outstanding Warrants represented thereby shall be made by the Warrant Agent
and Depositary (as defined below) in accordance with instructions given by the
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holder thereof. The Depository Trust Company shall act as the Depositary (the
"DEPOSITARY") with respect to the Global Warrants until a successor shall be
appointed by the Company. Upon written request, and subject to Section 2.8
hereof, a Warrant holder may receive from the Warrant Agent Definitive Warrants
as set forth in Section 2.8 hereof.
2.3 EXECUTION OF WARRANT CERTIFICATES. The Warrant Certificates shall be
executed on behalf of the Company by the chairman of its Board of Directors, its
president or any vice president and attested by its secretary or assistant
secretary. Such signatures may be the manual or facsimile signatures of the
present or any future such officers. Typographical and other minor errors or
defects in any such reproduction of any such signature shall not affect the
validity or enforceability of any Warrant Certificate that has been duly
countersigned and delivered by the Warrant Agent.
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 Certificate so
signed shall be countersigned and delivered by the Warrant Agent or disposed of
by the Company, such Warrant Certificate nevertheless may be countersigned and
delivered or disposed of as though the Person who signed such Warrant
Certificate had not ceased to be such officer of the Company; and any Warrant
Certificate may be signed on behalf of the Company by such Persons as, at the
actual date of the execution of such Warrant Certificate, shall be the proper
officers of the Company, although at the date of the execution and delivery of
this Agreement any such Person was not such an officer.
2.4 COUNTERSIGNATURE AND DELIVERY. Subject to the immediately following
paragraph, Warrant Certificates shall be countersigned by manual signature and
dated the date of countersignature by the Warrant Agent and shall not be valid
for any purpose unless so countersigned and dated. The Warrant Certificates
shall be numbered and shall be registered in the Warrant Register (as defined in
Section 2.7 hereof).
Upon the receipt by the Warrant Agent of a written order of two officers of
the Company, which order shall be signed by the chairman of its Board of
Directors, its president or any vice president and attested by its secretary or
assistant secretary, and shall specify the amount of Warrants to be
countersigned, whether the Warrants are to be Global Warrants or Definitive
Warrants, the date of such Warrants and such other information as the Warrant
Agent may reasonably request, without any further action by the Company, the
Warrant Agent is authorized, upon receipt from the Company at any time and from
time to time of the Warrant Certificates, duly executed as provided in Section
2.3 hereof, to countersign the Warrant Certificates and deliver them. Such
countersignature shall be by a duly authorized signatory of the Warrant Agent
(although it shall not be necessary for the same signatory to sign all Warrant
Certificates).
In case any authorized signatory of the Warrant Agent who shall have
countersigned any of the Warrant Certificates shall cease to be such authorized
signatory before the Warrant Certificate shall be disposed of by the Company,
such Warrant Certificate nevertheless may be delivered or disposed of as though
the Person who countersigned such Warrant Certificate had not ceased to be such
authorized signatory of the Warrant Agent; and any Warrant Certificate may be
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countersigned on behalf of the Warrant Agent by such Persons as, at the actual
time of countersignature of such Warrant Certificates, shall be the duly
authorized signatories of the Warrant Agent, although at the time of the
execution and delivery of this Agreement any such Person is not such an
authorized signatory.
The Warrant Agent's countersignature on all Warrant Certificates shall be
in substantially the form set forth in Exhibit A hereto.
2.5 TEMPORARY WARRANT CERTIFICATES. Pending the preparation of definitive
Warrant Certificates, the Company may execute, and the Warrant Agent shall
countersign and deliver, temporary Warrant Certificates, which are printed,
lithographed, typewritten or otherwise produced, substantially of the tenor of
the definitive Warrant Certificates in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Warrant Certificates may determine, as evidenced by
their execution of such Warrant Certificates.
If temporary Warrant Certificates are issued, the Company will cause
definitive Warrant Certificates to be prepared without unreasonable delay. After
the preparation of definitive Warrant Certificates, the temporary Warrant
Certificates shall be exchangeable for definitive Warrant Certificates upon
surrender of the temporary Warrant Certificates at any office or agency
maintained by the Company for that purpose pursuant to Section 2.10 hereof.
Subject to the provisions of Section 4 hereof, such exchange shall be without
charge to the holder. Upon surrender for cancellation of any one or more
temporary Warrant Certificates, the Company shall execute, and the Warrant Agent
shall countersign and deliver in exchange therefor, one or more definitive
Warrant Certificates representing in the aggregate a like number of Warrants.
Until so exchanged, the holder of a temporary Warrant Certificate shall in all
respects be entitled to the same benefits under this Agreement as a holder of a
definitive Warrant Certificate.
2.6 INTENTIONALLY OMITTED.
2.7 REGISTRATION. The Company will keep, at the office or agency maintained
by the Company for such purpose, a register or registers in which, subject to
such reasonable regulations as it may prescribe, the Company shall provide for
the registration of, and registration of transfer and exchange of, Warrants as
provided in Sections 2.8 and 2.9. Each Person designated by the Company from
time to time as a Person authorized to register the transfer and exchange of the
Warrants is hereinafter called, individually and collectively, the "REGISTRAR."
The Company hereby initially appoints the Warrant Agent as Registrar. Upon
written notice to the Warrant Agent and any acting Registrar, the Company may
appoint a successor Registrar for such purposes.
The Company will at all times designate one Person (who may be the Company
and who need not be a Registrar) to act as repository of a master list of names
and addresses of the holders of Warrants (the "WARRANT REGISTER"). The Warrant
Agent will act as such repository unless and until some other Person is, by
written notice from the Company to the Warrant Agent and the Registrar,
designated by the Company to act as such. In the event the Registrar is not the
repository, the
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Company shall cause the Registrar to furnish to such repository, on a current
basis, such information as to all registrations of transfer and exchanges
effected by the Registrar, as may be necessary to enable such repository to
maintain the Warrant Register on as current a basis as is practicable.
2.8 REGISTRATION OF TRANSFERS AND EXCHANGES.
(a) TRANSFER AND EXCHANGE OF DEFINITIVE WARRANTS. When Definitive Warrants
are presented to the Warrant Agent with a request:
(i) to register the transfer of the Definitive Warrants; or
(ii) to exchange such Definitive Warrants for an equal number of Definitive
Warrants of other authorized denominations,
the Warrant Agent shall register the transfer or make the exchange as requested
if the requirements under this
Warrant Agreement as set forth in this Section
2.8 hereof for such transactions are met; PROVIDED, HOWEVER, that the Definitive
Warrants presented or surrendered for registration of transfer or exchange shall
be duly endorsed or accompanied by a written instruction of transfer in form
satisfactory to the Company and the Warrant Agent, duly executed by the holder
thereof or by his attorney, duly authorized in writing.
(b) RESTRICTIONS ON TRANSFER OF A DEFINITIVE WARRANT FOR A BENEFICIAL
INTEREST IN A GLOBAL WARRANT. A Definitive Warrant may not be exchanged for a
beneficial interest in a Global Warrant except upon satisfaction of the
requirements set forth below. Upon receipt by the Warrant Agent of a Definitive
Warrant, duly endorsed or accompanied by appropriate instruments of transfer, in
form satisfactory to the Warrant Agent, together with written instructions
directing the Warrant Agent to make, or to direct the Depositary to make, an
endorsement on the Global Warrant to reflect an increase in the aggregate amount
of the Warrants represented by the Global Warrant, the Warrant Agent shall
cancel such Definitive Warrant and cause, or direct the Depositary to cause, in
accordance with the standing instructions and procedures existing between the
Depositary and the Warrant Agent, the number of Warrants represented by the
Global Warrant to be increased accordingly. If no Global Warrant is then
outstanding, the Company shall issue and the Warrant Agent shall countersign a
new Global Warrant in the appropriate amount.
(c) TRANSFER AND EXCHANGE OF GLOBAL WARRANTS. The transfer and exchange of
Global Warrants or beneficial interests therein shall be effected through the
Depositary, in accordance with this
Warrant Agreement (including the
restrictions on transfer set forth herein) and the procedures of the Depositary
therefor.
(d) TRANSFER OF A BENEFICIAL INTEREST IN A GLOBAL WARRANT FOR A DEFINITIVE
WARRANT.
(i) Any Person having a beneficial interest in a Global Warrant may upon
request exchange such beneficial interest for a Definitive Warrant. Upon
receipt by the Warrant Agent of
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written instructions or such other form of instructions as is customary
for the Depositary from the Depositary or its nominee on behalf of any
Person having a beneficial interest in a Global Warrant and upon receipt
by the Warrant Agent of a written order or such other form of instructions
as is customary for the Depositary or the Person designated by the
Depositary as having such a beneficial interest containing registration
instructions, the Warrant Agent will cause, in accordance with the
standing instructions and procedures existing between the Depositary and
the Warrant Agent, the aggregate amount of the Global Warrant to be
reduced and, following such reduction, the Company will execute and, upon
receipt of a countersignature order in the form of an Officers'
Certificate, the Warrant Agent will authenticate and deliver to the
transferee a Definitive Warrant.
(ii) Definitive Warrants issued in exchange for a beneficial interest in a
Global Warrant pursuant to this Section 2.8(d) shall be registered in such
names and in such authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Warrant Agent in writing. The Warrant Agent shall deliver
such Definitive Warrants to the Persons in whose names such Warrants are
so registered.
