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EXHIBIT 10.28
FORM OF
WARRANT AGREEMENT
Dated as of January___, 2000
by and between
ALAMOSA PCS HOLDINGS, INC.
and
NORTEL NETWORKS INC.
This WARRANT AGREEMENT ("Agreement") is made and entered into as of January
__, 2000, by and between ALAMOSA PCS HOLDINGS, INC., a Delaware corporation (the
"Company"), NORTEL NETWORKS INC., a Delaware corporation ("Nortel Networks"),
and the Holders of the Warrants from time to time.
WHEREAS, in consideration for, among other things, the execution of the
Credit Agreement (as defined below), the Company agrees to issue Common Stock
warrants as hereinafter described (the "Warrants") to purchase shares Common
Stock (as defined below), in such number and at such price determined in
accordance with this Agreement. Each Warrant entitles the holder thereof to
purchase one share of Common Stock.
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 and Nortel Networks, the parties hereto agree as
follows:
Section 1. Certain Definitions. Capitalized defined terms used in this
Agreement and not otherwise defined herein shall have the meanings given to
those terms in the Credit Agreement. As used in this Agreement, the following
terms shall have the following respective meanings:
"Commission" means the Securities and Exchange Commission.
"Common Equity Securities" means Common Stock and securities convertible
into, or exercisable or exchangeable for, Common Stock or rights or options to
acquire Common Stock or such other securities, excluding the Warrants.
"Common Stock" means the common stock, par value $0.01 per share, of the
Company, and any other capital stock of the Company into which such common stock
may be converted or reclassified or that may be issued in respect of, in
exchange for, or in substitution for, such common stock by reason of any stock
splits, stock dividends, distributions, mergers, consolidations or other like
events.
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"Credit Agreement" means the Amended and Restated Credit Agreement dated as
of January __, 2000, by and among ALAMOSA PCS, INC., a Delaware corporation (the
"Borrower"), the Company, certain subsidiaries of Borrower and the lenders named
therein or that may become a party thereto, and Nortel Networks Inc., as agent
(collectively, the "Lenders"), as the same may be amended, renewed, extended,
restated, replaced, substituted, supplemented or otherwise modified from time to
time.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any successor statute, and the rules and regulations promulgated thereunder.
"Exercise Price" means the purchase price per share of Common Stock to be
paid upon the exercise of each Warrant in accordance with the terms hereof,
which price shall initially be [$____] [THE IPO PRICE], subject to adjustment
from time to time pursuant to Section 11 hereof; provided, however, in no event
shall the Exercise Price be less than the par value per share of the Common
Stock.
"Expiration Date" means January___, 2008, as the same may be extended
pursuant to Section 6 hereof.
"Holder" or "Warrant Holder" means a Person who is the owner as shown on
the Warrant register maintained by the Company.
"Issue Date" means the date of the initial issuance of the Warrants, which
shall be the Closing Date under the Credit Agreement.
"Registrable Securities" means any of (i) the Warrant Shares and (ii) any
other securities issued or issuable with respect to any Warrant Shares by way of
stock dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or otherwise,
unless, in each case, such Warrant Shares and securities, if any, have been
offered and sold to the Holders pursuant to an effective Registration Statement
under the Securities Act declared effective prior to the date of exercisability
of the Warrants or the date such Warrant Shares and securities, if any, may be
sold to the public pursuant to Rule 144 without any restriction on the amount of
securities which may be sold by such Holders or the satisfaction of any
condition. As to any particular Registrable Securities held by a Holder, such
securities shall cease to be Registrable Securities when (i) a Registration
Statement with respect to the exercise or offering of such securities by the
Holder thereof shall have been declared effective under the Securities Act and
such securities shall have been exercised and/or disposed of by such Holder
pursuant to such Registration Statement, (ii) such securities may at the time of
determination be sold to the public pursuant to Rule 144 without any restriction
on the amount of securities which may be sold by such Holder (or any similar
provision then in force, but not Rule 144A) without the lapse of any further
time or the satisfaction of any condition, (iii) such securities shall have been
otherwise transferred by such Holder and new certificates for such securities
not bearing a legend restricting further transfer shall have been delivered by
the Company or its transfer agent and subsequent disposition of such
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securities shall not require registration or qualification under the Securities
Act or any similar state law then in force or (iv) such securities shall have
ceased to be outstanding.
"Registration Rights Agreement" means the registration rights agreement,
dated as of the date hereof by and between the Company and Nortel Networks
relating to the Warrants and the Warrant Shares.
