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EXHIBIT 10.11
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WARRANT REGISTRATION RIGHTS AGREEMENT
between
ALLEGIANCE TELECOM, INC.
and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED,
SALOMON BROTHERS INC,
BEAR, ▇▇▇▇▇▇▇ & CO. INC.,
and
▇▇▇▇▇▇▇▇▇ LUFKIN & ▇▇▇▇▇▇▇▇ SECURITIES CORPORATION
Dated as of January 29, 1998
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WARRANT REGISTRATION RIGHTS AGREEMENT
WARRANT REGISTRATION RIGHTS AGREEMENT, dated as of January 29,
1998 (this "Agreement"), between ALLEGIANCE TELECOM, INC., a Delaware
corporation (the "Company"), and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED, SALOMON
BROTHERS INC., BEAR, ▇▇▇▇▇▇▇ & CO. INC. and ▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION (collectively, the "Initial Purchasers").
Pursuant to the terms of a Purchase Agreement dated the date
hereof (the "Purchase Agreement"), among the Company and Initial Purchasers,
the Company has agreed to issue and sell to the Initial Purchasers an aggregate
of 445,000 warrants (each, a "Warrant") to be issued pursuant to the provisions
of a Warrant Agreement (the "Warrant Agreement"), to be dated as of the Closing
Date (as defined below), between the Company and The Bank of New York (the
"Warrant Agent"), each Warrant initially entitling the holder thereof to
purchase .0034224719 shares of Common Stock (as defined below) of the Company
at an exercise price of $.01 per Common Share, as part of 445,000 units (the
"Units"), each Unit consisting of one 11 3/4% Senior Discount Note due 2008 of
the Company (each a "Note" and collectively, the "Notes") to be issued pursuant
to the provisions of an Indenture to be dated as of February 3, 1998 (the
"Indenture") between the Company and The Bank of New York and one Warrant. The
Note and the Warrant included in each Unit will become separately transferable
at the close of business upon the earliest to occur of (i) the date that is six
months after the Closing Date, (ii) the commencement of an exchange offer with
respect to the Notes undertaken pursuant to the Notes Registration Rights
Agreement (as defined below), and (iii) the effectiveness of a shelf
registration statement with respect to resales of the Notes.
In consideration of the foregoing and of the mutual agreements
contained herein and in the Purchase Agreement, the Company and the Warrant
Agent hereby agree as follows:
1. Definitions.
As used in this Agreement, the following capitalized defined
terms shall have the following meanings:
"Auditors" means, at any time, the independent auditors of the
Company at such time.
"Board" means the board of directors of the Company from time
to time.
"Closing Date" means the date the Warrants are originally
issued under the Warrant Agreement.
"Comfort Letter" has the meaning specified in Section 3
hereof.
"Commission" means the United States Securities and Exchange
Commission.
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"Common Stock" means the common stock, par value $0.01 per
share, of the Company.
"Common Shares" means the shares of the Common Stock of the
Company.
"Company" has the meaning specified in the preamble to this
Agreement.
"Company IPO Shares" has the meaning specified in Section 2
hereof.
"Cutback Notice" has the meaning specified in Section 2
hereof.
"Expiration Date" means the tenth anniversary of the Closing
Date.
"Holders" means the record holders of the Warrants and the
holders of Common Shares (or other securities) received upon exercise thereof.
"Includible Secondary Shares" has the meaning specified in
Section 2 hereof.
"Indenture" has the meaning specified in the preamble to this
Agreement.
"Initial Purchasers" has the meaning specified in the preamble
to this Agreement.
"managing underwriter" has the meaning specified in Section 2
hereof.
"Notes" has the meaning specified in the recitals to this
Agreement.
"Notes Registration Rights Agreement" means the Notes
Registration Rights Agreement dated the date hereof between the Company and the
Initial Purchasers.
"Opinion" has the meaning specified in Section 3 hereof.
"Other IPO Shares" has the meaning specified in Section 2
hereof.
"Piggy-back Registration Rights" has the meaning specified in
Section 2 hereof.