(e) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL WARRANTS.
Notwithstanding any other provisions of this
Warrant Agreement (other than the
provisions set forth in subsection (f) of this Section 2.8), a Global Warrant
may not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(f) COUNTERSIGNATURE OF DEFINITIVE WARRANTS IN ABSENCE OF DEPOSITARY. If at
any time:
(i) the Depositary for the Warrants notifies the Company that the Depositary
is unwilling or unable to continue as Depositary for the Global Warrant
and a successor Depositary for the Global Warrant is not appointed by the
Company within 90 days after delivery of such notice; or
(ii) the Company, at its sole discretion, notifies the Warrant Agent in
writing that it elects to cause the issuance of Definitive Warrants in
place of the Global Warrant under this
Warrant Agreement,
then the Company will execute, and the Warrant Agent, upon receipt of an
Officers' Certificate requesting the countersignature and delivery of Definitive
Warrants, will authenticate and deliver Definitive Warrants, in an aggregate
number equal to the aggregate number of Warrants represented by the Global
Warrant, in exchange for such Global Warrant.
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(g) CANCELLATION AND/OR ADJUSTMENT OF A GLOBAL WARRANT. At such time as all
beneficial interests in a Global Warrant have either been exchanged for
Definitive Warrants, redeemed, repurchased or cancelled, such Global Warrant
shall be returned to or retained and cancelled by the Warrant Agent. At any time
prior to such cancellation, if any beneficial interest in a Global Warrant is
exchanged for Definitive Warrants, redeemed, repurchased or cancelled, the
number of Warrants represented by such Global Warrant shall be reduced and an
endorsement shall be made on such Global Warrant by the Warrant Agent to reflect
such reduction.
(h) OBLIGATIONS WITH RESPECT TO TRANSFERS AND EXCHANGES OF DEFINITIVE
WARRANTS.
(i) To permit registrations of transfers and exchanges, the Company shall
deliver to the Warrant Agent, prior to the Issue Date and from time to
time thereafter, sufficient inventory of executed Definitive Warrants and
Global Warrants.
(ii) All Definitive Warrants and Global Warrants issued upon any
registration, transfer or exchange of Definitive Warrants or Global
Warrants shall be the valid obligations of the Company, entitled to the
same benefits under this
Warrant Agreement as the Definitive Warrants or
Global Warrants surrendered upon the registration of transfer or exchange.
(iii) Prior to due presentment for registration of transfer of any Warrant,
the Warrant Agent and the Company may deem and treat the Person in whose
name any Warrant is registered as the absolute owner of such Warrant, and
neither the Warrant Agent nor the Company shall be affected by notice to
the contrary.
(i) GENERAL. The Warrant Agent shall be under no duty to monitor compliance
with any federal, state or other securities laws.
2.9 LOST, STOLEN, DESTROYED, DEFACED OR MUTILATED WARRANT CERTIFICATES.
Upon receipt by the Company and the Warrant Agent (or any agent of the Company
or the Warrant Agent, if requested by the Company) of evidence satisfactory to
them of the loss, theft, destruction, defacement, or mutilation of any Warrant
Certificate and of indemnity satisfactory to them (which shall include the
posting an open-penalty bond) and, in the case of mutilation or defacement, upon
surrender thereof to the Warrant Agent for cancellation, then, in the absence of
notice to the Company or the Warrant Agent that such Warrant Certificate has
been acquired by a protected purchaser or holder in due course (as such terms
are defined in the Uniform Commercial Code), the Company shall execute, and an
authorized signatory of the Warrant Agent shall manually countersign and
deliver, in exchange for or in lieu of the lost, stolen, destroyed, defaced or
mutilated Warrant Certificate, a new Warrant Certificate representing a like
number of Warrants, bearing a number or other distinguishing symbol not
contemporaneously outstanding. Upon the issuance of any new Warrant Certificate
under this Section, the Company may require the payment from the holder of such
Warrant Certificate of a sum sufficient to cover any tax, stamp tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Warrant Agent and the
Registrar) in connection therewith. Every substitute Warrant Certificate
executed and delivered pursuant to this
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Section in lieu of any lost, stolen or destroyed Warrant Certificate shall
constitute an additional contractual obligation of the Company, whether or not
the lost, stolen or destroyed Warrant Certificate shall be at any time
enforceable by anyone, and shall be entitled to the benefits of (but shall be
subject to all the limitations of rights set forth in) this Agreement equally
and proportionately with any and all other Warrant Certificates duly executed
and delivered hereunder. The provisions of this Section 2.9 are exclusive with
respect to the replacement of lost, stolen, destroyed, defaced or mutilated
Warrant Certificates and shall preclude (to the extent lawful) any and all other
rights or remedies notwithstanding any law or statute existing or hereafter
enacted to the contrary with respect to the replacement of lost, stolen,
destroyed, defaced or mutilated Warrant Certificates.
The Warrant Agent is hereby authorized to countersign in accordance with
the provisions of this Agreement, and deliver the new Warrant Certificates
required pursuant to the provisions of this Section.
2.10 OFFICES FOR EXERCISE, ETC. So long as any of the Warrants remain
outstanding, the Company will designate and maintain in the Borough of
Manhattan, The City of
New York: (a) an office or agency where the Warrant
Certificates may be presented for exercise, (b) an office or agency where the
Warrant Certificates may be presented for registration of transfer and for
exchange (including the exchange of temporary Warrant Certificates for
definitive Warrant Certificates pursuant to Section 2.5 hereof), and (c) an
office or agency where notices and demands to or upon the Company in respect of
the Warrants or of this Agreement may be served. The Company may from time to
time change or rescind such designation, as it may deem desirable or expedient;
PROVIDED, HOWEVER, that an office or agency shall at all times be maintained in
the Borough of Manhattan, The City of
New York, as provided in the first
sentence of this Section. In addition to such office or offices or agency or
agencies, the Company may from time to time designate and maintain one or more
additional offices or agencies within or outside The City of
New York, where
Warrant Certificates may be presented for exercise or for registration of
transfer or for exchange, and the Company may from time to time change or
rescind such designation, as it may deem desirable or expedient. The Company
will give to the Warrant Agent written notice of the location of any such office
or agency and of any change of location thereof. The Company hereby designates
the Warrant Agent at its corporate trust office in the Borough of Manhattan, The
City of New York (the "WARRANT AGENT OFFICE"), as the initial agency maintained
for each such purpose. In case the Company shall fail to maintain any such
office or agency or shall fail to give such notice of the location or of any
change in the location thereof, presentations and demands may be made and notice
may be served at the Warrant Agent Office and the Company appoints the Warrant
Agent as its agent to receive all such presentations, surrenders, notices and
demands.
SECTION 3. TERMS OF WARRANTS; EXERCISE OF WARRANTS. Subject to the terms of
this Agreement, each Holder shall have the right, which may be exercised
commencing at the opening of business on the Issue Date and until 5:00 p.m., New
York City time on the Expiration Date, to receive from the Company the number of
fully paid and nonassessable Warrant Shares which the Holder may at the time be
entitled to receive on exercise of such Warrants and payment of the Exercise
Price then in effect for such Warrant Shares. Each Warrant not exercised prior
to 5:00 p.m., New York City time, on the Expiration Date shall become void and
all rights thereunder and all rights in respect thereof under
10
this Agreement shall cease as of such time. No payments or adjustments shall be
made on account of any dividends on the Warrant Shares issuable upon exercise of
the Warrants.
The Company shall give notice not less than 90, and not more than 120, days
prior to the Expiration Date to the Holders of all then outstanding Warrants to
the effect that the Warrants will terminate and become void as of 5:00 p.m., New
York City time, on the Expiration Date; PROVIDED, HOWEVER, that the failure by
the Company to give such notice as provided in this Section shall not affect
such termination and becoming void of the Warrants as of 5:00 p.m., New York
City time, on the Expiration Date.
A Warrant may be exercised at any time on or after the Issue Date and prior
to the Expiration Date upon surrender to the Company at the principal office of
the Warrant Agent of the certificate or certificates evidencing the Warrant to
be exercised with the form of election to purchase on the reverse thereof duly
filled in and signed, which signature shall be guaranteed by a member of the
"Medallion System", and upon payment to the Warrant Agent for the account of the
Company of the Exercise Price, as adjusted as herein provided, for each of the
Warrant Shares in respect of which such Warrant is then exercised.
Payment of the aggregate Exercise Price shall be made, at the option of the
Holder, (i) by wire transfer or by certified or official bank check payable to
the order of the Company, (ii) by "CASHLESS EXERCISE," which shall mean the
surrender (which surrender shall be evidenced by cancellation of the number of
Warrants represented by any Warrant Certificate presented in connection with a
Cashless Exercise) of a Warrant or Warrants (represented by one or more Warrant
Certificates), and without payment of the Exercise Price in cash, for such
number of Warrant Shares equal to the product of (1) the number of Warrant
Shares for which such Warrant is exercisable with payment in cash of the
aggregate Exercise Price as of the date of exercise and (2) the Cashless
Exercise Ratio (as defined below) or (iii) with any combination of (i) and (ii).
For purposes of this Agreement, the "CASHLESS EXERCISE RATIO" shall equal a
fraction, the numerator of which is the excess of the Current Market Price per
share of the Common Stock on the date of exercise over the Exercise Price per
share as of the date of exercise and the denominator of which is the Current
Market Price per share of the Common Stock on the date of exercise. Upon
surrender of a Warrant Certificate representing more than one Warrant in
connection with the holder's option to elect a Cashless Exercise, the number of
Warrant Shares deliverable upon a Cashless Exercise shall be equal to the
Cashless Exercise Ratio multiplied by the number of Warrant Shares purchasable
under the Warrant or, if only a portion of the Warrant is being exercised, the
portion of the Warrant being exercised (without giving effect to the Cashless
Exercise option). All provisions of this Agreement shall be applicable with
respect to an exercise of a Warrant Certificate pursuant to a Cashless Exercise
for less than the full number of Warrants represented thereby. If, at the time
of the exercise of any Warrant, the Company does not have an effective
registration statement under the Securities Act of the offer and sale of the
Warrant Shares by the Company to the Holder of the Warrant upon the exercise
thereof, the Company may, in its sole discretion, elect to require that the
holder of the Warrant effect the exercise of the Warrant solely pursuant to the
Cashless Exercise option and may also amend the Warrants to eliminate the
requirement for payment of the Exercise Price with respect the Cashless Exercise
option. The
11
Warrant Agent shall have no obligation under this section to calculate the
Cashless Exercise Ratio. The Company shall calculate the Exercise Price and the
Cashless Exercise Ratio whenever such calculation is necessary and shall deliver
an Officers' Certificate to the Warrant Agent specifying such numbers.
Subject to the provisions of Section 4 hereof, upon surrender of Warrants
and payment of the Exercise Price as provided above, the Warrant Agent shall
thereupon promptly notify the Company, and the Company shall transfer to the
Holder of such Warrant Certificate appropriate evidence of ownership of any
Warrant Shares or other securities or property (including any money) to which
the Holder is entitled, registered or otherwise placed in, or payable to the
order of, such name or names as may be directed in writing by the Holder, and
shall deliver such evidence of ownership and any other securities or property
(including any money) to the Person or Persons entitled to receive the same. Any
such evidence of ownership 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.
The Warrants shall be exercisable commencing on the Issue Date, 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 2.3 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.
All Warrant Certificates surrendered for the purpose of exercise (in whole
or in part), exchange, substitution or transfer shall, if surrendered to the
Company or to any of its agents, be delivered to the Warrant Agent for
cancellation or in cancelled form, or if surrendered to the Warrant Agent shall
be cancelled by it, and no Warrant Certificates shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Agreement. If the
Company purchases or acquires Warrants and if the Company so chooses, the
Company may deliver to the Warrant Agent for cancellation and retirement, and
the Warrant Agent shall so cancel and retire, the Warrant Certificates
evidencing said Warrants. The Warrant Agent shall destroy such cancelled Warrant
Certificates, and in such case shall upon the written request of the Company
deliver a certificate of destruction thereof 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.
The Warrant Agent shall keep copies of this Agreement and any notices given
or received hereunder by or from the Company 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.
12
SECTION 4. PAYMENT OF TAXES. The Company will pay all documentary stamp
taxes attributable to the initial issuance of the Warrants and the Warrant
Shares issuable 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 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 5. RESERVATION OF WARRANT SHARES. The Company will at all times
reserve and keep available, free from preemptive rights, out of the aggregate of
its authorized but unissued 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.
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 9. The Company will furnish
such Transfer Agent a copy of all notices of adjustments and certificates
related thereto, transmitted to each Holder of the Warrants pursuant to Section
14 hereof. As of the date of this Agreement, the Transfer Agent is Computershare
Trust Company of New York.
Before taking any action which would cause an adjustment pursuant to
Section 7 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, 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.
The Company covenants that all Warrant Shares which may be issued upon
exercise of Warrants will, upon issue and payment of the Exercise Price
therefor, be duly and validly issued, fully paid, nonassessable, free of
preemptive rights and free from all taxes, liens, charges and security interests
with respect to the issue thereof.
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SECTION 6. 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 (including, without limitation,
the Nasdaq National Market) within the United States of America, if any, on
which other shares of Common Stock are then listed. The Company shall not have
any obligation to list the Warrants on any securities exchange or to arrange for
their quotation on any quotation system.
SECTION 7. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES
ISSUABLE. The number and kind of shares purchasable upon the exercise of
Warrants and the Exercise Price shall be subject to adjustment from time to time
as follows:
(a) STOCK SPLITS, COMBINATIONS, ETC. In case the Company shall hereafter
(A) pay a dividend or make a distribution on its Common Stock in shares of its
Capital Stock, (B) subdivide its outstanding shares of Common Stock or (C)
combine its outstanding shares of Common Stock into a smaller number of shares,
the Exercise Price and the number and kind of shares purchasable upon the
exercise of the Warrant in effect immediately prior to such action shall be
adjusted so that the Holder of any Warrant thereafter exercised in full shall be
entitled to receive upon payment of the same aggregate exercise price as prior
to such adjustment the number of shares of Capital Stock of the Company which
such Holder would have owned immediately following such action had such Warrant
been exercised immediately prior thereto. An adjustment made pursuant to this
paragraph shall become effective immediately after the record date in the case
of a dividend and shall become effective immediately after the effective date in
the case of a subdivision, combination or reclassification. If, as a result of
an adjustment made pursuant to this paragraph, the Holder of any Warrant
thereafter exercised shall become entitled to receive shares of two or more
classes of Capital Stock of the Company, the Board of Directors of the Company
(whose determination shall be conclusive) shall determine the allocation of the
adjusted Exercise Price between or among shares of such classes of Capital
Stock.
(b) RECLASSIFICATION, COMBINATIONS, MERGERS, ETC. In case of any
reclassification or change of outstanding shares of Common Stock issuable upon
exercise of the Warrants (other than as set forth in paragraph (a) above and
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 in
case of any consolidation or merger of the Company with or into another
corporation (other than a merger in which the Company is the continuing
corporation and which does not result in any reclassification or change of the
then outstanding shares of Common Stock or other Capital 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 in case of any sale or conveyance to another corporation of
all or substantially all of the assets of the Company, then, as a condition of
such reclassification, change, consolidation, merger, sale or conveyance, the
Company or such a successor or purchasing corporation, as the case may be, shall
forthwith make lawful and adequate provision whereby the Holder of such Warrant
then outstanding shall have the right thereafter to receive on exercise of such
Warrant the kind and amount of shares of stock and other securities and property
receivable upon such reclassification, change, consolidation, merger, sale or
conveyance by a holder of the number of shares of Common Stock issuable upon
exercise of such Warrant immediately prior to
14
such reclassification, change, consolidation, merger, sale or conveyance and
enter into a supplemental
warrant agreement so providing. Such provisions shall
include provision for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 7. If the issuer of
securities deliverable upon exercise of Warrants under the supplemental
warrant
agreement is an Affiliate of the formed, surviving or transferee corporation,
that issuer shall join in the supplemental warrant agreement. The above
provisions of this paragraph (b) shall similarly apply to successive
reclassifications and changes of shares of Common Stock and to successive
consolidations, mergers, sales or conveyances.
In case of any such reorganization, reclassification, merger, consolidation
or disposition of assets, the successor or acquiring corporation (if other than
the Company) shall expressly assume the due and punctual observance and
performance of each and every covenant and condition of this Warrant Agreement
to be performed and observed by the Company and all the obligations and
liabilities hereunder, subject to such modifications as may be deemed
appropriate (as determined by resolution of the Board of Directors of the
Company) in order to provide for adjustments of shares of the Common Stock for
which this Warrant is exercisable which shall be as nearly equivalent as
practicable to the adjustments provided for in this Section 7. For purposes of
this Section 7(b) "shares of stock and other securities" of a successor or
acquiring corporation shall include stock of such corporation of any class which
is not preferred as to dividends or assets over any other class of stock of such
corporation and which is not subject to redemption and shall also include any
evidences of indebtedness, shares of stock or other securities which are
convertible into or exchangeable for any such stock, either immediately or upon
the arrival of a specified date or the happening of a specified event and any
warrants or other rights to subscribe for or purchase any such stock. The
foregoing provisions of this Section 7(b) shall similarly apply to successive
reorganizations, reclassifications, mergers, consolidations or disposition of
assets.
Notwithstanding the foregoing provisions of this Section 7(b), in
connection with any merger or consolidation of the Company with any other
corporation in which the consideration paid to holders of the Company's Common
Stock or other Capital Stock issuable upon exercise of the Warrants consists
solely of cash, the Company may, in its discretion, (i) cancel any or all
outstanding Warrants in consideration for payment to the holders thereof of an
amount equal to the portion of the consideration that would have been payable to
such holders pursuant to such transaction if their Warrant had been fully
exercised immediately prior to such transaction, less the aggregate exercise
price that would have been payable therefor, or (ii) if the amount that would
have been payable to the Warrant holders pursuant to such transaction if their
Warrants had been fully exercised immediately prior thereto would be equal to or
less than the aggregate exercise price that would have been payable therefor,
cancel any or all such Warrants for no consideration or payment of any kind. The
foregoing provisions of this Section 7(b) shall similarly apply to successive
reorganizations, reclassifications, mergers, consolidations or disposition of
assets.