"Rule 144" shall mean Rule 144 promulgated under the Securities Act, as
such Rule may be amended from time to time, or any similar rule (other than Rule
144A) or regulation hereafter adopted by the Commission providing for offers and
sales of securities made in compliance therewith resulting in offers and sales
by subsequent holders that are not affiliates of an issuer of such securities
being free of the registration and prospectus delivery requirements of the
Securities Act.
"Rule 144A" shall mean Rule 144A promulgated under the Securities Act, as
such Rule may be amended from time to time, or any similar rule (other than Rule
144) or regulation hereafter adopted by the Commission.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor statute and the rules and regulations promulgated thereunder.
"Warrant Holder" or "Holder" means a Person who is the owner as shown on
the Warrant register maintained by the Company.
"Warrant Shares" means the shares of Common Stock issued or issuable upon
the exercise of the Warrants.
Section 2. Issuance of Warrants; Warrant Certificates.
(a) The Warrants will be issued in the form of definitive certificates,
substantially in the form of Exhibit A (the "Warrant Certificates"). Each
Warrant 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
reduced or increased, as appropriate.
(b) The Warrants shall be issued on the Issue Date in the aggregate amount
of [________] shares of Common Stock, subject to adjustment as herein provided,
and shall be issued under one Warrant Certificate.
Section 3. Execution of Warrant Certificates. Warrant Certificates shall be
signed on behalf of the Company by the Company's President or a Vice President
and by its Secretary or an Assistant Secretary under its corporate seal. Each
such signature upon the Warrant Certificates may be in the form of a facsimile
signature of the present or any future President, Vice President, Secretary or
Assistant Secretary and may be imprinted or otherwise reproduced on the Warrant
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Certificates and for that purpose the Company may adopt and use the facsimile
signature of any person who shall have been President, Vice President, Secretary
or Assistant Secretary, notwithstanding the fact that at the time the Warrant
Certificates shall be countersigned and delivered or disposed of, such person
shall have ceased to hold such office. The seal of the Company may be in the
form of a facsimile thereof and may be impressed, affixed, imprinted or
otherwise reproduced on the Warrant Certificates.
In case any officer of the Company who shall have signed any of the Warrant
Certificates shall cease to be such officer before the Warrant Certificates so
signed shall have been disposed of by the Company, such Warrant Certificates
nevertheless may be countersigned and delivered or disposed of as though such
person had not ceased to be such officer of the Company; and any Warrant
Certificate may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Warrant Certificate, shall be a proper
officer of the Company to sign such Warrant Certificate, although at the date of
the execution of this Warrant Agreement any such person was not such officer.
Section 4. Registration. The Company shall number and register the Warrant
Certificates in a register as they are issued by the Company.
The Company may deem and treat the person in whose name any Warrant is
registered as the absolute owner(s) thereof, for all purposes, and the Company
shall not be affected by any notice to the contrary.
Section 5. Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Warrants and Registrable Securities. When
Warrants or Registrable Securities are presented to the Company with a request
to register their transfer; or to exchange such Warrants for an equal number of
Warrants of other authorized denominations, the Company shall register the
transfer or make the exchange as requested if the following requirements are
met:
(i) Notwithstanding anything in this Agreement to the contrary, Nortel
Networks will not transfer or agree to transfer any rights under this
Agreement or under the Warrants until the first anniversary of the Issue
Date; provided, however, that any rights in the Warrants transferred after
the first anniversary of the Issue Date but prior to the second anniversary
of the Issue Date will be subject to all of the terms of this Agreement,
including without limitation Section 6 hereof;
(ii) the 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, duly executed
by the Holder thereof or by his attorney-in-fact, duly authorized in
writing; and
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(iii) in the case of Registrable Securities, such request shall be
accompanied by the following additional information and documents (all of
which may be submitted by facsimile), as applicable:
(A) if such Registrable Security is being delivered to the
Company by a Holder for registration in the name of such Holder,
without transfer, a certification from such Holder to that effect (in
substantially the form of Exhibit B hereto);
(B) if such Registrable Security is being transferred (1) to a
"qualified institutional buyer" (as defined in Rule 144A) in
accordance with Rule 144A or (2) pursuant to an exemption from
registration in accordance with Rule 144 (and based on an opinion of
counsel if the Company so requests) or (3) pursuant to an effective
registration statement under the Securities Act, a certification to
that effect (in substantially the form of Exhibit B hereto);
(C) if such Registrable Security is being transferred pursuant to
an exemption from registration in accordance with Rule 904 under the
Securities Act (and based on an opinion of counsel if the Company so
requests), a certification to that effect (in substantially the form
of Exhibit B hereto); or
(D) if such Registrable Security is being transferred in reliance
on another exemption from the registration requirements of the
Securities Act (and based on an opinion of counsel if the Company so
requests), a certification to that effect (in substantially the form
of Exhibit B hereto).
