Exhibit 4.4
OFFSHORE WARRANT SUBSCRIPTION AGREEMENT
This Warrant Subscription Agreement (the
"Agreement"), dated as of December 22, 1997, is entered
into by and between Coyote Network Systems Inc., a
Delaware corporation (the "Issuer"), and First Bermuda
Securities Limited. (the "Purchaser").
The Issuer has offered to sell outside the
United States (as that term is defined in Regulation S
("Regulation S") under the United States Securities Act
of 1933, as amended (the "Act")) to the Purchaser a
warrant to purchase 48,611 shares of its common stock
("Common Stock"), $1.00 par value, at a price of $7.20
per share. Capitalized terms used herein and not
defined herein shall have the meanings given to them in
Regulation S.
The parties hereto agree as follows:
1. Sale of Warrant. Upon the basis of the
representations and warranties, and subject to the
terms and conditions, set forth in this Agreement, the
Issuer covenants and agrees to sell to the Purchaser on
the Closing Date (as hereinafter defined), a warrant in
the form of Exhibit A hereto (the "Warrant") to
purchase 48,611 shares of its Common Stock (such shares
of Common Stock and other securities issued and
issuable upon any exercise of the Warrant or a New
Warrant (as defined below), the "Warrant Shares"), at a
price equal to $7.20 per share, in exchange for
services already rendered in full by the Purchaser in a
capital-raising transaction for the Issuer and upon the
basis of the representations and warranties, and
subject to the terms and conditions, set forth in this
Agreement, the Purchaser covenants and agrees to accept
from the Issuer on the Closing Date the Warrant as
payment for said services.
2. Closing. The closing of the sale of the
Warrant pursuant to Section 1 hereof shall take place
on or before December 22, 1997 (the "Closing Date"), at
the offices of First Bermuda Securities Limited,
located at 00 Xxxxxx Xxxxxx, Xxxxxxx Xxxxx, Xxxxxxxx,
Xxxxxxx XX00. The Warrant shall be delivered by, or on
behalf of, the Issuer at the above-mentioned offices of
First Bermuda on the Closing Date. Delivery of the
Warrant shall be in accordance with the instructions of
the Purchaser, and in such names as the Purchaser shall
instruct, subject to customary settlement procedures.
3. Description of the Warrant
(a) Execution and Delivery. The
Warrant shall be executed by the Issuer and delivered
to the Purchaser on the Closing Date.
(b) Exercise. (i) The Issuer covenants
that procedures will be implemented ("Procedures") to
ensure that the Warrant and any new warrant issued
pursuant to Section 2(a) or Section 4 of the Warrant or
otherwise (a "New Warrant") may not be exercised within
the United States and that no Warrant Share may be
delivered within the United States upon any such
exercise, other than in an offering that meets the
definition of "offshore transaction" pursuant to
paragraph (i)(3) of Rule 902 of Regulation S, unless
registered under the Act or an exemption from such
registration is available. The Purchaser and any
subsequent transferee pursuant to the terms of this
Agreement and the Warrant or any New Warrant (the
Purchaser and each such transferee, a "Holder")
covenant not to
exercise the Warrant or any New Warrant except in compliance
with the Procedures and the terms of this Agreement and the
Warrant or such New Warrant.
(ii) Each Holder agrees to
deliver, prior to any exercise of the Warrant or any
New Warrant, a certificate in the form of Schedule Two
to Exhibit A hereto or a written opinion of counsel
that the Warrant, or New Warrant, as the case may be,
and the Warrant Shares delivered upon any exercise
thereof have been registered under the Act or are
exempt from registration thereunder.
(iii) The Issuer need not issue
or deliver Warrant Shares unless and until in the
opinion of the Issuer's counsel (such counsel's fees to
be paid by the Issuer) all applicable requirements of
federal and state securities laws and registration (or
exemption from registration) of such shares under the
Act, and all applicable listing requirements of any
national securities exchange on which shares of the
same class are then listed, have been complied with.
(c) Transferability of Warrant. Each
Holder will not sell, assign, convey, pledge,
hypothecate, grant security interests in, encumber,
give away or in any other manner dispose of or
transfer, whether voluntarily or by operation of law,
any of the Warrant, any New Warrant or the Warrant
Shares to any person or entity that, to the knowledge
of such Holder, competes directly or indirectly with
the Issuer without the prior written consent of the
Issuer. Any attempted transfer of the Warrant, the
Warrant Shares or any New Warrant not in accordance
with this Section 3(c) shall be null and void, and the
Issuer shall not in any way be required to give effect
to such transfer. No transfer of the Warrant or any
New Warrant shall be effective for any purpose
hereunder unless and until (i) written notice of such
transfer and of the name and address of the transferee
has been received by the Issuer, (ii) the transferee
shall first agree in a writing deposited with the
Secretary of the Issuer to be bound by all the
provisions of this Agreement, and (iii) in the opinion
of the Issuer's counsel (such counsel's fees to be paid
by the Issuer) all requirements of applicable state
securities laws and any requirement to register such
transfer under the Act have been complied with.
(d) Successors to the Issuer. This
Agreement shall be binding upon and inure to the
benefit of any successor or successors of the Issuer.
(e) Legends. The Warrant and each New
Warrant shall bear a legend stating:
This warrant and the shares of common stock
of Coyote Network Systems Inc. to be issued
upon any exercise of the Warrant have not
been registered under the Securities Act of
1933, as amended (the "Act") and this warrant
may not be exercised by or on behalf of any
U.S. person (as defined in Regulation S under
the Act) unless registered under the Act or
an exemption from such registration is
available.
In addition, this Warrant is subject to
restrictions on sale, assignment, conveyance,
pledge, hypothecation, grant of security
interest, encumbrance, gift or any other
manner of disposition or transfer, whether
voluntarily or by operation of law, as set
forth in an Offshore Warrant Subscription
Agreement, dated as of December 22, 1997, by
and between First Bermuda Securities Limited,
and Coyote Network Systems Inc., a copy of
which is available for inspection at the
offices of Coyote Network Systems Inc..