(c) RIGHTS OFFERINGS. In the event the Company shall, at any time or from
time to time after the date hereof, issue, sell, distribute or otherwise grant
in any manner (including by assumption) to all holders of the Common Stock any
rights to subscribe for or to purchase, or any
15
warrants or options for the purchase of, Common Stock (any such rights, warrants
or options being herein called "OPTIONS") or any Convertible Securities (other
than upon exercise of any Option), whether or not such Options or the rights to
convert or exchange such Convertible Securities are immediately exercisable, and
the price per share at which Common Stock is issuable upon the exercise of such
Options or upon the conversion or exchange of such Convertible Securities
(determined by dividing (i) the aggregate amount, if any, received or receivable
by the Company as consideration for the issuance, sale, distribution or granting
of such Options or any such Convertible Security, plus the minimum aggregate
amount of additional consideration, if any, payable to the Company upon the
exercise of all such Options or upon conversion or exchange of all such
Convertible Securities, plus, in the case of Options to acquire Convertible
Securities, the minimum aggregate amount of additional consideration, if any,
payable upon the conversion or exchange of all such Convertible Securities, by
(ii) the total maximum number of shares of Common Stock issuable upon the
exercise of all such Options or upon the conversion or exchange of all such
Convertible Securities or upon the conversion or exchange of all Convertible
Securities issuable upon the exercise of all such Options) shall be less than
the Current Market Price per share of Common Stock (determined pursuant to
Section 7(g)) on the record date for the issuance, sale, distribution or
granting of such Options (any such event being herein called a "DISTRIBUTION")
then, effective upon such Distribution, the Exercise Price shall be reduced to
the price (calculated to the nearest 1/1,000 of one cent) determined by
multiplying the Exercise Price in effect immediately prior to such Distribution
by a fraction, the numerator of which shall be the sum of (i) the number of
shares of Common Stock outstanding (exclusive of any treasury shares)
immediately prior to such Distribution multiplied by the Current Market Price
per share of Common Stock on the date of such Distribution plus (ii) the
consideration, if any, received by the Company upon such Distribution, and the
denominator of which shall be the product of (A) the total number of shares of
Common Stock outstanding (exclusive of any treasury shares) immediately after
such Distribution multiplied by (B) the Current Market Price per share of Common
Stock on the record date for such Distribution. For purposes of the foregoing,
the total maximum number of shares of Common Stock issuable upon exercise of all
such Options or upon conversion or exchange of all such Convertible Securities
or upon the conversion or exchange of the total maximum amount of the
Convertible Securities issuable upon the exercise of all such Options shall be
deemed to have been issued as of the date of such Distribution and thereafter
shall be deemed to be outstanding and the Company shall be deemed to have
received as consideration therefor such price per share, determined as provided
above. Except as provided in paragraphs (j) and (k) below, no additional
adjustment of the Exercise Price shall be made upon the actual exercise of such
Options or upon conversion or exchange of the Convertible Securities or upon the
conversion or exchange of the Convertible Securities issuable upon the exercise
of such Options.
(d) DIVIDENDS AND DISTRIBUTIONS. In the event the Company shall, at any
time or from time to time after the date hereof, distribute to all the holders
of Common Stock any dividend or other distribution of cash, evidences of its
indebtedness, other securities or other properties or assets (in each case other
than (i) dividends payable in Common Stock, Options or Convertible Securities
and (ii) any cash dividend from current or retained earnings), or any options,
warrants or other rights to subscribe for or purchase any of the foregoing, then
(A) the Exercise Price shall be decreased to a price determined by multiplying
the Exercise Price then in effect by a fraction, the numerator of which
16
shall be the Current Market Price per share of Common Stock on the record date
for such distribution less the sum of (X) the cash portion, if any, of such
distribution per share of Common Stock outstanding (exclusive of any treasury
shares) on the record date for such distribution plus (Y) the then fair market
value (as determined in good faith by the Board of Directors of the Company) per
share of Common Stock outstanding (exclusive of any treasury shares) on the
record date for such distribution of that portion, if any, of such distribution
consisting of evidences of indebtedness, other securities, properties, assets,
options, warrants or subscription or purchase rights, and the denominator of
which shall be such Current Market Price per share of Common Stock and (B) the
number of shares of Common Stock purchasable upon the exercise of each Warrant
shall be increased to a number determined by multiplying the number of shares of
Common Stock so purchasable immediately prior to the record date for such
distribution by a fraction, the numerator of which shall be the Exercise Price
in effect immediately prior to the adjustment required by clause (A) of this
sentence and the denominator of which shall be the Exercise Price in effect
immediately after such adjustment. The adjustments required by this paragraph
(d) shall be made whenever any such distribution occurs retroactive to the
record date for the determination of stockholders entitled to receive such
distribution.
(e) SELF-TENDERS. In case of the consummation of a tender or exchange offer
(other than an odd-lot tender offer) made by the Company or any subsidiary of
the Company for all or any portion of the Common Stock to the extent that the
cash and value of any other consideration included in such payment per share of
Common Stock exceeds the first reported sales price per share of Common Stock on
the trading day next succeeding the Expiration Time, the Exercise Price shall be
reduced so that the same shall equal the price determined by multiplying the
Exercise Price in effect immediately prior to the Expiration Time by a fraction
of which the numerator shall be the number of shares of Common Stock outstanding
(including any tendered or exchanged shares) at the Expiration Time multiplied
by the first reported sales price of the Common Stock on the trading day next
succeeding the Expiration Time, and the denominator shall be the sum of (A) the
fair market value (determined by the Board of Directors of the Company, whose
determination shall be conclusive and described in a resolution of the Board of
Directors) of the aggregate consideration payable to stockholders based on the
acceptance (up to any maximum specified in the terms of the tender or exchange
offer) of all shares validly tendered or exchanged and not withdrawn as of the
Expiration Time (the shares deemed so accepted, up to any such maximum, being
referred to as the "PURCHASED SHARES") and (B) the product of the number of
shares of Common Stock outstanding (less any Purchased Shares) on the Expiration
Time and the first reported sales price of the Common Stock on the trading day
next succeeding the Expiration Time, such reduction to become effective
immediately prior to the opening of business on the day following the Expiration
Time.
(f) ISSUANCE OF ADDITIONAL SHARES OF COMMON STOCK. If at any time the
Company shall (except as hereinafter provided) issue or sell any additional
shares of Common Stock for consideration in an amount per additional share of
Common Stock less than the Current Market Price, then the number of shares of
Common Stock for which this Warrant is exercisable shall be adjusted to equal
the product obtained by multiplying the number of shares of Common Stock for
which this Warrant is exercisable immediately prior to such issue or sale by a
fraction (A) the numerator of which shall be the number of shares of Common
Stock outstanding immediately after such issue or sale, and
17
(B) the denominator of which shall be the sum of (1) the number of shares of
Common Stock outstanding immediately prior to such issue or sale, and (2) the
aggregate consideration received from the issuance or sale of the additional
shares of Common Stock divided by the Current Market Price. For the purposes of
this paragraph (f), the date as of which the Current Market Price per share of
Common Stock shall be computed shall be the earlier of (a) the date on which the
Company shall enter into a firm contract for the issuance of such additional
shares of Common Stock or (b) the date of actual issuance of such additional
shares of Common Stock. Notwithstanding the foregoing, no adjustment shall be
made under this paragraph for issuances of shares of Common Stock: (i) under or
pursuant to any of the Company's stock option or other compensation plans, (ii)
upon exercise of the Warrants, (iii) in connection with the Recapitalization
Transactions or upon the conversion of any Convertible Securities issued in
connection with the Recapitalization Transactions (including shares of Common
Stock issuable as a result of accrued and unpaid dividends on the Preferred
Stock or accrued and unpaid interest on the Loans), (iv) in connection with any
firm commitment underwritten offering by the Company (an "UNDERWRITTEN
OFFERING") registered under the Securities Act or upon the conversion of any
Convertible Securities that were originally sold in an Underwritten Offering
either registered under the Securities Act or pursuant to Rule 144A promulgated
under the Securities Act, (v) in any transaction in which the Company has
received an opinion as to the fairness of such transaction to the holders of the
Common Stock from a financial point of view issued by an investment banking firm
of national standing, (vi) that has been approved by a majority of the Company's
outstanding Common Stock who are not otherwise participating in the transaction
or (vii) upon conversion of any Convertible Securities or exercise of any
Options outstanding as of the Issue Date.