"Purchase Agreement" has the meaning specified in the recitals
to this Agreement.
"Registration Agreement" means the Registration Agreement
dated as of August 13, 1997 as amended from time to time among the Company, the
Investor Members and the Management Members (each as defined therein).
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"Registration Statement" has the meaning specified in Section
2 hereof.
"Resale Shelf" has the meaning specified in Section 3 hereof.
"Resales Registration Statement" has the meaning specified in
Section 9 hereof.
"Securities Act" means the United States Securities Act of
1933, as amended.
"Underlying Securities" means the Common Shares issuable upon
exercise of the Warrants or such other securities as shall be issuable upon the
exercise of the Warrants, pursuant to the Warrant Agreement.
"Units" has the meaning specified in the recitals to this
Agreement.
"Warrant" has the meaning specified in the recitals to this
Agreement.
"Warrant Agent" has the meaning specified in the recitals to
this Agreement.
"Warrant Agreement" has the meaning specified in the recitals
to this Agreement.
"Warrant Registration Statement" has the meaning specified in
Section 3 hereof.
"Warrant Shares" has the meaning specified in Section 2 hereof.
2. Piggy-Back Registration Rights.
(a) If the Company proposes to file a Registration
Statement with the Commission respecting an offering of any shares of Common
Stock (or other securities) issuable upon exercise of the Warrants (other than
an offering registered solely on Form S-4 or S-8 or any successor form thereto
and other than the initial public offering of shares of Common Stock (or other
securities) issuable upon exercise of the Warrants if no shareholder of the
Company participates therein), the Company shall give prompt written notice to
all the Holders of Warrants or Common Shares or such other securities received
upon exercise thereof at least 30 days prior to the initial filing of the
registration statement relating to such offering (the "Registration
Statement"). Each such Holder shall have the right, within 20 days after
delivery of such notice, to request in writing that the Company include all or
a portion of such of the Common Shares issuable upon exercise of such Holder's
Warrants, such other securities as shall be issuable upon the exercise of the
Warrants, or the Common Shares or such other securities received upon the
exercise thereof, pursuant to the Warrant Agreement, ("Warrant Shares") in such
Registration Statement ("Piggy-back Registration Rights"). The Company shall
include in the public offering all of the Warrant Shares that a Holder has
requested be included, unless the underwriter for the
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public offering or the underwriter managing the public offering (in either
case, the "managing underwriter") delivers a notice (a "Cutback Notice")
pursuant to Section 2(b) or 2(c) hereof. The managing underwriter may deliver
one or more Cutback Notices at any time prior to the execution of the
underwriting agreement for the public offering.
(b) If a proposed public offering includes both
securities to be offered for the account of the Company ("Company IPO Shares")
and shares to be sold by shareholders, the provisions of this Section 2(b)
shall be applicable if the managing underwriter delivers a Cutback Notice
stating that, in its opinion, the number of Common Shares that selling
shareholders propose to sell therein, whether or not such selling shareholders
have the right to include shares therein (the "Other IPO Shares"), plus the
number of Warrant Shares that the Holders have requested to be sold therein,
plus the Company IPO Shares, exceeds the maximum number of shares specified by
the managing underwriter in such Cutback Notice that may be distributed without
adversely affecting the price, timing or distribution of the Company IPO
Shares. Such maximum number of shares that may be so sold, excluding the
Company IPO Shares, are referred to as the "Includible Shares."
If the managing underwriter delivers such Cutback Notice, the
Company shall be entitled to include all of the Company IPO Shares in the
public offering and each requesting Holder shall be entitled to include in the
public offering up to its pro rata portion of the Includible Shares on a pro
rata basis with the holders of Registrable Securities under the Registration
Agreement and in priority to the inclusion of any Other IPO Shares (other than
the Registrable Securities) that are proposed to be sold in such public
offering. No shareholder that proposes to sell Other IPO Shares in the
proposed initial public offering may sell any such shares therein unless all
Warrant Shares requested by the Holders to be sold therein, and all Registrable
Securities requested by the holders thereof to be sold therein, are so
included.