Further, unless the Warrant Shares have been registered
under the Act, upon any exercise of any part of the
Warrant or any New Warrant, all certificates
representing Warrant Shares shall bear on the face
thereof substantially the following legend:
The shares of common stock represented hereby
have not been registered under the Federal
Securities Act of 1933, as amended (the
"Act") or the securities laws of any
state, and may be offered or sold only if registered
under the Act and all other applicable
securities laws or if Coyote Network Systems
Inc. receives a satisfactory opinion of
counsel that an exemption from such
registration is available.
4. Representations and Warranties of the
Purchaser. The Purchaser understands, and represents
and warrants to, and agrees with, the Issuer, that:
(a) The Purchaser understands that no
federal or state agency has passed on or made any
recommendation or endorsement of the Warrant.
(b) The Purchaser acknowledges that, in
making the decision to purchase the Warrant, it has
relied solely upon independent investigations made by
it and not upon any representations made by the Issuer
with respect to the Issuer or the Warrant.
(c) The Purchaser understands that the
Warrant is being offered and sold to it in reliance on
specific exemptions or non-application from the
registration requirements of federal and state
securities laws and that the Issuer is relying upon the
truth and accuracy of the representations, warranties,
agreements, acknowledgments and understandings of the
Purchaser set forth herein in order to determine the
applicability of such exemptions and the suitability of
the Purchaser to acquire the Warrant.
(d) The Purchaser is not a U.S. Person
(as defined in Regulation S) and is not an affiliate of
the Issuer.
(e) No offer of the Warrant was made to
the Purchaser in the United States.
(f) At the time the buy order for the
Warrant was originated the Purchaser was located
outside the United States.
(g) None of the Purchaser, its
affiliates or any person acting on behalf of the
Purchaser or any such affiliate has engaged, or will
engage, in any Directed Selling Efforts with respect to
the Warrant, any New Warrant or the Warrant Shares; and
the Purchaser and its affiliates have complied, and
will comply, with the Offering Restrictions, and any
other requirements, of Regulation S.
(h) The Purchaser is aware that the
Warrant, any New Warrant and the Warrant Shares have
not been and will not be registered under the Act and
may only be offered or sold pursuant to registration
under the Act or an available exemption therefrom, and
subject to the terms and conditions set forth herein.
(i) The Purchaser:
(i) will not, during the period
commencing on the Closing Date and ending on the day 40
days after the Closing Date (the "Restricted Period"),
offer or sell the Warrant, any New Warrant or any
Warrant Shares in the United States, to a U.S. Person
or for the account or benefit of a U.S. Person or other
than in accordance with Rule 903 or Rule 904 of
Regulation S; and
(ii) will, after the expiration of
the Restricted Period, offer, sell, pledge or otherwise
transfer the Warrant, any New Warrant or any Warrant
Shares only pursuant to registration under the Act or
an available exemption therefrom and, in any case, in
accordance with applicable state securities laws.
(j) If the Purchaser offers and sells
the Warrant, any New Warrant or any Warrant Shares
during the Restricted Period, then it will do so only
in accordance with the provisions of Regulation S or
pursuant to registration under the Act.
(k) The transactions contemplated by
this Agreement:
(i) have not been pre-arranged
with a purchaser located in the United States or is a
U.S. Person; and
(ii) are not part of a plan or
scheme to evade the registration provisions of the Act.
(l) The Purchaser is purchasing the
Warrant for its own account for the purpose of
investment and not (i) with a view to, or for sale in
connection with, any distribution thereof or of any New
Warrant or Warrant Shares or (ii) for the account or on
behalf of any U.S. Person.
(m) The Purchaser has consulted with
the Issuer with respect to the transactions pursuant to
this Agreement, and no objection has been raised by the
Issuer.
(n) Neither the Purchaser nor any
affiliate thereof has entered, or will enter or has the
intention of entering, into any put option, short
position or other similar instrument or position with
respect to the Warrant Shares or securities of the same
class as the Warrant Shares purchased in any
transaction.
5. Representations and Warranties of the
Issuer. The Issuer represents and warrants to, and
agrees with, the Purchaser that:
(a) The Issuer has been duly
incorporated and is validly existing as a corporation
in good standing under the laws of Delaware.
(b) This Agreement has been duly
authorized, executed and delivered by the Issuer and is
a valid and binding agreement enforceable in accordance
with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or
affecting creditors' rights generally and to general
principles of equity; and the Issuer has full corporate
power and authority necessary to enter into this
Agreement and to perform its obligations hereunder.
(c) No consent, approval, authorization
or order of any court, governmental agency or body or
arbitrator having jurisdiction over the Issuer or any
of its affiliates is required for execution of this
Agreement, including, without limitation, the issuance
and sale of the Warrant or any exercise of the Warrant
or the issuance of shares upon any exercise of the
Warrant, or the performance of its obligations
hereunder.
(d) Neither the sale of the Warrant or
any exercise of the Warrant, any New Warrant or the
issuance of Warrant Shares upon any exercise of the
Warrant, pursuant to, nor the performance of its
obligations under, this Agreement by the Issuer will:
(i) violate, conflict with, result
in a breach of, or constitute a default (or an event
which with the giving of notice or the lapse of time or
both would be reasonably likely to constitute a
default) under (A) the articles of incorporation,
charter or by-laws of the Issuer or any of its
affiliates, (B) any decree, judgment, order, law,
treaty, rule, regulation or determination applicable to
the Issuer or any of its affiliates of any court,
governmental agency or body, or arbitrator having
jurisdiction over the Issuer or any of its affiliates
or over the properties or assets of the Issuer or any
of its affiliates,
(C) the terms of any bond, debenture, note or any other
evidence of indebtedness, or any agreement, stock option
or other similar plan, indenture, lease, mortgage, deed of
trust or other instrument to which the Issuer or any of its
affiliates is a party, by which the Issuer or any of its
affiliates is bound, or to which any of the properties
of the Issuer or any of its affiliates is subject, or
(D) the terms of any "lock-up" or similar provision of
any underwriting or similar agreement to which the
Issuer or any of its affiliates is a party; or
(ii) result in the creation or
imposition of any lien, charge or encumbrance upon the
Warrant, any New Warrant or any Warrant Shares or any
of the assets of the Issuer or any of its affiliates.
