THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES ACT OF ANY STATE (COLLECTIVELY, THE "ACTS"). NEITHER
THIS WARRANT NOR ANY INTEREST HEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED
OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
WITH RESPECT HERETO UNDER ALL OF THE APPLICABLE ACTS OR AN OPINION OF COUNSEL
SATISFACTORY TO SUNSHINE PCS CORPORATION (THE "COMPANY") TO THE EFFECT THAT SUCH
REGISTRATIONS ARE NOT REQUIRED.
WARRANT
To Purchase 4,300,000 Shares of Class A Common Stock
Of
Sunshine PCS Corporation
THIS IS TO CERTIFY THAT, for value received, Xxxxx PCS Corporation
A, a Delaware corporation, or permitted assigns, is entitled to purchase from
Sunshine PCS Corporation, a Delaware Corporation, at the Warrant Office, at a
purchase price per share of $0.75, subject to adjustment as provided below (the
"Exercise Price"), 4,300,000 shares of duly authorized, validly issued, fully
paid and nonassessable shares of the Company's Class A Common Stock, par value
$0.0001 ("Class A Common Stock"), and is entitled also to exercise the other
appurtenant rights, powers and privileges hereinafter set forth. The number of
shares of Common Stock purchasable hereunder and the Exercise Price are subject
to adjustment in accordance with Article IV hereof.
The holders of these Warrants may transfer or exchange such Warrants
or a portion thereof in the manner specified herein.
Certain terms used in this Warrant are defined in Article I.
ARTICLE I
TERMS DEFINED
As used in this Warrant, unless the context otherwise requires, the
following terms have the respective meanings set forth below or in the Section
indicated:
ACTS -- shall mean the Securities Act of 1933 and any applicable
state securities or blue sky laws, as they may be amended from time to time, and
the rules and regulations thereunder, all as the same shall be in effect at the
time.
BOARD OF DIRECTORS -- shall mean the Board of Directors of the
Company.
2
CLASS A COMMON STOCK -- shall mean the Company's Class A Common
Stock, par value $0.0001 per share.
COMMON STOCK -- shall mean Class A Common Stock, Class B Common
Stock or any other common stock of the Company and its successors or assigns.
COMPANY -- shall mean Sunshine PCS Corporation, a Delaware
corporation, and its successors and assigns.
EXERCISE PRICE -- shall mean the purchase price per share of Common
Stock payable by the holder hereof upon exercise of this Warrant, as it may be
adjusted from time to time in accordance with the provisions of Article IV
hereof.
OUTSTANDING -- when used with reference to Common Stock at any date,
shall mean all issued shares of Common Stock at such date, except shares then
held in the treasury of the Company.
PERSON - shall mean any individual, corporation, partnership, trust,
organization, association or other entity or individual.
3
PREFERRED STOCK - shall mean the 10,000 shares of Preferred Stock of
the Company (and any securities into which such Preferred Stock is converted or
exchanged with the Company) initially issued to Xxxxx PCS corporation A and any
transferee or other successor thereto.
SHARES - shall mean any securities issued or issuable pursuant to
the exercise of this Warrant.
SUBORDINATED NOTES - shall mean Transferable Subordinated Promissory
Notes of the Company (and any securities into which such Notes are converted or
exchanged with the Company) in the aggregate principal amount of $16,131,117,
initially issued to Xxxxx PCS Corporation A and any transferee or other
successor thereto.
WARRANT - shall mean this Warrant and any successor or replacement
Warrant delivered in accordance herewith.
WARRANT OFFICE - shall have the meaning set forth in Section 3.1.
4
WARRANT SHARES - shall mean the shares of Class A Common Stock
purchased or purchasable by the registered holder of this Warrant or the
permitted assignees of such holder upon exercise hereof pursuant to Article II
hereof.
ARTICLE II
EXERCISE OF WARRANT
2.1 TERM. This Warrant may be exercised as a whole at any time or in
part from time to time on or before 5:00 p.m., New York time, on ___________,
2006.
