Exhibit 10.1.17
STOCK PURCHASE WARRANT
AGREEMENT
This WARRANT AGREEMENT ("Warrant Agreement") is entered as of July
19, 1999, by and between Advanced Telecommunications, Inc., a Minnesota
corporation (the "Issuer") and General Electric Capital Corporation, a Delaware
corporation (the "Administrative Agent"). All capitalized terms used but not
otherwise defined herein shall have the meaning given to them in that certain
Loan and Security Agreement dated as of July 16, 1999, by and among the
Borrower, the Issuer and certain of its Subsidiaries as Guarantors, the
financial institutions and other entities from time to time party thereto as
Lenders and the Administrative Agent (as amended or modified from time to time,
the "Loan Agreement").
1. Issuance of Warrants; Term.
(a) For and in consideration of the sum of One Dollar ($1.00) in
cash and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Issuer hereby grants to the Administrative
Agent, subject to the provisions hereinafter set forth and to the adjustments in
the number of shares issuable pursuant to this Warrant Agreement hereinafter
provided, the right to purchase (the "Warrants") 570,600 shares of Common Stock,
one cent ($.0l) par value, of the Issuer (the "Common Stock"), which number of
shares represents four percent (4%) of the aggregate outstanding shares of
capital stock of the Issuer (both common and preferred) as of the date hereof on
a fully diluted basis, assuming exercise by all other holders of all warrants,
stock options, and other rights to purchase capital stock of the Issuer,
including the Warrants hereunder, and the conversion of all other securities
convertible into capital stock of the Issuer. Such outstanding securities of the
Issuer on the date hereof are hereinafter referred to as "Closing Date Stock."
Such percentage is hereinafter referred to as "the Administrative Agent's
Proportionate Share." The shares of Common Stock issuable upon exercise of the
Warrants, subject to adjustment under Section 8 below, are hereinafter referred
to as the "Shares."
(b) The Warrants issued under this Warrant Agreement shall be
evidenced by one or more Warrant Certificates (the "Warrant Certificates") in
the form of Exhibit A hereto. No more than fifty percent (50%) of the Warrants
shall be exercisable on or prior to December 31, 2000. In the event that the
Issuer receives at least $30,000,000 of Additional Contributed Capital on or
prior to December 31, 2000, the Administrative Agent will return to the Issuer
for cancellation fifty percent (50%) of the Warrants. Thereafter, all of the
Warrants shall be exercisable, in whole or in part. All Warrants issued under
this Warrant Agreement shall terminate on (i) the third anniversary of the final
repayment of all Obligations due under the Loan Agreement (the "Termination
Date").
2. Warrant Price. The exercise price at which all or any of the
Shares may be purchased pursuant to the terms of this Warrant Agreement shall be
One Cent ($.01) per Share (the "Warrant Price").
3. Exercise. Commencing on the First Borrowing Date, prior to
December 31, 2000, the Warrants may be exercised from time to time by the holder
thereof (but only on the conditions hereinafter set forth) as to fifty percent
(50%) of the Warrants and after December 31, 2000, as to all of the Warrants, or
any increment or increments of one (1) Share thereof, upon delivery of written
notice of intent to exercise to the Issuer at the address set forth in Section
16 hereof, together with the Warrant Certificate(s) and a check payable to the
Issuer for the aggregate purchase price of the Shares so purchased. Subject to
any regulatory approvals or notifications required for the Issuer to issue any
Shares, upon exercise of the Warrants, the Issuer shall as promptly as
practicable, and in any event within ten (10) days thereafter, execute and
deliver to the holder of the Warrants a certificate or certificates for the
total number of Shares for which the Warrants are being exercised in the name of
the Administrative Agent or a permitted transferee under Section 4(a) hereof. If
the Warrants are exercised with respect to fewer than all of the Shares, the
holder shall be entitled to receive one or more new Warrant Certificate(s), in
the same form as the original, covering the number of Shares in respect of which
the Warrants have not been exercised ("Replacement Warrant Certificate(s)"). The
Issuer covenants and agrees that it will pay when due any and all state and
federal issue taxes which may be payable in respect of the issuance of the
Warrants, Warrant Certificate(s) or any Replacement Warrant Certificate(s), or
in respect of the issuance of any Shares upon exercise of the Warrants.
4. Covenants and Conditions. The above provisions are subject to the
following terms and conditions:
(a) Neither the Warrants nor the Shares have been registered
under the Securities Act of 1933, as amended (the "Act"), or any
state securities laws ("Blue Sky Laws"). The Administrative Agent
has acquired the Warrants for investment purposes, and not with a
view to distribution or resale, and the Warrants and Shares, if any,
may not be sold or otherwise transferred without an effective
registration statement for such sale or transfer under the Act and
such applicable Blue Sky Laws or an opinion of counsel, reasonably
satisfactory to the Issuer, that registration is not required under
the Act and/or under any applicable Blue Sky Laws, except that the
Administrative Agent may transfer the Warrants to any corporation
directly or indirectly controlling, controlled by or under common
control with the Administrative Agent (each, an "Affiliate") without
opinion of counsel or other restriction.
(b) The Administrative Agent represents that it is experienced
in evaluating companies such as the Issuer, is familiar with
transactions such as the one contemplated by this Warrant Agreement,
has such knowledge and experience in financial and business matters
that it is
2
capable of evaluating the merits and risks of its prospective
investment in the Issuer, and has the ability to bear the economic
risks of the investment.
(c) The holder of any Warrant hereunder and the Issuer agree
to execute such other documents and instruments as counsel for the
Issuer reasonably deems necessary to effect compliance with
applicable federal and state securities laws in connection with the
issuance of the Warrants and any shares of Common Stock issued upon
exercise hereof.
(d) The Issuer covenants and agrees that all Shares which may
be issued upon exercise of the Warrants will, upon issuance and
payment therefor, be legally and validly issued and outstanding,
fully paid and nonassessable, and free from all taxes, liens and
charges with respect thereto or to the issuance thereof. The Issuer
shall at all times reserve and keep available for issuance upon the
exercise of the Warrants such number of authorized but unissued
shares of Common Stock as will be sufficient to permit the exercise
in full of all outstanding Warrants.
5. Transfer of Warrants and/or Shares; Right of First Refusal.
(a) Subject to the provisions of Sections 4(a) and (c),
Section 5(b) and Section 18 hereof, the Warrants or the Shares
issued pursuant hereto or thereto may be transferred, in whole or in
part, to any person or business entity upon thirty (30) days prior
written notice to the Issuer specifying the price and terms of the
proposed sale (the "Transfer Notice"). Unless the Issuer exercises
its "Right of First Refusal" as defined in Section 5(b) below, the
transfer shall be accomplished by presentation of the Warrant
Certificate(s), the Replacement Warrant Certificate(s) or the stock
certificate(s) representing the Shares to the Issuer with written
instructions for such transfer. Upon such presentation for transfer,
the Issuer shall promptly execute and deliver or issue new Warrant
Certificate(s) or Replacement Warrant Certificate(s) in the form
provided for herein with appropriate adjustments to the number of
Shares and such other provisions hereof as may require adjustment
and in the denominations specified in such instructions or stock
certificate(s). The Issuer shall pay all expenses, taxes and other
charges payable in connection with the preparation, issuance and
delivery of Warrant Certificate(s) or stock certificates under this
Section 5(a).
(b) Except for a requested transfer to an Affiliate of the
Administrative Agent, within the thirty (30) day period described in
Section 5(a) above, the Issuer shall have the right to purchase the
Warrants or the shares proposed for transfer at a price and on terms
equal to those specified in the Transfer Notice (the "Right of First
Refusal"). If the Issuer wishes to exercise its Right of First
Refusal, it shall provide notice of that election to the transferor
within ten (10) days of its receipt of the Transfer Notice and shall
pay the offered price on the terms contained in the
3
Transfer Notice or if no terms are provided, in immediately
available funds, within twenty (20) calendar days.
(c) Shares issued pursuant to this Warrant Agreement shall
bear the following legend:
PURSUANT TO A WARRANT AGREEMENT BETWEEN ADVANCED TELECOMMUNICATIONS, INC.
AND GENERAL ELECTRIC CAPITAL CORPORATION DATED AS OF JULY 16, 1999, THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS
ON TRANSFER AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF EXCEPT IN COMPLIANCE WITH SUCH WARRANT AGREEMENT. A COPY OF
SAID WARRANT AGREEMENT IS ON FILE AT THE PRINCIPAL BUSINESS OFFICE OF THE
ISSUER.