(e) The Warrant (except for clauses iii
and vi below) and all Warrant Shares upon issuance:
(i) are, or will be, free and
clear of any security interests, liens, claims or other
encumbrances;
(ii) have been, or will be, duly
and validly authorized and will be duly and validly
issued;
(iii) shall be duly authorized,
validly issued, fully paid and nonassessable, and the
Holder will have full legal and equitable title
thereto, free and clear of all liens, encumbrances,
claims and rights of others created by or through the
Issuer. The Issuer shall use its best efforts to list
such Warrant Shares prior to such delivery upon each
securities exchange, if any, upon which such class of
security is listed at the time of such delivery;
(iv) will not have been issued or
sold in violation of any preemptive or other similar
rights of the holders of any securities of the Issuer;
(v) will not subject the holders
thereof to personal liability by reason of being such
holders; and
(vi) are quoted on, and will be,
following the completion of the Restricted Period (if
sold in accordance with the provisions of this
Agreement), eligible for trading on, the National
Association of Securities Dealers Automated Quotations
system ("NASDAQ").
(f) The Issuer is a Reporting Issuer
and has filed all reports required to be filed by
Section 13(a) or 15(d) of the Securities and Exchange
Act of 1934 (the "Exchange Act") during the preceding
12 months and has been subject to such filing
requirements for the past 90 days.
(g) There is no pending or, to the best
knowledge of the Issuer, threatened action, suit,
proceeding or investigation before any court,
governmental agency or body, or arbitrator having
jurisdiction over the Issuer or any of its affiliates
that would materially affect the execution by the
Issuer of, or the performance by the Issuer of its
obligations under, this Agreement other than as set
forth in the Exchange Act Reports, public announcements
made by the Company prior to the Closing Date and
information submitted to the Purchaser in the letter
dated September 30, 1997.
(h) The Issuer, any person representing
the Issuer, and, to the best knowledge of the Issuer,
any other person selling or offering to sell the
Warrant in connection with the transaction contemplated
by this Agreement, have not made, at any time through
and including the date hereof, any oral communication
in connection with the offer or sale of the Warrant
which contained any untrue statement of a material fact
or omitted to state any material fact necessary in
order to make the statements, in the light of the
circumstances under which they were made, not
misleading.
(i) The sale of the Warrant pursuant to
this Agreement will be made in accordance with the
provisions and requirements of Regulation S and any
applicable state law.
(j) No offer to buy the Warrant was
made to the Issuer by any person in the United States.
(k) None of the Issuer, any affiliate
of the Issuer, or any person acting on behalf of the
Issuer or any such affiliate has engaged, or will
engage, in any Directed Selling Efforts with respect to
the Warrant, any New Warrant or the Warrant Shares.
(l) The transactions contemplated by
this Agreement:
(i) have not been pre-arranged
with a purchaser who is in the United States or is a
U.S. Person; and
(ii) are not part of a plan or
scheme to evade the registration provisions of the Act.
(m) The Issuer has not issued, and
after the Closing Date will not issue, any stop
transfer order or other order impeding the sale and
delivery of the Warrant, any New Warrant or any Warrant
Shares except for a stop order restricting the sale of
the Warrant, any New Warrant or any such Warrant Shares
into the United States or to, or for the account or
benefit of, U.S. Persons during the Restricted Period,
and a stop order restricting the sale of the Warrant
and any New Warrant pursuant to Section 3(c) hereof.
6. Covenants of the Issuer. The Issuer
covenants and agrees with the Purchaser to:
(a) continue to comply with all
applicable reporting requirements of the Exchange Act;
(b) refrain from publishing or
disseminating any material in connection with the
offering of the Warrant, any New Warrant or the Warrant
Shares except as required by regulatory or judicial
order or request or as deemed by the Issuer to be
advisable in complying with SEC or Nasdaq reporting or
listing requirements.
(c) ensure that all Offering
Restrictions applicable to the sale of Warrant, any New
Warrant and the Warrant Shares pursuant to this
Agreement are thoroughly complied with and satisfied;
(d) refrain from engaging, and insure
that none of its affiliates will engage, in any
Directed Selling Efforts with respect to the Warrant,
any New Warrant and the Warrant Shares; and
(e) notify the Purchaser promptly if at
any time during the period beginning on the date of
this Agreement and ending on the Closing Date (i) any
event shall have occurred as a result of which any oral
communication made by the Issuer, any person
representing the Issuer, or, to the best knowledge of
the Issuer, by any other person in connection with the
transactions contemplated by this Agreement would
include an untrue statement of a material fact or omit
to state any material fact necessary in order to make
the statements therein, in the light of the
circumstances under which they were made, not
misleading, or (ii) there is any public disclosure of
material information regarding the Issuer or its
financial condition or results of operation.
7. Conditions Precedent to the Purchaser's
Obligations. The obligations of the Purchaser
hereunder are subject to the performance by the Issuer
of its obligations hereunder and to the satisfaction of
the following additional conditions precedent:
(a) The representations and warranties
made by the Issuer in this Agreement shall, unless
waived by the Purchaser, be true and correct as of the
date hereof and at the Closing Date, with the same
force and effect as if they had been made on and as of
the Closing Date.
8. Conditions Precedent to the Issuer's
Obligations. The obligations of the Issuer hereunder
are subject to the performance by the Purchaser of its
obligations hereunder and to the satisfaction of the
following additional conditions precedent:
(a) The representations and warranties
made by the Purchaser in this Agreement shall, unless
waived by the Issuer, be true and correct as of the
date hereof and at the Closing Date, with the same
force and effect as if they had been made on and as of
the Closing Date.
(b) The Purchaser will execute and
deliver to the Issuer, and retain in the records of the
Purchaser, a certificate in the form attached hereto as
Exhibit B.
9. Fees and Expenses. Each of the
Purchaser and the Issuer agrees to pay its own expenses
incident to the performance of its obligations
hereunder, including, but not limited to, the fees,
expenses and disbursements of such party's counsel.