(g) CURRENT MARKET PRICE. For the purpose of any computation of Current
Market Price under this Section 7, the Current Market Price per share of Common
Stock at any date shall be the average of the daily closing prices for the
shorter of (i) the 15 consecutive trading days ending on the last full trading
day on the exchange or market specified in the second succeeding sentence prior
to the Time of Determination (as defined below) and (ii) the period commencing
on the date next succeeding the first public announcement of the issuance, sale,
distribution or granting in question through such last full trading day prior to
the Time of Determination; PROVIDED THAT in the case of a firm commitment
underwritten public offering, the Current Market Price shall mean the closing
price of the Common Stock on the day of the pricing of such offering. The term
"TIME OF DETERMINATION" as used herein shall be the time and date of the earlier
to occur of (A) the date as of which the Current Market Price is to be computed
and (B) the last full trading day on such exchange or market before the
commencement of "ex-dividend" trading in the Common Stock relating to the event
giving rise to the adjustment required by paragraph (a), (b), (c) or (d). The
closing price for any day shall be the last reported sale price regular way or,
in case no such reported sale takes place on such day, the average of the
closing bid and asked prices regular way for such day, in each case (1) on the
principal national securities exchange on which the shares of Common Stock are
listed or to which such shares are admitted to trading or (2) if the Common
Stock is not listed or admitted to trading on a national securities exchange, in
the over-the-counter market as reported by the Nasdaq National Market or any
comparable system or (3) if the Common Stock is not listed on the Nasdaq
National Market or a comparable system, as furnished by two members of the NASD
selected from time to time in good faith by the Board of Directors of the
Company for that purpose. In the absence of all of the foregoing, or if
18
for any other reason the Current Market Price per share cannot be determined
pursuant to the foregoing provisions of this paragraph (g), the Current Market
Price per share shall be the fair market value thereof as determined in good
faith by the Board of Directors of the Company.
(h) CERTAIN DISTRIBUTIONS. If the Company shall pay a dividend or make any
other distribution payable in Options or Convertible Securities, then, for
purposes of paragraph (c) above, such Options or Convertible Securities shall be
deemed to have been issued or sold without consideration.
(i) CONSIDERATION RECEIVED. If any shares of Common Stock, Options or
Convertible Securities shall be issued, sold or distributed for a consideration
other than cash, the amount of the consideration other than cash received by the
Company in respect thereof shall be deemed to be the then fair market value of
such consideration (as determined in good faith by the Board of Directors of the
Company). If any Options shall be issued in connection with the issuance and
sale of other securities of the Company, together comprising one integral
transaction in which no specific consideration is allocated to such Options by
the parties thereto, such Options shall be deemed to have been issued without
consideration; PROVIDED, HOWEVER, that if such Options have an exercise price
equal to or greater than the Current Market Price of the Common Stock on the
date of issuance of such Options, then such Options shall be deemed to have been
issued for consideration equal to such exercise price.
(j) DEFERRAL OF CERTAIN ADJUSTMENTS. No adjustment to the Exercise Price
(including the related adjustment to the number of shares of Common Stock
purchasable upon the exercise of each Warrant) shall be required hereunder
unless such adjustment, together with other adjustments carried forward as
provided below, would result in an increase or decrease of at least one percent
(1%) of the Exercise Price; PROVIDED that any adjustments which by reason of
this paragraph (j) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. No adjustment need be made for
a change in the par value of the Common Stock. All calculations under this
Section shall be made to the nearest 1/1,000 of one cent or to the nearest
1/1,000th of a share, as the case may be.
(k) CHANGES IN OPTIONS AND CONVERTIBLE SECURITIES. If the exercise price
provided for in any Options referred to in paragraph (c) above, the additional
consideration, if any, payable upon the conversion or exchange of any
Convertible Securities referred to in paragraph (c) above, or the rate at which
any Convertible Securities referred to in paragraph (c) above are convertible
into or exchangeable for Common Stock shall change at any time (other than under
or by reason of provisions designed to protect against dilution upon an event
which results in a related adjustment pursuant to this Section 7), the Exercise
Price then in effect and the number of shares of Common Stock purchasable upon
the exercise of each Warrant shall forthwith be readjusted (effective only with
respect to any exercise of any Warrant after such readjustment) to the Exercise
Price and number of shares of Common Stock so purchasable that would then be in
effect had the adjustment made upon the issuance, sale, distribution or granting
of such Options or Convertible Securities been made based upon
19
such changed purchase price, additional consideration or conversion rate, as the
case may be, but only with respect to such Options and Convertible Securities as
then remain outstanding.
(l) EXPIRATION OF OPTIONS AND CONVERTIBLE SECURITIES. If, at any time after
any adjustment to the number of shares of Common Stock purchasable upon the
exercise of each Warrant shall have been made pursuant to paragraph (c) or (k)
above or this paragraph (1), any Options or Convertible Securities shall have
expired unexercised, the number of such shares so purchasable shall, upon such
expiration, be readjusted and shall thereafter be such as they would have been
had they been originally adjusted (or had the original adjustment not been
required, as the case may be) as if (i) the only shares of Common Stock deemed
to have been issued in connection with such Options or Convertible Securities
were the shares of Common Stock, if any, actually issued or sold upon the
exercise of such Options or Convertible Securities and (ii) such shares of
Common Stock, if any, were issued or sold for the consideration actually
received by the Company upon such exercise plus the aggregate consideration, if
any, actually received by the Company for the issuance, sale, distribution or
granting of all such Options or Convertible Securities, whether or not
exercised; PROVIDED that no such readjustment shall have the effect of
decreasing the number of such shares so purchasable by an amount (calculated by
adjusting such decrease to account for all other adjustments made pursuant to
this Section 7 following the date of the original adjustment referred to above)
in excess of the amount of the adjustment initially made in respect of the
issuance, sale, distribution or granting of such Options or Convertible
Securities.
(m) OTHER ADJUSTMENTS. In the event that at any time, as a result of an
adjustment made pursuant to this Section 7, the Holders shall become entitled to
receive any securities of the Company other than shares of Common Stock,
thereafter the number of such other securities so receivable upon exercise of
the Warrants and the Exercise Price applicable to such exercise shall be subject
to adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the shares of Common Stock
contained in this Section 7.
SECTION 8. STATEMENT ON WARRANTS. Irrespective of any adjustment in the
number or kind of shares issuable upon the exercise of the Warrants or the
Exercise Price, Warrants theretofore or thereafter issued may continue to
express the same number and kind of shares as are stated in the Warrants
initially issuable pursuant to this Agreement.
SECTION 9. FRACTIONAL INTERESTS. The Company shall not be required to issue
fractional shares of Common Stock 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 shares of Common Stock which shall be issuable upon
such exercise shall be computed on the basis of the aggregate number of shares
of Common Stock acquirable on exercise of the Warrants so presented. If any
fraction of a share of Common Stock would, except for the provisions of this
Section, be issuable on the exercise of any Warrant (or specified portion
thereof), such fractional interest shall be rounded to the next highest whole
number in the case of fractional interests equal to or greater than 0.5 and to
the preceding whole number in the case of fractional interests less than 0.5.
The Holders, by their
20
acceptance of the Warrant Certificates, expressly waive any and all rights to
receive any fraction of a share of Common Stock or a stock certificate
representing a fraction of a share of Common Stock.
SECTION 10. WHEN ADJUSTMENT NOT REQUIRED. If the Company shall take a
record of the holders of its Common Stock for the purpose of entitling them to
receive a dividend or distribution or subscription or purchase rights and shall,
thereafter and before the distribution to stockholders thereof, legally abandon
its plan to pay or deliver such dividend, distribution, subscription or purchase
rights, then thereafter no adjustment shall be required by reason of the taking
of such record and any such adjustment previously made in respect thereof shall
be rescinded and annulled.
SECTION 11. ESCROW OF WARRANT STOCK. If after any property becomes
distributable pursuant to Section 7 by reason of the taking of any record of the
holders of Common Stock, but prior to the occurrence of the event for which such
record is taken, and the Holder exercises this Warrant, any additional shares of
Common Stock issuable upon exercise by reason of such adjustment shall be deemed
the last shares of Common Stock for which this Warrant is exercised
(notwithstanding any other provision to the contrary herein) and such shares or
other property shall be held in escrow for the Holder by the Company to be
issued to the Holder upon and to the extent that the event actually takes place.
Notwithstanding any other provision to the contrary herein, if the event for
which such record was taken fails to occur or is rescinded, then such escrowed
shares shall be cancelled by the Company and escrowed property returned.
SECTION 12. CHALLENGE TO GOOD FAITH DETERMINATION. Whenever the Board of
Directors of the Company shall be required to make a determination in good faith
of the fair value of any item under Section 7, such determination may be
challenged in good faith by the Majority Holders, and any dispute shall be
resolved by an investment banking firm of national standing selected by the
Company. The fee of such investment banking firm shall be paid by the Company,
unless such fair market value as determined by the investment banking firm is
more than 95% of the fair market value determined by the Board of Directors of
the Company, in which case the challenging Holders shall be jointly and
severally liable for such fee.
SECTION 13. TREASURY STOCK. The sale or other disposition of any issued
shares of Common Stock owned or held by or for the account of the Company shall
be deemed an issuance thereof and a repurchase thereof and designation of such
shares as treasury stock shall be deemed to be a redemption thereof for the
purposes of this Agreement.
SECTION 14. NOTICES TO WARRANT HOLDERS. Upon any adjustment of the Exercise
Price pursuant to Section 7, 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
21
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. The Warrant Agent shall be entitled to
conclusively rely on the above-referenced accountant's certificate and shall be
under no duty or responsibility with respect to any such certificate, except to
exhibit the same from time to time to any Holder desiring an inspection thereof
during normal business hours upon reasonable notice. The Warrant Agent shall not
at any time be under any duty or responsibility to any Holder to determine
whether any facts exist that may require any adjustment of the number of shares
of Common Stock or other stock or property issuable on exercise of the Warrants
or the Exercise Price, or with respect to the nature or extent of any such
adjustment when made, or with respect to the method employed in making such
adjustment or the validity or value (or the kind or amount) of any shares of
Common Stock or other stock or property which may be issuable on exercise of the
Warrants. The Warrant Agent shall not be responsible for any failure of the
Company to make any cash payment or to issue, transfer or deliver any shares of
Common Stock or stock certificates or other common stock or property upon the
exercise of any Warrant.