6. Holder's Right to Put.
(a) At any time after December 31, 1999 and before the
Termination Date, the holder of Warrants that are then exercisable
as provided in Section 1(b) or of Shares previously issued upon
exercise of Warrants shall have the right to sell (the "Put"), and
the Issuer shall have the obligation to buy, all such Warrants
and/or all such Shares previously issued pursuant to Section 3
hereof at a price (the "Put Price") equal to the greater of (i) the
fair market value thereof or (ii) a price reflecting the average
price-to-earnings ratio of ten (10) industry peers (based on the
reported net income of the Issuer calculated in conformance with
GAAP).
(b) The Put shall be exercised upon delivery to the Issuer of
a written notice of exercise of the Put (the "Put Notice"). The Put
Notice shall specify, the holder's determination of the Put Price.
(c) (i) If the Issuer agrees with the Put Price, it shall so
notify the holder within thirty (30) days of the receipt of the Put
Notice. If the Issuer fails to notify the holder of a disagreement
with the Put Price specified by the Put Notice within such thirty
(30) days, the Put Price shall be that set forth in the Put Notice.
Upon receipt of the Issuer's notice of acceptance of the Put Price
(or thirty (30) days after delivery of the Put Notice if no response
is sent), the holder may surrender to the Issuer the Put Warrant
Certificate(s) and/or Shares issued pursuant to Section 3 hereof,
together with fully executed stock powers and the Issuer shall
thereupon pay the Put Price in immediately available funds.
(ii) If the Issuer disagrees with the Put Price, it shall so
notify the holder within thirty (30) days of the receipt of the Put
Notice. If the Issuer and the holder cannot agree on the fair market
value of the Warrants and/or Shares within ten (10) business days
after receipt of the Issuer's
4
notice of disagreement, either party shall have the right to employ
the procedure set forth in subsection 6(f)below.
(d) For purposes of this Section 6(d), the Administrative
Agent shall act as agent for all transferees desiring to exercise
their Put rights unless the Administrative Agent has not elected to
Put any Warrants or any Shares, in which event that transferee
exercising a Put for the highest number of Shares or Warrant(s)
exercisable for the highest number of Shares shall act as agent for
the other transferees. All such transferees shall be bound by the
agent hereunder.
(e) Prior to the Issuer's full and complete performance of all
Obligations under the Loan Agreement, no holder of Warrants or
Shares shall have the right to exercise the Put until such time as
the exercise of the Put as to all outstanding Warrants would not
create a default under the covenants set forth in the Loan
Agreement. This Section 6(e) shall be null and void after the Issuer
satisfies all Obligations under the Loan Agreement.
(f) If the holder disagrees with the Put Price specified in
the Put Notice, it must so notify the Issuer within thirty (30) days
of the receipt of the Put Notice. If the Issuer and the holder
cannot agree on the fair market value of the Warrants and/or Shares
within ten (10) Business Days after the Issuer's receipt of the
holder's notice of disagreement regarding fair market value, either
party shall have the right to designate an independent, mutually
agreeable nationally recognized accounting firm ("Accounting Firm")
to determine such fair market value. The determination of fair
market value by the Accounting Firm or the average of such fair
market value, if two Accounting Firms are used, shall be final and
binding upon both parties. The determination shall be made within
sixty (60) days of the designation of the Accounting Firms. Within
fifteen (15) business days following the receipt by the Issuer of
notice of the determination of fair market value by the Accounting
Firm(s), the Issuer shall pay the Put Price in immediately available
funds in exchange for the Warrant Certificate(s) or Shares, as the
case may be. All fees, costs and expenses relating to the
determination of fair market value shall be paid by the Issuer.
7. Antidilution. The following provisions shall govern dilution of
the Warrants or Shares issuable under this Warrant Agreement.
(a) In the event that the Issuer shall at any time after the
date of this Warrant Agreement (i) declare a dividend on the Common
Stock in shares of its capital stock (whether in shares of Common
Stock or of capital stock of any other class), (ii) split or
subdivide the outstanding Common Stock or (iii) combine the
outstanding Common Stock into a smaller number of shares, the number
and/or kind of shares subject to the
5
Warrants in effect at the time of the record date for such dividend
or of the effective date of such split, subdivision or combination
shall be adjusted so that the holder of any Warrant shall be
entitled to receive, upon payment of the aggregate Warrant Price,
the aggregate number and kind of shares issuable or payable on the
aggregate number of Shares for which the Warrants are exercisable,
without regard to Section 1(b) solely for this purpose, as a result
of such dividend, subdivision or combination. Such adjustment shall
be made successively whenever any event listed above shall occur.
