Exhibit 4.8
EXECUTION COPY
________________________________________________________________________________
WARRANT REGISTRATION RIGHTS AGREEMENT
between
ECONOPHONE INC.
and
THE BANK OF NEW YORK,
as Warrant Agent
Dated as of July 1, 1997
________________________________________________________________________________
WARRANT REGISTRATION RIGHTS AGREEMENT
WARRANT REGISTRATION RIGHTS AGREEMENT, dated as of July 1, 1997 (this
"AGREEMENT"), between ECONOPHONE, INC., a New York corporation (the "COMPANY"),
and THE BANK OF NEW YORK, a New York banking corporation, as warrant agent (in
such capacity, the "WARRANT AGENT").
Pursuant to the terms of a Placement Agreement, dated June 26, 1997
(the "PLACEMENT AGREEMENT"), among the Company and Xxxxxx Xxxxxxx & Co.
Incorporated, as placement agent (the "PLACEMENT AGENT"), the Company has agreed
to issue and sell to the Placement Agent an aggregate of 155,000 warrants (each,
a "WARRANT"), each Warrant initially entitling the holder thereof to purchase
8.167 shares of Common Stock (as defined below) of the Company at an exercise
price of $.01 per share, as part of 155,000 units (the "UNITS"), each Unit
consisting of one 131/2% Senior Note due 2007 of the Company (each a "Note" and
collectively, the "NOTES") to be issued pursuant to the provisions of an
Indenture dated as of July 1, 1997 (the "Indenture") between the Company, as
issuer, and The Bank of New York, as trustee, 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 180 days
following the Closing Date (as defined below), (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 Placement 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 hereof.
"Comfort Letter" has the meaning specified in Section 3 hereof.
"Commission" means the United States Securities and Exchange
Commission.
"Common Stock" means the Voting Common Stock, par value $0.0001 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 second 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 recitals 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 Registration Rights
Agreement dated the Closing Date between the Company and the Placement Agent
relating to the Notes.
"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.
"Placement Agent" has the meaning specified in the recitals to this
Agreement.
"Placement Agreement" has the meaning specified in the recitals to
this Agreement.
"Registration Statement" has the meaning specified in Section 2
hereof.
"Resale Shelf" has the meaning specified in Section 3 hereof.
"Securities Act" means the United States Securities Act of 1933, as
amended.
"Securityholders Agreement" means the Securityholders Agreement, dated
as of November 1, 1996 among the Company, Xx. Xxxxxx Xxxx and Princes Gate
Investors II, L.P., as amended and supplemented from time to time.
"Shelf Expiration Date" has the meaning specified in Section 3 hereof.
"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.
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"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 preamble to this
Agreement.
"Warrant Agreement" means the Warrant Agreement dated as of the
Closing Date between the Company and the Warrant Agent.
"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 prior to the Shelf Expiration Date, 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) for cash (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 of Warrants, to the extent such
Common Shares or other securities would be (upon issuance) or are, as the case
may be, subject to restrictions on transfer (not taking into account any
registration pursuant to the Warrant Registration Statement in connection with
the issuance or resale of such Common Shares or other securities), 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
previously received upon the exercise thereof pursuant to the Warrant Agreement,
in each case to the extent that such Common Shares or other securities would be
(upon issuance) or are, as the case may be, subject to restrictions on transfer
("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
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 (other than Warrant Shares to be sold by the
Holders) that selling shareholders propose to sell therein, whether or not such
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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 and in priority to
the inclusion of any Other IPO Shares that are proposed to be sold in such
public offering, except for Other IPO Shares entitled to be included in such
public offering in priority over any Warrant Shares pursuant to the terms of the
Securityholders Agreement. Other than shareholders entitled to sell shares in
the proposed public offering in priority over the sale of any Warrant Shares
pursuant to the Securityholders Agreement, 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 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
and in priority to the inclusion of any Other IPO Shares that are proposed to be
sold in such public offering, except for Other IPO Shares entitled to be
included in such public offering in priority over any Warrant Shares pursuant to
the terms of the Securityholders Agreement. Other than shareholders entitled to
sell shares in the proposed public offering in priority over the sale of any
Warrant Shares pursuant to the Securityholders Agreement, no shareholder that
proposes to sell Other IPO Shares in such public offering may sell any such
shares therein unless all Warrant Shares requested by the Holders to be sold
therein are so included.