(b) Legends.
(i) Except for any Registrable Security sold or transferred as
discussed in clause (ii) below, each Warrant Certificate (and all Warrants
issued in exchange therefor or substitution thereof) and each certificate
representing the Warrant Shares shall bear a legend in substantially the
following form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX XXXXXX
XXXXXX SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY AND THE SECURITIES DELIVERED UPON EXERCISE
THEREOF MAY NOT BE EXERCISED, OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY AND THE SECURITIES DELIVERED
UPON THE EXERCISE THEREOF IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING
ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A. THE HOLDER
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OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUER THAT
SUCH SECURITY AND THE SECURITIES DELIVERED UPON EXERCISE HEREOF MAY BE
EXERCISED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED
STATES TO A PERSON THAT IS NOT A U.S. PERSON (AS DEFINED IN RULE 902 UNDER
THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904
UNDER THE SECURITIES ACT, OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (IN THE CASE OF (b),
(c) or (d), UPON AN OPINION OF COUNSEL AND WRITTEN CERTIFICATION IF THE
ISSUER, REGISTRAR OR TRANSFER AGENT FOR THE SECURITIES SO REQUESTS), (2) TO
THE ISSUER OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN
EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION."
(ii) Upon any sale or transfer of a Registrable Security pursuant to
an effective registration statement under the Securities Act, pursuant to
Rule 144 or pursuant to an opinion of counsel reasonably satisfactory to
the Company that no legend is required, the Holder thereof shall be
permitted to exchange such Registrable Security for a Warrant that does not
bear the legend set forth in clause (i) above and rescind any restriction
on the transfer of such Registrable Security.
(c) Obligations With Respect to Transfers and Exchanges of Warrants.
(i) To permit registrations of transfers and exchanges, the Company
shall execute in accordance with the provisions of Section 4 and this
Section 5, Warrants as required pursuant to the provisions of this Section
5. Notwithstanding anything to the contrary contained herein, the Company
shall refuse to register any transfer of the Warrants not made in
accordance with Regulation S, pursuant to registration under the Securities
Act or pursuant to an available exemption from the registration
requirements of the Securities Act; provided, however, that if a foreign
law prevents the Company from refusing to register securities transfers,
the Company shall implement other reasonable measures designed to prevent
transfers of the Warrants not made in accordance with Regulation S,
pursuant to registration under the Securities Act or pursuant to an
available exemption from the registration requirements of the Securities
Act.
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(ii) All Warrants issued upon any registration of transfer or exchange
of Warrants shall be the valid obligations of the Company, entitled to the
same benefits under this Warrant Agreement, as the Warrants surrendered
upon such registration of transfer or exchange.
(iii) Prior to due presentment for registration of transfer of any
Warrant, the Company may deem and treat the person in whose name any
Warrant is registered as the absolute owner of such Warrant and the Company
shall not be affected by notice to the contrary.
(iv) No service charge shall be made to a Holder for any registration
of transfer or exchange.
Section 6. Terms of Warrants; Exercise of Warrants. Subject to the terms of
this Agreement and the last paragraph of this Section 6 in particular, each
Warrant Holder shall have the right, which may be exercised at any time and from
time to time, in whole or in part, commencing on the fifteenth (15th) day after
the second anniversary of the Issue Date and ending at 4:00 p.m., Dallas, Texas
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. Subject to the provisions of the
following paragraph of this Section 6, each Warrant not exercised prior to 4:00
p.m., Dallas, Texas time, on the Expiration Date shall become void and all
rights thereunder and all rights in respect thereof under this Agreement shall
cease as of such time.
A Warrant may be exercised upon surrender to the Company of the certificate
or certificates evidencing the Warrant to be exercised with the form of election
to purchase on the reverse thereof properly completed and signed, which
signature shall be guaranteed by a bank or trust company having an office or
correspondent in the United States or a broker or dealer which is a member of a
registered securities exchange or the National Association of Securities
Dealers, Inc., and upon payment to the Company of the Exercise Price as adjusted
as herein provided, for each of the Warrant Shares in respect of which such
Warrants are then exercised. Payment of the aggregate Exercise Price shall be
made in cash or by certified or official bank check, payable to the order of the
Company. In the alternative, each Holder may exercise its right to receive
Warrant Shares (i) on a net basis, such that without the exchange of any funds,
the Holder receives that number of Warrant Shares otherwise issuable upon
exercise of its Warrants less that number of Warrant Shares having a fair market
value equal to the aggregate Exercise Price that would otherwise have been paid
by the Holder for the Warrant Shares being issued, (ii) by any Holder to whom
the Company is indebted, by tendering indebtedness having an aggregate principal
amount, plus accrued but unpaid interest, if any, thereon, to the date of
exercise equal to the aggregate Exercise Price that would otherwise have been
paid by the Holder for the Warrant Shares being issued, or (iii) by a
combination of the procedures in clauses (i) and (ii). For purposes of the
foregoing sentence, "fair market value" of the Warrant Shares shall be as
determined by the Board of Directors of the Company in good faith and evidenced
by a resolution thereof. The Company shall notify the Holders in writing of any
such determination of fair market value.