(c) If a proposed public offering is entirely a secondary
offering, the provisions of this Section 2(c) shall be applicable if the
managing underwriter delivers a Cutback Notice stating that, in its opinion,
the aggregate number of Warrant Shares and Other IPO Shares proposed to be sold
therein exceeds the maximum number of shares (the "Includible Secondary
Shares") specified by the managing underwriter in such Cutback Notice that may
be distributed without adversely affecting the price, timing or distribution of
the Common Shares being distributed. If the managing underwriter delivers such
Cutback Notice, each requesting Holder shall be entitled to include in the
public offering up to its pro rata portion of the Includible Secondary Shares
on a pro rata basis with the holders of Registrable Securities under the
Registration Agreement and in priority to the inclusion of any Other IPO Shares
(other than Registrable Securities) that are proposed to be sold in such public
offering. No shareholder that proposes to sell Other IPO Shares in the
proposed public offering may sell any such shares therein unless all Warrant
Shares requested by the Holders to be sold therein, and all Registrable
Securities requested by the holders thereof to be sold therein, are so
included.
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(d) The underwriting agreement for such public offering
shall provide that each requesting Holder shall have the right to sell its
Warrant Shares to the underwriters and that the underwriters shall purchase the
Warrant Shares at the price paid by the underwriters for the Common Shares sold
by the Company and/or selling shareholders, as the case may be.
3. Shelf Registration.
(a) If only the Company sells Common Shares in an initial
public offering or all of the Warrant Shares have not been sold in a public
offering, the Company shall use its best efforts to cause to be filed pursuant
to Rule 415 under the Securities Act a shelf registration statement on the
appropriate form (the "Warrant Registration Statement") covering the issuance
of the Warrant Shares upon exercise of the Warrants and shall use its best
efforts to cause the Warrant Registration Statement to become effective under
the Securities Act within 180 days after the closing date of the initial public
offering; provided, however, that (1) in no event may the Warrant Registration
Statement be declared effective prior to the first anniversary of the Closing
Date and (2) if the Commission shall request that the Company register the
resale of the Warrant Shares instead of the issuance thereof, the Warrant
Registration Statement shall register such resale as opposed to such issuance.
The Company shall use reasonable efforts to keep the Warrant Registration
Statement continuously effective until such time as all Warrants have been
exercised or have expired or in the case of clause (2), until such time as all
Warrant Shares have been resold. Prior to filing the Warrant Registration
Statement or any amendment thereto, the Company shall provide a copy thereof to
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and its counsel and afford them a reasonable
time to comment thereon.
(b) If the Warrant Registration Statement shall register
the sale of the Warrant Shares (a "Resale Shelf") as provided in Section
3(a)(2) above, the Company agrees to:
(i) make available for inspection by a representative of
the Holders, any underwriter participating in any disposition pursuant
to such Resale Shelf and attorneys and accountants designated by the
Holders, at reasonable times and in a reasonable manner, financial and
other records, documents and properties of the Company that are
pertinent to the conduct of due diligence customary for an
underwritten offering, and cause the officers, directors and employees
of the Company to supply all information reasonably requested by any
such representative, underwriter, attorney or accountant in connection
with a Resale Shelf; provided, however, that such persons shall first
agree in writing with the Company that any information that is
reasonably and in good faith designated by the Company in writing as
confidential at the time of delivery of such information shall be kept
confidential by such persons, unless and to the extent that disclosure
of such information is required by law or such information becomes
generally available to the public other than as a result of a
disclosure or failure to safeguard such information by such person;
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(ii) use its best efforts to cause all Warrant Shares sold
under a Resale Shelf to be listed on any securities exchange or any
automated quotation system on which similar securities issued by the
Company are then listed if requested by the Holders of Warrant Shares
representing a majority of the Warrants originally issued, to the
extent such Warrant Shares satisfy applicable listing requirements;
(iii) provide a reasonable number of copies of the
prospectus included in such Resale Shelf to Holders that are selling
Warrant Shares pursuant to such Resale Shelf;
(iv) cause to be provided to the Warrant Agent, on behalf
of the Holders and beneficial owners of Warrant Shares, upon the