2.2 METHOD OF EXERCISE. To exercise this Warrant, the holder hereof
or permitted assignees of all rights of the registered owner hereof shall
deliver to the Company, at the Warrant Office (a) a written notice in the form
of the Subscription Notice attached hereto, stating therein the election of such
holder or such permitted assignees to exercise this Warrant in whole or in part
in the manner provided in the Subscription Notice, (b) payment in full of the
Exercise Price (in the manner described below) for the number of Warrant Shares
to be purchased thereunder, and (c) this Warrant. This Warrant shall be deemed
to be
5
exercised to the extent specified in the Subscription Notice on the date of
receipt by the Company of the Subscription Notice, accompanied by payment for
the Warrant Shares subscribed for and surrender of this Warrant, as aforesaid,
and such date is referred to herein as the "Exercise Date." Upon such exercise,
the Company shall issue and deliver to such holder a certificate for the full
number of the Warrant Shares purchased by such holder hereunder, against the
receipt by the Company of this Warrant and the total Exercise Price payable
hereunder for all such Warrant Shares, in accordance with Section 2.4 below.
Upon any partial exercise of this Warrant, the Company shall forthwith issue and
deliver to or upon the order of the exercising holder a new Warrant of like
tenor, in the name of the holder thereof, or as such holder may request, calling
in the aggregate on the face or faces thereof for the number of Warrant Shares
equal to the number of such shares called for on the face of the original
Warrant minus the number of such shares designated by the holder in the
Subscription Notice. The person in whose name the certificate(s) for Class A
Common Stock is to be issued shall be deemed to have become a holder of record
of such Class A Common Stock on the Exercise Date.
6
2.3 FRACTIONAL SHARES. No fractional shares of Common Stock are to
be issued upon the exercise of this Warrant, but in lieu of such fractional
share, the Company shall make a cash payment therefore equal to the Exercise
Price then in effect multiplied by such fractional share.
2.4 PAYMENT OF EXERCISE PRICE. Upon exercise of this Warrant, the
Exercise Price then in effect shall be payable, at the holder's election, by
delivering to the Company, in accordance with this Article II, a bank check or
wire transfer of good funds in an amount equal to the Exercise Price then in
effect multiplied by the number of Warrant Shares with respect to which this
Warrant is then being exercised. In addition, the Exercise Price shall be
payable, at the holder's election, by surrendering Preferred stock and/or
Subordinated Notes. When exercising warrants through the surrender of
Subordinated Notes, credit will only be given for the principal of the Notes,
and not for any accrued interest. When surrendering Preferred Stock to exercise
warrants, credit will be given for the Preferred Stock's liquidation value,
which is $1,000 per share, and for accrued but unpaid dividends on the Preferred
Stock through the payment date next preceding the Exercise.
7
ARTICLE III
WARRANT OFFICE; TRANSFER
3.1 WARRANT OFFICE. The Company shall maintain an office for certain
purposes specified herein (the "Warrant Office"), which office shall initially
be the Company's office at c/o Xxxxx X. Xxxxxxx, 000 Xxxxxx Xxxxxx, #000, Xxx
Xxxx, XX 00000 and may subsequently be such other office of the Company or of
any transfer agent of the Common Stock in the continental United States as to
which written notice has previously been given to the holder of this Warrant.
The Company shall maintain, at the Warrant Office, a register for the Warrant,
in which the Company shall record the name and address of the person in whose
name this Warrant has been issued, as well as the name and address of each
permitted assignee of the registered owner hereof.
3.2 OWNERSHIP OF WARRANT. The Company may deem and treat the person
in whose name this Warrant is registered as the holder and owner hereof
(notwithstanding any notations of
8
ownership or writing hereon made by anyone other than the Company) for all
purposes and shall not be affected by any notice to the contrary, until
presentation of this Warrant for registration of transfer as provided in this
Article III.
3.4 RESTRICTIONS ON TRANSFER OF WARRANTS AND WARRANT SHARES. The
Company agrees to maintain at the Warrant Office books for the registration and
transfer of this Warrant. Subject to the restrictions on transfer of Warrants in
this Section 3.4, the Company, from time to time, shall register the transfer of
this Warrant in such books upon surrender of this Warrant at the Warrant Office
properly endorsed or accompanied by appropriate instruments of transfer and
written instructions for transfer satisfactory to the Company. Upon any such
transfer, a new Warrant shall be issued to the transferee and the surrendered
Warrant shall be cancelled by the Company. The Company shall pay all expenses,
taxes (other than transfer or income taxes incurred by the holder) and other
charges payable in connection with the transfer of Warrants pursuant to this
Section 3.4.
9
(a) RESTRICTIONS IN GENERAL. Neither the Warrant nor the
Warrant Shares shall be transferable except upon the conditions specified in
this Section 3.4, which conditions are intended, among other things, to insure
compliance with the provisions of the Acts in respect of the exercise or
transfer of this Warrant or transfer of Warrant Shares. The registered holder of
this Warrant agrees that it will neither transfer this Warrant nor transfer
Warrant Shares before delivery to the Company of the opinion of counsel referred
to in, and to the effect described in, clause (1) of Section 3.4(b), or until
registration of this Warrant or the Warrant Shares under the Acts have become
effective.