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Subject to the provisions of Section 7 hereof, upon surrender of Warrants
and payment of the Exercise Price as provided above, the Company shall promptly
transfer to the Holder of such Warrant a certificate or certificates for the
appropriate number of 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 certificate or certificates representing the
Warrant Shares and any other securities or property (including any money) to the
Person or Persons entitled to receive the same, together with an amount in cash
in lieu of any fraction of a share as provided in Section 13. Any such
certificate or certificates representing the Warrant Shares 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 later
of the date of the surrender of such Warrants and payment of the Exercise Price.
Subject to the last paragraph of this Section 6, 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 delivered pursuant to the provisions of this
Section and of Section 3 hereof.
All Warrant Certificates surrendered upon exercise of Warrants shall be
canceled. Such canceled Warrant Certificates shall then be disposed of in
accordance with customary procedures.
Notwithstanding any of the provisions of this Section 6 or this Agreement,
each of the Warrants shall not be exercisable and shall become automatically
void, and all rights of the Holders thereunder and all rights of the Holders and
Nortel Networks arising under this Agreement shall terminate automatically, upon
the occurrence of any one of the events described below (all capitalized terms
not defined in the following shall have the meanings set forth in the Credit
Agreement):
(a) The contribution to the Borrower as equity by the Company of at least
U.S. $75 million of funds (not derived from the first U.S. $111 million of
proceeds from the Company's initial public offering of its Common Stock)
following the Issue Date and at least U.S. $75 million is paid to the Lenders as
prepayment of any outstanding loan amounts under the Credit Agreement before the
second anniversary of the Issue Date;
(b) Nortel Networks assigns at least U.S. $75 million of its Loans and
Commitments under the Credit Agreement to a Lender who is not affiliated with
Nortel Networks (excluding assignments to NTFC Capital Corporation and the
Export Development Corporation) prior to the second anniversary of the Issue
Date and such Lender does not require assignment and transfer to it of this
Warrant Agreement and the Warrants in connection with such assignment;
(c) A combination of (x) one or more equity contributions by the Company to
the Borrower and prepayments to the Lenders of such contributions in a manner
similar to clause (a) and
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(y) assignments of Loans and Commitments as contemplated under clause (b) above
takes place prior to the second anniversary of the Issue Date, and the total sum
of (i) the amounts of such equity contributions and prepayments to the Lenders
under clause (x) and (ii) the amounts of such assignments under clause (y)
equals at least U.S. $100 million; or
(d) As of the second anniversary of the Issue Date, the Borrower's ratio of
Senior Debt to Total Capitalization (assuming full funding of the Loans and
Commitments under the Credit Agreement) is 0.40 to 1.0 or less and has been so
as of the end of each of the two calendar quarters immediately preceding the
second anniversary of the Issue Date.
Section 7. Payment of Taxes. The Company will pay all documentary stamp
taxes, if any, attributable to the issuance of the Warrant Certificates or the
initial issuance of Warrant Shares upon the exercise of Warrants; provided,
however, that the Company shall not be required to pay any tax or taxes which
may be payable in respect of any transfer involved in the issue of any
certificates for Warrant Shares in a name other than that of the Holder of a
Warrant Certificate surrendered upon the exercise of a Warrant.
Section 8. Mutilated or Missing Warrant Certificates. In case any of the
Warrant Certificates shall be mutilated, lost, stolen or destroyed, the Company
may in its discretion issue in exchange and substitution for and upon
cancellation of the mutilated Warrant Certificate, or in lieu of and
substitution for the Warrant Certificate lost, stolen or destroyed, a new
Warrant Certificate of like tenor and representing an equivalent number of
Warrants, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction of such Warrant Certificate and, if
requested, indemnity reasonably satisfactory to them. Applicants for such
substitute Warrant Certificates shall also comply with such other reasonable
regulations and pay such other reasonable charges as the Company may prescribe.
Section 9. Reservation of Warrant Shares. The Company will at all times
reserve and keep available, free from any 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 transfer agent for the Common Stock and every subsequent transfer agent
("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 for any shares of the Company's
capital stock issuable upon the exercise of the rights of purchase represented
by the Warrants. 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 13. The Company will furnish
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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.