effectiveness of such Resale Shelf, a customary "10b-5" opinion of
independent counsel (an "Opinion") and a customary "cold comfort"
letter of independent auditors (a "Comfort Letter");
(v) cause to be provided to Holders and beneficial owners
of Warrant Shares an Opinion and Comfort Letter with respect to each
Form 10-K and Form 10-Q, including any amendments thereto, that is
incorporated by reference in such Resale Shelf; and
(vi) notify the Warrant Agent, for distribution to the
Holders, (A) when the Resale Shelf has become effective and when any
post-effective amendment thereto has been filed and becomes effective,
(B) of any request by the Commission or any state securities authority
for amendments and supplements to the Resale Shelf or of any material
request by the Commission or any state securities authority for
additional information after the Resale Shelf has become effective,
(C) of the issuance by the Commission or any state securities
authority of any stop order suspending the effectiveness of the Resale
Shelf or the initiation of any proceedings for that purpose, (D) if,
between the effective date of the Resale Shelf and the closing of any
sale of Warrant Shares covered thereby, the representations and
warranties of the Company contained in any underwriting agreement,
securities sales agreement or other similar agreement, including this
Agreement, relating to disclosure cease to be true and correct in all
material respects or if the Company receives any notification with
respect to the suspension of the qualification of the Warrant Shares
for sale in any jurisdiction or the initiation of any proceeding for
such purpose, (E) of the happening of any event during the period the
Resale Shelf is effective such that such Resale Shelf or the related
prospectus contains an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to
make statements therein not misleading and (F) of any determination by
the Company that a post-effective amendment to a Registration
Statement would be appropriate. The Holders hereby agree to suspend
use of the prospectus contained in a Resale Shelf upon receipt of such
notice under clause (E) or (F) above until the Company has amended or
supplemented such prospectus to correct such misstatement or omission.
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4. Suspension.
Notwithstanding the foregoing, during any consecutive 365-day
period, the Company shall have the privilege to suspend availability of the
Warrant Registration Statement and the related prospectus for (a) up to two 30-
consecutive-day periods, except during the 30 days immediately prior to the
Expiration Date, if the Board determines in good faith that there is a valid
purpose for such suspension and provides notice of such determination to the
Holders at their addresses appearing in the register of Warrants maintained by
the Warrant Agent and (b) five additional, non consecutive three day periods,
except during the 30 day period immediately prior to the Expiration Date, if
the Board determines in good faith that the Company cannot provide adequate
disclosure during such period due to circumstances beyond its control.
5. Blue Sky.
The Company shall use its reasonable best efforts to register
or qualify the Underlying Securities proposed to be sold or issued pursuant to
the Registration Statement or the Warrant Registration Statement under all
applicable securities or "blue sky" laws of all jurisdictions in the United
States in which any Holder of Warrants may or may be deemed to purchase
Underlying Securities upon the exercise of Warrants or resale of the Warrant
Shares, as the case may be, and shall use its reasonable best efforts to
maintain such registration or qualification through the earlier of (A) the date
upon which all Warrants have been exercised or all Warrant Shares have been
resold, as the case may be, under the Warrant Shelf Registration Statement and
(B) the Expiration Date; provided, however, that the Company shall not be
required to (i) qualify as a foreign corporation or as a broker or a dealer in
securities in any jurisdiction where it would not otherwise be required to
qualify but for this Section 5, (ii) file any general consent to service of
process or (iii) subject itself to taxation in any jurisdiction if it is not
otherwise so subject.
6. Accuracy of Disclosure.
The Company (and its successors) represents and warrants to
each Holder (and each beneficial owner of a Warrant or Warrant Share) and
agrees for the benefit of each Holder (and each beneficial owner of a Warrant
or Warrant Share) that, except during any period in which the availability of
the Warrant Registration Statement has been suspended, (i) the Warrant
Registration Statement and the documents incorporated by reference therein will
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein not misleading; and (ii) the
prospectus delivered to such Holder upon its exercise of Warrants or pursuant
to which such Holder sells its Warrant Shares, as the case may be, and the
documents incorporated by reference therein will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
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7. Indemnity.
