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EXHIBIT 4.10
===============================================================
Dated as of May 31, 1996
by and between
PETERSBURG LONG DISTANCE INC.
and
THE BANK OF NEW YORK
as Warrant Agent
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XXXXX XXXXXX WARRANT AGREEMENT
TABLE OF CONTENTS*
PAGE
SECTION 1. Appointment of Warrant Agent................................... 2
SECTION 2. [Intentionally Omitted......................................... 2
SECTION 3. Xxxxx Xxxxxx Warrant Certificates.............................. 2
SECTION 4. Execution of Xxxxx Xxxxxx Warrant Certificates................. 2
SECTION 5. Transfers of Xxxxx Xxxxxx Warrants............................. 3
(a) ............................................................... 3
(b) Private Placement Legend....................................... 3
(c) Global Xxxxx Xxxxxx Warrant Legend............................. 4
SECTION 6. Registration and Countersignature.............................. 4
SECTION 7. (a) Registration of Transfers and Exchanges................... 5
(b) Book-Entry Provisions for the Global Xxxxx Xxxxxx
Warrants....................................................... 6
(c) Special Transfer Provisions.................................... 7
SECTION 8. Terms of Xxxxx Xxxxxx Warrants; Exercise of Xxxxx
Xxxxxx Warrants................................................ 9
SECTION 9. Reports........................................................ 11
SECTION 10. Payment of Taxes............................................... 11
SECTION 11. Mutilated or Missing Xxxxx Xxxxxx Warrant
Certificates................................................... 12
SECTION 12. Reservation of Xxxxx Xxxxxx Warrant Shares..................... 12
SECTION 13. Obtaining Stock Exchange Listings.............................. 13
SECTION 14. Consolidation.................................................. 13
SECTION 15. Adjustment of Exercise Price................................... 14
SECTION 16. ............................................................... 24
SECTION 17. Fractional Interests........................................... 24
SECTION 18. Notices to Xxxxx Xxxxxx Warrant holders........................ 25
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SECTION 19. Warrant Agent.................................................. 27
SECTION 20. Merger, Consolidation or Change of Name of
Warrant Agent.................................................. 29
SECTION 21. Change of Warrant Agent........................................ 30
SECTION 22. Notices to the Company and Warrant Agent....................... 30
SECTION 23. Supplements and Amendments..................................... 31
SECTION 24. Successors..................................................... 32
SECTION 25. Termination.................................................... 32
SECTION 26. Governing Law; Jurisdiction.................................... 32
SECTION 27. Indemnity...................................................... 33
SECTION 28. Benefits of This Agreement..................................... 33
SECTION 29. Counterparts................................................... 33
SECTION 30. Further Assurances............................................. 33
PAGE
EXHIBIT A Form of Warrant Certificate.................................... 35
EXHIBIT B Form of Warrant Shares Legend.................................. 41
--------------------
* This Table of Contents does not constitute a part of this Agreement
or have any bearing upon the interpretation of any of its terms or
provisions.
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XXXXX XXXXXX WARRANT AGREEMENT (this "Agreement") dated as of May 31,
1996 between Petersburg Long Distance Inc., (the "Company"), and The Bank of New
York, a New York banking corporation, as Warrant Agent (the "Warrant Agent")
WHEREAS, the Company has entered into an agreement, dated March 28,
1996, (the "Engagement Letter") with Xxxxx Xxxxxx Inc. ("Xxxxx Xxxxxx") pursuant
to which Xxxxx Xxxxxx will provide certain advisory services to the Company,
including those involving the Company's offering and sale of its (i) 123,000
Units (the "Units") consisting of $123,000,000 aggregate principal amount at
maturity of 14% Senior Discount Notes due 2004 (the "Senior Notes") and warrants
(the "Warrants") to purchase up to an aggregate of 4,182,000 common shares
without par value of the Company (the "Common Shares"); and (ii) $26,500,000
principal amount of 9% Convertible Subordinated Notes due 2006; and
WHEREAS, as partial consideration for its services under the Engagement
Letter, on April 30, 1996 (the "Issue Date") the Company issued to Xxxxx Xxxxxx
Warrants to purchase 100,000 Common Shares exercisable at $4.70 per share, as to
50,000 Common Shares immediately and as to 50,000 shares on or after 9:00 a.m.
New York time on October 30, 1996 (the "Xxxxx Xxxxxx Warrants");
WHEREAS, the Xxxxx Xxxxxx Warrants are exercisable at any time during
the five year period commencing on the Issue Date;
WHEREAS, each Xxxxx Xxxxxx Warrant entitles the holder thereof, upon
exercise, to purchase one fully paid and nonassessable Common Shares at an
exercise price of US $4.70 per share (the "Exercise Price"). The Exercise Price
and the number of shares are both subject to adjustment under certain
circumstances as provided herein. The Common Shares issuable upon exercise of
the Xxxxx Xxxxxx Warrants are referred to herein as "Xxxxx Xxxxxx Warrant
Shares");
WHEREAS, the Xxxxx Xxxxxx Warrants shall bear the legend (the "Xxxxx
Xxxxxx Warrant Legend") set forth on the form of Xxxxx Xxxxxx Warrant
Certificate set forth in Exhibit A attached hereto subject to the terms of this
Agreement. Unless registered under the Securities Act of 1933, as amended (the
"Securities Act"), and any applicable state securities laws, the Xxxxx Xxxxxx
Warrant Shares shall bear the legend set forth in Exhibit B (the "Xxxxx Xxxxxx
Warrant Shares Legend");
WHEREAS, the Company and the Warrant Agent desire to set forth their
respective rights and obligations with respect to the Xxxxx Xxxxxx Warrants; and
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WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing so to act, in connection with the
issuance of Xxxxx Xxxxxx Warrant Certificates and other matters as provided
herein.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
SECTION 1. Appointment of Warrant Agent. The Company hereby appoints
the Warrant Agent to act as agent for the Company in accordance with the
instructions set forth hereinafter in this Agreement, and the Warrant Agent
hereby accepts such appointment.
SECTION 2. [Intentionally Omitted.]
SECTION 3. Xxxxx Xxxxxx Warrant Certificates. The certificates
evidencing the Xxxxx Xxxxxx Warrants ("Xxxxx Xxxxxx Warrant Certificates") shall
be substantially in the form annexed hereto as Exhibit A.
Xxxxx Xxxxxx Warrants were offered and sold in reliance on Rule 144A
and shall be evidenced initially by a Xxxxx Xxxxxx Warrant Certificate. In the
future, the Xxxxx Xxxxxx Warrants may be evidenced duly executed by the Company
and countersigned by the Warrant Agent as hereinafter provided. The aggregate
amount of the Xxxxx Xxxxxx Warrant may from time to time be increased or
decreased by adjustments made on the records of the Warrant Agent, as custodian
for the Depositary or its nominee, as hereinafter provided.
SECTION 4. Execution of Xxxxx Xxxxxx Warrant Certificates. Xxxxx Xxxxxx
Warrant Certificates shall be signed on behalf of the Company by any two of the
following officers: its Chairman of the Board, Chief Executive Officer, Chief
Financial Officer, President, any Vice President, Secretary or an Assistant
Secretary, under its Corporate Seal. Each such signature upon the Xxxxx Xxxxxx
Warrant Certificates may be in the form of a facsimile signature of the present
or any future Chairman of the Board, Chief Executive Officer, Chief Financial
Officer, President or any Vice President and Secretary or Assistant Secretary
and may be imprinted or otherwise reproduced on the Xxxxx Xxxxxx Warrant
Certificates and for that purpose the Company may adopt and use the facsimile
signature of any person who shall have been Chairman of the Board, Chief
Executive Officer, Chief Financial Officer, President, any Vice President,
Secretary or Assistant Secretary, notwithstanding the fact that at the time the
Xxxxx Xxxxxx Warrant Certificates shall be countersigned and delivered or
disposed of he or she shall have ceased to hold such office. The seal of the
Company may be in
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the form of a facsimile thereof and may be impressed, affixed, imprinted or
otherwise reproduced on the Xxxxx Xxxxxx Warrant Certificates.
In case any officer of the Company who shall have signed any of the
Xxxxx Xxxxxx Warrant Certificates shall cease to be such officer before the
Xxxxx Xxxxxx Warrant Certificates so signed shall have been countersigned by the
Warrant Agent, or disposed of by the Company, such Xxxxx Xxxxxx Warrant
Certificates nevertheless may be countersigned and delivered or disposed of as
though such person had not ceased to be such officer of the Company; and any
Xxxxx Xxxxxx Warrant Certificate may be signed on behalf of the Company by any
person who, at the actual date of the execution of such Xxxxx Xxxxxx Warrant
Certificate, shall be a proper officer of the Company to sign such Xxxxx Xxxxxx
Warrant Certificate, although at the date of the execution of this Agreement any
such person was not such officer.
Xxxxx Xxxxxx Warrant Certificates shall be dated the date of
countersignature by the Warrant Agent.
SECTION 5. Transfers of Xxxxx Xxxxxx Warrants.
(a) The registered holder of a Xxxxx Xxxxxx Warrant Certificate
containing a Xxxxx Xxxxxx Warrant Legend may surrender such Xxxxx Xxxxxx Warrant
Certificate accompanied by a written instrument or instruments of transfer in
form satisfactory to the Warrant Agent, duly executed by the registered holder
or holders thereof or by the duly appointed legal representative thereof or by a
duly authorized attorney to the Warrant Agent, at its address specified in
Section 22 hereof (the Warrant Agent Office") for the exchange of such Xxxxx
Xxxxxx Warrant Certificate containing a Xxxxx Xxxxxx Warrant Legend, in whole or
in part, for a new Xxxxx Xxxxxx Warrant Certificate or certificates.
(b) Private Placement Legend. Except as otherwise provided in Section
7(c)(ii) hereof, the Global Xxxxx Xxxxxx Warrant Certificate shall bear the
following legend (the "Private Placement Legend"):
THE XXXXX XXXXXX WARRANTS REPRESENTED HEREBY AND, AS OF THE DATE THIS
XXXXX XXXXXX WARRANT CERTIFICATE WAS ORIGINALLY ISSUED, THE COMMON
SHARES PURCHASABLE UPON THEIR EXERCISE, HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT
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(A)(1) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A") IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A, OR (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES
LAWS OF THE STATES OF THE UNITED STATES AND THE PROVINCES OF CANADA.
(c) Global Xxxxx Xxxxxx Warrant Legend. The Global Xxxxx Xxxxxx Warrant
Certificate shall also bear the following legend:
UNLESS THIS XXXXX XXXXXX WARRANT IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY XXXXX
XXXXXX WARRANT ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY OR SUCH OTHER REPRESENTATIVE OF THE
DEPOSITORY OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH
THE RESTRICTIONS SET FORTH IN SECTION 7 OF THE XXXXX XXXXXX WARRANT
AGREEMENT.
SECTION 6. Registration and Countersignature. The Warrant Agent, on
behalf of the Company, shall number and register the Xxxxx Xxxxxx Warrant
Certificates in a register as they are issued by the Company.
Xxxxx Xxxxxx Warrant Certificates shall be manually countersigned by
the Warrant Agent and shall not be valid for any purpose unless so
countersigned. The Warrant Agent shall, upon written instructions of the
Chairman of the Board, Chief Executive Officer, Chief Financial Officer,
President, a Senior
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Vice President or Secretary of the Company, initially countersign and deliver
Xxxxx Xxxxxx Warrant Certificates entitling the holders thereof to purchase not
more than the number of Xxxxx Xxxxxx Warrant Shares referred to above in the
first recital hereof and shall countersign and deliver Xxxxx Xxxxxx Warrant
Certificates as otherwise provided in this Agreement. Such written instructions
shall specify the amount of the Xxxxx Xxxxxx Warrants to be Countersigned and
the date of Countersignature.