(b) OPINION OF COUNSEL. The registered holder of this
Warrant, by its acceptance hereof, agrees that prior to any transfer of this
Warrant or any transfer of the related Warrant Shares, the holder will deliver
to the Company a statement setting forth either the holder's intention with
respect to the disposition of any Warrant Shares, or the intention of the
holder's prospective transferee with respect to its acquisition of this Warrant
or of the Warrant Shares (whichever is involved in such transfer), in either
such case, together with a signed copy
10
of the opinion of the holder's counsel, such opinion and counsel to be
reasonably acceptable to the Company, as to the necessity or non-necessity for
registration under the Acts in connection with such exercise or such transfer.
The following provisions shall then apply:
(i) If, in the opinion of the holder's counsel, the
proposed transfer of this Warrant or the proposed transfer of such Warrant
Shares may be effected without registration under the Acts of this Warrant or
such Warrant Shares, as the case may be, then the registered holder of this
Warrant shall be entitled to transfer this Warrant or such Warrant Shares in
accordance with the statement of intention delivered by the holder to the
Company.
(ii) If, in the opinion of such counsel, either the
proposed transfer of this Warrant or the proposed transfer of such Warrant
Shares may not be effected without registration under the Acts of this Warrant
or such Warrant Shares, as the case may be, the registered holder of this
Warrant shall not be entitled to transfer this Warrant or such Warrant Shares,
as the case may be, until such registration is effected.
11
(c) TERMINATION OF RESTRICTIONS. If, in the opinion of
counsel to the holder of this Warrant, a copy of which shall be furnished, and
reasonably acceptable, to the Company, this Warrant may be freely transferred
pursuant to the provisions of Rule 144(k) promulgated under the Securities Act
of 1933, as amended, or other applicable provisions of the Acts, the
restrictions set forth in this Section 3.4 shall terminate and, upon request by
the holder, the Company shall cause the restrictive legends on the face hereof
to be removed.
3.5 ACKNOWLEDGEMENT OF RIGHTS. The Company will, at the time of any
exercise of this Warrant in accordance with the terms hereof, upon the request
of the registered holder hereof, acknowledge in writing its continuing
obligation to afford to such holder any rights (including, without limitation,
any right to registration of the Warrant Shares pursuant to Section 6.5 hereof)
to which such holder shall continue to be entitled after such exercise in
accordance with the provisions of this Warrant, provided that if the holder of
this Warrant shall fail to make any such request, such failure shall not affect
the continuing obligation of the Company to afford to such holder any such
rights.
12
3.6 EXPENSES OF DELIVERY OF WARRANTS. The Company shall pay all
expenses, taxes (other than transfer or income taxes incurred by the holder) and
other charges payable in connection with the preparation, issuance and delivery
of Warrants and related Warrant Shares hereunder.
ARTICLE IV
ANTI-DILUTION PROVISIONS
4.1 ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise
Price shall be subject to adjustment from time to time as provided in this
Article IV. Upon each adjustment of the Exercise Price, except pursuant to
Section 4.1(a)(iii), 4.1(a)(iv) and 4.1(a)(v), the registered holder hereof
shall thereafter be entitled to purchase, upon exercise hereof, at the Exercise
Price resulting from such adjustment, the number of shares of Common Stock
(calculated to the nearest whole shares pursuant to Section 4.1(a)(i)) obtained
by multiplying the Exercise Price in effect immediately prior to such adjustment
by the number of shares of Common Stock purchasable pursuant hereto immediately
prior to such
13
adjustment and dividing the product thereof by the Exercise Price resulting from
such adjustment.
(a) EXERCISE PRICE ADJUSTMENTS. The Exercise Price shall
be subject to adjustment from time to time as follows:
(i) STOCK DIVIDENDS. If the number of shares
of Common Stock outstanding at any time after the date of this Warrant is
increased by a stock dividend payable in shares of Common Stock or by a
subdivision or split-up of shares of Common Stock, then immediately after the
record date fixed for the determination of holders of Common Stock entitled to
receive such stock dividend or the effective date of such subdivision or
split-up, as the case may be, the Exercise Price shall be appropriately adjusted
so that the adjusted Exercise Price shall bear the same relation to the Exercise
Price in effect immediately prior to such adjustment as the total number of
shares of Common Stock outstanding immediately prior to such action shall bear
to the total number of shares of Common Stock outstanding immediately after such
action.