The Company shall, in addition, promptly notify the Holders of the Warrants
of any determination of its Board of Directors pursuant to Section 7(n) that any
actions affecting its Common Stock will not require an adjustment to the
Exercise Price or the number of shares for which a Warrant is exercisable, and
shall specify in such notice the reasons for such determination. In the event
that the Majority Holders shall challenge any of the calculations set forth in
such notice within 20 days after the Company's delivery thereof, the Company
shall retain a firm of independent certified public accountants of national
standing selected by the Company to prepare and execute a certificate verifying
that no adjustment is required. The Company shall promptly cause a signed copy
of any certificate prepared pursuant to this Section 14 to be delivered to each
Holder in accordance with Section 20. The Company shall keep at its office or
agency designated pursuant to Section 2.10 copies of all such certificates and
cause the same to be available for inspection at said office during normal
business hours upon reasonable notice by any Holder or any prospective purchaser
of a Warrant designated by a Holder thereof.
SECTION 15. MERGER, CONSOLIDATION OR CHANGE OF NAME OF WARRANT AGENT. Any
corporation into which the Warrant Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which the Warrant Agent shall be a party, or any corporation succeeding to the
business of the Warrant Agent, shall be the successor to the Warrant Agent
hereunder without the execution or filing of any paper or any further act on the
part of any of the parties hereto, provided that such corporation would be
eligible for appointment as a successor warrant agent under the provisions of
Section 17. 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
22
name of the successor to the Warrant Agent; and in all such cases such Warrant
Certificates shall have the full force and effect provided in the Warrant
Certificates and in this Agreement.
In case at any time the name of the Warrant Agent shall be changed and at
such time any of the Warrant Certificates shall have been countersigned but not
delivered, the Warrant Agent whose name has been changed may adopt the
countersignature under its prior name, and in case at that time any of the
Warrant Certificates shall not have been countersigned, the Warrant Agent may
countersign such Warrant Certificates either in its prior name or in its changed
name, and in all such cases such Warrant Certificates shall have the full force
and effect provided in the Warrant Certificates and in this Agreement.
SECTION 16. 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. The Warrant Agent assumes
no responsibility with respect to the distribution of the Warrant Certificates
except as herein otherwise provided.
(b) The Warrant Agent shall not be responsible for any failure of the
Company to comply with any of the covenants contained in this Agreement or in
the Warrant Certificates to be complied with by the Company.
(c) The Warrant Agent may consult at any time with counsel satisfactory to
it (who may be counsel for the Company) and the Warrant Agent shall incur no
liability or responsibility to the Company or to any holder of any Warrant
Certificate in respect of any action taken, suffered or omitted by it hereunder
in good faith and in accordance with the opinion or the advice of such counsel.
(d) The Warrant Agent shall incur no liability or responsibility to the
Company or to any holder of any Warrant Certificate for any action taken in
reliance on any Warrant Certificate, certificate of shares, notice, resolution,
waiver, consent, order, certificate, opinion, direction 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,
as agreed in writing from time to time, for all services rendered by the Warrant
Agent in connection with this Agreement, to reimburse the Warrant Agent for all
expenses, taxes and governmental charges and other charges of any kind and
nature reasonably incurred by the Warrant Agent in connection with this
Agreement (including, without limitation, reasonable fees and expenses of
counsel) and to indemnify the Warrant Agent and its agents, employees,
directors, officers, attorneys and affiliates and save it and them harmless
against any and all losses, liabilities, damages and expenses of any nature
whatsoever, including, without limitation, judgments, costs and counsel fees and
actual expenses, for any action
23
taken or omitted by the Warrant Agent or arising in connection with this
Agreement and the exercise by the Warrant Agent of its rights hereunder and the
performance by the Warrant Agent of any of its obligations hereunder except as a
result of the Warrant Agent's gross negligence or bad faith or willful
misconduct, which finding of liability shall have been determined by a court of
competent jurisdiction.
(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 Holders of Warrant Certificates shall furnish
the Warrant Agent with reasonable security and indemnity satisfactory to the
Warrant Agent 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 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 willful misconduct, gross
negligence or bad faith.
(i) The Warrant Agent shall not at any time be under any duty or
responsibility to any holder of any Warrant Certificate to make or cause to be
made any adjustment of the Exercise Price or number of the Warrant Shares or
other securities or property deliverable as provided in this Agreement, or to
determine whether any facts exist which may require any of such adjustments, or
with respect to the nature or extent of any such adjustments, when made, or with
respect to the method employed in making the same. The Warrant Agent shall not
be accountable with respect to the validity or value or the kind or amount of
any Warrant Shares or of any securities or property which may at any time be
issued or delivered upon the exercise of any Warrant or with respect to whether
any such Warrant Shares or other securities will when issued be validly issued
and fully paid and nonassessable, and makes no representation with respect
thereto.
(j) Before the Warrant Agent acts or refrains from acting with respect to
any matter contemplated by this Warrant Agreement, it may require:
24
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Warrant
Agreement relating to the proposed action have been complied with; and
(2) if reasonably necessary in the sole judgment of the Warrant Agent,
an Opinion of Counsel for the Company stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
Each Officers' Certificate or, if requested, an Opinion of Counsel
with respect to compliance with a condition or covenant provided for in this
Warrant Agreement shall include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person he or she has made
such examination or investigation as is necessary to enable him or her to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been complied with.
The Warrant Agent shall not be liable for any action it takes or omits
to take in good faith in reliance on any such certificate or opinion.
(k) The Warrant Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the President, a Vice President, the Secretary, an
Assistant Secretary, the Treasurer or an Assistant Treasurer of the Company, and
to apply to such officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or suffered to be taken
by it in good faith in accordance with instructions of any such officer.
(l) The Warrant Agent shall not have any duty to calculate or determine any
adjustments with respect either to the Exercise Price or the kind and amount of
shares or other securities or any property receivable by holders of Warrant
Certificates upon the exercise or tender of Warrants required from time to time,
and the Warrant Agent shall have no duty or responsibility in determining the
accuracy or correctness of such calculations.
(m) The Company will perform, execute, acknowledge and deliver or cause to
be performed, executed, acknowledged and delivered all such further acts,
instruments and assurances as
25
may be required by the Warrant Agent in order to enable it to carry out or
perform its duties under this Agreement.
(n) The Warrant Agent may rely and shall be fully protected in relying upon
any document believed by it to be genuine and to have been signed or presented
by the proper Person. The Warrant Agent need not investigate any fact or matter
stated in the document.
(o) The Warrant Agent may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
SECTION 17. RESIGNATION AND REMOVAL OF WARRANT AGENT; APPOINTMENT OF
SUCCESSOR.
(a) No resignation or removal of the Warrant Agent and no appointment of a
successor warrant agent shall become effective until the acceptance of
appointment by the successor warrant agent as provided herein. The Warrant Agent
may resign its duties and be discharged from all further duties and liability
hereunder (except liability arising as a result of the Warrant Agent's own gross
negligence, willful misconduct or bad faith) upon not less than 30 days' prior
written notice to the Company. The Company may remove the Warrant Agent upon
written notice, and the Warrant Agent shall thereupon in like manner be
discharged from all further duties and liabilities hereunder, except as
aforesaid. The Warrant Agent shall, at the Company's expense, cause to be mailed
(by first class mail, postage prepaid) to each Holder of a Warrant at his last
address as shown on the Warrant Register a copy of said notice of resignation or
notice of removal, as the case may be. Upon such resignation or removal, the
Company shall appoint in writing a new 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 resignation by the resigning Warrant Agent or after such
removal, then the resigning Warrant Agent or the Holder of any Warrant may apply
to any court of competent jurisdiction for the appointment of a new warrant
agent. Any new warrant agent, whether appointed by the Company or by such a
court, shall be a corporation doing business under the laws of the United States
or any state thereof, in good standing and having a combined capital and surplus
of not less than $50,000,000. The combined capital and surplus of any such new
warrant agent shall be deemed to be the combined capital and surplus as set
forth in the most recent annual report of its condition published by such
warrant agent prior to its appointment, provided that such reports are published
at least annually pursuant to law or to the requirements of a federal or state
supervising or examining authority. After acceptance in writing of such
appointment by the new warrant agent, it shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named herein as
the Warrant Agent, without any further assurance, conveyance, act or deed; but
if for any reason it shall be necessary or expedient to execute and deliver any
further assurance, conveyance, act or deed, the same shall be done at the
expense of the Company and shall be legally and validly executed and delivered
by the resigning or removed Warrant Agent. Not later than the effective date of
any such appointment, the Company shall give notice thereof to the resigning or
removed Warrant Agent. Failure to give any notice provided for in this Section,
however, or any defect therein, shall not affect the legality or validity of the
resignation of the Warrant Agent or the appointment of a new warrant agent, as
the case may be. Notwithstanding any
26
resignation or removal of the Warrant Agent or the failure to exercise the
Warrants, the Company's obligations under Section 16(e) shall survive for the
benefit of the retiring Warrant Agent.