10. Indemnification.
(a) In the event the Purchaser becomes
involved in any capacity in any action, proceeding or
investigation in connection with any matter referred to
in or relating to this Agreement (except as expressly
provided for in paragraph (c) of this Section 10), the
Issuer will reimburse the Purchaser for its reasonable
legal and other expenses (including the cost of any
investigation and preparation) incurred in connection
therewith, as such expenses are incurred, and will
indemnify and hold the Purchaser harmless from and
against any losses, claims, damages or liabilities to
which it may become subject in connection with any such
action, proceeding, investigation or matter, unless
such loss, claim, damage or liability results primarily
from the Purchaser's gross negligence, recklessness or
bad faith in performing the services which are the
subject of this Agreement.
(b) In the event that the Issuer
becomes involved in any capacity in any action,
proceeding or investigation in connection with any
matter referred to in or relating to this Agreement
(except as expressly provided for in paragraph (c) of
this Section 10), the Purchaser will reimburse the
Issuer for its reasonable legal and other expenses
(including the cost of any investigation and
preparation) incurred in connection therewith, as such
expenses are incurred, and will indemnify and hold the
Issuer harmless from and against any losses, claims,
damages or liabilities to which it may become subject
in connection with any such action, proceeding,
investigation or matter, unless such loss, claim,
damage or liability results primarily from the Issuer's
gross negligence, recklessness or bad faith in
performing the services which are the subject of this
Agreement.
(c) Promptly after receipt by an
indemnified party under this Section 10 of notice of
the commencement of any action, such indemnified party
shall notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the
indemnifying party shall not relieve the indemnifying
party from any liability which it may have pursuant to
this Section 10 unless,
due to the failure to be so notified, the indemnifying
party is unable to contest the losses or claims indemnified
against, and such omission shall in no event relieve the
indemnifying party from any liability which it may have to
any indemnified party otherwise than under this Section 10.
In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to
the extent that it may elect by written notice
delivered to such indemnified party promptly after
receiving the aforesaid notice from such indemnified
party, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party, (who
shall not, except with the consent of the indemnified
party, which consent shall not be unreasonably
withheld, be counsel to the indemnifying party);
provided, however, that if the defendants in any such
action include both the indemnified party and the
indemnifying party and the indemnified party shall have
reasonably concluded that there may be legal defenses
available to it and/or other indemnified parties which
are different from or additional to those available to
the indemnifying party, the indemnified party or
parties shall have the right to select separate counsel
to assert such legal defenses and otherwise to
participate in the defense of such action on behalf of
such indemnified party or parties. Upon receipt of
notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such
action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to
such indemnified party under this Section 10 for any
legal or other expenses subsequently incurred by such
indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have
employed separate counsel in connection with the
assertion of legal defenses in accordance with the
proviso to the next preceding sentence (it being
understood, however, that the indemnifying party shall
be liable for only the reasonable expenses of counsel
and shall not be liable for the expenses of more than
one separate counsel for each indemnified party), (ii)
the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable
time after notice of commencement of the action or
(iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the
expense of the indemnifying party; provided further,
however, that, if clause (i) or (iii) is applicable,
such liability shall be only in respect of the counsel
referred to in such clauses (i) or (iii).
11. Survival of the Representations,
Warranties, etc. The respective agreements,
representations, warranties, indemnities and other
statements made by or on behalf of the Issuer and the
Purchaser, respectively, pursuant to this Agreement,
shall remain in full force and effect for the term of
the Warrant, regardless of any investigation made by or
on behalf of the other party to this Agreement or any
officer, director or employee of, or person controlling
or under common control with, such party and will
survive delivery of any payment for the Warrant.
12. Notices. All communications hereunder
shall be in writing, and, if sent to the Purchaser
shall be sufficient in all respects if delivered, sent
by registered mail, or by telecopy and confirmed to the
Purchaser at:
First Bermuda Securities Limited
00 Xxxxxx Xxxxxx, Xxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxx XX00
Attention: Xxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
or, if sent to the Issuer, shall be delivered, sent by
registered mail or by telecopy and confirmed to the
Issuer at:
Coyote Network Systems Inc.
0000 Xxxx Xxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
13. Miscellaneous.
(a) This Agreement may be executed in
one or more counterparts and it is not necessary that
signatures of all parties appear on the same
counterpart, but such counterparts together shall
constitute but one and the same agreement.
(b) This Agreement shall inure to the
benefit of and be binding upon the parties hereto,
their respective successors and, with respect to
Section 10 hereof, the officers, directors and
controlling persons thereof and each person under
common control therewith, and no other person shall
have any right or obligation hereunder.
(c) This Agreement shall be governed
by, and construed in accordance with, the laws of the
state of Delaware.
(d) The headings of the sections of
this document have been inserted for convenience of
reference only and shall not be deemed to be a part of
this Agreement.
IN WITNESS WHEREOF, the parties hereto have
duly executed and delivered this Agreement, all as of
the day and year first above written.
BY: COYOTE NETWORK SYSTEMS INC.
Signature:
Name: Xxxxx Xxxxxxx
Title: Chief Executive Officer
BY: FIRST BERMUDA SECURITIES LIMITED
Signature:
Name: Xxxxxxx X. Xxxxxxx, CPA
Title: Chief Operating Officer
EXHIBIT A
THIS WARRANT AND THE SHARES OF
COMMON STOCK OF COYOTE NETWORK
SYSTEMS INC. TO BE ISSUED UPON ITS
EXERCISE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT") AND THIS
WARRANT MAY NOT BE EXERCISED BY OR
ON BEHALF OF ANY U.S. PERSON (AS
DEFINED IN REGULATION S UNDER THE
ACT) UNLESS REGISTERED UNDER THE
ACT OR ON EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE.
IN ADDITION, THIS WARRANT IS
SUBJECT TO RESTRICTIONS ON SALE,
ASSIGNMENT, CONVEYANCE, PLEDGE,
HYPOTHECATION, GRANT OF SECURITY
INTEREST, ENCUMBRANCE, GIFT OR ANY
OTHER MANNER OF DISPOSITION OR
TRANSFER, WHETHER VOLUNTARILY OR BY
OPERATION OF LAW, AS SET FORTH IN
AN OFFSHORE WARRANT SUBSCRIPTION
AGREEMENT, DATED AS OF DECEMBER 22,
1997, BY AND BETWEEN FIRST BERMUDA
SECURITIES, LTD., AND COYOTE
NETWORK SYSTEMS INC. (THE
"AGREEMENT"), A COPY OF WHICH IS
AVAILABLE FOR INSPECTION AT THE
OFFICES OF COYOTE NETWORK SYSTEMS
INC..