14
(ii) COMBINATION OF STOCK. If the number of
shares of Common Stock outstanding at any time after the date of issuance of
this Warrant is decreased by a combination of the outstanding shares of Common
Stock, then, immediately after the effective date of such combination, the
Exercise Price shall be appropriately adjusted so that the adjusted Exercise
Price shall bear the same relation to the Exercise Price in effect immediately
prior to such adjustment as the total number of shares of Common Stock
outstanding immediately prior to such action shall bear to the total number of
shares of Common Stock outstanding immediately after such action.
(iii) REORGANIZATIONS, ETC. In case of any
capital reorganization of the Company involving, or any reclassification of, the
Common Stock, or in case of the consolidation of the Company with or the merger
of the Company with any other Person or of the sale, lease or other transfer of
all or substantially all of the assets of the Company to any other Person, this
Warrant shall, after such capital reorganization, reclassification,
consolidation, merger, sale, lease or other transfer, be exercisable for the
number of shares of stock or other securities or property to which the Common
Stock issuable
15
(at the time of such capital reorganization, reclassification, consolidation,
merger, sale, lease or other transfer) upon exercise of this Warrant would have
been entitled to receive upon such capital reorganization, reclassification,
consolidation, merger, sale, lease or other transfer if such exercise had taken
place; and in any such case, if necessary, the provisions set forth herein with
respect to the rights and interests thereafter of the holder of this Warrant
shall be appropriately adjusted so as to be applicable, as nearly as may
reasonably be, to any shares of stock or other securities or property thereafter
deliverable on the exercise of this Warrant. The subdivision or combination of
shares of Common Stock issuable upon exercise of this Warrant at any time
outstanding into a greater or lesser number of shares of Common Stock (whether
with or without par value) shall not be deemed to be a reclassification of the
Common Stock of the Company for the purposes of this clause (iii).
(iv) ISSUANCE OF STOCK. If at any time after the date of
issuance of this Warrant, the Company issues Common Stock at a purchase price
per share which is lower than the Exercise Price of this Warrant or grants or
issues securities (including options and warrants) convertible or
16
exercisable into Common Stock which have an exercise or conversion price which
is lower than the Exercise Price of this Warrant the Exercise Price of this
Warrant will be adjusted so that it will equal the purchase price of the Common
Stock which has been issued or the conversion or exercise price of the
securities convertible or exercisable into Common Stock.
(v) DIVIDENDS. If at any time after the date of issuance
of this Warrant the Company declares or makes any dividend or other distribution
on its Common Stock (other than as provided in this Section 4.1(a)), the
Exercise Price shall be reduced by the amount of the dividend or distribution.
Any non-cash dividend or distribution shall be valued at the fair market value
thereof.
(vi) ROUNDING OF CALCULATIONS; MINIMUM ADJUST-MENT. All
calculations under this Section 4.1(a) shall be made to the nearest cent or to
the whole share without regard to fractional shares (as provided in Section
2.3), as the case may be. Any provision of this Section 4.1 to the contrary
notwithstanding, no adjustment in the Exercise Price shall be made if the amount
of such adjustment would be less than $0.01, but any such amount shall be
carried
17
forward and an adjustment with respect thereto shall be made at the time of and
together with any subsequent adjustment which, together with such amount and any
other amount or amounts so carried forward, shall aggregate $0.01 or more.
(vii) TIMING OF ISSUANCE OF ADDITIONAL COMMON STOCK UPON
CERTAIN ADJUSTMENTS. In any case in which the provisions of this Section
4.1(a)(vii) shall require that an adjustment shall become effective immediately
after a record date for an event, the Company may defer until the occurrence of
such event the additional shares of Common Stock or other property issuable or
deliverable upon exercise by reason of the adjustment required by such event
over and above the shares of Common Stock or other property issuable or
deliverable upon such exercise before giving effect to such adjustment;
PROVIDED, HOWEVER, that the Company upon request shall deliver to such holder a
due xxxx or other appropriate instrument evidencing such holder's right to
receive such additional shares or other property, and such cash, upon the
occurrence of the event requiring such adjustment.
18
(b) STATEMENT REGARDING ADJUSTMENTS. Whenever the Exercise
Price shall be adjusted as provided in Section 4.1(a), the Company shall
forthwith file at the Warrant Office a statement showing in detail the facts
requiring such adjustment and the Exercise Price and new number of shares
issuable that shall be in effect after such adjustment, and the company shall
also cause a copy of such statement to be given to the holder of this Warrant.