Before taking any action which would cause an adjustment pursuant to
Section 11 hereof that would 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 in accordance with the terms of this Agreement (including
the payment of the Exercise Price) will, upon issue, be duly and validly issued,
fully paid, nonassessable, and free of preemptive rights and Liens.
Section 10. Obtaining Stock Exchange Listings. The Company will from time
to time take all action which may be necessary so that the Warrant Shares,
immediately upon their issuance upon the exercise of Warrants, will be listed on
the principal securities exchanges and markets (including, without limitation,
the Nasdaq National or SmallCap Markets) within the United States of America, if
any, on which other shares of Common Stock are then listed. Upon the listing of
such Warrant Shares, the Company shall notify the Holders in writing. The
Company will obtain and keep all required permits and records in connection with
such listing.
Section 11. 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 set forth in the notices required by Section 14 hereof) 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 (whether shares of Common Stock or of capital stock of any other
class), (B) subdivide its outstanding shares of Common Stock, (C) combine its
outstanding shares of Common Stock into a smaller number of shares, or (D) issue
by reclassification of its shares of Common Stock any shares of capital stock of
the Company, the Exercise Price in effect and the number of Warrant Shares
issuable upon exercise of each Warrant immediately prior to such action shall be
adjusted so that the Holder of any Warrant thereafter exercised shall be
entitled to receive 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. Any 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
shall in good faith determine the allocation of the adjusted Exercise Price
between or among shares of such classes of capital stock.
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(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) 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 each 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 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 11. 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.
(c) Issuance of Additional Shares of Common Stock. 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) any
additional shares of Common Stock without consideration or for a price per share
less than the current market price per share of Common Stock on the date of the
issuance, sale, distribution or granting of such additional shares, then,
effective upon such issuance or sale, (I) 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 issuance or
sale 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 issuance or sale multiplied by the current market
price per share of Common Stock on the date of such issuance or sale plus (ii)
the consideration, if any, received by the Company in respect of such issuance
or sale, 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 issuance or sale multiplied by (B) the current market
price per share of Common Stock on the record date for such issuance or sale and
(II) 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 issuance or sale by a fraction, the numerator of which shall be the
Exercise Price in effect immediately prior to the adjustment required by clause
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(I) of this sentence and the denominator of which shall be the Exercise Price in
effect immediately after such adjustment.
(d) Issuance of Options or Convertible Securities. 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) any rights
to subscribe for or to purchase, or any warrants or options for the purchase of,
Common Stock or any stock or securities convertible into or exchangeable for
Common Stock (any such rights, warrants or options being herein called "Options"
and any such convertible or exchangeable stock or securities being herein called
"Convertible Securities") 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 if 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 on the date for the issuance,
sale, distribution or granting of such Options or Convertible Securities (any
such event being herein called a "Distribution"), then, effective upon such
Distribution, (I) 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
in respect of 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 and (II) 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 (I) of this sentence and the denominator of which shall be
the Exercise Price in effect immediately after such adjustment. 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
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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.
(e) 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 that, when added to all other cash dividends paid
with respect to Common Stock in the one year prior to the declaration date of
such dividend (excluding any such other dividend included in a previous
adjustment of the Exercise Price pursuant to this paragraph (e) and excluding
any cash dividends or other cash distributions from current or retained
earnings), does not exceed 5% of the current market price per share of Common
Stock on such declaration date), 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 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 (e) shall be made
whenever any such distribution occurs retroactive to the record date for the
determination of stockholders entitled to receive such distribution.
(f) Current Market Price. For the purpose of any computation of current
market price under this Section 11 and Section 13, the current market price per
share of Common Stock at any date shall be (x) for purposes of Section 13, the
closing price on the business day immediately prior to the exercise of the
applicable Warrant pursuant to Section 6 and (y) in all other cases, the average
of the daily closing prices for the shorter of (i) the 20 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. The term
"Time of Determination" as used herein
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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), (d) or (e) above. 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 Nasdaq National or SmallCap Markets or any comparable system or (3)
if the Common Stock is not listed on Nasdaq National or SmallCap Markets 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 for any other reason the current
market price per share cannot be determined pursuant to the foregoing provisions
of this paragraph (f), 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 and evidenced by a resolution of such Board, subject to the
following dispute resolution right of the Holders of the Warrants. In the event
that Holders of a majority of the Warrants dispute the determination of the
Board of Directors, such Holders shall notify the Company and the current market
price shall be determined in a reasonably prompt manner as follows:
(1) The Company and Holders of a majority of the Warrants shall each
appoint an independent, experienced appraiser who is a member of a
recognized professional association of business appraisers. The two
appraisers shall determine the value of shares of Common Stock at the
relevant date, assuming a sale between a willing buyer and a willing
seller, both of whom have full knowledge of the financial and other affairs
of the Company, and neither of whom is under any compulsion to sell or to
buy.
(2) If the higher of the two appraisals is not more than 20% more than
the lower of the appraisals, the current market price per share shall be
the average of the two appraisals. If the higher of the two appraisals is
20% or more than the lower of the two appraisals, then a third appraiser
shall be appointed by the two appraisers, and if they cannot agree on a
third appraiser, the American Arbitration Association shall appoint the
third appraiser. The third appraiser, regardless of who appoints him or
her, shall have the same qualifications as the first two appraisers.
(3) The current market price per share after the appointment of the
third appraiser shall be the average of the two appraisals that are closest
in value to each other.
(4) The fees and expenses of the appraisers shall be paid one-half by
the Company and one-half by the Holders.
(g) 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 (d) above,
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such Options or Convertible Securities shall be deemed to have been issued or
sold without consideration.
(h) 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 and evidenced by a Board resolution). 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.
(i) 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
of the Exercise Price; provided that any adjustments which by reason of this
paragraph (i) 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 1/1000 of a
share, as the case may be.
(j) Changes in Options and Convertible Securities. If the exercise price
provided for in any Options referred to in paragraph (d) above, the additional
consideration, if any, payable upon the conversion or exchange of any
Convertible Securities referred to in paragraph (d) or (e) above, or the rate at
which any Convertible Securities referred to in paragraph (d) or (e) 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 11), 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 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.
(k) 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 (d), (e) or
(j) above or this paragraph (k), any Options or Convertible Securities shall
have expired unexercised, the number of such shares so purchasable shall,
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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 11 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.
(l) Other Adjustments. In the event that at any time, as a result of an
adjustment made pursuant to this Section 11, 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 11.
(m) Employee Plans. No adjustment in the Exercise Price or the number and
kind of shares purchaseable upon exercise of the Warrants shall be made under
the provisions of Section 11 for shares of Common Stock and Common Equity
Securities issued or issuable as compensation to employees of the Company or its
subsidiaries but only to the extent that the total aggregate number of issued
and issuable shares of Common Stock in connection therewith does not exceed
_______________ shares [15% OF THE FULLY DILUTED OUTSTANDING SHARES OF COMMON
STOCK ON ISSUE DATE].
Section 12. 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 13. Fractional Interest. 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 13, be issuable on the exercise of any Warrant (or specified portion
thereof), the Company shall direct the Transfer Agent to pay an amount in cash
calculated by it equal to (i) the then current market price per share multiplied
by such fraction computed to the nearest whole cent, less (ii) an amount equal
to the
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Exercise Price multiplied by such fraction computed to the nearest whole cent.
The Holders, by their 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 14. Notices to Warrant Holders. Upon any adjustment of the Exercise
Price pursuant to Section 11, the Company shall promptly thereafter cause to be
given to each of the registered Holders by first-class mail, postage prepaid, a
certificate executed by the Chief Financial Officer 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, absent manifest error, of the correctness of the matters set forth
therein.
In case:
(a) the Company shall authorize the issuance to all holders of shares
of Common Stock of rights, options or warrants to subscribe for or purchase
shares of Common Stock or of any other subscription rights or warrants; or
(b) the Company shall authorize the distribution to all holders of
shares of Common Stock of evidences of its indebtedness or assets (other
than cash dividends or cash distributions payable out of consolidated
earnings or earned surplus or dividends payable in shares of Common Stock
or distributions referred to in Section 11 hereof); or
(c) of any consolidation or merger to which the Company is a party for
which approval of any shareholders of the Company is required and following
which the shareholders of the Company before such consolidation or merger
no longer hold at least 75% of the outstanding capital stock of the Company
following the merger or consolidation, or of the conveyance or transfer of
all or substantially all of the properties and assets of the Company, or of
any reclassification or change of Common Stock issuable upon exercise of
the Warrants (other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision
or combination), or a tender offer or exchange offer for shares of Common
Stock, or other transaction that would result in a change in control; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(e) the Company proposes to take any other action that would require
an adjustment of the Exercise Price or the number of Warrant Shares
pursuant to Section 11; then the Company shall cause to be given to each of
the registered Holders of the Warrants at such Holder's address appearing
on the Warrant register, at least 20 days (or 10 days in any case specified
in clauses (a) or (b) above) prior to the applicable record date
hereinafter
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specified, or promptly in the case of events for which there is no record
date, by first-class mail, postage prepaid, a written notice stating (i)
the date as of which the holders of record of shares of Common Stock to be
entitled to receive any such rights, options, warrants or distribution are
to be determined, or (ii) the initial expiration date set forth in any
tender offer or exchange offer for shares of Common Stock, or (iii) the
date on which any such consolidation, merger, conveyance, transfer,
dissolution, liquidation or winding up or change of control is expected to
become effective or consummated, and the date as of which it is expected
that holders of record of shares of Common Stock shall be entitled to
exchange such shares for securities or other property, if any, deliverable
upon such reclassification, consolidation, merger, conveyance, transfer,
dissolution, liquidation or winding up or change of control. The failure to
give the notice required by this Section 14 or any defect therein shall not
affect the legality or validity of any distribution, right, option,
warrant, consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding up, or change of control or the vote upon any
action. Nothing contained in this Agreement or in any of the Warrant
Certificates shall be construed as conferring upon the Holders thereof the
right to vote or to consent or to receive notice as shareholders in respect
of the meetings of shareholders or the election of Directors of the Company
or any other matter, or any rights whatsoever as shareholders of the
Company.
Section 15. Registration. The Company acknowledges that Holders of Warrants
shall have the registration rights set forth in the Registration Rights
Agreement.
Section 16. Reports. For each fiscal quarter and each fiscal year of the
Company, the Company will transmit by mail to all Warrant Holders, as their
names and addresses appear in the register, without cost to such Warrant
Holders, unaudited quarterly and audited annual financial statements of the
Company prepared in accordance with GAAP. Beginning with the initial public
offering of the Company and thereafter, whether or not the Company is subject to
Section 13(a) or 15(d) of the Exchange Act, or any successor provision thereto,
the Company shall prepare the annual and quarterly reports and other
information, and documents ("SEC Reports") as the Commission shall prescribe
pursuant to such Section 13(a) or 15(d) and which the Company is or would be (if
they were so subject) required to file with the Commission pursuant to such
Section 13(a) or 15(d) or any successor provision thereto (on or prior to the
respective dates (the "Required Filing Dates") by which the Company is or would
(if they were so subject) be required so to file such SEC Reports) and shall,
within 15 days of the Required Filing Date transmit by mail to all Warrant
Holders, as their names and addresses appear in the register, without cost to
such Warrant Holders, copies of such annual and quarterly reports.
Section 17. Rule 144A. The Company hereby agrees with each Holder, for so
long as any Registrable Securities remain outstanding and the Company is not
subject to Section 13(a) or 15(d) of the Exchange Act, to make available, upon
request of any Holder of Registrable Securities, to any Holder or beneficial
owner of Registrable Securities in connection with any sale thereof and any
prospective purchaser of such Registrable Securities designated by such Holder
or beneficial owner,
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the information required by Rule 144A(d)(4) under the Securities Act in order to
permit resales of such Registrable Securities pursuant to Rule 144A.
Section 18. Notices to Holders and Company. All notices and other
communications provided herein (including, without limitation, any waivers or
consents under this Agreement) shall be given or made by telecopy, telegraph,
cable or otherwise in writing (each communication given by any such means to be
deemed "in writing" for purposes of this Agreement) and telecopies, telegraphed,
cabled, mailed or delivered to the intended recipient at the address for such
party following hereafter or, as to any party, at such other addresses as shall
be designated by such party in a notice to the others. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly given (i) when delivered to the telegraph or cable office or personally
delivered or, (ii) in the case of transmission by telecopy, when telecopied
(with confirmation) and mailed (with same day post-xxxx) certified mail, return
receipt requested or (iii) in the case of a mailed notice, three days after
deposit with the United States Post Office, by registered or certified mail,
return receipt requested, in each case given or addressed as follows:
(a) If to Nortel Networks:
Nortel Networks Inc.
GMS 911 15 A40
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxxx 00000-0000
Attn: Xxxxxx Xxxxxx, Director, Customer Finance
Telecopy No.: (000) 000-0000
(b) If to the Company:
Alamosa PCS Holdings, Inc..
0000 Xxxxx Xxxx 000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxxxxxx, President
Telecopy No.: (000) 000-0000
(c) If to the Holders other than Nortel Networks, to the respective
addresses of the Holders provided to the Company from time to time.
Section 19. Supplements and Amendments. The Company and Nortel Networks may
from time to time supplement or amend this Agreement without the approval of any
Holders of Warrants 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 Nortel Networks may deem
necessary or desirable and which shall not in any way adversely affect the
interests of the Holders of Warrants. Any amendment or supplement to this
Agreement that has a material adverse effect on the
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interests of Holders shall require the written consent of Holders representing a
majority of the then outstanding Warrants (excluding Warrants held by the
Company or any of its Affiliates); provided, however, that 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 (other than pursuant to
adjustments provided for in Section 11 hereof). Nortel Networks shall be
entitled to receive and shall be fully protected in relying upon an officer's
certificate and opinion of counsel as conclusive evidence that any such
amendment or supplement is authorized or permitted hereunder, that it does or
does not, as the case may be, require the written consent of Holders to be
effective hereunder, that it is not inconsistent herewith, and that it will be
valid and binding upon the Company in accordance with its terms.
Section 20. Successors. All the covenants and provisions of this Agreement
by or for the benefit of the Company shall bind and inure to the benefit of its
respective successors and assigns hereunder.
Section 21. Termination. Subject to the last paragraph of Section 6, this
Agreement (other than any party's obligations with respect to Warrants
previously exercised and with respect to indemnification) shall terminate at
4:00 p.m., Dallas, Texas time on the Expiration Date.
Section 22. Governing Law. THIS AGREEMENT AND EACH WARRANT CERTIFICATE
ISSUED HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE
STATE OF NEW YORK AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF SAID STATE, WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS
PRINCIPLES THEREOF.
Section 23. Benefits of This Agreement.
(a) The Holders are the third-party beneficiaries of this Agreement.
Nothing in this Agreement shall be construed to give to any Person other than
the Company, Nortel Networks and the Holders of the Warrants 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, Nortel Networks and the
Holders of the Warrants from time to time.
(b) Prior to the exercise of the Warrants, no Holder of a Warrant, as such,
shall be entitled to any rights of a stockholder of a 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 or to participate in meetings of stockholders for the election of
directors of the Company or any other matter or to receive any notice of any
proceedings of the Company, except as may be specifically and expressly provided
for herein. The Holders of the Warrants are not entitled to share in the assets
of the Company in the event of the liquidation, dissolution or winding up of the
Company's affairs.
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(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 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 24. Representations and Warranties.
(a) The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, has the corporate power
and authority to conduct its business as currently conducted and as intended to
be conducted, has the corporate power and authority to execute and deliver this
Agreement and the Warrant Certificates, to issue the Warrants and to perform its
obligations under this Agreement and the Warrant Certificates, has the corporate
power and authority and legal right to own and lease its properties and is duly
qualified and in good standing as a foreign corporation in each jurisdiction in
which it owns or leases real property or in which the conduct of its business
requires such qualification, except where failure to be so qualified could not
be reasonably expected to have a material adverse effect on the business,
properties, financial condition or results of operations of the Company and its
subsidiaries taken as a whole.
(b) The execution, delivery and performance by the Company of this
Agreement and the Warrant Certificates, the issuance of the Warrants and the
issuance of the Warrant Shares upon exercise of the Warrants have been duly
authorized by all necessary corporate action and do not and will not violate, or
result in a breach of, or constitute a default under, or require any consent
under, or result in the creation of any lien, charge of encumbrance upon any of
the assets of the Company pursuant to, any law, statute, ordinance, rule,
regulation, order or decree of any court, governmental body or regulatory
authority or administrative agency having jurisdiction over the Company or its
subsidiaries or the Company's Articles of Incorporation or any contract,
mortgage, loan agreement, note, lease or other instrument binding upon the
Company or its subsidiaries or by which any of their respective properties are
bound.
(c) This Agreement and the Warrant Certificates executed and delivered on
the date hereof have been duly executed and delivered by the Company. This
Agreement, the Warrant Certificates and the Warrants constitute legal, valid,
binding and enforceable obligations of the Company. The Warrant Shares, when
issued upon exercise of the Warrants in accordance with the terms hereof, will
be duly authorized, validly issued, fully paid, nonassessable and free of any
lien or encumbrance not created by the Holder thereof. The Warrants and the
Warrant Shares are not subject to any preemptive right or right of first
refusal.
(d) The authorized capital stock of Company consists solely of (i)
[__________] shares of Common Stock, of which [__________] shares are currently
issued and outstanding, and (ii) [__________] shares of preferred stock (the
"Preferred Stock"), of which [_________] shares of [_________________]are
currently issued and outstanding (the Common Stock and the Preferred
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Stock being, collectively, the "Capital Stock"). Except for the Warrants, and
except as set forth on Schedule 1 attached hereto, there are outstanding on the
date hereof no options, warrants or other securities exercisable or exchangeable
for or convertible into shares of Capital Stock of the Company or any other
rights to acquire Capital Stock of the Company.
(e) The representations and warranties as to the financial statements of
the Company set forth in Section 7.2 of the Credit Agreement are true and
correct.
Section 25. 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
ALAMOSA PCS HOLDINGS, INC.
By:
Name:
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Title:
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NORTEL NETWORKS INC.
By:
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Xxxx X. Day
Vice President Customer Finance
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