WARRANT
to Purchase 48,611 Shares
of
Common Stock ($1.00 par value)
of
COYOTE NETWORK SYSTEMS INC.
This certifies that, for value received,
First Bermuda Securities Limited and any subsequent
transferee pursuant to the terms of the Agreement and
this Warrant (each, a "Holder") is entitled to
purchase, subject to the provisions of this Warrant,
from Coyote Network Systems Inc., a Delaware
corporation (the "Issuer"), at any time or from time to
time on or after the date hereof and on or before
December 22, 2002 (the "Expiration Date"), 48,611 fully
paid and nonassessable shares of common stock, $1.00
par value (the "Common Stock"), of the Issuer at a
price equal to $7.20 per share (the "Exercise
Price")(such shares of Common Stock and other
securities issued and issuable upon exercise of this
Warrant, the "Warrant Shares").
Section 1. Definitions. Except as otherwise
specified herein, terms defined herein shall have the
meanings assigned to them in the Agreement.
Section 2. Exercise of Warrant. (a) Subject to
the provisions hereof, this Warrant may be exercised,
in whole or in part, but not as to a fractional share,
at any time or from time to time on or after the date
hereof and on or before the Expiration Date, by
presentation and surrender hereof to the Issuer at the
address which, in accordance with the provisions of
Section 10 hereof, is then effective for notices to the
Issuer, with the Election to Purchase Form annexed
hereto as Schedule One, duly executed and accompanied
by payment to the Issuer as further set forth below in
this Section 2, for the account of the Issuer, of the
Exercise Price for the number of Warrant Shares
specified in such form. If this Warrant should be
exercised in part only, the Issuer shall, upon
surrender of this Warrant for the cancellation, execute
and deliver a new Warrant evidencing the rights of the
Holder hereof to purchase the balance of the Warrant
Shares purchasable hereunder. The Issuer shall
maintain at its principal place of business a register
for the registration of this Warrant and registration
of transfer for this Warrant. The Exercise Price for
the number of Warrant Shares specified in the Election
to Purchase Form shall be payable in United States
dollars by certified or official bank check payable to
the order of the Issuer or by wire transfer of
immediately available funds to an account by the Issuer
for that purpose.
(b) Prior to the delivery of any securities
which the Issuer shall be obligated to deliver upon
exercise of this Warrant, the Issuer shall use its best
efforts to comply with all Federal and state laws and
regulations thereunder, including without limitation,
Regulation S under the Act, requiring the registration
of such securities with, or any approval of or consent
to the delivery thereof by, any governmental authority,
provided, however, that the Issuer shall have no
obligation to register the Warrant Shares beyond its
obligation set forth in Section 9 below. The Issuer
need not issue or deliver such shares of Common Stock
unless and until in the opinion of the Issuer's counsel
(such counsel's fees to be paid by the Issuer) all
applicable requirements of state securities laws and
registration of such shares under the Act, and all
applicable listing requirements of any national
securities exchange on which shares of the same class
are then listed, have been complied with.
(c) The Issuer covenants that procedures
will be implemented ("Procedures") to ensure that this
Warrant may not be exercised within the United States
and that the Warrant Shares may not be delivered within
the United States upon such exercise, other than in
offerings that meet the definition of "offshore
transaction" pursuant to paragraph (i)(3) of Rule 902
of Regulation S under the Act, unless registered under
the Act or an exemption from such registration is
available. The Holder covenants not to exercise this
Warrant except in compliance with the Procedures and
the terms of the Agreement. The Purchaser or any other
Holder of this Warrant must deliver, prior to any
exercise of this Warrant, (i) a certificate in the form
attached hereto as Schedule Two or (ii) a written
opinion of counsel that this Warrant and the securities
delivered upon any exercise thereof have been
registered under the Act or are exempt from
registration thereunder.
(d) All Warrant Shares, when issued upon
exercise of this Warrant, shall be duly authorized,
validly issued, fully paid and nonassessable, and the
Holder will have full legal and equitable title
thereto, free and clear of all liens, encumbrances,
claims and rights of others created by or through the
Issuer. The Issuer shall use its best efforts to list
such Warrant Shares prior to such delivery upon each
securities exchange, if any, upon which such class of
security is listed at the time of such delivery.
(e) Unless the Warrant Shares have been
registered under the Act, upon any exercise of any part
of this Warrant, all certificates representing Warrant
Shares shall bear on the face thereof substantially the
following legend:
The shares of common stock represented hereby
have not been registered under the Federal
Securities Act of 1933, as amended (the
"Act") or the securities laws of any state,
and may be offered or sold only if registered
under the Act and all other applicable
securities laws or Coyote Network Systems
Inc. receives a satisfactory opinion of
counsel that an exemption from such
registration is available.
(f) This Warrant may not be exercised to any
extent by anyone after the end of the Warrant term.
Section 3. Reservation of Shares; Preservation of
Rights of Investor. The Issuer hereby agrees that
there shall be reserved for issuance and/or delivery
upon exercise of this Warrant, such number of Warrant
Shares as shall be required for issuance or delivery
upon exercise of this Warrant. The Warrant surrendered
upon exercise shall be cancelled by the Issuer. After
the Expiration Date, no shares of Common Stock shall be
subject to reservation in respect of this Warrant. The
Issuer further agrees (i) that it will not, by
amendment of its Articles of Incorporation or through
reorganization, consolidation, merger, dissolution or
sale of assets, or by any other voluntary act, avoid or
seek to avoid the observation or performance of any of
the covenants, stipulations or conditions to be
observed or performed hereunder by the Issuer, (ii)
promptly to take all action as may from time to time be
required in order to permit the Holder to exercise this
Warrant and the Issuer duly and effectively to issue
shares of its Common Stock or other securities as
provided herein upon the exercise hereof, and (iii)
promptly to take all action required or provided for
herein to protect the rights of the Holder granted
hereunder against dilution other then issuances on
conversion of options, offerings or acquisitions.