Each such statement shall be signed by the Company's chief financial or
accounting officer. Where appropriate, such copy may be given in advance and may
be included as part of a notice required to be mailed under the provisions of
Section 4.2.
4.2 NOTICE TO HOLDERS.
(a) In the event the Company shall propose to take any action of the
type described in Section 4.1(a), the Company shall give notice to the holder of
this Warrant, in the manner set forth in Section 6.6, which notice shall specify
the record date, if any, with respect to any such action and the approximate
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
19
indicate the effect of such action (to the extent such effect may be known at
the date of such notice) on the Exercise Price and the number, kind or class of
shares or other securities or property which shall be deliverable upon exercise
of this Warrant. In the case of any action that would require the fixing of a
record date, such notice shall be given at least 10 days prior to the date so
fixed, and in case of all other action, such notice shall be given at least 15
days prior to the taking of such proposed action.
(b) OTHER NOTICES. Notwithstanding the foregoing, in the event at
any time:
(i) the Company shall declare any cash dividend upon its
Common Stock;
(ii) the Company shall declare any dividend upon its
Common Stock payable in stock or make any special dividend or other distribution
(other than regular cash dividends) to the holders of its Common Stock;
(iii) the Company shall offer for subscription pro rata
to the holders of its Common Stock any additional shares of stock of any class
or other rights;
20
(iv) there shall be any capital reorganization, or
reclassification of the capital stock of the Company, or consolidation or merger
of the Company with, or sale of all or substantially all of its assets to,
another Person; or,
(v) there shall be a voluntary or involuntary
dissolution, liquidation or winding up of the Company;
then, in any one or more of such cases, the Company shall give, by first class
mail, postage prepaid, addressed to the holder of this Warrant at the address of
such holder as shown on the books of the Company, (1) at least 10 days prior
written notice of the date on which the books of the Company shall close or a
record shall be taken for such dividend, distribution or subscription rights or
for determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
21
winding up, and (2) in the event of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up, at least 15
days, prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause (1) shall also specify, in the
case of any such dividend, distribution or subscription rights the date on which
the holders of Common Stock shall be entitled to exchange their Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up, as the case may be.
(c) If any event occurs as to which in the opinion of the Board of
Directors the other provisions of this Article IV are not strictly applicable or
if strictly applicable would not fairly protect the purchase rights of the
holders of the Warrants in accordance with the essential intent and principles
of such provisions, then the Board of Directors shall make an adjustment in the
application of such provisions, in accordance with such purchase rights provided
for herein, but in no event shall any such adjustment have the effect of
increasing the Exercise Price as otherwise determined pursuant to this Article
IV, except in the event of a combination of shares of the type contemplated in
Section 4.1(a) and then in no event to an
22
amount larger than the Exercise Price as adjusted pursuant to Subsection 4.1(a).
4.3. COSTS. The Company shall pay all documentary, stamp, transfer
or other transactional taxes attributable to the issuance or delivery of shares
of Common Stock upon exercise of this Warrant; PROVIDED, HOWEVER, that the
Company shall not be required to pay any 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 this Warrant in respect of
which such shares are being issued.
ARTICLE V
COVENANTS OF THE COMPANY
5.1 DILUTION OR IMPAIRMENTS. The Company will not, by amendment of
its Certificate of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms of this Warrant, but will at all times in good faith assist in
the
23
carrying out of all such terms. Without limiting the generality of the
foregoing, the Company:
(a) shall at all times reserve and keep available, so
long as this Warrant remains outstanding, free from preemptive rights, the
number of shares of Common Stock equal to the number of shares of Common Stock
to be issued upon the exercise of all of the Warrants issued and outstanding
(b) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable shares of Common Stock upon the exercise of this Warrant from
time to time outstanding.
ARTICLE VI
REGISTRATION
6.1 (a) PIGGYBACK. (i) If, at any time, the Company proposes to file
a registration statement relating to any of its common stock under the Acts,
other than (i) a registration statement provided for by Section 6.2(a)
24
hereof or (ii) a registration statement solely to implement an employee benefit
plan or a transaction to which Rule 145 or any other similar rule of the SEC is
applicable, the Company will promptly, but in any event not less than 30 days
before the initial filing of such registration statement, deliver written notice
of such intention to the holders of the Warrants and the Shares, setting forth
the type of securities proposed to be registered, the intended method of
disposition, the maximum proposed offering price, commissions and discounts in
connection therewith and other relevant information. If the holders of Shares so
request within 20 days after such notification, the Company hereby agrees to use
its best efforts to register the Shares or any part hereof by inclusion in such
registration statement so that such Shares may be sold at such times and in such
manner as the holder thereof shall determine.
(ii) If any Shares are included in a registration
statement filed in connection with a firm commitment underwriting, the holder
thereof agrees to sell its Shares to the underwriters pursuant to an
underwriting agreement in form acceptable to the Company and the managing
underwriters named therein.
25
6.2 (a) DEMAND. Upon the request of any Person or Persons holding
(or having the right to acquire by virtue of holding Warrants) a majority of the
Shares, the Company agrees to use its best efforts promptly to file and cause to
become effective an appropriate registration or similar statement under the Acts
covering such number of Shares as such holders shall request and to register the
sale of such Shares so that such Shares may be sold at such times and in such
manner as the holder thereof shall determine. Nothing contained in Section
6.2(a) shall obligate the Company to file and cause to become effective more
than one registration statement. Furthermore, the Company may postpone for a
reasonable period of time, but not to exceed 120 days, the filing of any
registration statement required under Section 6.2(a) if the Company has good
business reasons for such postponement.
6.3 (a) LIMITATION ON OBLIGATION. The Company shall not be required
by this Article VI to register Shares under the Acts or under any state
securities law if, in the opinion of counsel for both the holder of the Shares
and the Company or should they not agree, in the opinion of another counsel
experienced in securities law matters agreeable to counsel for the holders and
for the Company),
26
the proposed public offering or transfer of the number of Shares, as to which
registration is requested, is exempt from the registration provisions of the
Acts and the securities laws of the states in which the Shares are to be sold or
transferred or all of the Shares that the holder desires to sell may be sold
pursuant to Rule 144 without the registration under the Acts.
6.4 (a) COSTS AND EXPENSES. All costs and expenses in connection
with the registration of any Shares under this Article VI, including federal and
state registration and filing fees, printing expenses (including such number of
any preliminary and the final prospectus as may be reasonably requested) and the
fees and disbursements of counsel and of independent accountants and other
experts of the Company shall be borne by the Company; provided, however, that
the Company shall not be obligated to pay fees and disbursements of counsel for
the holders of the Shares nor any underwriting commissions or discounts relating
to the Shares.
6.5 CERTAIN OBLIGATIONS OF THE COMPANY. In connection with any
registration filings effected under Section 6.1 or 6.2 hereof, the Company will:
27
(a) PREPARATION AND FILING. Promptly prepare, file and
use its best efforts to cause to become effective the registration statement and
such amendments and supplements to the registration statement and the prospectus
used in connection therewith as may be necessary to keep the registration
statement effective for a period of 180 days and to comply with the provisions
of the Acts and applicable state securities laws with respect to the disposition
of the Shares covered by the registration statement;
(b) PROVIDE PROSPECTUS. Furnish to such selling security
holder such reasonable number of copies of the prospectus, including the
preliminary prospectus, in conformity with the requirements of the Acts, as such
selling security holder may reasonably request in order to facilitate the
disposition of the Shares;
(c) BLUE SKY. Use its best efforts to register or
qualify the securities covered by the registration statement under the
securities or "blue sky" laws of such jurisdiction as such selling holder of
Shares shall reasonably request, and accomplish any and all other acts
28
which may be reasonably necessary or advisable to enable such selling holder of
Shares to consummate the disposition in such jurisdictions of the Shares;
provided, however, that the Company shall not be required to qualify as a
foreign corporation in any such jurisdictions or escrow shares of its capital
stock.
6.6 OBLIGATIONS OF HOLDERS AND OTHERS IN A REGISTRATION. Any holder
of Shares included in any registration agrees to furnish such information
regarding such person and the securities sought to be registered as the Company
may reasonably request in connection with the registration, qualification or
compliance. If the registration involves an underwriter, such holders shall,
upon the request of such underwriter, not sell any unregistered securities of
the Company for such period of time following the effective date of the
registration statement for such offering as the underwriter may reasonably
request.
6.7 INDEMNIFICATION. (a) THE COMPANY. The Company will indemnify and
hold harmless each holder of Shares requesting or joining in a registration
statement hereunder and each other person, if any, who Controls such
29
holder within the meaning of the Acts, against any such losses, claims, damages
or liabilities (or actions in respect thereto), joint or several, to which such
holder or Controlling Person may become subject under the Acts, or otherwise, as
a result of failure to comply with the Acts by reason of any omission from the
registration statement of any material fact required to be stated therein or
necessary to make the statements therein in light of the circumstances under
which they were made not misleading, or by reason of the fact that such
registration statement contains any untrue statement of a material fact, or by
reason of any omission from any prospectus furnished to such holder of any
material fact necessary to be stated therein in order to make statements therein
in the light of the circumstances under which they were made not misleading, or
by reason of the fact that such prospectus contained any untrue statement of a
material fact, unless such statement or omission was made in reliance upon and
in conformity with written information furnished to the Company by such holder.
(b) THE HOLDERS. By requesting Shares to be covered by any
registration statement in accordance with this Article VI, each such holder
agrees to indemnify and hold
30
harmless the Company, each of its directors, each of its officers who have
signed the registration statement, and each person, if any, who Controls the
Company within the meaning of the Acts, and each underwriter who participated in
the offering of such securities against any losses, claims, damages or
liabilities (or actions in respect thereto) to which the Company or any such
director, officer or Controlling Person or underwriter may become subject, under
the Acts, or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement of any material fact contained in such registration statement or
prospectus contained therein, or any amendment or supplement thereto, or arise
out of or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein in light of the circumstance under which they were made not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in such
registration statement, or prospectus, or amendment or supplement in reliance
upon and in conformity with written information furnished to the
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Company by the holder specifically for use in the preparation thereof.
(c) PARTICIPATION BY INDEMNIFYING PARTY. In case of any
such action is brought against any indemnified party, and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate in, and, to the extent that it may wish, jointly with
any other indemnifying party similarly notified, to assume the defense thereof,
with counsel to whose employment such indemnified party has consented (which
consent shall not be unreasonably withheld); and after notice from the
indemnifying party to such indemnified party of its election to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Article VI for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation; provided, however, that such indemnified
party shall, at all times, cooperate in the defense of the indemnified party.
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6.8 ASSIGNABLE REGISTRATION RIGHTS. The registration rights under
this Article VI shall inure to the benefit of the successive holders of the
Warrants and the Shares.
6.9 SALE WITHOUT REGISTRATION. If, at the time of any sale or other
transfer (other than a transfer not involving change in beneficial ownership) of
the Warrants or the Shares and the Warrants or Shares are not to be registered
under the Acts, the Company may require, as a condition of allowing such sale or
transfer, that the holder or transferee of the Warrants or Shares, as the case
may be, for investment and not with a view to the distribution thereof; provided
that nothing contained in this Section 6.9 relieve the Company from complying
with any request for registration, qualification or compliance made pursuant to
this Article VI.
6.10 HOLDERS' COMPLIANCE WITH SECURITIES LAWS. The holder or
transferee of the Warrants or the Shares shall, at all times, cooperate with the
Company and its legal counsel in the preparation, execution and filing of all
reports, forms and proxy solicitation material which the Company must file with
the commission and with applicable securities regulatory bodies.
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ARTICLE VII
MISCELLANEOUS
7.1 ENTIRE AGREEMENT. This Warrant, along with the Purchase
Agreement, contains the entire agreement between the holder hereof and the
Company with respect to the Warrant Shares purchasable upon exercise hereof and
the related transactions and supersedes all prior arrangements or understanding
with respect thereto.
7.2 GOVERNING LAW. This Warrant shall be interpreted, construed and
governed by the laws of the State of Delaware.
7.3. WAIVER AND AMENDMENT. Any term or provision of this Warrant may
be waived at any time by the party which is entitled to the benefits thereof,
and any term or provision of this Warrant may be amended or supplemented at any
time by agreement of a majority of the holders of Warrants and the Company,
except that any waiver of any term or condition, or any amendment or
supplementation, of this Warrant must be in writing. No course of dealing
34
between the holder hereof and any other party hereto or any failure or delay on
the part of the holder hereof in exercising any rights or remedies hereunder
shall operate as a waiver of any rights or remedies of the holder under this or
any other applicable instrument. No single or partial exercise of any rights or
remedies hereunder shall operate as a waiver or preclude the exercise of any
other rights or remedies hereunder, and a waiver of any breach or failure to
enforce any of the terms or conditions of this Warrant shall not in any way
affect, limit or waive a party's rights hereunder at any time to enforce strict
compliance thereafter with every term or condition of this Warrant.
7.4 SEVERABILITY. Any provision contained in this Warrant which is
prohibited or unenforceable by law shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
contained in this Warrant.
7.5 COPY OF WARRANT. A copy of this Warrant shall be filed among the
records of the Company.
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7.6 NOTICES. Any notices or communications under this Agreement
shall be given by any of the following means: (i) registered, certified or first
class mail; (ii) hand delivery; or (iii) telex, telecopy or telegram. Such
notice or communication shall be sent to the respective parties at the address
listed below. Except as expressly provided herein, notice shall be deemed to
have been given when sent to or refused by the party to whom notice is being
given. Notice given by first class mail shall be deemed received on the third
business day following the date on which it is mailed. Communication by telex,
telecopy or telegram shall be confirmed by posting a copy of the same by
registered, certified or first class mail in an envelope properly addressed to
the respective parties at the address listed below:
If to the Company: Sunshine PCS Corporation
X/x 000 Xxxxxx Xxxxxx
Xxxxxxxxx 000
Xxx Xxxx, XX 00000
Telecopy No. 212/422-0069
If to holder hereof: Xxxxx PCS Corporation A
000 Xxxxxxxx Xxxxx Xxxxxx
Xxx, XX 00000
Telecopy No. 914/921-6410
36
Any party may, be written notice to the others, change the representative or the
address to which such notices and communications are to be sent.
7.7 LIMITATION OF LIABILITY; NOT SHAREHOLDERS. No provision of this
Warrant shall be construed as conferring upon the holder hereof the right to
vote, consent, receive dividends or receive notices other than as herein
expressly provided in respect of meetings of shareholders for the election of
directors of the Company or any other matter whatsoever as a shareholder of the
Company. No provision hereof, In the absence of affirmative action by the holder
hereof to purchase shares of Common Stock, and no mere enumeration herein of the
rights or privileges of the holder hereof, shall give rise to any liability of
such holder for the purchase price of any shares of Common Stock or as a
shareholder of the Company, whether such liability is asserted by the Company or
by creditors of the Company.
7.8 EXCHANGE OF WARRANTS. Subject to Section 3.4 hereof, upon
surrender for exchange of this Warrant to the
37
Company, the Company at its expense will promptly issue and deliver to or upon
the order of the holder hereof a new Warrant of like tenor, in the name such
holder or as such holder may direct, calling in the aggregate for the purchase
of the number of shares of the Common Stock to be issued upon the exercise of
this Warrant so surrendered. The Company shall pay all taxes (other than
securities transfer taxes) and all other expenses and charges payable in
connection with the preparation, execution and delivery of Warrants pursuant to
this Section 7.8.
7.9 REPLACEMENT OF WARRANT. Upon receipt of evidence satisfactory to
the Company of the loss, theft, mutilation or destruction of this Warrant, and
in the case of any such loss, theft or destruction upon delivery of an agreement
of indemnity in such form and amount as shall be reasonably satisfactory to the
Company, or in the event of such mutilation upon surrender and cancellation of
this Warrant, the Company will make and deliver a new Warrant of like tenor, in
the name of the holder hereof, lieu of such lost, stolen, destroyed or mutilated
Warrant. This Warrant shall be promptly cancelled by the Company upon the
surrender hereof in connection with any exchange or replacement. The Company
shall pay all taxes other than securities transfer
38
taxes) and all other expenses and charges payable in connection with the
preparation, execution and delivery of Warrants pursuant to this Section 7.9.
6.10 HEADINGS. The Article and Section and other headings herein are
for convenience only and are not part of this Warrant and shall not affect the
interpretation thereof.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
executed as of the ___ day of _______, 2001.
SUNSHINE PCS CORPORATION
By: _____________________________
Xxxxx X. Xxxxxxx
President
(CORPORATE SEAL)
Attest:
---------------------------
Xxxxxx X. Xxxxx
Assistant Secretary
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SUBSCRIPTION NOTICE
The undersigned, the holder of the foregoing Warrant, hereby elects
to exercise purchase rights represented by said Warrant for, and to purchase
thereunder, _____________ shares of the Common Stock covered by said Warrant and
herewith makes payment in full thereof or pursuant to Section 2.1 of such
Warrant, and requests (a) that certificates for such shares (and any securities
or other property issuable upon such exercise) be issued in the name of, and
delivered to, ____________________________________, and (b) if such shares shall
not include all of the shares issuable as provided in said Warrant, that a new
Warrant of like tenor and date, in the name of the undersigned, for the balance
of the shares issuable thereunder be delivered to the undersigned.
------------------------
Dated: ___________, 20__
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ASSIGNMENT
For value received, ______________________________, hereby sells,
assigns and transfers unto __________________ the within Warrant, together with
all right, title and interest therein and does hereby irrevocably constitute and
appoint attorney, to transfer said Warrant on the books of the Company, with
full power of substitution.
-----------------------------
Dated: ____________, 20__