(b) Any corporation into which the Warrant Agent or any new warrant agent
may be merged or any corporation resulting from any consolidation to which the
Warrant Agent or any new warrant agent shall be a party or any corporation to
which the Warrant Agent transfers substantially all of its corporate trust or
shareholder business shall be a successor Warrant Agent under this Agreement
without any further act, provided that such corporation (i) would be eligible
for appointment as successor to the Warrant Agent under the provisions of
Section 17(a) or (ii) is a wholly owned subsidiary of the Warrant Agent. Any
such successor Warrant Agent shall promptly cause notice of its succession as
Warrant Agent to be mailed (by first class mail, postage prepaid) to each Holder
at such Holder's last address as shown on the Warrant Register.
SECTION 18. REGISTRATION RIGHTS.
18.1 WARRANT REGISTRATION STATEMENT. Subject to Section 18.5, the Company
agrees, with and for the benefit of the Holders of Warrants, to file with the
Commission a registration statement to register the issuance of the Warrant
Shares by the Company to the Holders from time to time in accordance with Rule
415 promulgated under the Securities Act (the "WARRANT REGISTRATION STATEMENT")
as soon as reasonably practicable after the date of this Agreement (but in no
event later than 30 days) and to use its reasonable best efforts to cause the
Warrant Registration Statement to be declared effective under the Securities Act
as soon as reasonably practicable thereafter. For a period commencing on the
Issue Date and ending on the earlier of (i) the third anniversary of the Issue
Date (subject to extension pursuant to Section 18.5) or (ii) such date when all
of the Warrant Shares have been issued (the "Registration Period"), the Company
will keep such Warrant Registration Statement continuously effective under the
Securities Act and will file such amendments and/or supplements to the Warrant
Registration Statement, and supplement and keep current any prospectus forming a
part of such Warrant Registration Statement, as may be necessary to permit the
Company to comply with the Securities Act and the rules and regulations
thereunder in connection with the issuance of the Warrant Shares, and to permit
the Company to deliver to each Holder exercising a Warrant a prospectus meeting
the requirements of Section 10(a)(3) of the Securities Act and otherwise comply
therewith; and the Company will deliver such prospectus to each such Holder. The
Company shall, upon the request of any Holder of Warrants that may be required
pursuant to the Securities Act to deliver a prospectus in connection with any
sale or other disposition of Warrant Shares, include within the plan of
distribution section of the prospectus and in such other places in the
prospectus as may be necessary, all information necessary under the Securities
Act to enable such holder to deliver such prospectus in connection with sales or
other dispositions of such Warrant Shares, and the Company shall also take such
action as may be necessary under the Securities Act with respect to the related
registration statement to enable such holder to effect such delivery in
connection with such sale or other disposition. The Company further agrees to
provide any holder who may be required to deliver a prospectus upon the sale or
other disposition of such Warrant Shares, such number of copies of the
prospectus as such holder reasonably requests.
27
18.2 REGISTRATION EXPENSES. All expenses incident to the Company's
performance of or compliance with this Section 18 will be borne by the Company,
including without limitation: (i) all registration and filing fees and expenses;
(ii) all fees and expenses of compliance with federal securities and state Blue
Sky or securities laws; (iii) all expenses of printing (including printing
certificates for the Warrant Shares and printing of prospectuses), messenger and
delivery services; (iv) all fees and disbursements of counsel for the Company;
(v) all fees and disbursements of independent certified public accountants of
the Company (including the expenses of any special audit and comfort letters
required by or incident to such performance); and (vi) the Company's internal
expenses, the expenses of any annual or other audit and the fees and expenses of
any Person, including special experts, retained by the Company.
18.3 TRANSFER AGENT; LISTING OF WARRANT SHARES. The Company shall maintain
a transfer agent and registrar for the Warrant Shares and shall cause the
Warrant Shares to be listed on each securities exchange on which securities of
the same class issued by the Company are then listed.
18.4 BLUE SKY LAWS. If the Company determines that any registration or
qualification is required for the issuance of any Warrant Shares under state
securities or "Blue Sky" laws, no Warrant shares may be issued until such
registration or qualification has been obtained; provided that the Company shall
use its reasonable best efforts to take such actions as are necessary to permit
the Company to issue the Warrant Shares in compliance with such state securities
or "Blue Sky" laws.
18.5 DELAY PERIODS. Notwithstanding any other provision of this Agreement,
the Company shall have the right to delay the filing or effectiveness of the
Registration Statement or refuse the use of the Warrant Registration Statement
(a "DELAY PERIOD") and thereby delay the exercise of the Warrant by the Holder
thereof for a reasonable length of time (but in any case not to exceed 90 days
in any calendar year) and from time to time, if the Company's Board of Directors
or senior management determine, with respect to the advisability (as determined
in good faith) of deferring public disclosure of material corporate developments
or other information, that use of the Warrant Registration Statement and the
disclosure required to be made therein would not be in the best interests of the
Company at such time. The Company shall use its reasonable efforts to minimize
the length of any Delay Period. In the event a Delay Period(s) occurs during the
90 days preceding the third anniversary of the Issue Date, the Registration
Period shall be extended by the number of days in any such Delay Period(s)
occurring during such 90-day period; provided that the Registration Period shall
in any event terminate at such time as all of the Warrant Shares have been
issued.
SECTION 19. REPORTS.
(a) So long as any of the Warrants remain outstanding, and to the extent
such documents are sent by the Company to the holders of its outstanding Common
Stock, the Company shall cause copies of all quarterly and annual financial
reports and of the information, documents, and other reports (or copies of such
portions of any of the foregoing as the Commission may by rules and regulations
prescribe) which the Company is required to file with the Commission pursuant to
Section
28
13 or 15(d) of the Exchange Act ("SEC Reports") to be filed with the Warrant
Agent and mailed to the Holders of the Warrants at their addresses appearing in
the Warrant Register, in each case, within 15 days of filing with the
Commission. If the Company is not subject to the requirements of Section 13 or
15(d) of the Exchange Act, the Company shall nevertheless continue to cause SEC
Reports, comparable to those which it would be required to file pursuant to
Section 13 or 15(d) of the Exchange Act if it were subject to the requirements
of either such Section, to be so filed with the Commission (but only if the
Commission permits such filings) and, to the extent it is required to send such
SEC Reports to the holders of its outstanding Common Stock, with the Warrant
Agent and mailed to the Holders, in each case, within the same time periods as
would have applied (including under the preceding sentence) had the Company been
subject to the requirements of Section 13 or 15(d) of the Exchange Act.
(b) The Company shall provide the Warrant Agent with a sufficient number of
copies of all SEC Reports that the Warrant Agent may be required to deliver to
the Holders of the Warrants under this Section 19, and any such cost of delivery
will be at the expense of the Company.
SECTION 20. 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
Holder of any Warrant Certificate to or on the Company shall be sufficiently
given or made (i) five business days after deposited in the mail, first class or
registered, postage prepaid, (ii) one business day after being timely delivered
to a next-day air courier or (ii) when receipt is acknowledged by the addressee,
if telecopied, addressed (until another address is filed in writing by the
Company with the Warrant Agent), as follows:
Focal Communications Corporation
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
Telephone: (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
Holder(s) of any Warrant Certificate to the Warrant Agent shall be sufficiently
given or made (i) five business days after deposited in the mail, first-class or
registered, postage prepaid, (ii) one business day after being timely delivered
to a next-day air courier or (ii) when receipt is acknowledged by the addressee,
if telecopied, addressed (until another address is filed in writing by the
Warrant Agent with the Company) to the Warrant Agent as follows:
29
Computershare Trust Company of New York
Wall Street Plaza
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: General Manager
WITH A COPY TO:
Computershare Investor Services, LLC
Xxx Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Relationship Manager
SECTION 21. 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. Any
amendment or supplement to this Agreement that has a material adverse effect on
the interests of holders shall require the written consent of Majority Holders
representing a majority of the then outstanding Warrants. The consent of each
Holder of a Warrant affected shall be required for any amendment pursuant to
which the Exercise Price would be increased or the number of Warrant Shares
purchasable upon exercise of Warrants would be decreased (except pursuant to
Section 7 herein). The Warrant Agent shall be entitled to receive and, subject
to Section 16, shall be fully protected in relying upon, an Officers'
Certificate and Opinion of Counsel as conclusive evidence that any such
amendment or supplement is authorized or permitted hereunder, that it is not
inconsistent herewith, and that it will be valid and binding upon the Company in
accordance with its terms. The Company may not sign any amendment or supplement
until the Company's Board of Directors approves it.
SECTION 22. SEVERABILITY. Wherever possible, each provision of this Warrant
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Warrant Agreement.
SECTION 23. 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.
30
SECTION 24. TERMINATION. This Agreement (other than the Company's
obligations with respect to Warrants previously exercised) shall terminate at
5:00 p.m., New York City time on the Expiration Date, except for Section 16(e)
hereto.