The Company hereby agrees to indemnify each beneficial owner
of a Warrant and each person, if any, who controls any beneficial owner of a
Warrant within the meaning of either Section 15 of the Securities Act or
Section 20 of the Securities Exchange Act of 1934 (the "Exchange Act"), or is
under common control with, or is controlled by, any beneficial owner of a
Warrant (whether or not it is, at the time the indemnity provided for in this
Section 7 is sought, such a beneficial owner), from and against all losses,
damages or liabilities which such beneficial owner or any such controlling or
affiliated person suffers as a result of any breach, on the date of any
exercise of a Warrant by such beneficial owner or the resale of any Warrant
Share by such Holder, in either case pursuant to the Warrant Registration
Statement, of the representations, warranties or agreements contained in
Section 6. Each beneficial owner of a Warrant Share sold pursuant to a Resale
Shelf, by accepting its beneficial ownership of a Warrant, hereby (i) agrees to
provide the Company with information with respect to it that the Company
reasonably requests in connection with any Resale Shelf and (ii) agrees,
severally and not jointly, to indemnify the Company, its directors and officers
and each person, if any, who controls the Company within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act against any
liability incurred by it or such controlling person as a result of any
misstatement of information provided by such beneficial owner to the Company in
writing expressly for inclusion in the Resale Shelf.
8. Expenses.
All expenses incident to the Company's performance of or
compliance with its obligations under this Agreement will be borne by the
Company, regardless of whether a Registration Statement or Warrant Registration
Statement becomes effective, including without limitation (i) all Commission or
National Association of Securities Dealers, Inc. registration and filing fees,
(ii) all reasonable fees and expenses incurred in connection with compliance
with state securities or "blue sky" laws, (iii) all reasonable expenses of any
persons incurred by or on behalf of the Company in preparing or assisting in
preparing, word processing, printing and distributing any registration
statement, any prospectus, any amendments or supplements thereto and other
documents relating to the performance of and compliance with this Agreement,
(iv) the reasonable fees (including legal fees and expenses) and disbursements
of the Warrant Agent, (v) the reasonable fees and disbursements of counsel for
the Company and (vi) the fees and disbursements, if any, of the Auditors but
excluding (x) fees and disbursements of counsel retained by the participating
Holders and (y) the Holders' share of underwriting discounts and commissions.
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9. Resale Shelf Registration Statement.
In the event that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, or any
successor thereto, in its opinion, becomes an Affiliate (as such term is
defined in Rule 144 under the Securities Act) of the Company, or any successor
thereto, the Company (or its successor) shall use its best efforts to cause to
be filed as soon as practicable after receiving notice thereof from such
Initial Purchaser (or its successor) a shelf registration statement (the
"Resales Registration Statement") under the Securities Act providing for the
resale by such Initial Purchaser (or its successor) of all Warrants and Common
Shares it acquires from time to time and to have such shelf registration
statement declared effective by the Commission. The provisions of this
Agreement concerning the Warrant Registration Statement shall apply to the
Resales Registration Statement as if such Resales Registration Statement were
the Warrant Registration Statement (except that the Company (or its successor)
will use its best efforts to keep the Resales Registration Statement effective
until the earlier of (i) the Expiration Date and (ii) such time as ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated shall, in its opinion, cease to be an Affiliate of
the Company, as evidenced by written notice sent promptly upon such event).
Notwithstanding anything to the contrary herein, the Company shall not be
required to effect a Resales Registration Statement if ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated shall have ceased to make a market in the Warrants and Common
Stock.