(b) In the event that the Issuer issues any securities or
rights in addition to those outstanding on the date hereof and
defined as "Closing Date Stock" in Section 1 hereof other than to a
public offering in which the Shares are registered or purchased
under Section 8 below, the aggregate number of Shares for which the
Warrants are exercisable, without regard to Section 1(b) solely for
this purpose, shall automatically be adjusted so that following such
an issuance, the Administrative Agent's Proportionate Share shall
remain as in existence immediately prior to such issuance.
(c) If at any time before the Termination Date there shall
occur any capital reorganization or any reclassification of the
stock of the Issuer not specified in Section 7(a) above, or the
consolidation or merger of the Issuer with or into another person
(other than a consolidation or merger in which the Issuer is the
continuing corporation and which does not result in any change in
the Common Stock or the Administrative Agent's Proportionate Share
thereof) or the sale or disposition of all or substantially all of
the properties and assets of the Issuer as an entirety to any other
person, then, after such reorganization, reclassification,
consolidation, merger, sale or other disposition, each outstanding
Warrant shall be exercisable for the kind and number of shares of
stock or other securities or property of the Issuer or of the
corporation resulting from such consolidation or surviving such
merger or to which such properties and assets shall have been sold
or otherwise disposed to which such holder would have been entitled
if it held the Shares issuable upon the exercise of Warrants issued
hereunder immediately prior to such reorganization,
reclassification, consolidation, merger, sale or other disposition.
The provisions of this Section 7(c) shall similarly apply to
successive reorganizations, reclassifications, consolidations,
mergers, sales or other dispositions.
(d) If at any time, as a result of an adjustment made pursuant
to this Section 7, the holder of any Warrant thereafter exercised
shall become entitled to receive any shares of the Issuer other than
shares of Common Stock, thereafter the number of such other shares
so receivable upon exercise of any Warrant shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions
6
with respect to the Shares contained in this Section 7, and the
provisions of this Warrant Agreement with respect to the Shares
shall apply on like terms to such other shares.
(e) Whenever the number of Shares for which the Warrants are
exercisable shall be subject to adjustment as provided in this
Section 7, the Issuer shall forthwith prepare a statement, signed by
its chief financial officer, showing in detail the facts requiring
such adjustment and the Shares for which the Warrants may be
exercised that shall be in effect after such adjustment. The Issuer
shall cause a copy of such statement to be sent by certified mail,
return receipt requested or by overnight courier (with receipt) to
each holder of the Warrants or Shares at its address appearing on
the Issuer's records.
(f) The Issuer shall pay all documentary, stamp or other
transactional taxes attributable to the issuance or delivery of
Shares upon exercise of any Warrant; provided, however, that the
Issuer shall not be required to pay any issue taxes which may be
payable in respect of any transfer involved in the issuance or
delivery of any certificate for such Shares in a name other than
that of the holder of the applicable Warrant.
(g) In the event the Issuer shall propose to take any action
of the types described in this Section 7, the Issuer shall give
notice to the holders of the Warrants, in the manner set forth in
Section 7(e) above, which notice shall specify the record date, if
any, with respect to any such action and the date on which such
action is to take place. Such notice shall also set forth such facts
with respect thereto as shall be reasonably necessary to indicate
the effect of such action (to the extent such effect may be known at
the date of such notice) on the Shares for which the Warrants are
exercisable and the number, kind or class of shares or other
securities or property which shall be deliverable or purchasable
upon the occurrence of such action or deliverable upon exercise of
the Warrants. Such notice shall be given at least twenty (20) days
prior to the taking of such proposed action. Failure to give such
notice, or any defect therein, shall not affect the legality or
validity of any such action or the rights of holders of Warrants or
Shares to receive the benefits of this Section 7.
(h) If any question shall at any time arise with respect to an
adjustment to the number of Shares into which the Warrants may be
exercised, such question shall be determined by the independent
auditors of the Issuer, unless it is demonstrably incorrect, and
such determination shall be binding upon the Issuer and the holders
of the Warrants and the Shares.
(i) Anything in this Section 7 to the contrary
notwithstanding, the Issuer shall be entitled to make such
reductions in the Warrant Price or increase in the number of Shares
purchasable upon the exercise of each
7
Warrant, in addition to those adjustments required by this Section
7, as shall be advisable in order that any consolidation or
subdivision of the Common Stock, or any issuance wholly for cash of
any shares of Common Stock at less than the current market price, or
any issuance wholly for cash or shares of Common Stock or securities
which by their terms are convertible into or exchangeable for shares
of Common Stock, or any stock dividend, or any issuance of rights,
options or warrants referred to hereinabove in this Section 8,
hereinafter made by the Issuer to the holders of its Common Stock
shall not be taxable to them.