The Company and the Warrant Agent may deem and treat the registered
holder(s) of the Xxxxx Xxxxxx Warrant Certificates as the absolute owner(s)
thereof (notwithstanding any notation of ownership or other writing thereon made
by anyone), for all purposes, and neither the Company nor the Warrant Agent
shall be affected by any notice to the contrary. The Company agrees to arrange
for the Trustee under the Indenture (or any other Registrar thereunder) to act
as registrar hereunder with respect to Xxxxx Xxxxxx Warrants that are not
Separated.
SECTION 7. (a) Registration of Transfers and Exchanges. In accordance
with this Section 7, the Warrant Agent shall from time to time register the
transfer of any outstanding Xxxxx Xxxxxx Warrant Certificates upon the records
to be maintained by it for that purpose, upon surrender thereof accompanied by a
written instrument or instruments of transfer in form satisfactory to the
Warrant Agent, duly executed by the registered holder or holders thereof or by
the duly appointed legal representative thereof or by a duly authorized
attorney. Upon any such registration of transfer, a new Xxxxx Xxxxxx Warrant
Certificate shall be issued to the transferee(s) and the surrendered Xxxxx
Xxxxxx Warrant Certificate shall be canceled by the Warrant Agent. Canceled
Xxxxx Xxxxxx Warrant Certificates shall thereafter be disposed of by the Warrant
Agent in a manner consistent with the Warrant Agent's customary procedure and in
accordance with applicable law.
Xxxxx Xxxxxx Warrant Certificates may be exchanged at the option of the
holder(s) thereof, when surrendered to the Warrant Agent at its office for
another Xxxxx Xxxxxx Warrant Certificate or other Xxxxx Xxxxxx Warrant
Certificates of like tenor and representing in the aggregate a like number of
Xxxxx Xxxxxx Warrants. Xxxxx Xxxxxx Warrant Certificates surrendered for
exchange shall be canceled by the Warrant Agent. Such canceled Xxxxx Xxxxxx
Warrant Certificates shall then be disposed of by the Warrant Agent in a manner
consistent with the Warrant Agent's customary procedure and in accordance with
applicable law.
No service charge shall be made for any transfer or exchange of Xxxxx
Xxxxxx Warrant Certificates or any issuance of
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Xxxxx Xxxxxx Warrant Certificates, but the Company may require payment of a sum
sufficient to cover any stamp or other governmental charge or tax that may be
imposed in connection with any such transfer or exchange.
The Warrant Agent is hereby authorized to countersign, in accordance
with the provisions of this Section 7 and Section 5, the new Xxxxx Xxxxxx
Warrant Certificates required pursuant to the provisions of this Section 7.
(b) Book-Entry Provisions for the Global Xxxxx Xxxxxx Warrants. (i) The
Global Xxxxx Xxxxxx Warrant Certificate initially shall (x) be registered in the
name of the Depositary or the nominee of such Depositary, (y) be delivered to
the Warrant Agent as custodian for the Depositary and (z) bear the legend as set
forth in Section 5(b).
(ii)Transfers of the Global Xxxxx Xxxxxx Warrant Certificates
shall be limited to transfers of such Global Xxxxx Xxxxxx Warrant Certificates
in whole, but not in part, to the Depositary, its successors or their respective
nominees. Beneficial interests in the Global Xxxxx Xxxxxx Warrant may be
transferred in accordance with the applicable rules and procedures of the
Depositary. Physical Xxxxx Xxxxxx Warrant Certificates in substantially the form
set forth in Exhibit A ("Physical Xxxxx Xxxxxx Warrant Certificates") evidencing
physical warrants ("Physical Xxxxx Xxxxxx Warrants"), shall be transferred to
all beneficial owners in exchange for their beneficial interests in the Global
Xxxxx Xxxxxx Warrant if the Depositary notifies the Company that it is unwilling
or unable to continue as, or ceases to be, a "Clearing Agency" registered under
Section 17A of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and a successor depositary registered as a "Clearing Agency" under
Section 17 of the Exchange Act is not appointed by the Company within 90 days of
such notice.
(iii)In connection with the transfer of the Global Xxxxx Xxxxxx
Warrant to beneficial owners pursuant to paragraph (b) (ii) of this Section 7,
the Global Xxxxx Xxxxxx Warrant shall be deemed to be surrendered to the Warrant
Agent for cancellation, and the Company shall execute, and the Warrant Agent
shall countersign and deliver, to each beneficial owner identified by the
Depositary in exchange for its beneficial interest in the Global Xxxxx Xxxxxx
Warrant, an equal aggregate amount of Physical Xxxxx Xxxxxx Warrant Certificates
of authorized denominations.
(iv)Any Physical Xxxxx Xxxxxx Warrant Certificate delivered in
exchange for an interest in the Global Xxxxx Xxxxxx
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Warrant pursuant to paragraph (b) (ii) of this Section 7 shall, except as
otherwise provided by paragraph (c) (ii) of this Section 7, bear the legend
regarding transfer restrictions set forth in Section 5(b).
(v) The registered holder of the Global Xxxxx Xxxxxx Warrant may
grant proxies and otherwise authorize any person, including Agent Members and
persons that may hold interests through Agent Members, to take any action which
a Xxxxx Xxxxxx Warrant holder is entitled to take under this Xxxxx Xxxxxx
Warrant Agreement or the Xxxxx Xxxxxx Warrants.
(c) Special Transfer Provisions.
(i) Transfers to QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer of a Xxxxx Xxxxxx Warrant
to a QIB:
(x) If the Xxxxx Xxxxxx Warrant to be transferred consists of
Physical Xxxxx Xxxxxx Warrants, the Warrant Agent shall
register the transfer if such transfer is being made by a
proposed transferor who has checked the box provided for on the
form of Xxxxx Xxxxxx Warrant stating, or has otherwise advised
the Company and the Warrant Agent in writing, that the sale has
been made in compliance with the provisions of Rule 144A to a
transferee who has signed the certification provided for on the
form of Xxxxx Xxxxxx Warrant stating, or has otherwise advised
the Company and the Warrant Agent in writing, that it is
purchasing the Xxxxx Xxxxxx Warrant for its own account or an
account with respect to which it exercises sole investment
discretion and that it and any such account is a QIB within the
meaning of Rule 144A, and is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it has
received such information regarding the Company as it has
requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the
transferor is relying upon its foregoing representations in
order to claim the exemption from registration provided by Rule
144A.
(y)If the proposed transferee is an Agent Member and the Xxxxx
Xxxxxx Warrant to be
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transferred consists of Physical Xxxxx Xxxxxx Warrants, upon
receipt by the Warrant Agent of the documents referred to in
clause (x) and instructions given in accordance with the
Depositary's and the Warrant Agent's procedures, the Warrant
Agent shall reflect on its books and records the date and an
increase in the aggregate amount of the Global Xxxxx Xxxxxx
Warrant in an amount equal to the aggregate amount of the
Physical Xxxxx Xxxxxx Warrants, as the case may be, to be
transferred, and the Warrant Agent shall cancel the Physical
Xxxxx Xxxxxx Warrants so transferred.
(ii) Private Placement Legend. Upon the transfer, exchange or
replacement of Xxxxx Xxxxxx Warrant Certificates not bearing the Private
Placement Legend, the Warrant Agent shall deliver Xxxxx Xxxxxx Warrant
Certificates that do not bear the Private Placement Legend. Upon the transfer,
exchange or replacement of Xxxxx Xxxxxx Warrant Certificates bearing the Private
Placement Legend, the Warrant Agent shall deliver only Xxxxx Xxxxxx Warrant
Certificates that bear the Private Placement Legend unless there is delivered to
the Warrant Agent an opinion of counsel reasonably satisfactory to the Company
and the Warrant Agent to the effect that neither such legend nor the related
restrictions on transfer are required in order to maintain compliance with the
provisions of the Securities Act and the provisions of applicable Canadian
provincial securities legislation.
(iii) General. The provisions hereof shall be qualified in their
entirety by any applicable securities laws of the United States, the Province of
Ontario, and any other applicable jurisdiction and by the procedures of any
applicable clearing agency, in each case as in effect from time to time, and all
such laws and clearing procedures shall be deemed to be incorporated herein by
reference. By its acceptance of any Xxxxx Xxxxxx Warrant Certificate bearing the
Private Placement Legend, each holder of such a Xxxxx Xxxxxx Warrant Certificate
shall be deemed to acknowledge the restrictions on transfer of such Xxxxx Xxxxxx
Warrant Certificate set forth in this Xxxxx Xxxxxx Warrant Agreement and in the
Private Placement Legend and agrees that it will transfer such Xxxxx Xxxxxx
Warrant Certificate only as provided in this Xxxxx Xxxxxx Warrant Agreement. The
Warrant Agent shall not register a transfer of any Xxxxx Xxxxxx Warrant
Certificate unless such transfer complies with the restrictions on transfer of
such Xxxxx Xxxxxx Warrant Certificate set forth in this Xxxxx Xxxxxx Warrant
Agreement. In connection with any transfer of Xxxxx Xxxxxx Warrant Certificates,
each Xxxxx Xxxxxx
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Warrant holder agrees by its acceptance of the Xxxxx Xxxxxx Warrant Certificates
to furnish the Warrant Agent or the Company such certifications, legal opinions
or other information as either of them may reasonably require to confirm that
such transfer is being made pursuant to an exemption from, or a transaction not
subject to, the registration requirements of the Securities Act and the
provisions of applicable Canadian provincial securities legislation; provided
that the Warrant Agent shall not be required to determine (but may rely on a
determination made by the Company with respect to) the sufficiency of any such
certifications, legal opinions or other information.
SECTION 8. Terms of Xxxxx Xxxxxx Warrants; Exercise of Xxxxx Xxxxxx
Warrants. Subject to the terms of this Agreement, each Xxxxx Xxxxxx Warrant
holder shall have the right, which may be exercised at any time from the date of
original issuance thereof and on or prior to the close of business on April 30,
2001 (the "Expiration Date") to exercise each Xxxxx Xxxxxx Warrant and receive
from the Company the number of fully paid and nonassessable Xxxxx Xxxxxx Warrant
Shares which the holder may at the time be entitled to receive on exercise of
such Xxxxx Xxxxxx Warrants and payment of the Exercise Price (as herein defined)
then in effect for such Xxxxx Xxxxxx Warrant Shares; provided that no Xxxxx
Xxxxxx Warrant holder shall be entitled to exercise such holder's Xxxxx Xxxxxx
Warrants at any time unless, at the time of exercise, (i) a registration
statement under the Securities Act covering the offer and sale of the Xxxxx
Xxxxxx Warrant Shares has been filed with, and declared effective by, the
Securities and Exchange Commission (the "SEC"), and no stop order suspending the
effectiveness of such registration statement has been issued by the SEC or (ii)
the offer and sale of the Xxxxx Xxxxxx Warrant Shares to the Xxxxx Xxxxxx
Warrant holder are exempt from registration under the Securities Act and the
holder of the Xxxxx Xxxxxx Warrants, if so requested by the Company, has
delivered to the Company an opinion of counsel to such effect. Each Xxxxx Xxxxxx
Warrant, when exercised, will entitle the holder thereof to purchase one fully
paid and nonassessable Common Share at the Exercise Price. The Exercise Price
and the number of shares are both subject to adjustment under certain
circumstances as provided herein by Section 15. Each Xxxxx Xxxxxx Warrant not
exercised prior to the Expiration Date shall become void and all rights
thereunder and all rights in respect thereof under this Agreement shall cease as
of such time.
A Xxxxx Xxxxxx Warrant may be exercised at any time on or after the
date of original issuance thereof upon surrender to the Company at the principal
office of the Warrant Agent of the Xxxxx Xxxxxx Warrant Certificate or
Certificates to be exercised
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with the form of election to purchase on the reverse thereof duly filled in and
signed, which signature shall be guaranteed by an "eligible guarantor" as
defined in the regulations promulgated under the Exchange Act and upon payment
to the Warrant Agent for the account of the Company of the Exercise Price, as
adjusted as herein provided, for each Xxxxx Xxxxxx Warrant then exercised.
Payment of the aggregate Exercise Price shall be made in the form of cash or a
certified or official bank or bank cashier's check payable to the order of the
Company.
Subject to the provisions of Section 9 hereof, upon such surrender of
Xxxxx Xxxxxx Warrants and payment of the Exercise Price, the Company shall issue
and cause to be delivered with all reasonable dispatch to or upon the written
order of the Xxxxx Xxxxxx Warrant holder and in such name or names as the Xxxxx
Xxxxxx Warrant holder may designate, a certificate or certificates for the
number of whole Xxxxx Xxxxxx Warrant Shares issuable upon the exercise of such
Xxxxx Xxxxxx Warrants together with any cash which may be payable as provided in
Section 17 hereof; provided that if any consolidation, merger or lease or sale
of assets is proposed to be effected by the Company as described in Section 14
hereof, or a tender offer or an exchange offer for Common Shares of the Company
shall be made, upon such surrender of Xxxxx Xxxxxx Warrants and payment of the
Exercise Price as aforesaid, the Company shall, as soon as possible, but in any
event not later than two Business Days thereafter, issue and cause to be
delivered to the registered holder thereof or any person so designated to be
named therein the full number of Xxxxx Xxxxxx Warrant Shares issuable upon the
exercise of such Xxxxx Xxxxxx Warrants in the manner described in this sentence
together with any cash which may be payable as provided in Section 17 hereof.
Such certificate or certificates shall be deemed to have been issued and any
person so designated to be named therein shall be deemed to have become a holder
of record of such Xxxxx Xxxxxx Warrant Shares as of the date of the surrender of
such Xxxxx Xxxxxx Warrants and payment of the aggregate Exercise Price. No
fractional shares shall be issued upon exercise of any Xxxxx Xxxxxx Warrants in
accordance with Section 17 hereof.
The Xxxxx Xxxxxx Warrants shall be exercisable at any time on or after
the date of original issuance thereof at the election of the holders thereof,
either in full or from time to time in part (in whole shares) and, in the event
that a Xxxxx Xxxxxx Warrant Certificate is exercised in respect of fewer than
all of the Xxxxx Xxxxxx Warrant Shares issuable on such exercise at any time
prior to the Expiration Date, a new Xxxxx Xxxxxx Warrant Certificate evidencing
the remaining Xxxxx Xxxxxx Warrant or Xxxxx Xxxxxx Warrants will be issued, and
the Warrant Agent is hereby irrevocably authorized to countersign and to deliver
the required new Xxxxx Xxxxxx Warrant Certificate or Certificates
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pursuant to the provisions of this Section and of Section 4 hereof, and the
Company, whenever required by the Warrant Agent, will supply the Warrant Agent
with Xxxxx Xxxxxx Warrant Certificates duly executed on behalf of the Company
for such purpose.
All Xxxxx Xxxxxx Warrant Certificates surrendered upon exercise of
Xxxxx Xxxxxx Warrants shall be canceled by the Warrant Agent. Such canceled
Xxxxx Xxxxxx Warrant Certificates shall then be disposed of by the Company in
accordance with applicable law. The Warrant Agent shall account promptly to the
Company with respect to Xxxxx Xxxxxx Warrants exercised and concurrently pay to
the Company all monies received by the Warrant Agent for the purchase of the
Xxxxx Xxxxxx Warrant Shares through the exercise of such Xxxxx Xxxxxx Warrants.
The Warrant Agent shall keep copies of this Agreement and any notices
given or received hereunder available for inspection by the Xxxxx Xxxxxx Warrant
holders during normal business hours at its office. The Company shall supply the
Warrant Agent from time to time with such numbers of copies of this Agreement as
the Warrant Agent may request.
SECTION 9. Reports. So long as any of the Xxxxx Xxxxxx Warrants remain
outstanding, the Company shall cause copies of all quarterly and annual
financial reports and of the information, documents and other reports (or copies
of such portions of any of the foregoing as the SEC may by rules and regulations
prescribe) that the Company is required to file with the SEC pursuant to Section
13 or 15(d) of the Exchange Act ("SEC Reports") to be filed with the Warrant
Agent and mailed to the holders of Xxxxx Xxxxxx Warrants, in each case, within
15 days after filing with the SEC. If the Company is not subject to the
requirements of Section 13 or 15(d) of the Exchange Act, the Company shall
nevertheless continue to cause reports, comparable to those that it would be
required to file pursuant to Section 13 or 15(d) of the Exchange Act if it were
then subject to the requirements of either such Section, to be so filed with the
SEC for public availability (unless the SEC will not accept such a filing) and
with the Warrant Agent and mailed to the holders of Xxxxx Xxxxxx Warrants, in
each case, within the same time periods as would have applied (including under
the preceding sentence) had the Company then been subject to the requirements of
Section 13 or 15(d) of the Exchange Act. The Company shall make available to
investors and prospective investors of the Xxxxx Xxxxxx Warrants information
that satisfies the requirements of Rule 144A(d)(4) under the Securities Act.
SECTION 10. Payment of Taxes. No service charge shall be made to any
holder of a Xxxxx Xxxxxx Warrant for any exercise,
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exchange or registration of transfer of Xxxxx Xxxxxx Warrant Certificates, and
the Company will pay all documentary stamp taxes attributable to the initial
issuance of Xxxxx Xxxxxx Warrant Shares upon the exercise of Xxxxx Xxxxxx
Warrants or to any Separation; provided that the Company shall not be required
to pay any tax or taxes which may be payable in respect of any transfer involved
in the issue of any Xxxxx Xxxxxx Warrant Certificates or any certificates for
Xxxxx Xxxxxx Warrant Shares in a name other than that of the registered holder
of a Xxxxx Xxxxxx Warrant Certificate surrendered upon the exercise of a Xxxxx
Xxxxxx Warrant, and the Company shall not be required to issue or deliver such
Xxxxx Xxxxxx Warrant Certificates unless or until the person or persons
requesting the issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the satisfaction of the Company that such
tax has been paid.
SECTION 11. Mutilated or Missing Xxxxx Xxxxxx Warrant Certificates. If
any of the Xxxxx Xxxxxx Warrant Certificates shall be mutilated, lost, stolen or
destroyed, the Company may in its discretion issue and the Warrant Agent may
countersign, in exchange and substitution for and upon cancellation of the
mutilated Xxxxx Xxxxxx Warrant Certificate, or in lieu of and substitution for
the Xxxxx Xxxxxx Warrant Certificate lost, stolen or destroyed, a new Xxxxx
Xxxxxx Warrant Certificate of like tenor and representing an equivalent number
of Xxxxx Xxxxxx Warrants, but only upon receipt of evidence satisfactory to the
Company and the Warrant Agent of such loss, theft or destruction of such Xxxxx
Xxxxxx Warrant Certificate and indemnity and security there for, if requested,
also satisfactory to them. Applicants for such substitute Xxxxx Xxxxxx Warrant
Certificates shall also comply with such other reasonable regulations and pay
such other reasonable charges as the Company or the Warrant Agent may prescribe.
SECTION 12. Reservation of Xxxxx Xxxxxx Warrant Shares. The Company
will at all times reserve and keep available, free of preemptive rights and free
from all taxes, liens, charges and security interests with respect to the
issuance thereof, out of the aggregate of its authorized but unissued Common
Shares, for the purpose of enabling it to satisfy any obligation to issue Xxxxx
Xxxxxx Warrant Shares upon exercise of Xxxxx Xxxxxx Warrants, the maximum number
of Common Shares which may then be deliverable upon the exercise of all
outstanding Xxxxx Xxxxxx Warrants.
The Company or the transfer agent for the Common Shares (the "Transfer
Agent") and every subsequent transfer agent for any shares of the Company's
capital stock issuable upon the exercise of any of the rights of purchase
aforesaid will be
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irrevocably authorized and directed at all times to reserve such number of
authorized shares as shall be required for such purpose. The Company will keep a
copy of this Agreement on file with the Transfer Agent and with every subsequent
transfer agent for any shares of the Company's capital stock issuable upon the
exercise of the rights of purchase represented by the Xxxxx Xxxxxx Warrants. The
Warrant Agent is hereby irrevocably authorized to requisition from time to time
from such Transfer Agent the stock certificates required to honor outstanding
Xxxxx Xxxxxx Warrants upon exercise thereof in accordance with the terms of this
Agreement. The Company will supply such Transfer Agent with duly executed
certificates for such purposes and will provide or otherwise make available to
the Warrant Agent any cash which may be payable as provided in Section 17
hereof. The Company will furnish such Transfer Agent a copy of all notices of
adjustments and certificates related thereto transmitted to each holder pursuant
to Section 18 hereof.
Before taking any action which would cause an adjustment pursuant to
Section 15 hereof to reduce the Exercise Price below the then par value (if any)
of the Xxxxx Xxxxxx Warrant Shares, the Company will take all corporate action
necessary, in the opinion of its counsel (which may be counsel employed by the
Company), in order that the Company may validly and legally issue fully paid and
nonassessable Xxxxx Xxxxxx Warrant Shares at the Exercise Price as so adjusted.
The Company covenants that all Xxxxx Xxxxxx Warrant Shares will be,
upon payment of the Exercise Price and issuance thereof, duly and validly
issued, fully paid, nonassessable, free of preemptive rights and free from all
taxes, liens, charges and security interests with respect to the issuance
thereof.
SECTION 13. Obtaining Stock Exchange Listings. The Company shall from
time to time take all action necessary so that the Xxxxx Xxxxxx Warrant Shares,
immediately upon their issuance upon the exercise of Xxxxx Xxxxxx Warrants, will
be listed on the principal securities exchanges, interdealer quotation systems
and markets, if any, on which any Common Shares are then listed or quoted.
SECTION 14. Consolidation. In the event the Company consolidates with,
merges with or into, or sells all or substantially all of its property and
assets to another Person, each Xxxxx Xxxxxx Warrant thereafter shall entitle the
holder thereof to receive upon exercise thereof the number of shares of capital
stock or other securities or property which the holder of a Common Share is
entitled to receive upon completion of such consolidation, merger or sale of
assets. If the Company merges
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Page 14
or consolidates with, or sells all or substantially all of its property and
assets to, another Person and, in connection therewith, consideration to the
holders of Common Shares in exchange for their shares is payable solely in cash,
or in the event of the dissolution, liquidation or winding-up of the Company,
then the holders of the Xxxxx Xxxxxx Warrants will be entitled to receive
distributions on an equal basis with the holders of Common Shares or other
securities issuable upon exercise of the warrants, as if the Xxxxx Xxxxxx
Warrants had been exercised immediately prior to such event, less the Exercise
Price. Upon receipt of such payment, if any, the Xxxxx Xxxxxx Warrants will
expire and the rights of the holders thereof will cease.
In case of any such merger, consolidation or sale of assets, the
surviving or acquiring Person, and in the event of any dissolution, liquidation
or winding-up of the Company, the Company, shall deposit promptly with the
Warrant Agent the funds or other consideration, if any, necessary to pay the
holders of the Xxxxx Xxxxxx Warrants. After such funds and the surrendered Xxxxx
Xxxxxx Warrant Certificate are received, the Warrant Agent shall make payment by
delivering a check in such amount as is appropriate (or, in the case of
consideration other than cash, shall transfer such other consideration as is
appropriate, to such Person or Persons as it may be directed in writing by the
holders surrendering such Xxxxx Xxxxxx Warrants.
SECTION 15. Adjustment of Exercise Price. (a) In case the Company shall
make a dividend or other distribution on the Common Shares exclusively in Common
Shares (other than a distribution referred to in paragraph (c) of this Section),
the Exercise Price in effect at the opening of business on the day following the
date fixed for the determination of shareholders entitled to receive such
dividend or other distribution shall be reduced by multiplying such Exercise
Price by a fraction of which the numerator shall be the number of shares of
Common Shares outstanding at the close of business on the date fixed for such
determination and the denominator shall be the sum of such number of shares and
the total number of shares constituting such dividend or other distribution,
such reduction to become effective immediately after the opening of business on
the day following the date fixed for such determination. In case the Company
shall make a dividend or other distribution on the Common Shares in shares of
its capital stock other than Common Shares, and such dividend or distribution
would not otherwise require reduction of the Exercise Price pursuant to
paragraph (d), then, the Exercise Price and the number and kind of shares of
capital stock of the Company issuable upon the exercise of a Xxxxx Xxxxxx
Warrant (as in effect immediately prior to such dividend or distribution) shall
be proportionately adjusted so that the
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Page 15
holder of any Xxxxx Xxxxxx Warrant thereafter exercised may receive the
aggregate number and kind of shares of capital stock of the Company that such
holder would have owned immediately following such dividend or distribution if
such Xxxxx Xxxxxx Warrant had been exercised immediately prior thereto. For the
purpose of this paragraph (a), the number of Common Shares at any time
outstanding shall not include shares held in the treasury of the Company but
shall include shares issuable in respect of scrip certificates issued in lieu of
fractions of Common Shares. The Company shall not pay any dividend or make any
distribution on Common Shares held in the treasury of the Company.
(b) Subject to the last sentence of paragraph (g) of this Section, in
case the Company shall make a dividend or other distribution on the Common
Shares consisting exclusively of, or shall otherwise issue to all holders of the
Common Shares, rights, options or warrants entitling the holders thereof to
subscribe for or purchase Common Shares or securities convertible into or
exchangeable for Common Shares at a price per share (determined on an
as-converted or as-exercised basis if the rights, options or warrants pertain to
securities convertible into or exchangeable for Common Shares) less than the
Current Market Price (determined as provided in paragraph (h) of this Section)
on the date fixed for the determination of shareholders entitled to receive such
rights, options or warrants, the Exercise Price in effect at the opening of
business on the day following the date fixed for such determination shall be
reduced by multiplying such Exercise Price by a fraction of which the numerator
shall be the number of Common Shares outstanding at the close of business on the
date fixed for such determination plus the number of Common Shares which the
aggregate of the offering price (including the minimum consideration payable
upon exercise or exchange of securities convertible into or exchangeable for
Common Shares) of the total number of Common Shares so offered for subscription
or purchase would purchase at such Current Market Price and the denominator
shall be the number of Common Shares outstanding at the close of business on the
date fixed for such determination plus the number of Common Shares so offered
for subscription or purchase, such reduction to become effective immediately
after the opening of business on the day following the date fixed for such
determination. For the purposes of this paragraph (b), the number of Common
Shares at any time outstanding shall not include shares held in the treasury of
the Company but shall include shares issuable in respect of scrip certificates
issued in lieu of fractions of Common Shares. The Company shall not issue any
rights, options or warrants in respect of Common Shares held in the treasury of
the Company.
(c) In case outstanding Common Shares shall be subdivided into a
greater number of Common Shares, the Exercise
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Page 16
Price in effect at the opening of business on the day following the day upon
which such subdivision becomes effective shall be proportionately reduced, and,
conversely, in case outstanding Common Shares shall be combined into a smaller
number of Common Shares, the Exercise Price in effect at the opening of business
on the day following the day upon which such combination becomes effective shall
be proportionately increased, such reduction or increase, as the case may be, to
become effective immediately after the opening of business on the day following
the day upon which subdivision or combination becomes effective.
(d) (i) Subject to the last sentence of this paragraph (d)(i) and the
last sentence of paragraph (g) of this Section, in case the Company shall, by
dividend or otherwise, distribute to all holders of the Common Shares evidences
of its indebtedness, shares of any class of its capital stock, cash or other
assets (including securities, but excluding any rights, options or warrants
referred to in paragraph (b) of this Section, excluding any dividend or
distribution paid exclusively in cash out of consolidated current or retained
earnings as shown on the books of the Company prepared in accordance with GAAP
(other than any Extraordinary Cash Dividend (as hereinafter defined)) and
excluding any dividend or distribution referred to in paragraph (a) or (c) of
this Section), the Exercise Price shall be reduced by multiplying the Exercise
Price in effect immediately prior to the close of business on the date fixed for
the determination of shareholders entitled to such distribution by a fraction of
which the numerator shall be the Current Market Price (determined as provided in
paragraph (h) of this Section) on such date less the fair market value (as
determined by the Board of Directors, whose determination shall be conclusive
and described in a resolution of the Board of Directors) on such date of the
portion of the evidences of indebtedness, shares of capital stock, cash and
other assets to be distributed applicable to one Common Share and the
denominator shall be such Current Market Price, such reduction to become
effective immediately prior to the opening of business on the day following such
date. If the Board of Directors determines the fair market value of any
distribution for purposes of this paragraph (d)(i) by reference to the actual or
when-issued trading market for any securities comprising part or all of such
distribution, it must in doing so consider the prices in such market over the
same period used in computing the Current Market Price pursuant to paragraph (h)
of this Section, to the extent possible. For purposes of this paragraph (d)(i),
an "Extraordinary Cash Dividend" shall be that portion, if any, of the aggregate
amount of all cash dividends paid in any fiscal year which exceed $25,000,000.
For purposes of this paragraph (d), any dividend or distribution that includes
Common Shares, rights, options or warrants to subscribe for or purchase Common
Shares or securities convertible into or exchangeable for Common
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Page 17
Shares shall be deemed to be (x) a dividend or distribution of the evidences of
indebtedness, cash assets or shares of capital stock other than such Common
Shares, such rights, options or warrants or such convertible or exchangeable
securities (making any Exercise Price reduction required by this paragraph
(d)(i) immediately followed by (y) in the case of such Common Shares or such
rights, options or warrants, a dividend or distribution thereof (making any
further Exercise Price reduction required by paragraph (a) and(b) of this
Section, except any Common Shares included in such dividend or distribution
shall not be deemed "outstanding at the close of business on the date fixed for
such determination" within the meaning of paragraph (a) of this Section), or (z)
in the case of such convertible or exchangeable securities, a dividend or
distribution of the number of Common Shares as would then be issuable upon the
exercise or exchange thereof, whether or not the exercise or exchange of such
securities is subject to any conditions (making any further Exercise Price
reduction required by paragraph (a) of this Section, except the shares deemed to
constitute such dividend or distribution shall not be deemed "outstanding at the
close of business on the date fixed for such determination" within the meaning
of paragraph (a) of this Section).
(ii)In case the Company shall issue Common Shares for a consideration
per share less than the Current Market Price (determined as provided in
paragraph (h) of this Section), the Exercise Price shall be reduced by
multiplying the Exercise Price in effect immediately prior to the close of
business on the date on which the Company fixes the offering price of such
additional shares by a fraction of which the numerator shall be the number of
Common Shares outstanding at the close of business on the date fixed for such
determination plus a fraction equal to the aggregate consideration received by
the Company from the issuance of such additional Common Shares over the Current
Market Price on the date on which the Company fixes the offering price of such
additional shares (determined as provided in paragraph (h) of this Section), and
the denominator of which shall be the number of Common Shares outstanding
immediately after giving effect to such issuance. The reduction in the Exercise
Price provided for in the preceding sentence shall not apply to (i) securities
issued in transactions described in paragraphs (a), (b), (c), (d)(i), (d)(ii) or
(f) of this Section or pursuant to the exercise or exchange of any such
securities (to the extent applicable); (ii) the exercise or exchange of
securities (including options) convertible or exchangeable for Common Shares
outstanding on the date of this Xxxxx Xxxxxx Warrant Agreement, or issuable
pursuant to binding agreements in effect on the date of this Xxxxx Xxxxxx
Warrant Agreement; (iii) Common Shares issued and issuable upon the exercise of
options issued to the Company's directors, officers and employees under bona
fide
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employees benefit plans adopted by the Board of Directors and approved by the
holders of Common Shares when required by law or otherwise where such issuances
have been approved by the Board of Directors (but only to the extent that the
aggregate number of shares excluded hereby and issued after the date of this
Xxxxx Xxxxxx Warrant Agreement shall not exceed 1% of the Common Shares
outstanding at the time of issuance); (iv) Common Shares issued to shareholders
of any person that merges into the Company in proportion to their stock holdings
of such person immediately prior to such merger, upon such merger; (v) Common
Shares issued in a bona fide underwritten public offering; (vi) Common Shares
issued in a bona fide private placement through a placement agent that is a
member firm of the National Association of Securities Dealers, Inc. (except to
the extent that any discount from the Current Market Price (determined as
provided in paragraph (h) of this Section) attributable to restrictions on
transferability of the Common Shares, as determined in good faith by the Board
of Directors and described in a resolution thereof which shall be filed with the
Warrant Agent, shall exceed 20%), or issuable pursuant to a binding agreement in
effect on the date of this Xxxxx Xxxxxx Warrant Agreement; or (vii) Common
Shares issued as a dividend on any securities outstanding on the date of this
Xxxxx Xxxxxx Warrant Agreement required to be made pursuant to the certificate
of designation pertaining to such securities in effect at the time such
securities were issued.
(iii) In case the Company shall issue any securities convertible into
or exchangeable for Common Shares for a consideration per Common Share
(including the minimum consideration per share payable upon exercise or exchange
of any securities convertible into or exchangeable for Common Shares) of Common
Shares initially deliverable upon exercise or exchange of such securities less
than the Current Market Price (determined as provided in paragraph (h) of this
Section), the Exercise Price shall be reduced by multiplying the Exercise Price
in effect immediately prior to the close of business on the date on which the
Company fixes the offering price of such additional shares by a fraction of
which the numerator shall be the number of Common Shares outstanding immediately
prior to the issuance of such securities plus a fraction equal to the aggregate
consideration received for the issuance of such securities (including the
minimum consideration per share payable upon exercise or exchange of any
securities convertible into or exchangeable for Common Shares) over the Current
Market Price on the date on which the Company fixes the offering price of such
additional shares (determined as provided in paragraph (h) of this Section) and
the denominator of which shall be the number of shares outstanding immediately
prior to the issuance of such securities plus the maximum number of shares
deliverable upon exercise of or in exchange for such securities at the initial
exercise or exchange
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rate. The reduction in the Exercise Price provided for in the preceding sentence
shall not apply to (i) securities issued in transactions described in paragraphs
(a), (b) or (d) (i) of this Section; (ii) convertible securities issued to
shareholders of any person that merges into the Company, or with a Subsidiary of
the Company, in proportion to their stock holdings of such person immediately
prior to such merger, upon such merger; (iii) convertible securities issued in a
bona fide underwritten public offering; (iv) convertible securities issued in a
bona fide private placement through a placement agent that is a member firm of
the National Association of Securities Dealers, Inc. (except to the extent that
any discount from the Current Market Price (determined as provided in paragraph
(h) of this Section) attributable to restrictions on transferability of Common
Shares issuable upon exercise, as determined in good faith by the Board of
Directors and described in a resolution thereof which shall be filed with the
Warrant Agent, shall exceed 20% of the then Current Market Price, or issuable
pursuant to a binding agreement in effect on the date of this Xxxxx Xxxxxx
Warrant Agreement; or (v) stock options issued to the Company's directors,
officers or employees.
(e) In case the Company shall, by dividend or otherwise, at any time
distribute to all holders of the Common Shares cash (excluding any cash that is
distributed as part of a distribution referred to in paragraph (d) (i) of this
Section or in connection with a transaction to which Section 14 applies in an
aggregate amount that, together with (i) the aggregate amount of any other
distributions to all holders of the Common Shares made exclusively in cash
within the 12 months preceding the date fixed for the determination of
shareholders entitled to such distribution and in respect of which no Exercise
Price adjustment pursuant to paragraph (d) (i) or this paragraph (e) has been
made previously and (ii) the aggregate of any cash plus the fair market value
(as determined by the Board of Directors, whose determination shall be
conclusive and described in a resolution of the Board of Directors) as of such
date of determination of consideration payable in respect of any tender offer by
the Company or a Subsidiary for all or any portion of the Common Shares, and any
purchase by the Company of Common Shares in the open market, consummated within
the 12 months preceding such date of determination and in respect of which no
Exercise Price adjustment pursuant to paragraph (f) of this Section has been
made previously, exceeds 12.5% of the product of the Current Market Price
(determined as provided in paragraph (h) of this Section) on such date of
determination times the number of Common Shares outstanding on such date, the
Exercise Price shall be reduced by multiplying the Exercise Price in effect
immediately prior to the close of business on such date of determination by a
fraction of which the numerator shall be the Current Market Price
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Page 20
(determined as provided in paragraph (h) of this Section) on such date less the
amount of cash to be distributed at such time applicable to one Common Share and
the denominator shall be such Current Market Price, such reduction to become
effective immediately prior to the opening of business on the day after such
date.
(f) In case a tender of exchange offer made by the Company or any
subsidiary for all or any portion of the Common Shares shall be consummated, or
in case the Company shall purchase Common Shares in the open market, the
Exercise Price shall be reduced by multiplying the Exercise Price in effect
immediately prior to the Expiration Time by a fraction of which the numerator
shall be (x) the product of the Current Market Price (determined as provided in
paragraph (h) of this Section) times the number of Common Shares outstanding
(including any tendered or exchanged shares) at the Expiration Time and the
denominator shall be the sum of (A) the fair market value (determined as
aforesaid) of the aggregate consideration payable to shareholders upon
consummation of such tender or exchange offer, or upon such purchase, and (B)
the product of such Current Market Price times such number of outstanding shares
at the Expiration Time minus the number of shares accepted for payment in such
tender or exchange offer, or so purchased (the "Purchased Shares"). For the
purpose of this paragraph, "Expiration Time" means either the last time that
tenders may be made pursuant to a tender offer or exchanges may be made pursuant
to an exchange offer, or the time of an agreement to purchase shares in the open
market, as the case may be. Any reduction in the Exercise Price pursuant to this
paragraph shall be made immediately following the close of business on the last
trading day used to compute Current Market Price; provided, that, such reduction
shall be deemed to have become effective immediately prior to the opening of
business on the day following the Expiration Time. To the extent that a holder
exercises Xxxxx Xxxxxx Warrants prior to the conclusion of the period for which
Current Market Price is to be calculated, any adjustment in the number of Common
Shares issuable upon exercise of such Xxxxx Xxxxxx Warrant shall inure to the
benefit of the holder of record of such Xxxxx Xxxxxx Warrant at the close of
business on the first Trading Day following the Expiration Time.
(g) The reclassification of Common Shares into securities which include
securities other than Common Shares (other than any reclassification upon a
consolidation or merger to which Section 14 applies) shall be deemed to involve
(i) a distribution of such securities other than Common Shares to all holders of
Common Shares (and the effective date of such reclassification shall be deemed
to be "the date fixed for the determination of shareholders entitled to such
distribution"
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within the meaning of paragraph (d) (i) of this Section), and (ii) a subdivision
or combination, as the case may be, of the number of Common Shares outstanding
prior to such reclassification into the number of Common Shares outstanding
immediately thereafter (and the effective date of such reclassification shall be
deemed to be "the day upon which such subdivision becomes effective "or" the day
upon which such combination becomes effective," as the case may be, and "the day
upon which such subdivision or combination becomes effective" within the meaning
of paragraph (c) of this Section). Rights, options or warrants issued by the
Company to all holders of the Common Shares entitling the holders thereof to
subscribe for or purchase Common Shares (either initially or under certain
circumstances), which rights, options or warrants (i) are deemed to be
transferred with such Common Shares, (ii) are not exercisable and (iii) are also
issued in respect of future issuances of Common Shares, in each case in clauses
(i) through (iii) until or upon the occurrence of a specified event or events
("Trigger Event"), shall for purposes of this Section 15 not be deemed issued
until the occurrence of the earliest Trigger Event.
(h) For the purpose of any computation under this paragraph and
paragraphs (b), (d) and (e) of this Section, the current market price per share
of Common Share (the "Current Market Price") on any date shall be deemed to be
the average of the daily Closing Prices for the 30 consecutive trading days
commencing 45 trading days before the date in question. For the purpose of any
computation under paragraph (f) of this Section, the Current Market Price on any
date shall be deemed to be the average of the daily closing prices for the five
consecutive trading days commencing on the first trading day immediately
following the expiration time. Notwithstanding anything to the contrary
contained in this paragraph, (i) the "ex" date for any event (other than the
issuance or distribution requiring such computation) that requires an adjustment
to the conversion price pursuant to paragraph (a), (b), (c), (d) or (e) above
occurs on or after the 15th trading day prior to the date in question and prior
to the "ex" date for the issuance or distribution requiring such computation,
the closing price for each trading day prior to the "ex" date for such other
event shall be adjusted by multiplying such closing price by the same fraction
by which the conversion price is so required to be adjusted as a result of such
other event, (ii) if the "ex" date for any event (other than the issuance or
distribution requiring such computation) that requires an adjustment to the
conversion price pursuant to paragraph (a),(b), (c), (d), (e) or (f) above
occurs on or after the "ex" date for the issuance or distribution requiring such
computation and on or prior to the date in question, the closing price for each
trading day on and after the "ex" date for such other event shall be adjusted by
multiplying such closing price
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by the reciprocal of the fraction by which the conversion price is so required
to be adjusted as a result of such other event, and (iii) if the "ex" date for
the issuance or distribution requiring such computation is on or prior to the
date in question, after taking into account any adjustment required pursuant to
clause (ii) of this proviso, the closing price for each trading day on or after
such "ex" date shall be adjusted by adding thereto the amount of any cash and
the fair market value on the date in question (as determined by the Board of
Directors in a manner consistent with any determination of such value for the
purposes of paragraph (d) or (e) of this Section, whose determination shall be
conclusive and described in a resolution of the Board of Directors) of the
evidences of indebtedness, shares of Capital Stock or assets being distributed
applicable to one share of Common Stock of the Company as of the close of
business on the day before such "ex" date.
(i) (i) If any event shall occur as to which the other provisions of
this Section 15 are not strictly applicable but the failure to make any
adjustment would have the effect of depriving holders of the benefit of all or a
portion of the exercise rights in respect of any Xxxxx Xxxxxx Warrant in
accordance with the essential intent and principles of this Section 15, then, in
each such case, the Company shall appoint an Independent Financial Expert, which
shall give its opinion upon the adjustment, if any, on a basis consistent with
the essential intent and principles established in this Section 15 necessary to
preserve, without dilution, such exercise rights. Upon receipt of such opinion,
the Company will promptly mail a copy thereof to the holders and shall make the
adjustments described therein. As used herein, an "Independent Financial Expert"
is a firm (a) which does not, and whose directors, officers and employees or
affiliates do not have a direct or indirect financial interest in the Company
and (b) which, in the judgment of the Board of Directors, is otherwise
independent and qualified to perform the task for which it is to be engaged.
(ii) The Company will not, by amendment of its articles of
incorporation or through any consolidation, merger, reorganization, transfer of
assets, 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 the
Xxxxx Xxxxxx Warrants, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the holders thereof
against dilution or other impairment. Without limiting the generality of the
foregoing, the Company (i) 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 Common Shares on the exercise
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of the Xxxxx Xxxxxx Warrants from time to time outstanding and (ii) will not
take any action which results in any adjustment of the Exercise Price if the
total number of Common Shares issuable after the action upon the exercise of all
of the Xxxxx Xxxxxx Warrants would exceed the total number of Common Shares then
authorized by the Company's certificate of incorporation and available for the
purposes of issue upon such exercise.
(j) The Company may, but shall not be obligated to, make such
reductions in the Exercise Price, in addition to those required by paragraphs
(a), (b), (c), (d), (e), (f) and (g) of this Section, as it considers to be
advisable in order that any event treated for United States federal income tax
purposes as a dividend of stock or stock rights shall not be taxable to the
recipients or if that is not possible, to diminish any income taxes that are
otherwise payable because of such event.
(k) No adjustment in the Exercise Price shall be required unless such
adjustment (plus any other adjustments not previously made by reason of this
paragraph (k)) would require an increase or decrease of at least 1% in the
Exercise Price; provided, however, that any adjustments which by reason of this
paragraph (k) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. No adjustment shall be made in
respect of any change in the conversion price at which the Company's 9%
Convertible Subordinated Note due 2006 may be converted into Common Shares of
the Company on the "Reset Date", as contemplated by Section 13.1 of the
Indenture dated May 31, 1996 relating to such Notes.
(l) [Intentionally Deleted] Notwithstanding any other provision of this
Section 15, no adjustment to the Exercise Price shall reduce the Exercise Price
below the then par value per Common Share, and any such purported adjustment
shall instead reduce the Exercise Price to such par value. The Company hereby
covenants not to take any action to increase the par value per Common Share.
(m) In any case in which this Section 15 shall require that an
adjustment in the Exercise Price be made effective as of or immediately after a
record date for a specified event, the Company may elect to defer until the
occurrence of such event (i) issuing to the holder of any Xxxxx Xxxxxx Warrant
exercised after such record date the Common Shares and other capital stock of
the Company, if any, issuable upon such exercise over and above the Common
Shares and other capital stock of the Company, if any, issuable upon such
exercise on the basis of the Exercise Price prior to such adjustment and (ii)
paying to such holder any amount in cash in lieu of a fractional share pursuant
to Section 17 hereof; provided that the Company
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shall deliver to such holder a due xxxx or other appropriate instrument
evidencing such holder's right to receive such additional Common Shares, other
capital stock and cash upon the occurrence of the event requiring such
adjustment.
(n) (i) No adjustment need be made for a transaction referred to in
subsections (a), (b), (c), (e) or (f) of this Section 15 if holders are to
participate in the transaction on a basis and with notice that the Board of
Directors determines to be fair and appropriate in light of the basis and notice
on which holders of Common Shares of the Company participate in the transaction.
(ii) No adjustment need be made for (x) a transaction referred to
in subsections (b), (d)(ii) or (d)(iii) of this Section 15 if the below market
portion of such issuances, taken together with the below market portion of all
other below market issuances and with the above market portion of all above
market tender or exchange offers described in clause (y) of this paragraph made
on and after the date of this Xxxxx Xxxxxx Warrant Agreement, is less than 2.0%
of the Total Market Capitalization (as defined in the Senior Note Indenture) of
the Company (determined by reference to the sum of the percentages of Total
Market Capitalization of the Company attributable to each such transaction on
the date thereof) and (y) a transaction referred to in subsection (f) of this
Section 15 if the above market portion of such tender or exchange offers, taken
together with the above market portion of all other above market tender or
exchange offers and with the below market portion of all below market issuances
described in clause (x) of this paragraph made on or after the date of this
Xxxxx Xxxxxx Warrant Agreement, is less than 2.0% of the Total Market
Capitalization of the Company (determined by reference to the sum of the
percentages of Total Market Capitalization of the Company attributable to each
such transaction on the date thereof).
(iii) No adjustment need be made for a change in the par value, or
from par value to no par value, or from no par value to par value, of the Common
Shares.
SECTION 16. [Intentionally Omitted.]
SECTION 17. Fractional Interests. The Company shall not be required to
issue fractional Xxxxx Xxxxxx Warrant Shares on the exercise of Xxxxx Xxxxxx
Warrants. If more than one Xxxxx Xxxxxx Warrant shall be presented for exercise
in full at the same time by the same holder, the number of full Xxxxx Xxxxxx
Warrant Shares which shall be issuable upon the exercise thereof shall be
computed on the basis of the aggregate number of Xxxxx Xxxxxx Warrant Shares
purchasable on exercise of the Xxxxx Xxxxxx
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Warrants so presented. If any fraction of a Xxxxx Xxxxxx Warrant Share would,
except for the provisions of this Section 17, be issuable on the exercise of any
Xxxxx Xxxxxx Warrants (or specified portion thereof), the Company shall notify
the Warrant Agent in writing of the amount to be paid in lieu of the fraction of
a Xxxxx Xxxxxx Warrant Share and concurrently pay or provide to the Warrant
Agent for payment to the Xxxxx Xxxxxx Warrant holder an amount in cash equal to
the product of (i) such fraction of a Warrant Share multiplied by (ii) the
difference of the current market price of a Common Share on the trading day
immediately preceding the date the Xxxxx Xxxxxx Warrant is presented for
exercise over the Exercise Price, computed to the nearest whole cent.
SECTION 18. Notices to Xxxxx Xxxxxx Warrant holders.
(i) Whenever the Exercise Price is adjusted as herein provided:
(a) The Company shall compute the adjusted Exercise Price in
accordance with Section 15 and shall prepare a certificate signed by the
Treasurer or Chief Financial Officer of the Company setting forth the adjusted
Exercise Price and showing in reasonable detail the facts upon which such
adjustment is based,and such certificate shall forthwith be filed (with a copy
to the Trustee) at each office or agency maintained for the purpose of exercise
of Warrants pursuant to this Agreement; and
(b) a notice stating that the Exercise Price has been adjusted and
setting forth the adjusted Exercise Price shall forthwith be prepared, and as
soon as practicable after it is prepared, such notice shall be furnished by the
Company to the Trustee and mailed by the Company at its expense to all
registered holders at their last addresses as they shall appear in the Xxxxx
Xxxxxx Warrant register.
(ii) In case:
(a) the Company shall declare a dividend (or any other distribution) on
its Common Shares payable (i) otherwise than exclusively in cash or (ii)
exclusively in cash in an amount that would require an Exercise Price adjustment
pursuant to paragraph (e) of Section 15; or
(b) the Company shall authorize the granting to the holders of its
Common Shares of rights, options or warrants to subscribe for or purchase any
shares of Capital Shares of any class or of any other rights (excluding shares
of Capital Shares or options for Capital Shares issued pursuant to a benefit
plan for employees, officers or directors of the Company; or
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Page 26
(c) of any reclassification of the Common Shares of the Company (other
than a subdivision or combination of the outstanding shares of such Common
Shares), or of any consolidation, merger or share exchange to which the Company
is a party and for which approval of any shareholders of the Company is
required, or of the sale or transfer of all or substantially all of the assets
of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or winding
up of the Company; or
(e) the Company or any subsidiary shall commence a tender or exchange
offer (other than an exchange offer contemplated by clause (c) above) for all or
a portion of the outstanding shares of Common Shares (or shall amend any such
tender or exchange offer to change the maximum number of shares being sought or
the amount or type of consideration being offered (including by exchange)
therefor);
then the Company shall cause to be filed at each office or agency maintained
pursuant to this Agreement, and shall cause to be mailed to all registered
holders at their last addresses as they shall appear in the Xxxxx Xxxxxx Warrant
register, at least 21 days (or 11 days in any case specified in clause (a), (b)
or (e) above) prior to the applicable record, effective or expiration date
hereinafter specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution or granting of rights,
options or warrants, or, if a record is not to be taken, the date as of which
the holders of its Common Shares of record who will be entitled to such
dividend, distribution, rights, options or warrants are to be determined, (y)
the date on which such reclassification, consolidation, merger, share exchange,
sale, transfer, dissolution, liquidation or winding up is expected to become
effective, and the date as of which it is expected that holders of its Common
Shares of record shall be entitled to exchange their Common Shares, for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, share exchange, sale, transfer, dissolution, liquidation
or winding up, or (z) the date on which such tender or exchange offer (other
than an exchange offer contemplated by clause (y) above) commenced, the date on
which such tender or exchange offer is scheduled to expire unless extended, the
consideration offered and the other material terms thereof (or the material
terms of any amendment thereto). Neither the failure to give any such notice nor
any defect therein shall affect the legality or validity of any action described
in clauses (a) through (e) of this Section 18.
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SECTION 19. Warrant Agent. The Warrant Agent under takes the duties and
obligations imposed by this Agreement upon the following terms and conditions,
by all of which the Company and the holders of Xxxxx Xxxxxx Warrants, by their
acceptance thereof, shall be bound.
(a) The statements contained herein and in the Xxxxx Xxxxxx Warrant
Certificates shall be taken as statements of the Company. The Warrant Agent
assumes no responsibility for the correctness of any of the same except such as
describe the Warrant Agent or action taken or to be taken by it. The Warrant
Agent assumes no responsibility with respect to the distribution of the Xxxxx
Xxxxxx Warrant Certificates except as herein otherwise provided.
(b) The Warrant Agent shall not be responsible for any failure of the
Company to comply with any of the covenants contained in this Agreement or in
the Xxxxx Xxxxxx Warrant Certificates to be complied with by the Company.
(c) The Warrant Agent may consult at any time with counsel satisfactory
to it (who may be counsel for the Company) and the Warrant Agent shall incur no
liability or responsibility to the Company or to any holder of any Xxxxx Xxxxxx
Warrant Certificate in respect of any action taken, suffered or omitted by it
here under in good faith and in accordance with the opinion or the advice of
such counsel.
(d) The Warrant Agent shall incur no liability or responsibility to the
Company or to any holder of any Xxxxx Xxxxxx Warrant Certificate for any action
taken in reliance on any Xxxxx Xxxxxx Warrant Certificate, certificate of
shares, notice, resolution, waiver, consent, order, certificate, or other paper,
document or instrument believed by it to be genuine and to have been signed,
sent or presented by the proper party or parties. The Warrant Agent shall not be
bound by any notice or demand, or any waiver, modification, termination or
revision of this Agreement or any of the terms hereof, unless evidenced by a
writing between the Company and the Warrant Agent.
(e) The Company agrees to pay to the Warrant Agent such compensation
from time to time as agreed upon between the Company and the Warrant Agent for
all services rendered by the Warrant Agent hereunder and in connection with the
execution of this Agreement, to reimburse the Warrant Agent for all expenses,
taxes (including withholding taxes and the reasonable fees and expenses of its
counsel and agents) and governmental charges and other charges of any kind and
nature incurred by the Warrant Agent in the execution, delivery and performance
of its responsibilities under this Agreement and to indemnify the
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Page 28
Warrant Agent and its directors, officers and agents, and save them harmless
against any and all liabilities, including judgments, costs and counsel fees,
for anything done or omitted by the Warrant Agent and its directors, officers
and agents in the execution, delivery and performance of its responsibilities
under this Agreement except as a result of its gross negligence or bad faith.
The provisions of this Section 19(e) shall survive termination of this Agreement
and the resignation or removal of the Warrant Agent.
(f) The Warrant Agent shall be under no obligation to institute any
action, suit or legal proceeding or to take any other action likely to involve
expense unless the Company or one or more registered holders of Xxxxx Xxxxxx
Warrant Certificates shall furnish the Warrant Agent with reasonable security
and indemnity for any costs and expenses which may be incurred, but this
provision shall not affect the power of the Warrant Agent to take such action as
it may consider proper, whether with or without any such security or indemnity.
All rights of action under this Agreement or under any of the Xxxxx Xxxxxx
Warrants may be enforced by the Warrant Agent without the possession of any of
the Xxxxx Xxxxxx Warrant Certificates or the production thereof at any trial or
other proceeding relative thereto, and any such action, suit or proceeding
instituted by the Warrant Agent shall be brought in its name as Warrant Agent
and any recovery of judgment shall be for the ratable benefit of the registered
holders of the Xxxxx Xxxxxx Warrants, as their respective rights or interests
may appear.
(g) Except as required by law, the Warrant Agent, and any stockholder,
director, officer or employee of the Warrant Agent, may buy, sell or deal in any
of the Xxxxx Xxxxxx Warrants or other securities of the Company or become
pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or otherwise act as
fully and freely as though it were not Warrant Agent under this Agreement.
Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.
(h) The Warrant Agent shall act hereunder solely as agent for the
Company, and its duties shall be determined solely by the provisions hereof. The
Warrant Agent shall not be liable for anything which it may do or refrain from
doing in connection with this Agreement except for its own gross negligence or
bad faith.
(i) The Warrant Agent shall not at any time be under any duty or
responsibility to any holder of any Xxxxx Xxxxxx Warrant Certificate to make or
cause to be made any adjustment of
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Page 29
the Exercise Price or number of the Xxxxx Xxxxxx Warrant Shares or other
securities or property deliverable as provided in this Agreement, or to
determine whether any facts exist which may require any of such adjustments, or
with respect to the nature or extent of any such adjustments, when made, or with
respect to the method employed in making the same. The Warrant Agent shall not
be accountable with respect to the validity or value or the kind or amount of
any Xxxxx Xxxxxx Warrant Shares or of any securities or property which may at
any time be issued or delivered upon the exercise of any Xxxxx Xxxxxx Warrant or
with respect to whether any such Xxxxx Xxxxxx Warrant Shares or other securities
will when issued be validly issued and fully paid and nonassessable, and makes
no representation with respect thereto.
SECTION 20. Merger, Consolidation or Change of Name of Warrant Agent.
Any corporation into which the Warrant Agent may be merged or with which it may
be consolidated, or any corporation resulting from any merger or consolidation
to which the Warrant Agent shall be a party, or any corporation succeeding to
the business of the Warrant Agent, shall be the successor to the Warrant Agent
hereunder without the execution or filing of any paper or any further act on the
part of any of the parties hereto; provided that such corporation would be
eligible for appointment as a successor warrant agent under the provisions of
Section 21 hereof. To the extent practicable, the Warrant Agent shall provide
prior written notice to the Company of any such merger, consolidation,
succession or similar change with respect to the Warrant Agent; provided,
however, that the failure to deliver such notice will not affect the rights of
any of the parties hereto. In case at the time such successor to the Warrant
Agent shall succeed to the agency created by this Agreement, and in case at that
time any of the Xxxxx Xxxxxx Warrant Certificates shall have been countersigned
but not delivered, any such successor to the Warrant Agent may adopt the
countersignature of the original Warrant Agent; and in case at that time any of
the Xxxxx Xxxxxx Warrant Certificates shall not have been countersigned, any
successor to the Warrant Agent may countersign such Xxxxx Xxxxxx Warrant
Certificates either in the name of the predecessor Warrant Agent or in the name
of the successor to the Warrant Agent; and in all such cases such Xxxxx Xxxxxx
Warrant Certificates shall have the full force and effect provided in the Xxxxx
Xxxxxx Warrant Certificates and in this Agreement.
In case at any time the name of the Warrant Agent shall be changed and
at such time any of the Xxxxx Xxxxxx Warrant Certificates shall have been
countersigned but not delivered, the Warrant Agent whose name has been changed
may adopt the countersignature under its prior name, and in case at that time
any of the Xxxxx Xxxxxx Warrant Certificates shall not have been
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countersigned, the Warrant Agent may countersign such Xxxxx Xxxxxx Warrant
Certificates either in its prior name or in its changed name, and in all such
cases such Xxxxx Xxxxxx Warrant Certificates shall have the full force and
effect provided in the Xxxxx Xxxxxx Warrant Certificates and in this Agreement.
SECTION 21. Change of Warrant Agent. If the Warrant Agent shall become
incapable of acting as Warrant Agent or shall resign as provided below, the
Company shall appoint a successor to such Warrant Agent. If the Company shall
fail to make such appointment within a period of 30 days after it has been
notified in writing of such incapacity by the Warrant Agent or by the registered
holders of a majority of Xxxxx Xxxxxx Warrant Certificates, then the registered
holder of any Xxxxx Xxxxxx Warrant Certificate may apply to any court of
competent jurisdiction for the appointment of a successor to the Warrant Agent.
Pending appointment of a successor to such Warrant Agent, either by the Company
or by such a court, the duties of the Warrant Agent shall be carried out by the
Company. The holders of a majority of the unexercised Xxxxx Xxxxxx Warrants
shall be entitled at any time to remove the Warrant Agent and appoint a
successor to such Warrant Agent. Such successor to the Warrant Agent need not be
approved by the Company or the former Warrant Agent. After appointment the
successor to the Warrant Agent shall be vested with the same powers, rights,
duties and responsibilities as if it had been originally named as Warrant Agent
without further act or deed; but the former Warrant Agent shall deliver and
transfer to the successor to the Warrant Agent any property at the time held by
it here under and execute and deliver any further assurance, conveyance, act or
deed necessary for the purpose. Failure to give any notice provided for in
Section 21, however, or any defect therein, shall not affect the legality or
validity of the appointment of a successor to the Warrant Agent.
The Warrant Agent may resign at any time and be discharged from the
obligations hereby created by so notifying the Company in writing at least 30
days in advance of the proposed effective date of its resignation. If no
successor Warrant Agent accepts the engagement hereunder by such time, the
Company shall act as Warrant Agent.
SECTION 22. Notices to the Company and Warrant Agent. Any notice or
demand authorized by this Agreement to be given or made by the Warrant Agent or
by the registered holder of any Xxxxx Xxxxxx Warrant Certificate to or on the
Company shall be sufficiently given or made when and if deposited in the mail,
first class or registered, postage prepaid, addressed (until another address is
filed in writing by the Company with the Warrant Agent), as follows:
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Page 31
Petersburg Long Distance Inc.,
000 Xxxxx Xxxxxx,
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attention: Vice President, Administration
with a copy to:
Xxxxxx, Xxxxx & Bockius LLP
0000 Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000, X.X.X.
Attention: X.X. Xxxxxxxx
Any notice pursuant to this Agreement to be given by the Company or by
the registered holder(s) of any Xxxxx Xxxxxx Warrant Certificate to the Warrant
Agent shall be sufficiently given when and if deposited in the mail, first-class
or registered, postage prepaid, addressed (until another address is filed in
writing by the Warrant Agent with the Company) to the Warrant Agent as follows:
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
fax: (000) 000-0000
Notice may also be given by facsimile transmission (effective when
receipt is acknowledged) (effective at the time of delivery) or by overnight
delivery service (effective the next business day).
SECTION 23. Supplements and Amendments. The Company and the Warrant
Agent may from time to time, with the consent of The Toronto Stock Exchange,
supplement or amend this Agreement without the consent of any holders of Xxxxx
Xxxxxx Warrant Certificates in order to cure any ambiguity or to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provision herein, or to make any other provisions in regard to
matters or questions arising hereunder which the Company and the Warrant Agent
may deem necessary or desirable and which shall not in any way materially
adversely affect the interests of the holders of Xxxxx Xxxxxx Warrant
Certificates. Any amendment or supplement to this Agreement that has a material
adverse effect on the interests of holders shall require the written consent of
registered holders of a majority of the then outstanding Xxxxx Xxxxxx Warrants.
The consent of each holder of a Xxxxx Xxxxxx Warrant affected shall be required
for any amendment pursuant to which the Exercise Price would be increased or the
number of Xxxxx Xxxxxx Warrant
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Shares purchasable upon exercise of Xxxxx Xxxxxx Warrants would be decreased
(other than in accordance with Section 15 or 17 hereof).
In executing any amendment or supplement, the Warrant Agent shall be
entitled to receive an opinion of counsel to the Company to the effect that such
amendment or supplement is authorized and permitted by this Agreement.
SECTION 24. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Warrant Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
SECTION 25. Termination. This Agreement shall terminate at 5:00 p.m.,
New York, New York time on April 30, 2001. Notwithstanding the foregoing, this
Agreement will terminate on such earlier date on which all outstanding Xxxxx
Xxxxxx Warrants have been exercised. The provisions of Section 19 hereof shall
survive such termination.
SECTION 26. Governing Law; Jurisdiction. This Agreement and each Xxxxx
Xxxxxx Warrant Certificate shall be governed by and construed in accordance with
the laws of the State of New York applicable to contracts made and to be
performed in the State of New York. The Company irrevocably consents to the
jurisdiction of any United States or State Court located in the State of New
York in any suit or proceeding based on or arising under this Agreement or the
Xxxxx Xxxxxx Warrant Certificates and irrevocably agrees that all claims in
respect of such suit or proceeding may be determined in any such court. The
Company irrevocably waives the defense of an inconvenient forum to the
maintenance of such suit or proceeding. The Company hereby agrees to designate
and appoint CT Corporation System, 0000 Xxxxxxxx, Xxx Xxxx, XX 00000 as an agent
upon whom process may be served in any suit or proceeding based on or arising
under this Agreement. The Company further agrees that service of process upon
the Company, or upon an agent appointed pursuant to the preceding sentence
accompanied with written notice of said service to the Company, as the case may
be, mailed by first class mail shall be deemed in every respect effective
service of process upon the Company in any such suit or proceeding. Nothing
herein shall affect the Warrant Agent's or any Xxxxx Xxxxxx Warrant holder's
right to serve process in any other manner permitted by law. The Company agrees
that a final non-appealable judgment in any such suit or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on such judgment
or in any other lawful manner.
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SECTION 27. Indemnity. The Company shall indemnify the Warrant Agent
for, and hold it harmless against, any and all loss, liability or expense
(including reasonable attorneys' fees) arising out of or incurred by it in
connection with the performance of its duties hereunder, except as set forth in
the next paragraph. The Warrant Agent shall notify the Company promptly of any
claim for which it may seek indemnity. Failure by the Warrant Agent to so notify
the Company shall not relieve the Company of its obligations hereunder. The
Company shall defend any such claim and the Warrant Agent shall cooperate in the
defense of such claim. The Warrant Agent may have separate counsel and the
Company shall pay the reasonable fees and expenses of such counsel. The Company
need not pay for any settlement made without its consent, which consent shall
not be unreasonably withheld.
The Company need not reimburse any expense or indemnify against any
loss, liability or expense incurred by the Warrant Agent through the Warrant
Agent's own willful misconduct, negligence or bad faith.
The Company's payment obligations pursuant to this Section 27 shall
survive the resignation or removal of the Warrant Agent and termination of this
Xxxxx Xxxxxx Warrant Agreement.
SECTION 28. Benefits of This Agreement. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company, the
Warrant Agent and the registered holders of the Xxxxx Xxxxxx Warrant
Certificates any legal or equitable right, remedy or claim under this Agreement;
but this Agreement shall be for the sole and exclusive benefit of the Company,
the Warrant Agent and the registered holders of the Xxxxx Xxxxxx Warrant
Certificates.
SECTION 29. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
SECTION 30. Further Assurances. From time to time on and after the date
hereof, the Company shall deliver or cause to be delivered to the Warrant Agent
such further documents and instruments and shall do and cause to be done such
further acts as the Warrant Agent shall reasonably request (it being under stood
that the Warrant Agent shall have no obligation to make such request) to carry
out more effectively the provisions and purposes of this Agreement, to evidence
compliance herewith or to assure itself that it is protected hereunder.
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Page 34
IN WITNESS WHEREOF, the parties here to have caused this Agreement to
be duly executed, as of the day and year first above written.
PETERSBURG LONG DISTANCE INC.
By: /s/ Xxxxx Xxxx
------------------------------------
------------------------------------
Name: Xxxxx Xxxx
Title: Chairman
THE BANK OF NEW YORK
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Assistant Treasurer
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EXHIBIT A
EXERCISABLE AS TO 50,000 COMMON SHARES ON OR AFTER JUNE 12, 1996
AND AS TO 50,000 COMMON SHARES ON OR AFTER OCTOBER 30, 1996
AND ON OR BEFORE APRIL 30, 2001
No. 100,000 Xxxxx Xxxxxx Warrants
------------
CUSIP 00000X000
---------
Xxxxx Xxxxxx Warrant Certificate
PETERSBURG LONG DISTANCE INC.
This Certificate certifies that XXXXX XXXXXX INC., or registered
assigns, is the registered holder of 100,000 warrants expiring (the "Xxxxx
Xxxxxx Warrants") to purchase the Common Shares (the "Common Shares"), of
Petersburg Long Distance Inc. ("the Company"). Each Xxxxx Xxxxxx Warrant
entitles the holder upon exercise to receive from the Company, at any time on or
after 9:00 a.m., New York, New York time on the date of issuance thereof and on
or prior to the close of business on April 30, 2001 fully paid and nonassessable
Common Shares (each a "Xxxxx Xxxxxx Warrant Share") at the initial exercise
price (the "Exercise Price") of $4.70 payable in the form of cash or certified
or official bank check payable to the order of the Company, upon surrender of
this Xxxxx Xxxxxx Warrant Certificate and payment of the aggregate Exercise
Price at the office or agency of the Warrant Agent, but only subject to the
conditions set forth herein and in the Xxxxx Xxxxxx Warrant Agreement referred
to herein. The Exercise Price and number of Xxxxx Xxxxxx Warrant Shares issuable
upon exercise of the Xxxxx Xxxxxx Warrants are subject to adjustment upon the
occurrence of certain events set forth in the Xxxxx Xxxxxx Warrant Agreement.
All capitalized terms not defined herein shall have the meaning assigned to such
terms in the Xxxxx Xxxxxx Warrant Agreement.
No Xxxxx Xxxxxx Warrant may be exercised after 5:00 p.m., New York, New
York on April 30, 2001 and to the extent not exercised by such time such Xxxxx
Xxxxxx Warrants shall become void.
Reference is hereby made to the further provisions of this Xxxxx Xxxxxx
Warrant Certificate set forth on the reverse hereof and such further provisions
shall far all purposes have the same effect as though fully set forth at this
place.
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This Xxxxx Xxxxxx Warrant Certificate shall not be valid unless
countersigned by the Warrant Agent, as such term is used in the Xxxxx Xxxxxx
Warrant Agreement.
This Xxxxx Xxxxxx Warrant Certificate shall be governed and construed
in accordance with the internal laws of the State of New York.
IN WITNESS WHEREOF, Petersburg Long Distance Inc. has caused this Xxxxx
Xxxxxx Warrant Certificate to be signed by its Chief Executive Officer and by
its Secretary, each by a facsimile of his signature, and has caused a facsimile
of its corporate seal to be affixed here unto or imprinted here on
Dated:
PETERSBURG LONG DISTANCE INC.
By: /s/ Xxxxx Xxxx
--------------------------
Xxxxx Xxxx
Chairman
By: /s/ Xxxx Xxxxx
--------------------------
Xxxx Xxxxx
Secretary
(seal)
Countersigned:
as Warrant Agent
By:
----------------------
Authorized Signatory
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Form of Xxxxx Xxxxxx Warrant Certificate
Reverse
THE XXXXX XXXXXX WARRANTS REPRESENTED HEREBY AND, AS OF THE DATE
THIS XXXXX XXXXXX WARRANT CERTIFICATE WAS ORIGINALLY ISSUED, THE
COMMON SHARES PURCHASABLE UPON THEIR EXERCISE, HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, OR (2) PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND (B)
IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF
THE UNITED STATES AND THE PROVINCES OF CANADA.
THE COMMON SHARES OF THE COMPANY (THE "COMMON SHARES") FOR WHICH
THIS XXXXX XXXXXX WARRANT IS EXERCISABLE MAY NOT BE OFFERED OR SOLD
IN THE UNITED STATES ABSENT REGISTRATION UNDER THE SECURITIES ACT,
AND ANY APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION
FROM SUCH REGISTRATION REQUIREMENTS OR IN CANADA EXCEPT PURSUANT TO
AN APPLICABLE EXEMPTION. ACCORDINGLY, NO XXXXX XXXXXX WARRANT HOLDER
SHALL BE ENTITLED TO EXERCISE SUCH HOLDER'S XXXXX XXXXXX WARRANTS AT
ANY TIME UNLESS, AT THE TIME OF EXERCISE, (I) A REGISTRATION
STATEMENT UNDER THE ACT COVERING THE OFFER AND SALE OF THE COMMON
SHARES ISSUABLE UPON THE EXERCISE OF THIS XXXXX XXXXXX WARRANT (THE
"XXXXX XXXXXX WARRANT SHARES") HAS BEEN FILED WITH, AND DECLARED
EFFECTIVE BY, THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC"),
AND NO STOP ORDER SUSPENDING THE EFFECTIVENESS OF SUCH REGISTRATION
STATEMENT HAS BEEN ISSUED BY THE SEC OR (II) THE OFFER AND SALE OF
THE XXXXX XXXXXX WARRANT SHARES TO THE XXXXX XXXXXX WARRANT HOLDERS
ARE EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT (AND
APPLICABLE CANADIAN PROVINCIAL SECURITIES LEGISLATION) AND THE XXXXX
XXXXXX WARRANT HOLDER, IF SO REQUESTED BY THE COMPANY, HAS DELIVERED
TO THE COMPANY AN OPINION OF COUNSEL TO SUCH EFFECT.
By accepting a Xxxxx Xxxxxx Warrant Certificate bearing the legend above, each
holder shall be bound by all of the terms and provisions of the Xxxxx Xxxxxx
Warrant Agreement (a copy of which is available on request to the Company or the
Warrant Agent) as fully and effectively as if such holder had signed the same.
The Xxxxx Xxxxxx Warrants evidenced by this Xxxxx Xxxxxx Warrant
Certificate are part of a duly authorized issue of Xxxxx Xxxxxx Warrants
expiring April 30, 2001, entitling the holder upon exercise to receive Common
Shares of the Company (the
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"Common Shares"), and are issued or to be issued pursuant to a Xxxxx Xxxxxx
Warrant Agreement, dated as of May 31, 1996 (the "Xxxxx Xxxxxx Warrant
Agreement"), duly executed and delivered by the Company to the Bank of New York,
as Warrant Agent (the "Warrant Agent"), which Xxxxx Xxxxxx Warrant Agreement is
hereby incorporated by reference in and made a part of this instrument and is
hereby referred to for a description of the rights, limitation of rights,
obligations, duties and immunities there under of the Warrant Agent, the Company
and the holders (the words "holders" or "holder" meaning the registered holders
or registered holder) of the Xxxxx Xxxxxx Warrants.
Xxxxx Xxxxxx Warrants may be exercised at any time on or after 9:00
a.m., New York, New York time on the date of issuance thereof and on or prior to
the close of business on April 30, 2001. The holder of Xxxxx Xxxxxx Warrants
evidenced by this Xxxxx Xxxxxx Warrant Certificate may exercise them by
surrendering this Xxxxx Xxxxxx Warrant Certificate, with the form of election to
purchase set forth hereon properly completed and executed, together with payment
of the Exercise Price in the form of cash or certified or official bank check or
official bank cashier's check payable to the order of the Company, at the office
of the Warrant Agent. In the event that upon any exercise of Xxxxx Xxxxxx
Warrants evidenced hereby the number of Xxxxx Xxxxxx Warrants exercised shall be
less than the total number of Xxxxx Xxxxxx Warrants evidenced hereby, there
shall be issued to the holder hereof or his assignee a new Xxxxx Xxxxxx Warrant
Certificate evidencing the number of Xxxxx Xxxxxx Warrants not exercised.
The Xxxxx Xxxxxx Warrant Agreement provides that upon the occurrence of
certain events the Exercise Price set forth on the face hereof may, subject to
certain conditions, be adjusted. If the Exercise Price is adjusted, the Xxxxx
Xxxxxx Warrant Agreement provides that the number of Common Shares issuable upon
the exercise of each Xxxxx Xxxxxx Warrant shall be adjusted. No fractions of a
Common Share will be issued upon the exercise of any Xxxxx Xxxxxx Warrant, but
the Company will pay the cash value thereof determined as provided in the Xxxxx
Xxxxxx Warrant Agreement.
Xxxxx Xxxxxx Warrant Certificates, when surrendered at the office of
the Warrant Agent by the registered holder thereof in person or by legal
representative or attorney duly authorized in writing, may be exchanged, in the
manner and subject to the limitations provided in the Xxxxx Xxxxxx Warrant
Agreement, but without payment of any service charge, for another Xxxxx Xxxxxx
Warrant Certificate or Xxxxx Xxxxxx Warrant Certificates of like tenor
evidencing in the aggregate a like number of Xxxxx Xxxxxx Warrants.
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Upon due presentation for registration of transfer of this Xxxxx Xxxxxx
Warrant Certificate at the office of the Warrant Agent a new Xxxxx Xxxxxx
Warrant Certificate or Xxxxx Xxxxxx Warrant Certificates of like tenor and
evidencing in the aggregate a like number of Xxxxx Xxxxxx Warrants shall be
issued to the transferee(s) in exchange for this Xxxxx Xxxxxx Warrant
Certificate, subject to the limitations provided in the Xxxxx Xxxxxx Warrant
Agreement, without charge except for any tax or other governmental charge
imposed in connection therewith.
The Company and the Warrant Agent may deem and treat the registered
holder(s) thereof as the absolute owner(s) of this Xxxxx Xxxxxx Warrant
Certificate (notwithstanding any notation of ownership or other writing hereon
made by anyone), for the purpose of any exercise hereof, of any distribution to
the holder(s) hereof, and for all other purposes, and neither the Company nor
the Warrant Agent shall be affected by any notice to the contrary. Neither the
Xxxxx Xxxxxx Warrants nor this Xxxxx Xxxxxx Warrant Certificate entitles any
holder hereof to any rights of a stockholder of the Company.
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Form of Election to Purchase
(To Be Executed Upon Exercise Of Xxxxx Xxxxxx Warrant)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Xxxxx Xxxxxx Warrant Certificate, to receive __________
Common Shares and herewith tenders payment for such shares to the order of
Petersburg Long Distance, Inc. in the amount of $____ in accordance with the
terms hereof.
The undersigned requests that a certificate for such shares be
registered in the name of _____________________, whose address is
______________________ and that such shares be delivered to ________________
whose address is ___________.
If said number of shares is less than all of the Common Shares
purchasable hereunder, the undersigned requests that a new Xxxxx Xxxxxx Warrant
Certificate representing the remaining balance of such shares be registered in
the name of _________________, whose address is ______________, and that such
Xxxxx Xxxxxx Warrant Certificate be delivered to _______________, whose address
is ___________________.
Date: ____________
Your Signature:___________________
(Sign exactly as your name appears on the face of this Xxxxx Xxxxxx
Warrant) Signature Guarantee:
FORM OF TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto Insert Taxpayer Identification No.
---------------------------------
---------------------------------
Please print or typewrite name and address including zip code of assignee the
within Xxxxx Xxxxxx Warrant Certificate and all rights there under, hereby
irrevocably constituting and appointing
---------------------------------------
attorney to transfer the Xxxxx Xxxxxx Warrants evidenced by said Xxxxx Xxxxxx
Warrant Certificate (the "Xxxxx Xxxxxx Warrants") on the books of the Company
with full power of substitution in the
premises.
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In connection with any transfer of the Xxxxx Xxxxxx Warrants occurring
prior to the date which is the earlier of (i) the date of an effective
Registration or (ii) three years after the later of the original issuance of the
Xxxxx Xxxxxx Warrants or the last date on which the Xxxxx Xxxxxx Warrants were
held by an affiliate of the Company, the undersigned confirms, that without
utilizing any general solicitation or general advertising:
Check One
(a) the Xxxxx Xxxxxx Warrants are being transferred in compliance with
the exemption from registration under the Securities Act of 1933, as
amended, provided by Rule 144A thereunder.
or
(b) the Xxxxx Xxxxxx Warrants are being transferred other than in
accordance with (a) above and documents are being furnished which
comply with the conditions of transfer set forth in this Xxxxx
Xxxxxx Warrant Certificate and the Xxxxx Xxxxxx Warrant Agreement.
If none of the foregoing boxes is checked, the Warrant Agent shall not be
obligated to register the Xxxxx Xxxxxx Warrants in the name of any Person other
than the holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 7(c) of the Xxxxx Xxxxxx Warrant
Agreement shall have been satisfied.
Date: NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of the within-mentioned
instrument in every particular, without
alteration or any change whatsoever.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Xxxxx Xxxxxx Warrant for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, as amended, and is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as the undersigned has requested pursuant to
Rule 144A or has determined not to request such information and that it is aware
that the transferor is relying upon the undersigned's foregoing representations
in order to claim the exemption from registration provided by Rule 144A.
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Dated:
NOTICE: To be executed by an
executive officer
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EXHIBIT B
FORM OF XXXXX XXXXXX WARRANT SHARES LEGEND
"THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT (A)(1) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A") IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A, OR (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER (IF AVAILABLE) AND
(B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF
THE UNITED STATES AND THE PROVINCES OF CANADA."