10. Miscellaneous.
(a) No Inconsistent Agreements. The Company represents
that it will not enter into any agreement which is inconsistent with the rights
granted to the Holders of Warrants or Warrant Shares in this Agreement or
otherwise conflicts with the provisions hereof. The Company represents that
the rights granted to the Holders hereunder do not in any way conflict with and
are not inconsistent with the rights granted to the holders of the Company's
other issued and outstanding securities under any agreements after giving
effect to any consents and amendments received on or prior to the date hereof.
(b) Amendments and Waivers. The provisions of this
Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given unless the Company has obtained the written
consent of Holders of at least a majority of the outstanding Warrants affected
by such amendment, modification, supplement, waiver or consent; provided that
any amendment, modification or supplement to this Agreement which, in the good
faith opinion of the Board of Directors of the Company (and evidenced by a
resolution of such board), does not adversely affect any Holder, shall not be
subject to such requirement for written consent.
(c) Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing by hand-delivery,
registered first-class mail, telex, telecopier, or any courier guaranteeing
overnight delivery (i) if to a Holder, at the most current address given by
such Holder to the Company by means of a notice given in accordance with the
provisions of this Section 10(c); (ii) if to the Company, initially at the
Company's address set forth in the
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Indenture and thereafter at such other address, notice of which is given in
accordance with the provisions of this Section 10(c); and (iii) if to the
Warrant Agent, initially at the Warrant Agent address set forth in the Warrant
Agreement and thereafter at such other address, notice of which is given in
accordance with the provisions of this Section 10(c).
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied;
and on the next business day if timely delivered to an air courier guaranteeing
overnight delivery.
(d) Successors and Assigns. This Agreement shall inure
to the benefit of and be binding upon the successors, assigns and transferees
of each of the parties, including, without limitation, subsequent Holders;
provided that nothing herein shall be deemed to permit any assignment, transfer
or other disposition of Warrants in violation of the terms of the Purchase
Agreement or the Warrant Agreement. If any transferee of any Holder shall
acquire Warrants, in any manner, whether by operation of law or otherwise, such
Warrants shall be held subject to all of the terms of this Agreement and the
Warrant Agreement, and by taking and holding such Warrants such person shall be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement or the Warrant Agreement and such person
shall be entitled to receive the benefits hereof.
(e) Purchases and Sales of Warrants. The Company shall
not, and shall use its best efforts to cause its affiliates (as defined in Rule
405 under the Securities Act) not to, purchase and then resell or otherwise
transfer any Warrants other than Warrants acquired and cancelled.
(f) Third Party Beneficiary. The Holders shall be third
party beneficiaries to the agreements made hereunder between the Company and
the Warrant Agent, and each Holder shall have the right to enforce such
agreements directly to the extent it deems such enforcement necessary or
advisable to protect its rights or the rights of Holders hereunder.
Notwithstanding anything to the contrary contained herein, Section 9 hereof
shall not be amended, modified or supplemented without the prior written
consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and the Company's obligations
under Section 9 will survive the termination of this Agreement and the
performance of all other obligations under this Agreement.
(g) Counterparts. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
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(h) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) Governing Law. This Agreement shall be governed by
the laws of the State of New York.
(j) Severability. In the event that any one or more of
the provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
(k) Waiver of Immunity. To the extent that the Company
has or hereafter may acquire any immunity from jurisdiction of any court or
from any legal process (whether through service of notice, attachment prior to
judgement, attachment in aid of execution, execution or otherwise) with respect
to itself or its property, it hereby irrevocably waives such immunity in
respect of their obligations under this Agreement to the fullest extent
permitted by law.
(l) Initial Public Offering. Notwithstanding anything to
the contrary herein contained, if the Company conducts an initial public
offering of equity securities (other than nonconvertible preferred shares), the
Company will give the Holders the opportunity to convert such Warrants into
warrants to purchase such equity securities (other than nonconvertible
preferred shares) and such Warrant Shares into such equity securities (other
than nonconvertible preferred shares). Such conversion opportunity will be on
terms and conditions determined to be fair and reasonable by the Company's
Board of Directors.
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
ALLEGIANCE TELECOM, INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman and Chief
Executive Officer
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
SALOMON BROTHERS INC
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
By ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