(j) Anything contained herein to the contrary notwithstanding,
this Section 7 shall terminate in all respects, and shall have no
further force or effect after the Termination Date.
8. "Piggy-Back" Registration Rights.
(a) If at any time after the date hereof the Issuer shall
propose to file a registration statement on a form suitable for
sales by selling stockholders, it will give notice in writing to
such effect to the holder(s) of the Warrants or any holder(s) of
Shares at least thirty (30) days prior to such filing. Such holders
shall keep such notice confidential until the Issuer shall make a
public announcement of its intention to file a registration
statement. At the written request of any holder(s) of the Warrants
(who shall have elected to purchase Shares within ten (10) days
following receipt of the Issuer's notice) or any holders of Shares,
made within ten (10) days after the receipt of such notice, the
Issuer will include in the registration statement at the Issuer's
cost and expense (except for the fees and expenses of counsel to
such holder(s) and underwriting discounts and commissions
attributable to the Shares included therein) such of the Shares held
by such holder(s) as they shall request (the "Offered Shares");
provided, however, that if the offering being registered by the
Issuer is underwritten and if the representative of the underwriters
certifies that the inclusion therein of the Offered Shares would
materially and adversely affect the sale of the securities to be
sold by the Issuer thereunder, then the public offering of the
Offered Shares so excluded shall be delayed for a period of ninety
(90) days after the commencement of the underwritten public
offering, provided that the representative of the underwriters
certifies that such delay would not materially and adversely affect
the sale of such Offered Shares. If the Offered Shares are not
included in a delayed public offering within this ninety (90) day
period: (i) the Issuer shall then have the obligation, at the option
of the holder(s) of the Offered Shares, to repurchase same at a
price per share equal to the higher of (x) in the event shares of
other stockholders are included in the registration, the net price
to such stockholders of the shares so offered, and (y) in the event
the offering includes only shares offered by the Issuer, the net
price to the Issuer of the shares so offered; (ii) such purchase
shall take place within ninety (90) days of the closing of the
public offering; and (iii)
8
Sections 5 and 6 shall not be applicable to such purchase of the
Shares; provided, however, that prior to the Issuer's full and
complete performance of all Obligations under the Loan Agreement, no
holder of Warrants or Shares shall have the right to require the
Issuer to effect such purchase until such time as such purchase
would not create a default under the covenants set forth in the Loan
Agreement and provided, further, that this provision shall be null
and void after the Issuer satisfies all Obligations under the Loan
Agreement.
The rights of holders of the Warrants, and Shares under this
Section (a) shall apply to an unlimited number of offerings by the
Issuer.
(b) At the time any registration statement filed in accordance
with the provisions of subsection 9(a) above becomes effective, and
at the effective date of a post-effective amendment thereto, the
Issuer will, at its own expense, furnish to the persons whose Shares
are included in such registration statement pursuant to this Section
8, an opinion of the Issuer's counsel to the effect that:
(i) The registration statement and the prospectus contained
therein, and each amendment or supplement thereto, as of their
respective effective or issue dates, comply as to form in all
material respects with the requirements of the Act and the rules and
regulations promulgated thereunder, and the sale of the Offered
Shares will be in compliance with applicable Blue Sky Laws; and
(ii) Such counsel has no reason to believe that, based upon
participation in the preparation thereof and discussions related
thereto, such registration statement, the prospectus contained
therein, or any amendment or supplement thereto, as of their
respective effective or issue dates, contains any untrue statement
of any material fact or omits to state any material fact required to
be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading (except that no opinion need be expressed with respect to
any financial statements, notes thereto or other financial data
contained therein). If for any reason the Issuer's counsel is unable
to give such opinion, the Issuer shall notify the holder(s) of
Offered Shares and shall use its best efforts to remove
expeditiously all impediments to the rendering of such opinion.
(c) The Issuer shall promptly notify the holder(s) of Offered
Shares of the occurrence of any event as a result of which any
prospectus included in a registration statement filed pursuant to
this Section 8 includes any misstatement of a material fact or
omission of any material fact required to be stated therein or
necessary to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.
9
(d) The Issuer's obligations under this Section 8 with respect
to each holder of Offered Shares are expressly conditioned upon such
holder's furnishing to the Issuer in writing such information
concerning such holder and the terms of such holder's proposed
offering as the Issuer shall reasonably request for inclusion in the
registration statement. If any registration statement including
Offered Shares is filed, the Issuer shall indemnify each holder
thereof (and each underwriter for such holder and each person, if
any, who controls such underwriter within the meaning of the Act)
from any loss, claim, damage or liability arising out of or based
upon any untrue statement of a material fact contained in such
registration statement or any omission to state therein a material
fact required to be stated therein or necessary to make the
statements made therein, in the light of the circumstances under
which they were made, not misleading, except for such statement or
omission based on information furnished in writing by such holder of
Offered Shares expressly for use in such registration statement.
Each holder of Offered Shares shall indemnify the Issuer (and each
of its officers and directors who has signed such registration
statement, each person, if any, who controls the Issuer within the
meaning of the Act, each underwriter for the company and each
person, if any, who controls such underwriter within the meaning of
the Act) against any loss, claim, damage or liability arising from
any statement or omission which was made in reliance upon
information furnished in writing to the Issuer by such holder of
Offered Shares expressly for use in such registration statement.
9. Notice of Actions, Settlement and Contribution. Promptly after
receipt by an indemnified party of notice of the commencement of any action
involving a claim referred to in the preceding paragraphs of Section 8 above,
such indemnified party will, if a claim in respect thereof is made against an
indemnifying party, give written notice to the latter of the commencement of
such action. In case any such action is brought against an indemnified party,
the indemnifying party will be entitled to participate in and to assume the
defense thereof, jointly with any other indemnifying party similarly notified to
the extent that it may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall be responsible for any legal or other expenses
subsequently incurred by the latter in connection with the defense thereof;
provided, however, that if any indemnified party shall have reasonably concluded
that there may be one or more legal defenses available to such indemnified party
which are different from or additional to and are inconsistent with those
available to the indemnifying party, or that such claim or litigation involves
or could have an effect upon matters beyond the scope of the indemnity agreement
provided in Section 8 above, the indemnifying party shall not have the right to
assume the defense of such action on behalf of such indemnified party and such
indemnifying party shall reimburse such indemnified party and any person
controlling such indemnified party for that portion of the fees and expenses of
any counsel retained by the indemnified party which are reasonably related to
the matters covered by the indemnity agreement provided in Section 8 above.
10
The indemnifying party shall not make any settlement of any claims
indemnified against hereunder without the written consent of the indemnified
party or parties, which consent shall not be unreasonably withheld.
In the event the indemnity provisions of Section 8 are not
enforceable in the court in which indemnity is sought, the indemnifying party
shall contribute to any cost, loss or liability of the indemnified party in
accordance with the applicable rules and principles of contribution by joint
tortfeasors in that jurisdiction for securities fraud actions.
10. No Fractional Shares to be Issued. The Issuer shall not, upon
any exercise of the Warrants, issue a certificate representing any fraction of a
share of Common Stock. If any adjustment under Section 7 would create a
fractional share of Common Stock or a right to acquire a fractional share of
Common Stock, such fractional share shall be disregarded and the number of
shares subject to the Warrants shall be the next higher number of shares,
rounding all fractions upward.
11. Entire Agreement. This Warrant Agreement contains the entire
agreement between the holders of the Warrants and the Issuer with respect to the
purchase of the Warrants and supersedes all prior arrangements or understandings
with respect thereto.
12. Governing Law. This Warrant Agreement shall be governed by and
construed in accordance with the law of the State of New York.
13. Waiver and Amendment. Any term or provision of this Warrant
Agreement may be waived at any time by the party which is entitled to the
benefits thereof and any term or provision of this Warrant Agreement may be
amended or supplemented at any time by agreement of the holders of the Warrants
and the Issuer, except that any waiver of any term or condition, or any
amendment or supplementation, of this Warrant Agreement must be in writing. A
waiver of any breach or failure to enforce any of the terms or conditions of
this Warrant Agreement shall not in any way affect, limit or waive a party's
rights hereunder at any time to enforce strict compliance thereafter with any
term or condition of this Warrant Agreement.
14. Severability. In the event that any one or more of the
provisions contained in this Warrant Agreement shall be determined to be
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in any other respect and the
remaining provisions of this Warrant Agreement shall not, at the election of the
party for whom the benefit of the provision exists, be in any way impaired.
15. Notice. Any notice or other document required or permitted to be
given or delivered to the Issuer or to the holder of the Warrants or any Shares
shall be delivered personally, or sent by certified or registered mail as
follows:
if to the Issuer:
11
Advanced Telecommunications, Inc.
000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx Xxxxx
Telecopy: (000) 000-0000
or at such other address as the Issuer shall designate in writing to the
Administrative Agent and/or its assignees;
if to the Administrative Agent:
General Electric Capital Corporation
Telecom Financial Services
00 Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Portfolio Manager
Telecopy: (000) 000-0000
with a copy to:
NTFC Capital Corporation
000 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxx 00000
Attention: Legal Department
Telecopy: (000) 000-0000
or at such other address as the Administrative Agent shall designate in writing
to the Issuer;
and if to an assignee or subsequent assignee of the Administrative Agent, at the
last address shown on the books of the Issuer maintained for the registration
of, and the registration of transfer of, the Warrant Certificate(s), any
Replacement Warrant Certificate(s) and any Shares, or at such other address as
the holder hereof or thereof shall have notified the Issuer in writing.
16. Holder of Warrant not a Shareholder. No holder of the Warrants
shall, as such, be entitled to vote or receive dividends (except as otherwise
provided herein) or be deemed to be a shareholder of the Issuer for any purpose.
17. Loss, Destruction, Etc. of Warrant Certificate(s). Upon receipt
of evidence satisfactory to the Issuer of the loss, theft, mutilation or
destruction of any Warrant Certificate(s), and in the case of any such loss,
theft or destruction, upon delivery of a bond of indemnity in such form and
amount as shall be reasonably satisfactory to the Issuer, or in the event of
such mutilation, upon surrender and cancellation of the Warrant Certificate(s),
the Issuer will make and deliver a Replacement Warrant Certificate, of like
tenor, in lieu of such lost, stolen, destroyed or mutilated Warrant
Certificate(s). Any Warrant Certificate(s) alleged to be lost, destroyed or
stolen
12
shall be replaced by a replacement Warrant Certificate upon receipt of an
affidavit from the holder. Any such replacement Warrant Certificate or any
Warrant Certificate issued in lieu of any mutilated Warrant Certificate(s),
shall constitute an original contractual obligation on the part of the Issuer.
18. Obligation of Transferee. Any transferee of the Warrants shall
execute a copy of this agreement as a condition to such transfer.
13
IN WITNESS WHEREOF, the Issuer and the Administrative Agent have
caused this Warrant Agreement to be executed by their duly authorized officers
as of the date first above written.
ISSUER:
ATTEST: ADVANCED TELECOMMUNICATIONS, INC.
By: /s/ Xxxxxxx Xxxxx By: /s/ Xxxxxxx X. Donchve
------------------------ -------------------------------------
Name: Xxxxxxx Xxxxx Name: Xxxxxxx X. Donchve
Title: CFO Title: Treasurer
ADMINISTRATIVE AGENT:
GENERAL ELECTRIC CAPITAL CORPORATION
By: _____________________________________
Name:
Title:
IN WITNESS WHEREOF, the Issuer and the Administrative Agent have
caused this Warrant Agreement to be executed by their duly authorized officers
as of the date first above written.
ISSUER:
ATTEST: ADVANCED TELECOMMUNICATIONS, INC.
By: __________________________ By: _____________________________________
Name: Name:
Title: Title:
ADMINISTRATIVE AGENT:
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ XX Xxxxxxxxx
-------------------------------------
Name: XX Xxxxxxxxx
Title: Att. Secretary
Exhibit A
To Warrant Agreement
[FORM OF WARRANT CERTIFICATE]
THE WARRANTS REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT. SUCH WARRANTS MAY BE
TRANSFERRED ONLY IN COMPLIANCE WITH THE CONDITIONS SPECIFIED IN THE WARRANT
AGREEMENT, DATED AS OF JULY 16, 1999, ("WARRANT AGREEMENT") BETWEEN THE ISSUER
AND THE INITIAL HOLDER OF THE WARRANTS THEREIN NAMED, A COMPLETE AND CORRECT
COPY OF WHICH IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF THE ISSUER
AND WILL BE FURNISHED TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT
CHARGE. THIS WARRANT CERTIFICATE IS NOT TRANSFERRABLE EXCEPT UPON CONDITIONS SET
FORTH IN AND EXECUTION OF THE WARRANT AGREEMENT.
EXERCISABLE AT ANY TIME FROM TIME TO TIME
UNTIL TERMINATED IN ACCORDANCE WITH
THE WARRANT AGREEMENT
No. W-________
Warrant Certificate
This Warrant Certificate certifies that General Electric Capital
Corporation (the "Administrative Agent"), or registered assigns, is the
registered holder of ___ Warrants (the "Warrants") to purchase shares of Common
Stock of Advanced Telecommunications, Inc., a Minnesota corporation (the
"Issuer"). Each Warrant entitles the holder, subject to the conditions set forth
herein and in the Warrant Agreement, to purchase from the Issuer before 5:00.
P.M., local time, on any business day of the Issuer at any time or from time to
time until terminated in accordance with the Warrant Agreement (the "Expiration
Date"), one fully paid and nonassessable share of the Common Stock of the Issuer
(the "Shares") at a price of $.0I per share (the "Exercise Price"), payable in
lawful money of the United States of America, upon surrender of this Warrant
Certificate, execution of the annexed Form of Election to Purchase and payment
of the applicable Exercise Price at the office of the Issuer at 000 Xxxxxx
Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxxxxxx, Xxxxxxxxx 00000 or such other address as
the Issuer may specify in writing to the registered holder of the Warrants
evidenced hereby (the "Warrant Office"). The Exercise Price and number of
Warrant Shares purchasable upon exercise of the Warrants are subject to
adjustment prior to the Expiration Date upon the occurrence of certain events as
set forth in Warrant Agreement.
15
No Warrant may be exercised after 5:00 P.M., local time of the
Warrant Office, on the Expiration Date and all rights of the registered holders
of the Warrants shall cease after 5:00 P.M., local time of the Warrant Office,
on the Expiration Date.
The Issuer may deem and treat the registered holder(s) of the
Warrants evidenced hereby as the absolute owner(s) thereof (notwithstanding any
notation of ownership or other writing hereon made by anyone), for the purpose
of any exercise hereof and of any distribution to the holder(s) hereof, and for
all other purposes, and the Issuer shall not be affected by any notice to the
contrary.
Warrant Certificates, when surrendered at the office of the Issuer
at the above-mentioned address by the registered holder hereof in person or by a
legal representative duly authorized in writing, may be exchanged, in the manner
and subject to the limitations provided in the Warrant Agreement, but without
payment of any service charge, for another Warrant Certificate or Warrant
Certificates of like tenor evidencing in the aggregate a like number of
Warrants.
Upon due presentment for registration of transfer of this Warrant
Certificate at the Warrant Office, a new Warrant Certificate or Warrant
Certificates of like tenor and evidencing in the aggregate a like number of
Warrants shall be issued in exchange for this Warrant Certificate to the
transferee(s) and, if less than all the Warrants evidenced hereby are to be
transferred, to the registered holder hereof, subject to the limitations
provided in the Warrant Agreement, without charge except for any tax or other
governmental charge imposed in connection therewith.
This Warrant Certificate is one of the Warrant Certificates referred
to in the Warrant Agreement dated as of _______, 199_ between the Issuer and the
Administrative Agent (the "Warrant Agreement"). Said Warrant Agreement is hereby
incorporated by reference in and made a part of this instrument and is hereby
referred to for a description of the rights, limitation of rights, obligations,
duties and immunities thereunder of the Issuer and the holders.
16
IN WITNESS WHEREOF, the Issuer has caused this Warrant Certificate
to be signed by its duly authorized officers on this the 19th day of July, 1999.
ADVANCED TELECOMMUNICATIONS, INC.
By:______________________________________
Name:
Title:
ATTEST:
By: ____________________________
Name:
Title:
17
FORM OF ELECTION TO PURCHASE
[To be executed only upon exercise of Warrant]
The undersigned registered owner of this Warrant irrevocably
exercises this Warrant for the purchase of __________ shares of Common Stock of
Advanced Telecommunications, Inc., and herewith makes payment therefor, all at
the price and on the terms and conditions specified in this Warrant and requests
that certificates for the shares of Common Stock hereby purchased (and any
securities or other property issuable upon such exercise) be issued in the name
of and delivered to _____________ whose address is ____________________ and, if
such shares of Common Stock shall not include all of the shares of Common Stock
issuable as provided in this Warrant, that a new Warrant of like tenor and date
for the balance of the shares of Common Stock issuable hereunder be delivered to
the undersigned.
_________________________________________
(Name of Registered Owner)
_________________________________________
(Signature of Registered Owner)
_________________________________________
(Street Address)
_________________________________________
(City) (State) (Zip Code)
NOTICE: The signature on this subscription must correspond with the name as
written upon the face of the Warrant in every particular, without
alteration or enlargement or any change whatsoever.
18