Without limiting the generality of the foregoing,
should the Warrant Shares at any time consist in whole
or in part of shares of capital stock having a par
value, the Issuer agrees that before taking any action
which would cause an adjustment of the Exercise Price
so that the same would be less than the then par value
of such Warrant Shares, the Issuer shall take any
corporate action which may, in the opinion of its
counsel, be necessary in order that the Issuer may
validly and legally issue fully paid and nonassessable
shares of such Common Stock at the Exercise Price as so
adjusted. The Issuer further agrees that it will not
establish a par value for its Common Stock while this
Warrant is outstanding in an amount greater than the
Exercise Price.
Section 4. Exchange, Transfer, Assignment or Loss
of Warrant. The Holder will not sell, assign, convey,
pledge, hypothecate, grant security interests in,
encumber, give away or in any other manner dispose of
or transfer, whether voluntarily or by operation of
law, any of this Warrant, the Warrant Shares or any new
Warrant to any person or entity that, to the knowledge
of such Holder, competes directly or indirectly with
the Issuer without the prior written consent of the
Issuer. Any attempted transfer of this Warrant, the
Warrant Shares or any new Warrant not in accordance
with this Section shall be null and void, and the
Issuer shall not in any way be required to give effect
to such transfer. No transfer of this Warrant shall be
effective for any purpose hereunder until (i) written
notice of such transfer and of the name and address of
the transferee has been received by the Issuer, (ii)
the transferee shall first agree in a writing deposited
with the Secretary of the Issuer to be bound by all the
provisions of this Agreement and (iii) in the opinion
of the Issuer's counsel (such counsel's fees to be paid
by the Issuer), all requirements of applicable state
securities laws and any requirement to register such
transfer under the Act have been complied with. Upon
surrender of this Warrant to the Issuer by any
transferee authorized under the provisions of this
Section 4, and subject to the terms and conditions of
the Securities Act, the Issuer shall, without charge,
execute and deliver a new Warrant registered in the
name of such transferee at the address specified by
such transferee, and this Warrant shall promptly be
cancelled. The Issuer may deem and treat the
registered holder of any Warrant as the absolute owner
thereof for all purposes, and the Issuer shall not be
affected by any notice to the contrary. Any Warrant,
if presented by an authorized transferee, may be
exercised by such transferee without prior delivery of
a new Warrant issued in the name of the transferee.
Upon receipt by the Issuer of evidence
reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, and (in the
case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and
cancellation of this Warrant, if mutilated, the Issuer
will execute and deliver a new Warrant of like tenor
and date. Any such new Warrant executed and delivered
shall constitute a separate contractual obligation on
the part of the Issuer, whether or not the Warrant so
lost, stolen, destroyed or mutilated shall be at any
time enforceable by anyone, provided, such
indemnification obligation may be used as an offset
against this new Warrant.
Section 5. Rights of the Holder. Neither a
Holder nor his transferee by devise or the laws of
descent and distribution or otherwise shall be, or have
any rights or privileges of, a shareholder of the
Issuer with respect to any Warrant Shares, unless and
until certificates representing such Warrant Shares
shall have been issued and delivered thereto.
Section 6. Adjustments in Exercise Price and
Warrant Shares. The Exercise Price and Warrant Shares
shall be subject to adjustment from time to time as
provided in this Section 6.
(a) If the Issuer is recapitalized through
the subdivision or combination of its outstanding
shares of Common Stock into a larger or smaller number
of shares, the number of shares of Common Stock for
which this Warrant may be exercised shall be increased
or reduced, as of the record date for such
recapitalization, in the same proportion as the
increase or decrease in the outstanding shares of
Common Stock, and the Exercise Price shall be adjusted
so that the aggregate amount payable for the purchase
of all Warrant Shares issuable hereunder immediately
after the record date for such recapitalization shall
equal the aggregate amount so payable immediately
before such record date.
(b) If the Issuer declares a dividend on
Common Stock, or makes a distribution to holders of
Common Stock, and such dividend or distribution is
payable or made in Common Stock or securities
convertible into or exchangeable for Common Stock, or
rights to purchase Common Stock or securities
convertible into or exchangeable for Common Stock, the
number of shares of Common Stock for which this Warrant
may be exercised shall be increased, as of the record
date for determining which holders of Common Stock
shall be entitled to receive such dividend or
distribution, in proportion to the increase in the
number of outstanding shares (and shares of Common
Stock issuable upon conversion of all such securities
convertible into Common Stock) of Common Stock as a
result of such dividend or distribution, and the
Exercise Price shall be adjusted so that the aggregate
amount payable for the purchase of all the Warrant
Shares issuable hereunder immediately after the record
date for such dividend or distribution shall equal the
aggregate amount so payable immediately before such
record date.
(c) If the Issuer declares a dividend on
Common Stock (other than a dividend covered by
subsection (b) above) or distributes to holders of its
Common Stock, other than as part of its dissolution or
liquidation or the winding up or its affairs, any
shares of its stock, any evidence of indebtedness or
any cash or other of its assets (other than Common
Stock or securities convertible into or exchangeable
for Common Stock), the Holder shall receive notice of
such event as set forth in Section 8 below.
(d) In case of any consolidation of the
Issuer with, or merger of the Issuer into, any other
corporation (other than a consolidation or merger in
which the Issuer is the continuing corporation and in
which no change occurs in its outstanding Common
Stock), or in case of any sale or transfer of all or
substantially all of the assets of the Issuer, or in
the case of any statutory exchange of securities with
another corporation (including any exchange effected in
connection with a merger of a third corporation into
the Issuer, except where the Issuer is the surviving
entity and no change occurs in its outstanding
Common Stock), the corporation formed by such consolidation
or the corporation resulting from such merger or the
corporation which shall have acquired such assets or
securities of the Issuer, as the case may be, shall
execute and deliver to the Holder simultaneously
therewith a new Warrant, satisfactory in form and
substance to the Holder, together with such other
documents as the Holder may reasonably request,
entitling the Holder thereof to receive upon exercise
of such Warrant the kind and amount of shares of stock
and other securities and property receivable upon such
consolidation, merger, sale, transfer or exchange of
securities, or upon the dissolution following such sale
or other transfer, by a holder of the number of shares
of Common Stock purchasable upon exercise of this
Warrant immediately prior to such consolidation,
merger, sale, transfer, or exchange, provided that if
the kind or amount of securities, cash or other
property receivable upon such consolidation, merger,
statutory exchange, sale or conveyance is not the same
for each share of Common Stock in respect of which
rights of election shall not have been exercised ("non-
electing share"), then for the purpose of this
paragraph (d) the kind and amount of securities, cash
or other property receivable upon such consolidation,
merger, statutory exchange, sale or conveyance for each
non-electing share shall be deemed to be the kind and
amount so receivable per share by a plurality of the
non-electing shares. Such new Warrant shall contain
the same basic other terms and conditions as this
Warrant and shall provide for adjustments which, for
events subsequent to the effective date of such written
instrument, shall be as nearly equivalent as may be
practicable to the adjustments provided for in this
Section 6. The above provisions of this paragraph (d)
shall similarly apply to successive consolidations,
mergers, exchanges, sales or other transfers covered
hereby.
(e) If the Issuer shall, at any time before
the expiration of this Warrant, dissolve, liquidate or
wind up its affairs, the Holder shall, upon exercise of
this Warrant have the right to receive, in lieu of the
shares of Common Stock of the Issuer that the Holder
otherwise would have been entitled to receive, the same
kind and amount of assets as would have been issued,
distributed or paid to the Holder upon any such
dissolution, liquidation or winding up with respect to
such shares of Common Stock of the Issuer had the
Holder been the holder of record of such shares of
Common Stock receivable upon exercise of this Warrant
on the date for determining those entitled to receive
any such distribution. If any such dissolution,
liquidation or winding up results in any cash
distribution in excess of the Exercise Price provided
by this Warrant for the shares of Common Stock
receivable upon exercise of this Warrant, the Holder
may, at the Holder's option, exercise this Warrant
without making payment of the Exercise Price and, in
such case, the Issuer shall, upon distribution to the
Holder, consider the Exercise Price to have been paid
in full and, in making settlement to the Holder, shall
obtain receipt of the Exercise Price by deducting an
amount equal to the Exercise Price for the shares of
Common Stock receivable upon exercise of this Warrant
from the amount payable to the Holder. For purposes of
this paragraph, the sale of all or substantially all of
the assets of the Issuer and distribution of the
proceeds thereof to the Issuer's shareholders shall be
deemed a liquidation.
(f) If an event occurs which is similar in
nature to the events described in this Section 6, but
is not expressly covered hereby, the Board of Directors
of the Issuer shall make or arrange for an equitable
adjustment to the number of Warrant Shares and the
Exercise Price.
(g) The term "Common Stock" shall mean the
Common Stock, $1.00 par value, of the Issuer as the
same exists at the Closing Date or as such stock may be
constituted from time to time, except that for the
purpose of this Section 6, the term "Common Stock"
shall include any stock of any class of the Issuer
which has no preference in respect of dividends or of
amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of
the Issuer and which is not subject to redemption by
the Issuer.
(h) The Issuer shall retain a firm of
independent public accountants of recognized standing
(who may be any such firm regularly employed by the
Issuer) to make any computation required under this
Section 6, and a certificate signed by such firm shall
be conclusive evidence of the correctness of any
computation made under this Section 6.
(i) Whenever the number of Warrant Shares or
the Exercise Price shall be adjusted as required by the
provisions of this Section 6, the Issuer forthwith
shall file in the custody of its secretary or an
assistance secretary, at its principal office, and
furnish to each Holder hereof, a certificate prepared
in accordance with paragraph (h) above, showing the
adjusted number of Warrant Shares and the Exercise
Price and setting forth in reasonable detail the
circumstances requiring the adjustment.
(j) Notwithstanding any other provision,
this Warrant shall be binding upon and inure to the
benefit of any successor or successors of the Issuer.
(k) No adjustment in the Exercise Price in
accordance with the provisions of this Section 6 need
be made if such adjustment would amount to a change in
such Exercise Price of less than $.01; provided,
however, that the amount by which any adjustment is not
made by reason of the provisions of this paragraph (k)
shall be carried forward and taken into account at the
time of any subsequent adjustment in the Exercise
Price.
(l) If an adjustment is made under this
Section 6 and the event to which the adjustment relates
does not occur, then any adjustments in accordance with
this Section 6 shall be readjusted to the Exercise
Price and the number of Warrant Shares which would be
in effect had the earlier adjustment hot been made.
Section 7. Taxes on Issue or Transfer of
Common Stock and Warrant. The Issuer shall pay any and
all documentary stamp or similar issue or transfer
taxes payable in respect of the issue or delivery of
shares of Common Stock or other securities on the
exercise of this Warrant. The Issuer shall not be
required to pay any tax which may be payable in respect
of any transfer of this Warrant or in respect of any
transfers involved in the issue or delivery of shares
or the exercise of this Warrant in a name other than
that of the Holder and the person requesting such
transfer, issue or delivery shall be responsible for
the payment of any such tax (and the Issuer shall not
be required to issue or deliver said shares until such
tax has been paid or provided for).
Section 8. Notice of Adjustment. So long as
this Warrant shall be outstanding, (a) if the Issuer
shall propose to pay any dividends or make any
distribution upon the Common Stock, or (b) if the
Issuer shall offer generally to the holders of Common
Stock the right to subscribe to or purchase any shares
of any class of Common Stock or securities convertible
into Common Stock or any other similar rights, or (c)
if there shall be any proposed capital reorganization
of the Issuer in which the Issuer is not the surviving
entity, recapitalization of the capital stock of the
Issuer, consolidation or merger of the Issuer with or
into another corporation, sale, lease or other transfer
of all or substantially all of the property and assets
of the Issuer, or voluntary or involuntary dissolution,
liquidation or winding up of the Issuer, or (d) if the
Issuer shall give to its stockholders any notice,
report or other communication respecting any
significant or special action or event, then in such
event, the Issuer shall give to the Holder, at least
thirty days prior to the relevant date described below
(or such shorter period as is reasonably possible if
thirty days is not reasonably possible), a notice
containing a description of the proposed action or
event and stating the date or expected date on which a
record of the Issuer's stockholders is to be taken for
any of the foregoing purposes, and the date or expected
date on which any such dividend, distribution,
subscription, reclassification, reorganization,
consolidation, combination,
merger, conveyance, sale, lease or transfer, dissolution,
liquidation or winding up is to take place and the date or
expected date, if any is to be fixed, as of which the
holders of Common Stock of record shall be entitled to
exchange their shares of Common Stock for securities or
other property deliverable upon such event.
Section 9. Registration Rights. (a) Right
to Piggyback. Whenever the Company proposes to
register any of its shares of Common Stock under the
Securities Act of 1933, as amended (the "Securities
Act") and the registration form to be used is not a
Form S-8 or Form S-4 and otherwise may be used for the
registration of any Warrant Shares (a "Piggyback
Registration"), the Company will give prompt written
notice to all holders of the Warrant Shares for which
the registration form may be used of its intention to
effect such a registration and will include in such
registration all Warrant Shares (in accordance with the
priorities set forth in Subsections 9(b) and 9(c)
below) with respect to which the Company has received
written requests for inclusion therein within fifteen
(15) days after the receipt of the Company's notice or
such shorter time as the Company may deem necessary or
advisable due to the anticipated filing date of such
registration. Inclusion of Warrant Shares in any
secondary registration on behalf of holders of the
Company's securities will be subject to any rights of
approval and other rights which such holders may have
and conditions which such holders may impose.
(b) Priority on Primary Registrations. If a
Piggyback Registration is an underwritten primary
registration on behalf of the Company and the managing
underwriters advise the Company in writing that in
their opinion the number of securities requested to be
included in such registration exceeds the number which
can be sold in such offering, the Company will include
in such registration (i) first, the securities that the
Company proposes to sell and (ii) second, the Warrant
Shares requested to be included in such registration
and other securities requested to be included in such
registration pro rata among the holders of the Warrant
Shares and the other securities on the basis of the
number of securities so requested to be included
therein.
(c) Priority on Secondary Registrations. If
a Piggyback Registration is an underwritten secondary
registration on behalf of holders of the Company's
securities and the managing underwriters advise the
Company in writing that in their opinion the number of
securities requested to be included in such
registration exceeds the number which can be sold in
such offering, the Company will include in such
registration (i) first, the securities requested to be
included therein by the holders requesting such
registration and such other securities as may have the
right to be included on a priority with such
securities, pro rata based on the number of such
securities requested to be included in such
registration and (ii) second, the Warrant Shares and
other securities requested to be included in such
registration, pro rata based on the number of Warrant
Shares and other securities so requested to be included
therein.
(d) Selection of Underwriters. If any
Piggyback Registration is an underwritten offering, the
selection of investment banker(s) and manager(s) for
the offering will be in the sole discretion of the
Company.
Section 10. Notices. All communications
hereunder shall be in writing, and, if sent to the
Holder shall be sufficient in all respects if
delivered, sent by registered mail, or by telecopy and
confirmed to the Holder at:
First Bermuda Securities Limited
00 Xxxxxx Xxxxxx, Xxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxx XX00
Attention: Xxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
or it to any other Holder, addressed to such Holder at
such address as it shall have specified to the Issuer
in writing, or, if sent to the Issuer, shall be
delivered, sent by registered mail or by telecopy and
confirmed to the Issuer at:
Coyote Network Systems Inc.
0000 Xxxx Xxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Section 11. Governing Law. This Warrant
shall be governed by, and interpreted in accordance
with, the laws of the State of Delaware.
Dated: December 22, 1997
COYOTE NETWORK SYSTEMS INC.
BY:_______________________________
Name:
Title:
ATTEST:
__________________________________
Secretary
Schedule One
ELECTION TO PURCHASE
The undersigned hereby irrevocably elects to
exercise this Warrant and to purchase ____________
shares of Coyote Network Systems Inc. Common Stock
issuable upon the exercise of this Warrant, and
requests that certificates for such shares shall be
issued in the name of:
________________________________________________________
(Name)
________________________________________________________
(Address)
________________________________________________________
(United States Social Security or other taxpayer
identifying number, if applicable)
and, if different from above, be delivered to:
________________________________________________________
(Name)
________________________________________________________
(Address)
and, if the number of Warrant Shares so purchased are
not all of the Warrant Shares issuable upon exercise of
this Warrant, that a Warrant to purchase the balance of
such Warrant Shares be registered in the name of, and
delivered to, the undersigned at the address stated
below.
Date:________________________, 19___
Name of Registered Owner: _____________________________
Address: _____________________________________________
______________________________________________________
Signature: ___________________________________________
Schedule Two
[Warrant Agent]
Dear Sir/Madam
In connection with the warrant of Coyote Network
Systems Inc. issued to First Bermuda Securities
Limited, on December 22, 1997, and attached hereto, the
undersigned certifies, represents and warrants as
follows:
1. I/We hereby exercise the warrants
identified above. [Give details of how
payment is being made, in accordance with
terms of warrants.]
2. I/We hereby certify that I am/we are not
a U.S. person (as that term is defined in
Regulation S under the Securities Act); nor
am I/we acting for or on behalf of a U.S.
person.
3. At the time of exercise of the warrants
I am/we are and any person for whom we are
acting is located outside the United States.
4. Please deliver the common stock of
Coyote Network Systems Inc. as follows:
______________
______________
______________
[specify address outside the United States]
Very truly yours,
[WARRANTHOLDER]
By:________________
Name:
Title:
EXHIBIT B
Coyote Network Systems Inc.
0000 Xxxx Xxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxxxx 00000
U. S. A.
Attention: Xx. Xxxxx Xxxxxxx
Dear Sirs:
In connection with the Warrant of Coyote Network
Systems Inc., issued to First Bermuda Securities
Limited, on December 22, 1997, and attached hereto, the
undersigned performed the functions of managing
underwriter in connection with the offering of such
warrants and certifies, represents and warrants as
follows:
We hereby certify that the distribution of the
warrants identified above was completed on December 22,
1997.
Very truly yours,
FIRST BERMUDA SECURITIES LIMITED
By:_____________________________
Name: Xxxxxxx X. Xxxxxxx, CPA
Title: Chief Operating Officer