SECTION 25. 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. Service of process on the Company or Holder in any
action arising out of or relating to this Agreement shall be effective if mailed
to such party in accordance with the procedures and requirements set forth in
Section 20. Nothing herein shall preclude any Holder or the Company from
bringing suit or taking other legal action in any other jurisdiction.
SECTION 26. BENEFITS OF THIS AGREEMENT. (a) Nothing in this Agreement shall
be construed to give to any Person or corporation other than the Company, the
Warrant Agent and the holders of the Warrant Certificates any legal or equitable
right, remedy or claim under this Agreement; but this Agreement shall be for the
sole and exclusive benefit of the Company, the Warrant Agent and the holders of
the Warrant Certificates.
(b) Prior to the exercise of the Warrants, no Holder of a Warrant
Certificate, as such, shall be entitled to any rights of a stockholder of the
Company, including, without limitation, the right to receive dividends or
subscription rights, the right to vote, to consent, to exercise any preemptive
right, to receive any notice of meetings of stockholders for the election of
directors of the Company, to share in the assets of the Company in the event of
the liquidation, dissolution or winding up of the Company's affairs or any other
matter or to receive any notice of any proceedings of the Company, except as may
be specifically provided for herein.
(c) All rights of action in respect of this Agreement are vested in the
Holders of the Warrants, and any Holder of any Warrant, without the consent of
the Warrant Agent or the Holder of any other Warrant, may, on such Holder's own
behalf and for such Holder's own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company suitable to enforce,
or otherwise in respect of, such Holder's rights hereunder, including the right
to exercise, exchange or surrender for purchase such Holder's Warrants in the
manner provided in this Agreement.
SECTION 27. ENTIRE AGREEMENT. This Agreement is intended by the parties as
a final expression of their agreement, and is intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein and therein. Such agreements
supersede all prior agreements and understandings between the parties with
respect to such subject matter.
SECTION 28. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
31
(Signature Page Follows)
32
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above written.
FOCAL COMMUNICATIONS CORPORATION
By /s/ XXXXX XXXXXXX
--------------------------------------------
Name: Xxxxx Xxxxxxx
-------------------------------------
Title: Acting Secretary
-------------------------------------
COMPUTERSHARE TRUST COMPANY OF NEW
YORK, as Warrant Agent
By /s/ XXXXX XXXXXXX
-------------------------------------------
Name: Xxxxx Xxxxxxx
-------------------------------------
Title: Vice President
-------------------------------------
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
[UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR WARRANTS IN
CERTIFICATED FORM, THIS WARRANT MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.]
EXERCISABLE ON OR AFTER ___________ __, 2001(1)
AND BEFORE ___________ __, 2007(2)
CUSIP No. _______
No. _________ ________ Warrants
Warrant Certificate
Focal Communications Corporation
This Warrant Certificate certifies that __________________ or registered
assigns, is the registered holder of Warrants expiring ___________ __, 2007(4)
(the "Warrants") to purchase Common Stock, par value $.01 per share (the "Common
Stock"), of
Focal Communications Corporation, a Delaware corporation (the
"Company"). Each Warrant entitles the registered holder upon exercise on or
before 5:00 p.m. New York City Time on ___________ __, 2007,(4) to receive from
the Company one fully paid and nonassessable share of Common Stock (each such
share a "Warrant Share") at the initial exercise price (the "Exercise Price") of
$2.34245 per share 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 (including by cashless exercise
--------
(1) The Issue Date.
(2) The Expiration Date.
A-1
pursuant to the provisions of the Warrant Agreement), but only subject to the
conditions set forth herein and in the Warrant Agreement referred to on the
reverse hereof. 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,(3) 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.
IN WITNESS WHEREOF,
Focal Communications Corporation has caused this
Warrant Certificate to be signed by its __________ and by its ____________.
Dated: _______________________
FOCAL COMMUNICATIONS CORPORATION
By:
--------------------------------
Name:
Title:
By:
--------------------------------
Name:
Title:
Countersigned:
COMPUTERSHARE TRUST COMPANY OF NEW YORK,
as Warrant Agent
By:
-----------------------
Authorized Signature
--------
(3) The Expiration Date.
A-2
REVERSE OF WARRANT CERTIFICATE
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants expiring ___________ __, 2007(4) entitling the
Holder on exercise to receive shares of Common Stock, par value $.01, of the
Company (the "Common Stock"), and are issued or to be issued pursuant to a
Warrant Agreement dated as of October 24, 2001 (the "Warrant Agreement"), duly
executed and delivered by the Company to Computershare Trust Company of New
York, as warrant agent (the "Warrant Agent"), which Warrant Agreement is hereby
incorporated by reference in and made a part of this instrument and is hereby
referred to for a description of the rights, limitation of rights, obligations,
duties and immunities thereunder of the Warrant Agent, the Company and the
holders (the words "holders" or "holder" meaning the registered holders or
registered holder) of the Warrants. A copy of the Warrant Agreement may be
obtained by the holder hereof upon written request to the Company.
Warrants may be exercised at any time on or after ___________ __, 2001(5)
and on or before 5:00 p.m., New York City time on ___________ __, 2007(6) . 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 at the office of the Warrant Agent (including by cashless
exercise pursuant to the provisions of the Warrant Agreement). 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 or payments 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 and/or the number of shares of
Common Stock issuable upon the exercise of each Warrant shall, subject to
certain conditions, be adjusted. No fractions of a share of Common Stock will be
issued upon the exercise of any Warrant, but the Company will round such
fractional interest to the nearest whole share as provided in the Warrant
Agreement.
The Warrant Agreement provides certain registration obligations of the
Company with respect to the Common Stock issuable upon exercise of the Warrants.
Warrant Certificates when surrendered at the office of the Warrant Agent by
the registered holder thereof in person or by 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
--------
(4) The Expiration Date.
(5) The Issue Date.
without payment of any service charge, for another Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants.
Upon due presentation for registration of transfer of this Warrant
Certificate at the Office of the Warrant Agent a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to transferree(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.
ELECTION TO EXERCISE
(To be executed upon exercise of Warrants on the Exercise Date)
The undersigned hereby irrevocably elects to exercise ___ of the Warrants
represented by this Warrant Certificate and purchase the whole number of Warrant
Shares issuable upon the exercise of such Warrants and herewith tenders payment
for such Warrant Shares in the amount of $_____ either (i) by wire transfer or
by certified or official bank check, (ii) by cashless exercise in accordance
with the provisions of the Warrant Agreement, or (iii) any combination of (i)
and (ii), in accordance with the terms hereof. The undersigned requests that a
certificate representing such Warrant Shares be registered in the name of
________________ whose address is ____________________ and that such certificate
be delivered to __________________ whose address is __________________.
Dated _____________, [20]__
Name of holder of Warrant Certificate: _______________
(Please Print)
Tax Identification or Social Security Number: _______________________
Address: ___________________________________________________
___________________________________________________
Signature: ____________________________________________________
Note: The above signature must correspond with the name as
written upon the face of this Warrant Certificate in
every particular, without alteration or enlargement or
any change whatever and if the certificate representing
the Warrant Shares or any Warrant Certificate
representing Warrants not exercised is to be registered
in a name other than that in which this Warrant
Certificate is registered, or if any cash payment to be
paid in lieu of a fractional share is to be made to a
Person other than the registered holder of this Warrant
Certificate, the signature of the holder hereof must be
guaranteed as provided in the Warrant Agreement.
Dated ______________, [20]__
Signature Guaranteed: __________________________________________
ASSIGNMENT
For value received ____________________ hereby sells, assigns and transfers
unto __________________ the within Warrant Certificate, together with all right,
title and interest therein, and does hereby irrevocably constitute and appoint
________________ attorney, to transfer said Warrant Certificate on the books of
the within-named Company, with full power of substitution in the premises.
Dated ____________, [20]__
Signature: _________________________________________________
Note: The above signature must correspond
with the name as written upon the
face of this Warrant Certificate in
every particular, without
alteration or enlargement or any
change whatever.
Signature Guaranteed: _______________________________________
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL WARRANTS
The following increases or decreases in this Global Warrant have
been made:
Number of Warrants of
Amount of decrease in Amount of increase in this Global Warrant
Date of Number of Warrants of Number of Warrants of following such decrease Signature of authorized
Exchange the Global Warrant This Global Warrant or increase officer of Warrant Agent
----------------- ------------------------- ------------------------ ------------------------ -------------------------
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF WARRANTS
Re: Warrants to Purchase Common Stock (the "Warrants") of
Focal
Communications Corporation
This Certificate relates to _____ Warrants held in* book-entry
or* ______ certificated form by _______ (the "Transferor").
The Transferor: *
| | has requested the Warrant Agent by written order to
deliver in exchange for its beneficial interest in the Global Warrant held by
the Depositary a Warrant or Warrants in definitive, registered form of
authorized denominations and an aggregate number equal to its beneficial
interest in such Global Warrant (or the portion thereof indicated above); or
| | has requested the Warrant Agent by written order to
exchange or register the transfer of a Warrant or Warrants.
In connection with such request and in respect of each such
Warrant, the Transferor does hereby certify that Transferor is familiar with the
Warrant Agreement relating to the above captioned Warrants and the restrictions
on transfers thereof as provided in Section 2.8 of such Warrant Agreement.
(INSERT NAME OF TRANSFEROR)
By: ______________________________
Date: ________________