(d) The underwriting agreement for such public offering shall
provide that each requesting Holder shall have the right to sell its Warrant
Shares (other than Warrant Shares excluded from such public offering pursuant to
a Cutback Notice and the terms of Sections 2(b) and 2(c)) 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 other selling
shareholders, as the case may be.
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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 of
Common Shares within 180 days after the closing of the Company's initial public
offering of Common Shares, 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 of Common Shares; 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 the earlier of
(x) the second anniversary of the Closing Date and (y) such time as all Warrants
have been exercised, or in the case of clause (2), such time as all Warrant
Shares have been resold (the "SHELF EXPIRATION DATE"). Prior to filing the
Warrant Registration Statement or any amendment thereto, the Company shall
provide a copy thereof to the Placement Agent and its counsel and afford them a
reasonable time to comment thereon.
(b) If the Warrant Registration Statement shall register the
resale of the Warrant Shares (a "RESALE SHELF") as provided in clause (2) of the
proviso to the first sentence of Section 3(a) 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 to use such
information only in connection with the transaction for which such
information was obtained and 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;
(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
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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 upon the initial filing with the Commission
of such documents; 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 (C) (but only to the
extent of the issuance of any stop order), (E) or (F) above until, in the
case of clause (C) above, such stop order is removed or rescinded, or, in
the case of clause (E) and (F) above, the Company has amended or
supplemented such prospectus to correct such misstatement or omission.
4. SUSPENSION.
Notwithstanding the foregoing, in addition to any suspension
contemplated by clause (C), (E) or (F) of Section 3(vi), during any consecutive
365-day period, the Company shall
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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 (but not the purpose) 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 earliest of (A) in the
case of the Registration Statement, the date upon which all of the Warrant
Shares have been sold or such other date as shall be required by applicable law,
(B) 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 (C) 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
contained in the Warrant Registration Statement 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, except that the
representations, warranties and agreements set forth in this Section 6 do not
apply to statements or omissions in the Warrant Registration Statement or any
such prospectus based upon information relating to any Holder furnished to the
Company in writing by such Holder expressly for use therein.
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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 or any omission from such information that the Company
reasonably requested such Holder to provide.
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 any fees,
expenses and disbursements of the Holders (not included above), including,
without limitation, (x) fees and disbursements of counsel retained by the
participating Holders and (y) the Holders' share of underwriting discounts and
commissions.
9. RESALE SHELF REGISTRATION STATEMENT.
In the event that, after an initial public offering of Common Shares,
the Placement Agent, 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
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its successor) shall use its best efforts to cause to be filed as soon as
practicable after receiving notice thereof from the Placement Agent (or its
successor) a shelf registration statement (the "RESALES REGISTRATION STATEMENT")
under the Securities Act providing for the resale by the Placement Agent (or its
successor) of all Warrants and Common Shares it acquires from time to time in
connection with market-making activities 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 tenth anniversary of the Closing Date and (ii) such time
as the Placement Agent 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, (i) the Company shall not be
required to effect a Resales Registration Statement if the Placement Agent or an
Affiliate thereof shall not have lead managed the Company's initial public
offering of Common Stock and (ii) the Company shall not be required to maintain
the effectiveness of a Resales Registration Statement if the Placement Agent
shall have ceased to make a market in the Warrants and Common Stock.
10. MISCELLANEOUS.
(a) NO INCONSISTENT AGREEMENTS. Each of the Company and the
Warrant Agent represent to the other that it has not entered into, and agrees
that on or after the date of this Agreement 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.
(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 and the Warrant Agent have 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 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
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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 Placement Agreement,
the Warrant Agreement or applicable law. 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, the Placement Agent will be a third party
beneficiary to the agreements between the Company and the Warrant Agent
contained in Section 9 hereof, such section shall not be amended, modified or
supplemented without the prior written consent of the Placement Agent 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.
(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
internal laws of the State of New York.
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(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 judgment,
attachment in aid of execution, execution or otherwise) with respect to itself
or its property, it hereby irrevocably waives such immunity in respect of its
obligations under this Agreement to the fullest extent permitted by law.
(1) 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 or Common 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 their 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.
ECONOPHONE, INC.
By: ____________________________________
Name:
Title:
THE BANK OF NEW YORK
By: ____________________________________
Name:
Title:
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
ECONOPHONE, INC.
By: ____________________________________
Name:
Title:
THE BANK OF NEW YORK
By: ____________________________________
Name:
Title:
