--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WARRANT AGREEMENT
Dated as of June 15, 1995
Between
CELLNET DATA SYSTEMS, INC.
and
THE BANK OF NEW YORK,
as Warrant Agent
______________________
940,000
Warrants to Purchase Common Stock
No Par Value Per Share
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
----
ARTICLE I.
ISSUANCE, FORM, EXECUTION, DELIVERY AND
REGISTRATION OF WARRANT CERTIFICATES
SECTION 1.01. Issuance of Warrants. . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Form of Warrant Certificates. . . . . . . . . . . . . . . 2
SECTION 1.03. Execution of Warrant Certificates . . . . . . . . . . . . 2
SECTION 1.04. Authentication and Delivery . . . . . . . . . . . . . . . 3
SECTION 1.05. Temporary Warrant Certificates. . . . . . . . . . . . . . 4
SECTION 1.06. [Intentionally Omitted] . . . . . . . . . . . . . . . . . 4
SECTION 1.07. Registration. . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 1.08. Registration of Transfers and Exchanges . . . . . . . . . 5
SECTION 1.09. Lost, Stolen, Destroyed, Defaced or
Mutilated Warrant Certificates. . . . . . . . . . . . . 13
SECTION 1.10. Offices for Exercise, etc.. . . . . . . . . . . . . . . . 14
ARTICLE II.
DURATION, EXERCISE OF WARRANTS
AND EXERCISE PRICE
SECTION 2.01. Duration of Warrants. . . . . . . . . . . . . . . . . . . 14
SECTION 2.02. Exercise, Exercise Price, Settle-
ment and Delivery . . . . . . . . . . . . . . . . . . . 15
SECTION 2.03. Cancellation of Warrant Certificates. . . . . . . . . . . 20
SECTION 2.04. Notice of an Exercise Event . . . . . . . . . . . . . . . 20
ARTICLE III.
OTHER PROVISIONS RELATING TO
RIGHTS OF HOLDERS OF WARRANTS
SECTION 3.01. Enforcement of Rights . . . . . . . . . . . . . . . . . . 21
ARTICLE IV.
CERTAIN COVENANTS OF THE COMPANY
-i-
PAGE
----
SECTION 4.01. Payment of Taxes. . . . . . . . . . . . . . . . . . . . . 21
SECTION 4.02. Qualification Under the Securities Laws . . . . . . . . . 22
SECTION 4.03. Rules 144 and 144A. . . . . . . . . . . . . . . . . . . . 23
ARTICLE V.
ADJUSTMENTS
SECTION 5.01. Adjustment of Exercise Rate; Notices. . . . . . . . . . . 23
SECTION 5.02. Fractional Shares . . . . . . . . . . . . . . . . . . . . 29
SECTION 5.03. Certain Distributions . . . . . . . . . . . . . . . . . . 30
ARTICLE VI.
CONCERNING THE WARRANT AGENT
SECTION 6.01. Warrant Agent . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 6.02. Conditions of Warrant Agent's
Obligations . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 6.03. Resignation and Appointment of
Successor . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE VII.
MISCELLANEOUS
SECTION 7.01. Amendment . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 7.02. Notices and Demands to the Company
and Warrant Agent . . . . . . . . . . . . . . . . . . . 38
SECTION 7.03. Addresses for Notices to Parties and
for Transmission of Documents . . . . . . . . . . . . . 38
SECTION 7.04. Notices to Holders. . . . . . . . . . . . . . . . . . . . 39
SECTION 7.05. Applicable Law. . . . . . . . . . . . . . . . . . . . . . 39
SECTION 7.06. Persons Having Rights Under Agreement . . . . . . . . . . 39
SECTION 7.07. Headings. . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 7.08. Counterparts. . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 7.09. Inspection of Agreement . . . . . . . . . . . . . . . . . 40
EXHIBIT A - Form of Warrant Certificate
EXHIBIT B - Certificate To Be Delivered Upon
-ii-
PAGE
----
Exchange or Registration of
Transfer of Warrants
EXHIBIT C - Transferee Letter of Representation
-iii-
PAGE
----
INDEX OF DEFINED TERMS
DEFINED TERM SECTION
------------ -------
Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.01
Capital Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . 5.01(o)
Cashless Exercise. . . . . . . . . . . . . . . . . . . . . . . . . 2.02(c)
Cashless Exercise Ratio. . . . . . . . . . . . . . . . . . . . . . 2.02(c)
Change of Control. . . . . . . . . . . . . . . . . . . . . . . . . 2.02(a)
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Current Market Value . . . . . . . . . . . . . . . . . . . . . . . 5.01(o)
Definitive Warrants. . . . . . . . . . . . . . . . . . . . . . . . 1.02
Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.03
Distribution Rights. . . . . . . . . . . . . . . . . . . . . . . . 5.03
Election To Exercise . . . . . . . . . . . . . . . . . . . . . . . 2.02(b)
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.01(n)
Exercisability Date. . . . . . . . . . . . . . . . . . . . . . . . 2.02(a)
Exercise Date. . . . . . . . . . . . . . . . . . . . . . . . . . . 2.02(d)
Exercise Event . . . . . . . . . . . . . . . . . . . . . . . . . . 2.02(a)
Exercise Price . . . . . . . . . . . . . . . . . . . . . . . . . . 2.02(a)
Exercise Price Per Share . . . . . . . . . . . . . . . . . . . . . 2.02(c)
Exercise Rate. . . . . . . . . . . . . . . . . . . . . . . . . . . 2.02(a)
Expiration Date. . . . . . . . . . . . . . . . . . . . . . . . . . 2.01
Global Warrants. . . . . . . . . . . . . . . . . . . . . . . . . . 1.02
Indenture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Independent Financial Expert . . . . . . . . . . . . . . . . . . . 5.01(n)
Initial Purchaser. . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Officers' Certificate. . . . . . . . . . . . . . . . . . . . . . . 1.08(f)
Prospectus . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.02
Public Equity Offering . . . . . . . . . . . . . . . . . . . . . . 2.02(a)
Public Market. . . . . . . . . . . . . . . . . . . . . . . . . . . 2.02(a)
Registrar. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.07
Related Parties. . . . . . . . . . . . . . . . . . . . . . . . . . 6.02(e)
Resale Restriction Termination Date. . . . . . . . . . . . . . . . 1.08
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . 1.08
Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.01
Time of Determination. . . . . . . . . . . . . . . . . . . . . . . 5.01(n)
-iv-
PAGE
----
Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Units. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Warrant Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Warrant Agent Office . . . . . . . . . . . . . . . . . . . . . . . 1.10
Warrant Certificates . . . . . . . . . . . . . . . . . . . . . . . Recitals
Warrant Exercise Office. . . . . . . . . . . . . . . . . . . . . . 2.02(b)
Warrant Register . . . . . . . . . . . . . . . . . . . . . . . . . 1.07
Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
-v-
WARRANT AGREEMENT
WARRANT AGREEMENT ("AGREEMENT"), dated as of June 15, 1995 by CELLNET
DATA SYSTEMS, INC., a California corporation (together with any successor
thereto, the "COMPANY"), and THE BANK OF NEW YORK, a New York banking
corporation, not in its individual capacity but solely as warrant agent (with
any successor Warrant Agent, the "WARRANT AGENT").
WHEREAS, the Company has entered into a purchase agreement dated
June 15, 1995 with Xxxxx Xxxxxx Inc. (the "INITIAL PURCHASER") in which the
Company has agreed to sell to the Initial Purchaser 235,000 units (the "UNITS")
consisting in the aggregate of (i) $235,000,000 aggregate principal amount at
maturity of 13% Senior Discount Notes due 2005 (the "NOTES") of the Company to
be issued under an indenture dated as of June 15, 1995 (the "INDENTURE"),
between the Company and The Bank of New York, as trustee (in such capacity, the
"TRUSTEE"), and (ii) 940,000 Warrants (the "WARRANTS" and the certificates
evidencing the Warrants being hereinafter referred to as "WARRANT
CERTIFICATES"), each representing the right to purchase initially one share of
Common Stock, no par value per share, of the Company (the "COMMON STOCK"),
subject to adjustment in accordance with the terms hereof; and
WHEREAS, the Company desires the Warrant Agent as warrant agent to
assist the Company in connection with the issuance, exchange, cancellation,
replacement and exercise of the Warrants, and in this Agreement wishes to set
forth, among other things, the terms and conditions on which the Warrants may be
issued, exchanged, cancelled, replaced and exercised;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I.
ISSUANCE, FORM, EXECUTION, DELIVERY AND
REGISTRATION OF WARRANT CERTIFICATES
-2-
SECTION 1.01. ISSUANCE OF WARRANTS. Warrants comprising part of the
Units shall be originally issued in connection with the issuance of the Units.
Each Warrant Certificate shall evidence the number of Warrants
specified therein, and each Warrant evidenced thereby shall represent the right,
subject to the provisions contained herein and therein, to purchase from the
Company (and the Company shall issue and sell to such holder of the Warrant) one
(1) fully paid and non-assessable share of the Company's Common Stock (the
shares purchasable upon exercise of a Warrant being hereinafter referred to as
the "SHARES" and, where appropriate, such term shall also mean the other
securities or property purchasable and deliverable upon exercise of a Warrant as
provided in Article V) at the price specified herein and therein, in each case
subject to adjustment as provided herein and therein.
SECTION 1.02. FORM OF WARRANT CERTIFICATES. The Warrant Certificates
will initially be issued either in global form (the "GLOBAL WARRANTS"),
substantially in the form of EXHIBIT A hereto (including footnote 1 thereto) or
in registered form as definitive Warrant certificates (the "DEFINITIVE
WARRANTS"). The Warrant Certificates evidencing the Global Warrants or the
Definitive Warrants to be delivered pursuant to this Agreement shall be
substantially in the form set forth in EXHIBIT A attached hereto. Such Global
Warrants shall represent such of the outstanding Warrants as shall be specified
therein and each shall provide that it shall represent the aggregate amount of
outstanding Warrants from time to time endorsed thereon and that the aggregate
amount of outstanding Warrants represented thereby may from time to time be
reduced or increased, as appropriate. Any endorsement of a Global Warrant to
reflect the amount of any increase or decrease in the amount of outstanding
Warrants represented thereby shall be made by the Warrant Agent and Depositary
(as defined below) in accordance with instructions given by the holder thereof.
The Depository Trust Company shall act as the Depositary with respect to the
Global Warrants until a successor shall be appointed by the Company and the
Warrant Agent. Upon written request, a Warrant holder may
-3-
receive from the Warrant Agent Definitive Warrants as set forth in Section 1.08
hereof.
SECTION 1.03. EXECUTION OF WARRANT CERTIFICATES. The Warrant
Certificates shall be executed on behalf of the Company by the chairman of its
Board of Directors, its president or any vice president and attested by its
secretary or assistant secretary, under its corporate seal. Such signatures may
be the manual or facsimile signatures of the present or any future such
officers. The seal of the Company may be in the form of a facsimile thereof and
may be impressed, affixed, imprinted or otherwise reproduced on the Warrant
Certificates. Typographical and other minor errors or defects in any such
reproduction of the seal or any such signature shall not affect the validity or
enforceability of any Warrant Certificate that has been duly countersigned and
delivered by the Warrant Agent.
In case any officer of the Company who shall have signed any of the
Warrant Certificates shall cease to be such officer before the Warrant
Certificate so signed shall be countersigned and delivered by the Warrant Agent
or disposed of by the Company, such Warrant Certificate nevertheless may be
countersigned and delivered or disposed of as though the person who signed such
Warrant Certificate had not ceased to be such officer of the Company; and any
Warrant Certificate may be signed on behalf of the Company by such persons as,
at the actual date of the execution of such Warrant Certificate, shall be the
proper officers of the Company, although at the date of the execution and
delivery of this Agreement any such person was not such an officer.
SECTION 1.04. AUTHENTICATION AND DELIVERY. Subject to the
immediately following paragraph, Warrant Certificates shall be authenticated by
manual signature and dated the date of authentication by the Warrant Agent and
shall not be valid for any purpose unless so authenticated and dated. The
Warrant Certificates shall be numbered and shall be registered in the Warrant
Register (as defined in Section 1.07 hereof).
-4-
Upon the receipt by the Warrant Agent of a written order of the
Company, which order shall be signed by the chairman of its Board of Directors,
its president or any vice president and attested by its secretary or assistant
secretary, and shall specify the amount of Warrants to be authenticated, whether
the Warrants are to be Global Warrants or Definitive Warrants, the date of such
Warrants and such other information as the Warrant Agent may reasonably request,
without any further action by the Company, the Warrant Agent is authorized, upon
receipt from the Company at any time and from time to time of the Warrant
Certificates, duly executed as provided in Section 1.03 hereof, to authenticate
the Warrant Certificates and deliver them. Such authentication shall be by a
duly authorized signatory of the Warrant Agent (although it shall not be
necessary for the same signatory to sign all Warrant Certificates).
In case any authorized signatory of the Warrant Agent who shall have
authenticated any of the Warrant Certificates shall cease to be such authorized
signatory before the Warrant Certificate shall be disposed of by the Company,
such Warrant Certificate nevertheless may be delivered or disposed of as though
the person who authenticated such Warrant Certificate had not ceased to be such
authorized signatory of the Warrant Agent; and any Warrant Certificate may be
authenticated on behalf of the Warrant Agent by such persons as, at the actual
time of authentication of such Warrant Certificates, shall be the duly
authorized signatories of the Warrant Agent, although at the time of the
execution and delivery of this Agreement any such person is not such an
authorized signatory.
The Warrant Agent's authentication on all Warrant Certificates shall
be in substantially the form set forth in ANNEX A hereto.
SECTION 1.05. TEMPORARY WARRANT CERTIFICATES. Pending the
preparation of definitive Warrant Certificates, the Company may execute, and the
Warrant Agent shall authenticate and deliver, temporary Warrant Certificates,
which are printed, lithographed, typewritten or otherwise produced,
substantially of the tenor of
-5-
the definitive Warrant Certificates in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Warrant Certificates may determine, as evidenced by
their execution of such Warrant Certificates.
If temporary Warrant Certificates are issued, the Company will cause
definitive Warrant Certificates to be prepared without unreasonable delay.
After the preparation of definitive Warrant Certificates, the temporary Warrant
Certificates shall be exchangeable for definitive Warrant Certificates upon
surrender of the temporary Warrant Certificates at any office or agency
maintained by the Company for that purpose pursuant to Section 1.10 hereof.
Subject to the provisions of Section 4.01 hereof, such exchange shall be without
charge to the holder. Upon surrender for cancellation of any one or more
temporary Warrant Certificates, the Company shall execute, and the Warrant Agent
shall authenticate and deliver in exchange therefor, one or more definitive
Warrant Certificates representing in the aggregate a like number of Warrants.
Until so exchanged, the holder of a temporary Warrant Certificate shall in all
respects be entitled to the same benefits under this Agreement as a holder of a
definitive Warrant Certificate.
SECTION 1.06. [Intentionally Omitted]
SECTION 1.07. REGISTRATION. The Company will keep, at the office or
agency maintained by the Company for such purpose, a register or registers in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of, and registration of transfer and exchange
of, Warrants as provided in this Article. Each person designated by the Company
from time to time as a person authorized to register the transfer and exchange
of the Warrants is hereinafter called, individually and collectively, the
"REGISTRAR". The Company hereby initially appoints the Warrant Agent as
Registrar. Upon written notice to the Warrant Agent and any acting Registrar,
the Company may appoint a successor Registrar for such purposes.
-6-
The Company will at all times designate one person (who may be the
Company and who need not be a Registrar) to act as repository of a master list
of names and addresses of the holders of Warrants (the "WARRANT REGISTER"). The
Warrant Agent will act as such repository unless and until some other person is,
by written notice from the Company to the Warrant Agent and the Registrar,
designated by the Company to act as such. The Company shall cause each
Registrar to furnish to such repository, on a current basis, such information as
to all registrations of transfer and exchanges effected by such Registrar, as
may be necessary to enable such repository to maintain the Warrant Register on
as current a basis as is practicable.
SECTION 1.08. REGISTRATION OF TRANSFERS AND EXCHANGES.
(a) TRANSFER AND EXCHANGE OF DEFINITIVE WARRANTS. When Definitive
Warrants are presented to the Warrant Agent with a request:
(i) to register the transfer of the Definitive Warrants; or
(ii) to exchange such Definitive Warrants for an equal number of Definitive
Warrants of other authorized denominations,
the Warrant Agent shall register the transfer or make the exchange as requested
if the requirements under this Warrant Agreement as set forth in this Section
1.08 hereof for such transactions are met; PROVIDED, HOWEVER, that the
Definitive Warrants presented or surrendered for registration of transfer or
exchange:
(x) shall be duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Company and the Warrant Agent,
duly executed by the holder thereof or by his attorney, duly
authorized in writing; and
(y) in the case of Warrants the offer and sale of which have not been
registered under the Securities Act of 1933, as amended (the
"SECURITIES ACT") and are presented for
-7-
transfer or exchange prior to (x) the date which is three years after the later
of the date of original issue and the last date on which the Company or any
affiliate of the Company was the owner of such Warrant, or any predecessor
thereto and (y) such later date, if any, as may be required by any subsequent
change in applicable law (the "RESALE RESTRICTION TERMINATION DATE"), such
Warrants shall be accompanied, in the sole discretion of the Company, by the
following additional information and documents, as applicable, however, it being
understood that the Warrant Agent need not determine which clause (A) through
(D) below is applicable:
(A) if such Warrant is being delivered to the Warrant Agent by a
holder for registration in the name of such holder, without
transfer, a certification from such holder to that effect (in
substantially the form of EXHIBIT B hereto); or
(B) if such Warrant is being transferred to a qualified institutional
buyer (as defined in Rule 144A under the Securities Act) in
accordance with Rule 144A under the Securities Act or pursuant to
an exemption from registration in accordance with Rule 144 or
Regulation S under the Securities Act or pursuant to an effective
registration statement under the Securities Act, a certification
to that effect (in substantially the form of EXHIBIT B hereto);
or
(C) if such Warrant is being transferred to an institutional
"accredited investor" within the meaning of subparagraphs (a)(1),
(a)(2), (a)(3) or (a)(7) of Rule 501 under the Securities Act,
delivery of a Certificate of Transfer in the form of EXHIBIT C
hereto and an opinion of counsel and/or other information
satisfactory to the Company to the effect that such transfer is
in compliance with the Securities Act; or
-8-
(D) if such Warrant is being transferred in reliance on another
exemption from the registration requirements of the Securities
Act, a certification to that effect (in substantially the form of
EXHIBIT B hereto) and an opinion of counsel reasonably acceptable
to the Company to the effect that such transfer is in compliance
with the Securities Act.
(b) RESTRICTIONS ON TRANSFER OF A DEFINITIVE WARRANT FOR A BENEFICIAL
INTEREST IN A GLOBAL WARRANT. A Definitive Warrant may not be exchanged for a
beneficial interest in a Global Warrant except upon satisfaction of the
requirements set forth below. Upon receipt by the Warrant Agent of a Definitive
Warrant, duly endorsed or accompanied by appropriate instruments of transfer, in
form satisfactory to the Warrant Agent, together with:
(A) certification, substantially in the form of EXHIBIT B hereto,
that such Definitive Warrant is being transferred to a "qualified
institutional buyer" (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A under the Securities
Act; and
(B) written instructions directing the Warrant Agent to make, or to
direct the Depositary to make, an endorsement on the Global
Warrant to reflect an increase in the aggregate amount of the
Warrants represented by the Global Warrant,
then the Warrant Agent shall cancel such Definitive Warrant and cause, or direct
the Depositary to cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Warrant Agent, the number of
Shares represented by the Global Warrant to be increased accordingly. If no
Global Warrant is then outstanding, the Company shall issue and the Warrant
Agent shall authenticate a new Global Warrant in the appropriate amount.
-9-
(c) TRANSFER AND EXCHANGE OF GLOBAL WARRANTS. The transfer and
exchange of Global Warrants or beneficial interests therein shall be effected
through the Depositary, in accordance with this Warrant Agreement (including the
restrictions on transfer set forth herein) and the procedures of the Depositary
therefor.
(d) TRANSFER OF A BENEFICIAL INTEREST IN A GLOBAL WARRANT FOR A
DEFINITIVE WARRANT.
(i) Any person having a beneficial interest in a Global Warrant may upon
request exchange such beneficial interest for a Definitive Warrant.
Upon receipt by the Warrant Agent of written instructions or such
other form of instructions as is customary for the Depositary from the
Depositary or its nominee on behalf of any person having a beneficial
interest in a Global Warrant and upon receipt by the Warrant Agent of
a written order or such other form of instructions as is customary for
the Depositary or the person designated by the Depositary as having
such a beneficial interest containing registration instructions and,
in the case of any such transfer or exchange prior to the Resale
Restriction Termination Date, the following additional information and
documents, however, it being understood that the Warrant Agent need
not determine which clause (A) through (D) below is applicable:
(A) if such beneficial interest is being transferred to the person
designated by the Depositary as being the beneficial owner, a
certification from such person to that effect (in substantially
the form of EXHIBIT B hereto); or
(B) if such beneficial interest is being transferred to a qualified
institutional buyer (as defined in Rule 144A under the Securities
Act) in accordance with Rule 144A under the Securities Act or
pursuant to an exemption from registration in accordance with
Rule 144 or Regulation S under the Securities Act
-10-
or pursuant to an effective registration statement under the
Securities Act, a certification to that effect from the
transferee or transferor (in substantially the form of EXHIBIT B
hereto); or
(C) if such beneficial interest is being transferred to an
institutional "accredited investor" within the meaning of
subparagraphs (a)(1), (a)(2), (a)(3) or (a)(7) of Rule 501 under
the Securities Act, delivery of a Certificate of Transfer in the
form of EXHIBIT C hereto and an opinion of counsel and/or other
information satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act; or
(D) if such beneficial interest is being transferred in reliance on
another exemption from the registration requirements of the
Securities Act, a certification to that effect from the
transferee or transferor (in substantially the form of EXHIBIT B
hereto) and an opinion of counsel from the transferee or
transferor reasonably acceptable to the Company to the effect
that such transfer is in compliance with the Securities Act,
then the Warrant Agent will cause, in accordance with the standing
instructions and procedures existing between the Depositary and the
Warrant Agent, the aggregate amount of the Global Warrant to be
reduced and, following such reduction, the Company will execute and,
upon receipt of an authentication order in the form of an Officers'
Certificate (as defined), the Warrant Agent will authenticate and
deliver to the transferee a Definitive Warrant.
(ii) Definitive Warrants issued in exchange for a beneficial interest in a
Global Warrant pursuant to this Section 1.08(d) shall be registered in
such names and in such authorized denominations as the Depositary,
pursuant to
-11-
instructions from its direct or indirect participants or otherwise,
shall instruct the Warrant Agent in writing. The Warrant Agent shall
deliver such Definitive Warrants to the persons in whose names such
Warrants are so registered.
(e) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL WARRANTS.
Notwithstanding any other provisions of this Warrant Agreement (other than the
provisions set forth in subsection (f) of this Section 1.08), a Global Warrant
may not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(f) AUTHENTICATION OF DEFINITIVE WARRANTS IN
ABSENCE OF DEPOSITARY. If at any time:
(i) the Depositary for the Warrants notifies the Company that the
Depositary is unwilling or unable to continue as Depositary for the
Global Warrant and a successor Depositary for the Global Warrant is
not appointed by the Company within 90 days after delivery of such
notice; or
(ii) the Company, at its sole discretion, notifies the Warrant Agent in
writing that it elects to cause the issuance of Definitive Warrants
under this Warrant Agreement,
then the Company will execute, and the Warrant Agent, upon receipt of an
officers' certificate signed by two officers of the Company (one of whom must be
the principal executive officer, principal financial officer or principal
accounting officer) (an "OFFICERS' CERTIFICATE") requesting the authentication
and delivery of Definitive Warrants, will authenticate and deliver Definitive
Warrants, in an aggregate number equal to the aggregate number of warrants
represented by the Global Warrant, in exchange for such Global Warrant.
(g) LEGENDS.
-12-
(i) Except as permitted by the following paragraph (ii), each Warrant
Certificate evidencing the Global Warrants and the Definitive Warrants
(and all Warrants issued in exchange therefor or substitution thereof)
shall bear a legend substantially to the following effect:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS
SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS
THREE YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE
LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE
OWNER OF THIS SECURITY (OR ANY PREDECESSOR SECURITY) ONLY (A) TO THE
COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON
IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED
STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT,
(E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF
SUBPARAGRAPHS (a)(1), (a)(2), (a)(3) OR (a)(7) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR
FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN
-13-
CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR
(F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S RIGHT IN ITS
SOLE DISCRETION PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF A WRITTEN OPINION OF
COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO THE
COMPANY, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN
THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND
DELIVERED BY THE TRANSFEROR TO THE COMPANY AND THE WARRANT AGENT. THIS
LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE.
(ii) Upon any sale or transfer of a Warrant pursuant to Rule 144 under the
Securities Act in accordance with Section 1.08 hereof or under an effective
registration statement under the Securities Act:
(A) in the case of any Warrant that is a Definitive Warrant, the
Warrant Agent shall permit the holder thereof to exchange such
Warrant for a Definitive Warrant that does not bear the legends
set forth above and rescind any related restriction on the
transfer of such Warrant; and
(B) any such Warrant represented by a Global Warrant shall not be
subject to the provisions set forth in (i) above (such sales or
transfers being subject only to the provisions of Section 1.08(c)
hereof); PROVIDED, HOWEVER, that with respect to any request for
an exchange of a Warrant that is represented by a Global Warrant
for a Definitive Warrant that does not bear the legends set forth
above, which request is made in reliance upon Rule 144 under the
Securities Act, the holder thereof shall certify in writing to
the Warrant Agent that such request is being made pursuant to
Rule 144 under the
-14-
Securities Act (such certification to be
substantially in the form of EXHIBIT B hereto).
(h) CANCELLATION AND/OR ADJUSTMENT OF A GLOBAL WARRANT. At such time
as all beneficial interests in a Global Warrant have either been exchanged for
Definitive Warrants, redeemed, repurchased or cancelled, such Global Warrant
shall be returned to or retained and cancelled by the Warrant Agent. At any
time prior to such cancellation, if any beneficial interest in a Global Warrant
is exchanged for Definitive Warrants, redeemed, repurchased or cancelled, the
number of Warrants represented by such Global Warrant shall be reduced and an
endorsement shall be made on such Global Warrant, by the Warrant Agent to
reflect such reduction.
(i) OBLIGATIONS WITH RESPECT TO TRANSFERS AND EXCHANGES OF DEFINITIVE
WARRANTS.
(i) To permit registrations of transfers and exchanges, the Company
shall execute, at the Warrant Agent's request, and the Warrant Agent
shall authenticate Definitive Warrants and Global Warrants.
(ii) All Definitive Warrants and Global Warrants issued upon any
registration, transfer or exchange of Definitive Warrants or Global
Warrants shall be the valid obligations of the Company, entitled to
the same benefits under this Warrant Agreement as the Definitive
Warrants or Global Warrants surrendered upon the registration of
transfer or exchange.
(iii) Prior to due presentment for registration of transfer of any
Warrant, the Warrant Agent and the Company may deem and treat the
person in whose name any Warrant is registered as the absolute owner
of such Warrant, and neither the Warrant Agent nor the Company shall
be affected by notice to the contrary.
(j) PAYMENT OF TAXES. The Company will pay all documentary stamp
taxes attributable to the initial issuance of the
-15-
Shares upon the exercise of Warrants; PROVIDED, HOWEVER, 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 Warrant Certificates or any certificates
for the Shares in a name other than that of the registered holder of a Warrant
Certificate surrendered upon the exercise of a Warrant, and the Company shall
not be required to issue or deliver such 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 1.09. LOST, STOLEN, DESTROYED, DEFACED OR MUTILATED WARRANT
CERTIFICATES. Upon receipt by the Company and the Warrant Agent (or any agent
of the Company or the Warrant Agent, if requested by the Company) of evidence
satisfactory to them of the loss, theft, destruction, defacement, or mutilation
of any Warrant Certificate and of indemnity satisfactory to them and, in the
case of mutilation or defacement, upon surrender thereof to the Warrant Agent
for cancellation, then, in the absence of notice to the Company or the Warrant
Agent that such Warrant Certificate has been acquired by a BONA FIDE purchaser
or holder in due course, the Company shall execute, and an authorized signatory
of the Warrant Agent shall manually authenticate and deliver, in exchange for or
in lieu of the lost, stolen, destroyed, defaced or mutilated Warrant
Certificate, a new Warrant Certificate representing a like number of Warrants,
bearing a number or other distinguishing symbol not contemporaneously
outstanding. Upon the issuance of any new Warrant Certificate under this
Section, the Company may require the payment from the holder of such Warrant
Certificate of a sum sufficient to cover any tax, stamp tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Warrant Agent and the
Registrar) in connection therewith. Every substitute Warrant Certificate
executed and delivered pursuant to this Section in lieu of any lost, stolen or
destroyed Warrant Certificate shall constitute an additional contractual
obligation of the Company, whether or not the lost, stolen or destroyed Warrant
Certificate shall be at any time enforceable by anyone, and shall be entitled
-16-
to the benefits of (but shall be subject to all the limitations of rights set
forth in) this Agreement equally and proportionately with any and all other
Warrant Certificates duly executed and delivered hereunder. The provisions of
this Section 1.09 are exclusive with respect to the replacement of lost, stolen,
destroyed, defaced or mutilated Warrant Certificates and shall preclude (to the
extent lawful) any and all other rights or remedies notwithstanding any law or
statute existing or hereafter enacted to the contrary with respect to the
replacement of lost, stolen, destroyed, defaced or mutilated Warrant
Certificates.
The Warrant Agent is hereby authorized to authenticate in accordance
with the provisions of this Agreement, and deliver the new Warrant Certificates
required pursuant to the provisions of this Section.
SECTION 1.10. OFFICES FOR EXERCISE, ETC. So long as any of the
Warrants remain outstanding, the Company will designate and maintain in the
Borough of Manhattan, The City of New York: (a) an office or agency where
the Warrant Certificates may be presented for exercise, (b) an office or
agency where the Warrant Certificates may be presented for registration of
transfer and for exchange (including the exchange of temporary Warrant
Certificates for definitive Warrant Certificates pursuant to Section 1.05
hereof), and (c) an office or agency where notices and demands to or upon the
Company in respect of the Warrants or of this Agreement may be served. The
Company may from time to time change or rescind such designation, as it may
deem desirable or expedient; PROVIDED, HOWEVER, that an office or agency
shall at all times be maintained in the Borough of Manhattan, The City of New
York, as provided in the first sentence of this Section. In addition to such
office or offices or agency or agencies, the Company may from time to time
designate and maintain one or more additional offices or agencies within or
outside The City of New York, where Warrant Certificates may be presented for
exercise or for registration of transfer or for exchange, and the Company may
from time to time change or rescind such designation, as it may deem
desirable or expedient. The Company will give to the Warrant Agent written
notice of the
-17-
location of any such office or agency and of any change of location thereof.
The Company hereby designates the Warrant Agent at its principal corporate trust
office in the Borough of Manhattan, The City of New York (the "WARRANT AGENT
OFFICE"), as the initial agency maintained for each such purpose. In case the
Company shall fail to maintain any such office or agency or shall fail to give
such notice of the location or of any change in the location thereof,
presentations and demands may be made and notice may be served at the Warrant
Agent Office and the Company appoints the Warrant Agent as its agent to receive
all such presentations, surrenders, notices and demands.
ARTICLE II.
DURATION, EXERCISE OF WARRANTS AND EXERCISE PRICE
SECTION 2.01. DURATION OF WARRANTS. Subject to the terms and
conditions established herein, the Warrants shall expire at 5:00 p.m., New
York City time, on the earlier to occur of (i) 90 days after an Exercise
Event which causes such Warrants to become exercisable and (ii) June 15, 2005
(such earlier date, the "EXPIRATION DATE"). Each Warrant may be exercised on
any Business Day (as defined below) on or after the Exercisability Date (as
defined below) and on or prior to the close of business on the Expiration
Date.
Any Warrant not exercised before the close of business on the
Expiration Date shall become void, and all rights of the holder under the
Warrant Certificate evidencing such Warrant and under this Agreement shall
cease.
"BUSINESS DAY" shall mean any day on which (i) banks in New York City,
(ii) the principal national securities exchange or market on which the Common
Stock is listed or admitted to trading and (iii) the principal national
securities exchange or market, if any, on which the Warrants are listed or
admitted to trading are open for business.
-18-
SECTION 2.02. EXERCISE, EXERCISE PRICE, SETTLEMENT AND DELIVERY. (a)
Subject to the provisions of this Agreement, a holder of Warrants shall have the
right to purchase from the Company on or after the occurrence of an Exercise
Event (the date of the occurrence of an Exercise Event, the "EXERCISABILITY
DATE") and on or prior to the close of business on the Expiration Date one (1)
fully paid, registered and non-assessable Share, subject to adjustment in
accordance with Article V hereof, at the purchase price of $.01 for each Warrant
exercised (the "EXERCISE PRICE"). The number and kind of Shares for which a
Warrant may be exercised (the "EXERCISE RATE") shall be subject to adjustment
from time to time as set forth in Article V hereof.
"CHANGE OF CONTROL" means the occurrence of one or more of the
following events (whether or not approved by the Board of Directors of the
Company):
(i) the Company consolidates with or merges with or into another
Person or the Company or any of its subsidiaries, directly or indirectly,
sells, assigns, conveys, transfers, leases or otherwise disposes of, in
one transaction or a series of related transactions, all or substantially
all of the property or assets of the Company and its subsidiaries
(determined on a consolidated basis) to any Person or group of related
Persons for purposes of Sections 13(d) and 14(d) of the Exchange Act,
whether or not applicable (a "GROUP OF PERSONS"), or any Person
consolidates with, or merges with or into, the Company, in any such event
pursuant to a transaction in which immediately after the consummation
thereof the Persons owning Voting Stock of the Company having greater than
50% of the total voting power of the outstanding Voting Stock of the
Company immediately prior to the consummation of such transaction shall
cease to own, directly or indirectly, the Voting Stock of the surviving or
transferee entity or of the Company having greater than 50% of the total
voting power of the outstanding Voting Stock of such Person; or
(ii) the approval by the holders of Capital Stock of the Company of
any Plan of Liquidation; or
-19-
(iii) any Person or Group of Persons either (1) is or becomes, by
purchase, tender offer, exchange offer, open market purchases, privately
negotiated purchases or otherwise, the "beneficial owner" (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act, whether or not applicable,
except that a Person shall be deemed to have "beneficial ownership" of all
securities that such Person has the right to acquire at the time of
determination, whether such right is exercisable immediately or after the
passage at the time of determination of 90 days or less), directly or
indirectly, of Voting Stock of the Company having greater than 50% of the
total voting power of the outstanding Voting Stock of the Company (for the
purpose of this clause (iii), such Person or Group of Persons will be
deemed to "beneficially own" (determined as aforesaid) any Voting Stock of
a corporation (the "SPECIFIED CORPORATION") held by any other corporation
(the "PARENT CORPORATION") if such Person or Group of Persons "beneficially
owns," directly or indirectly, Voting Stock of such parent corporation
having a majority of the voting power of the outstanding Voting Stock of
such parent corporation) or (2) otherwise has the ability to elect,
directly or indirectly, a majority of the members of the Board of Directors
of the Company; PROVIDED, HOWEVER, that for purposes of this clause (iii),
a Person shall not be deemed the beneficial owner of any securities in
respect of which beneficial ownership by such Person arises solely as a
result of a revocable proxy delivered in response to a proxy or consent
solicitation that is made pursuant to, and in accordance with, applicable
law for a shareholder meeting, or, if the Company is at the time required
to file reports under Section 13 or 15 of the Exchange Act, the Exchange
Act and is not then reportable on Schedule 13D (or any successor schedule,
form or report) under the Exchange Act; or
(iv) during any consecutive two-year period, individuals who at the
beginning of such period constituted the Board of Directors of the Company
(together with any new directors whose election to such Board of Directors
or whose nomination for election by the stockholders of the Company was
approved
-20-
by a vote of a majority of the directors of the Company then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for
any reason to constitute a majority of the Board of Directors of the
Company then in office.
For purposes of the foregoing definition of Change of Control, the
transfer (by lease, assignment, sale or otherwise, in a single transaction or
series of related transactions) of all or substantially all of the properties or
assets of one or more Subsidiaries of the Company, the Capital Stock of which
constitutes all or substantially all of the properties and assets of the
Company, shall be deemed to be the transfer of all or substantially all of the
properties and assets of the Company.
"EXERCISE EVENT" means, with respect to each Warrant, the date of the
earliest of: (1) the seventh day prior to the occurrence of a Change of
Control, (2) the consummation of a Public Equity Offering and (3) 90 days prior
to June 15, 2005.
"PERSON" means an individual, partnership, corporation, unincorporated
organization, trust or joint venture, or a governmental agency or political
subdivision thereof.
"PLAN OF LIQUIDATION" means, with respect to any Person, a plan
(including by operation of law) that provides for, contemplates or the
effectuation of which is preceded or accompanied by (whether or not
substantially contemporaneously) (i) the sale, lease, conveyance or other
disposition of all or substantially all of the assets of such Person otherwise
than as an entirety or substantially as an entirety and (ii) the distribution of
all or substantially all of the proceeds of such sale, lease, conveyance or
other disposition and all or substantially all of the remaining assets of such
Person to holders of Capital Stock of such Person.
"PUBLIC EQUITY OFFERING" means a primary public offering (whether or
not underwritten, but excluding any offering pursuant
-21-
to Form S-4 or S-8 under the Securities Act) of capital stock of the Company
pursuant to an effective registration statement under the Securities Act.
"VOTING STOCK" means, with respect to any Person, securities of any
class or classes of Capital Stock of such Person entitling the holders thereof
(whether at all times or only so long as no senior class of stock has voting
power by reason of any contingency) to vote in the election of members of the
Board of Directors of such Person.
(b) Warrants may be exercised on or after the Exercisability Date by
(i) surrendering at any office or agency maintained for that purpose by the
Company pursuant to Section 1.10 (each a "WARRANT EXERCISE OFFICE") the Warrant
Certificate evidencing such Warrants with the form of election to purchase
Shares set forth on the reverse side of the Warrant Certificate (the "ELECTION
TO EXERCISE") duly completed and signed by the registered holder or holders
thereof or by the duly appointed legal representative thereof or by a duly
authorized attorney, and in the case of a transfer, such signature shall be
guaranteed by an Eligible Guarantor Institution, and (ii) paying in full the
Exercise Price for each such Warrant exercised and any other amounts required to
be paid pursuant to Section 1.08(j) hereof. Each Warrant may be exercised only
in whole.
(c) Simultaneously with the exercise of each Warrant, payment in full
of the Exercise Price shall be made in cash or by certified or official bank
check to be delivered to the office or agency where the Warrant Certificate is
being surrendered. Notwithstanding the foregoing sentence, a Warrant may also
be exercised solely by the surrender of the Warrant, and without the payment of
the Exercise Price in cash, for such number of Shares equal to the product of
(1) the number of Shares for which such Warrant is exercisable with payment of
the Exercise Price as of the date of exercise and (2) the Cashless Exercise
Ratio. For purposes of this Agreement, the "CASHLESS EXERCISE RATIO" shall
equal a fraction, the numerator of which is the excess of the Current Market
Value of the Common Stock on the date of exercise
-22-
(calculated as set forth in Section 5.01(n) hereof) over the Exercise Price Per
Share as of the date of exercise and the denominator of which is the Current
Market Value of the Common Stock on the date of exercise (calculated as set
forth in Section 5.01(n) hereof). An exercise of a Warrant in accordance with
the immediately preceding sentences is herein called a "CASHLESS EXERCISE."
Upon surrender of a Warrant Certificate representing more than one Warrant in
connection with the holder's option to elect a Cashless Exercise, the number of
Shares deliverable upon a Cashless Exercise shall be equal to the number of
Warrants that the holder specifies is to be exercised pursuant to a Cashless
Exercise multiplied by the Cashless Exercise Ratio. All provisions of this
Agreement shall be applicable with respect to an exercise of a Warrant
Certificate pursuant to a Cashless Exercise for less than the full number of
Warrants represented thereby. "EXERCISE PRICE PER SHARE" means the Exercise
Price divided by the number of Shares for which a Warrant is then exercisable
(without giving effect to the Cashless Exercise option). No payment or
adjustment shall be made on account of any dividends on the Shares issued upon
exercise of a Warrant. If, pursuant to the Securities Act, the Company is not
able to effect the registration of the offer and sale of the Warrant Shares by
the Company to the holders of the Warrants upon the exercise thereof as required
by Section 4.02 hereof, the holders of the Warrants agree to effect the exercise
of the Warrants solely pursuant to the Cashless Exercise option to the extent
that such Cashless Exercise is not adverse to the interests of the holders of
the Warrants.
(d) Upon such surrender of a Warrant Certificate and payment and
collection of the Exercise Price at any Warrant Exercise Office (other than any
Warrant Exercise Office that also is an office of the Warrant Agent), such
Warrant Certificate and payment shall be promptly delivered to the Warrant
Agent. The "EXERCISE DATE" for a Warrant shall be the date when all of the
items referred to in the first sentence of paragraphs (b) and (c) of this
Section 2.02 are received by the Warrant Agent at or prior to 11:00 a.m., New
York City time, on a Business Day and the exercise of the Warrants will be
effective as of such Exercise Date. If any items referred to in the first
sentence of paragraphs
-23-
(b) and (c) are received after 11:00 a.m., New York City time, on a Business
Day, the exercise of the Warrants to which such item relates will be effective
on the next succeeding Business Day. Notwithstanding the foregoing, in the case
of an exercise of Warrants on the Expiration Date (as defined in Section 2.01),
if all of the items referred to in the first sentence of paragraphs (b) and (c)
are received by the Warrant Agent at or prior to 5:00 p.m., New York City time,
on such Expiration Date, the exercise of the Warrants to which such items relate
will be effective on the Expiration Date.
(e) Upon the exercise of a Warrant in accordance with the terms
hereof, the receipt of a Warrant Certificate and payment of the Exercise Price
(or election of the Cashless Exercise option), the Warrant Agent shall:
(i) except to the extent exercise of the Warrant has been effected through
Cashless Exercise, cause an amount equal to the Exercise Price to be paid to the
Company by crediting the same to the account designated by the Company in
writing to the Warrant Agent for that purpose; (ii) advise the Company
immediately by telephone of the amount so deposited to the Company's account and
promptly confirm such telephonic advice in writing; and (iii) as soon as
practicable, advise the Company in writing of the number of Warrants exercised
in accordance with the terms and conditions of this Agreement and the Warrant
Certificates, the instructions of each exercising holder of the Warrant
Certificates with respect to delivery of the Shares to which such holder is
entitled upon such exercise, and such other information as the Company shall
reasonably request.
(f) Subject to Section 5.02 hereof, as soon as practicable after the
exercise of any Warrant or Warrants in accordance with the terms hereof, the
Company shall issue or cause to be issued to or upon the written order of the
registered holder of the Warrant Certificate evidencing such exercised Warrant
or Warrants, a certificate or certificates evidencing the Shares to which such
holder is entitled, in fully registered form, registered in such name or names
as may be directed by such holder pursuant to the Election to Exercise, as set
forth on the reverse of the Warrant Certificate. Such certificate or
certificates evidencing
-24-
the Shares shall be deemed to have been issued and any persons who are
designated to be named therein shall be deemed to have become the holder of
record of such Shares as of the close of business on the Exercise Date. After
such exercise of any Warrant or Warrants, the Company shall also issue or cause
to be issued to or upon the written order of the registered holder of such
Warrant Certificate, a new Warrant Certificate, countersigned by the Warrant
Agent pursuant to written instruction, evidencing the number of Warrants, if
any, remaining unexercised unless such Warrants shall have expired.
SECTION 2.03. CANCELLATION OF WARRANT CERTIFICATES. In the event the
Company shall purchase or otherwise acquire Warrants, the Warrant Certificates
evidencing such Warrants may thereupon be delivered to the Warrant Agent, and if
so delivered, shall at the Company's written instruction be canceled by it and
retired. The Warrant Agent shall cancel all Warrant Certificates properly
surrendered for exchange, substitution, transfer or exercise. The Warrant Agent
shall deliver such canceled Warrant Certificates to the Company.
SECTION 2.04. NOTICE OF AN EXERCISE EVENT. The Company shall, to the
extent reasonably practicable, not fewer than 30 days nor more than 60 days
prior to the occurrence of an Exercise Event, send to each holder of Warrants
and to each beneficial owner of the Warrants to the extent that the Warrants are
held of record by a depositary or other agent, by first-class mail, at the
addresses appearing on the Warrant Register, a notice of the Exercise Event to
occur, which notice shall describe the type of Exercise Event and the date of
the proposed occurrence thereof and the date of expiration of the right to
exercise the Warrants prominently set forth in the face of such notice.
ARTICLE III.
OTHER PROVISIONS RELATING TO
RIGHTS OF HOLDERS OF WARRANTS
-25-
SECTION 3.01. ENFORCEMENT OF RIGHTS. (a) Notwithstanding any of the
provisions of this Agreement, any holder of any Warrant Certificate, without the
consent of the Warrant Agent, the holder of any Shares or the holder of any
other Warrant Certificate, may, in and for his own behalf, enforce, and may
institute and maintain any suit, action or proceeding against the Company
suitable to enforce, his right to exercise the Warrant or Warrants evidenced by
his Warrant Certificate in the manner provided in such Warrant Certificate and
in this Agreement.
(b) Neither the Warrants nor any Warrant Certificate shall entitle
the holders thereof to any of the rights of a holder of Shares, including,
without limitation, the right to vote or to receive any dividends or other
payments or to consent or to receive notice as stockholders in respect of the
meetings of stockholders or for the election of directors of the Company or any
other matter, or any rights whatsoever as stockholders of the Company.
ARTICLE IV.
CERTAIN COVENANTS OF THE COMPANY
SECTION 4.01. PAYMENT OF TAXES. The Company will pay all documentary
stamp taxes attributable to the initial issuance of Warrants and of the Shares
upon the exercise of Warrants; PROVIDED, HOWEVER, that the Company shall not be
required to pay any tax or other governmental charge which may be payable in
respect of any transfer or exchange of any Warrant Certificates or any
certificates for Shares in a name other than the registered holder of a Warrant
Certificate surrendered upon the exercise of a Warrant. In any such case, no
transfer or exchange shall be made unless or until the person or persons
requesting issuance thereof shall have paid to the Company the amount of such
tax or other governmental charge or shall have established to the satisfaction
of the Company that such tax or other governmental charge has been paid or an
exemption is available therefrom.
SECTION 4.02. QUALIFICATION UNDER THE SECURITIES LAWS. Prior to the
occurrence of an Exercise Event arising as a result of
-26-
a Public Offering the Company will, if permitted by applicable law, take all
such action as is necessary to cause the offer and sale by the Company of the
Shares issuable upon exercise of the Warrants to be registered or otherwise
qualified under the provisions of the Securities Act and pursuant to all
applicable state securities laws and to provide for the issuance of all Shares
delivered upon exercise of the Warrants pursuant to an effective registration
statement under the Securities Act. So long as any unexpired Warrants which
have become exercisable due to the occurrence of such an Exercise Event remain
outstanding, the Company will file such amendments and/or supplements to any
registration statement under the Securities Act or under any state securities
laws covering the issuance of such Shares and supplement and keep current any
prospectus forming a part of such registration statement as may be necessary to
permit the Company to deliver to each person exercising a Warrant a prospectus
meeting the requirements of Section 10(a)(3) of the Securities Act (a
"PROSPECTUS") and the regulations of the Securities and Exchange Commission and
otherwise complying with the Securities Act and regulations thereunder, and as
may be necessary to comply with any applicable state securities laws. The
Company shall, upon the request of any holder of Warrants that may be required
pursuant to the Securities Act to deliver a prospectus in connection with any
sale or other disposition of Shares, include within the plan of distribution
section of the Prospectus and in such other places in the Prospectus as may be
necessary, all information necessary under the Securities Act to enable such
holder to deliver such Prospectus in connection with sales or other dispositions
of such Shares, and the Company shall also take such action as may be necessary
under the Securities Act with respect to the related registration statement to
enable such holder to effect such delivery in connection with such sale or other
disposition. The Company further agrees to provide any holder who may be
required to deliver a prospectus upon the sale or other disposition of such
Shares, such number of copies of the Prospectus as such holder reasonably
requests. The Warrant Agent shall have no duty to monitor when such
registration or qualification is necessary nor shall the Warrant Agent be
responsible for the Company's failure to comply with this Section 4.02.
-27-
SECTION 4.03. RULES 144 AND 144A. The Company covenants that it will
file the reports required to be filed by it under the Securities Act and the
Exchange Act and the rules and regulations adopted by the Securities and
Exchange Commission thereunder in a timely manner in accordance with the
requirements of the Securities Act and the Exchange Act and, if at any time the
Company is not required to file such reports, it will, upon the request of any
holder or beneficial owner of Warrants, make available such information
necessary to permit sales pursuant to Rule 144A under the Securities Act. The
Company further covenants that it will take such further action as any holder or
beneficial owner of Warrants may reasonably request, all to the extent required
from time to time to enable such holder or beneficial owner to sell Warrants
without registration under the Securities Act within the limitation of the
exemptions provided by (a) Rule 144(k) and Rule 144A under the Securities Act,
as such Rules may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the Securities and Exchange Commission (it being
expressly understood that the foregoing shall not create any obligation on the
part of the Company to file periodic or other reports under the Exchange Act at
any time that it is not then required to file such reports pursuant to the
Exchange Act).
ARTICLE V.
ADJUSTMENTS
SECTION 5.01. ADJUSTMENT OF EXERCISE RATE; NOTICES. The Exercise
Rate is subject to adjustment from time to time as provided in this Section.
(a) ADJUSTMENT FOR CHANGE IN CAPITAL STOCK. If, after the date
hereof, the Company:
(i) pays a dividend or makes a distribution on its Common Stock in
shares of its Common Stock;
(ii) subdivides its outstanding shares of Common Stock into a greater
number of shares;
-28-
(iii) combines its outstanding shares of Common Stock into a smaller
number of shares;
(iv) pays a dividend or makes a distribution on its Common Stock in
shares of its Capital Stock (as defined below) (other than Common Stock or
rights, warrants, or options for its Common Stock to the extent such
issuance or distribution is covered by Section 5.03); or
(v) issues by reclassification of its Common Stock any shares of its
Capital Stock (other than rights, warrants or options for its Common
Stock);
then the Exercise Rate in effect immediately prior to such action shall be
adjusted so that the holder of a Warrant thereafter exercised may receive the
number of shares of Capital Stock of the Company which such holder would have
owned immediately following such action if such holder had exercised the Warrant
immediately prior to such action or immediately prior to the record date
applicable thereto, if any (regardless of whether the Warrants are then
exercisable and without giving effect to the Cashless Exercise option).
The adjustment shall become effective immediately after the record
date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or reclassification.
In the event that such dividend or distribution is not so paid or made or such
subdivision, combination or reclassification is not effected, the Exercise Rate
shall again be adjusted to be the Exercise Rate which would then be in effect if
such record date or effective date had not been so fixed.
If after an adjustment a holder of a Warrant upon exercise of such
Warrant may receive shares of two or more classes of Capital Stock of the
Company, the Exercise Rate shall thereafter be subject to adjustment upon the
occurrence of an action taken with respect to any such class of Capital Stock as
is contemplated
-29-
by this Article V with respect to the Common Stock, on terms comparable to
those applicable to Common Stock in this Article V.
(b) ADJUSTMENT FOR SALE OF COMMON STOCK BELOW CURRENT MARKET VALUE.
If, after the date hereof, the Company sells any Common Stock or any securities
convertible into or exchangeable or exercisable for the Common Stock (other than
(1) pursuant to the exercise of the Warrants, (2) any security convertible into,
or exchangeable or exercisable for, the Common Stock which was outstanding as of
the date of this Agreement or as to which the issuance thereof has previously
been the subject of any required adjustment pursuant to this Article V, (3) the
issuance of Common Stock upon the conversion, exchange or exercise of
convertible, exchangeable or exercisable securities of the Company outstanding
on the date of this Agreement (to the extent in accordance with the terms of
such securities as in effect on the date of this Agreement) or (4) any security
issued pursuant to any stock plan for employees, officers, directors or
consultants of the Company approved by the non-management members of the Board
of Directors of the Company) at a price per share less than the Current Market
Value, the Exercise Rate shall be adjusted in accordance with the formula:
E' = E x (O + N)
_________________
(O + (N x P/M))
where:
E' = the adjusted Exercise Rate;
E = the current Exercise Rate;
O = the number of shares of Common Stock outstanding on the date of sale
of Common Stock at a price per share less than the Current Market
Value to which this paragraph (b) applies;
N = the number of shares of Common Stock so sold or the maximum stated
number of shares of Common Stock issuable
-30-
upon the conversion, exchange, or exercise of any such convertible,
exchangeable or exercisable securities, as the case may be;
P = the offering price per share pursuant to any such convertible,
exchangeable or exercisable securities so sold or the sale price of
the shares so sold, as the case may be; and
M = the Current Market Value as of the Time of Determination or at the
time of sale, as the case may be.
The Board of Directors of the Company shall reasonably and in good
faith determine fair market values for the purposes of this paragraph (b), which
determination shall be conclusive absent manifest error.
The adjustment shall become effective immediately after the record
date for the determination of stockholders entitled to receive the rights,
warrants or options to which this paragraph (b) applies or upon consummation of
the sale of Common Stock, as the case may be. To the extent that shares of
Common Stock are not delivered after the expiration of such rights or warrants,
the Exercise Rate shall be readjusted to the Exercise Rate which would otherwise
be in effect had the adjustment made upon the issuance of such rights or
warrants been made on the basis of delivery of only the number of shares of
Common Stock actually delivered. In the event that such rights or warrants are
not so issued, the Exercise Rate shall again be adjusted to be the Exercise Rate
which would then be in effect if such date fixed for determination of
stockholders entitled to receive such rights or warrants had not been so fixed.
No adjustment shall be made under this paragraph (b) if the
application of the formula stated above in this paragraph (b) would result in a
value of E' that is lower than the value of E.
(c) NOTICE OF ADJUSTMENT. Whenever the Exercise Rate is adjusted,
the Company shall promptly mail to holders of Warrants at
-31-
the addresses appearing on the Warrant Register a notice of the adjustment. The
Company shall file with the Warrant Agent and any other Registrar such notice
and a certificate from the Company's independent public accountants briefly
stating the facts requiring the adjustment and the manner of computing it. The
certificate shall be conclusive evidence that the adjustment is correct.
Neither the Warrant Agent nor any such Registrar shall be under any duty or
responsibility with respect to any such certificate except to exhibit the same
during normal business hours to any holder desiring inspection thereof.
(d) REORGANIZATION OF COMPANY; SPECIAL DISTRIBUTIONS. If the
Company, in a single transaction or through a series of related transactions,
consolidates with or merges with or into any other person or transfers (by
lease, assignment, sale or otherwise) all or substantially all of its properties
and assets to another person or group of affiliated persons (other than a sale
of all or substantially all of the assets of the Company in a transaction in
which the holders of Common Stock immediately prior to such transaction do not
receive securities, cash, or other assets of the Company or any other person) or
is a party to a merger or binding share exchange which reclassifies or changes
its outstanding Common Stock, the person obligated to deliver securities, cash
or other assets upon exercise of Warrants shall enter into a supplemental
warrant agreement. If the issuer of securities deliverable upon exercise of
Warrants is an affiliate of the successor Company, that issuer shall join in the
supplemental warrant agreement.
The supplemental warrant agreement shall provide that the holder of a
Warrant may exercise it for the kind and amount of securities, cash or other
assets which such holder would have received immediately after the
consolidation, merger, binding share exchange or transfer if such holder had
exercised the Warrant immediately before the effective date of the transaction
(whether or not the Warrants were then exercisable and without giving effect to
the Cashless Exercise option), assuming (to the extent applicable) that such
holder (i) was not a constituent person or an affiliate of a constituent person
to such transaction; (ii) made no election with respect thereto; and (iii) was
treated alike with the
-32-
plurality of non-electing holders. The supplemental warrant agreement shall
provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article V. The successor
Company shall mail to holders of Warrants at the addresses appearing on the
Warrant Register a notice briefly describing the supplemental warrant agreement.
If this paragraph (d) applies paragraph (a) shall not apply.
(e) COMPANY DETERMINATION FINAL. Any determination that the Company
or the Board of Directors of the Company must make pursuant to this Article V is
conclusive.
(f) WARRANT AGENT'S ADJUSTMENT DISCLAIMER. The Warrant Agent has no
duty to determine when an adjustment under this Article V should be made, how it
should be made or what it should be. The Warrant Agent has no duty to determine
whether a supplemental warrant agreement under paragraph (e) need be entered
into or whether any provisions of any supplemental warrant agreement are
correct. The Warrant Agent shall not be accountable for and makes no
representation as to the validity or value of any securities or assets issued
upon exercise of Warrants. The Warrant Agent shall not be responsible for the
Company's failure to comply with this Article V.
(g) ADJUSTMENT FOR TAX PURPOSES. The Company may make such increases
in the Exercise Rate, in addition to those otherwise required by this Section,
as it considers to be advisable in order that any event treated for Federal
income tax purposes as a dividend of stock or stock rights shall not be taxable
to the recipients.
(h) UNDERLYING SHARES. The Company shall at all times reserve and
keep available, free from preemptive rights, out of its authorized but unissued
Common Stock or Common Stock held in the treasury of the Company, for the
purpose of effecting the exercise of Warrants, the full number of Shares then
deliverable upon the exercise of all Warrants then outstanding, and the shares
so
-33-
deliverable shall be fully paid and nonassessable and free from all liens and
security interests.
(i) SPECIFICITY OF ADJUSTMENT. Irrespective of any adjustments in
the number or kind of shares purchasable upon the exercise of the Warrants,
Warrant Certificates theretofore or thereafter issued may continue to express
the same number and kind of Shares per Warrant as are stated on the Warrant
Certificates initially issuable pursuant to this Agreement.
(j) ADJUSTMENTS TO PAR VALUE. The Company shall make such
adjustments to the par value of the Common Stock in order that, upon exercise of
the Warrants, the Shares will be fully paid and non-assessable.
(k) VOLUNTARY ADJUSTMENT. The Company from time to time may increase
the Exercise Rate by any number and for any period of time (PROVIDED, that such
period is not less than 20 Business Days). Whenever the Exercise Rate is so
increased, the Company shall mail to holders at the addresses appearing on the
Warrant Register and file with the Warrant Agent a notice of the increase. The
Company shall give the notice at least 15 days before the date the increased
Exercise Rate takes effect. The notice shall state the increased Exercise Rate
and the period it will be in effect. A voluntary increase in the Exercise Rate
does not change or adjust the Exercise Rate otherwise in effect as determined by
this Section 5.01.
(l) NO OTHER ADJUSTMENT FOR DIVIDENDS. Except as provided in this
Article V, no payment or adjustment will be made for dividends on any Common
Stock.
(m) MULTIPLE ADJUSTMENTS. After an adjustment to the Exercise Rate
under this Article V, any subsequent event requiring an adjustment under this
Article V shall cause an adjustment to the Exercise Rate as so adjusted.
(n) DEFINITIONS.
-34-
"CAPITAL STOCK" means, with respect to any corporation, any and all
shares, interests, rights to purchase, warrants, options, participations or
other equivalents of or interests (however designated) in stock issued by that
corporation.
"CURRENT MARKET VALUE" per share of Common Stock or of any other
security at any date shall be (1) if the security is not registered under the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), (i) the value
of the security determined reasonably and in good faith by a disinterested
majority of the Board of Directors of the Company and certified in a board
resolution, or, if at the time there are not at least three disinterested
members of the Board of Directors, by a nationally recognized investment banking
firm or appraisal firm which is not an affiliate of the Company ("INDEPENDENT
FINANCIAL EXPERT"), or (2) if the security is registered under the Exchange Act,
the average of the daily closing bid prices for each Business Day during the
period commencing 15 Business Days before such date and ending on the date one
day prior to such date or, if the security has been registered under the
Exchange Act for less than 15 consecutive Business Days before such date, then
the average of the daily closing bid prices for all of the Business Days before
such date for which daily closing bid prices are available. If the closing bid
is not determinable for at least 10 Business Days in such period, the Current
Market Value of the security shall be determined as if the security were not
registered under the Exchange Act.
"TIME OF DETERMINATION" means the time and date of the determination
of stockholders entitled to receive rights, warrants, or options or a
distribution, in each case, to which paragraph (b) applies.
SECTION 5.02. FRACTIONAL SHARES. The Company will not be required
to issue fractional Shares upon exercise of the Warrants or distribute Share
certificates that evidence fractional Shares. In lieu of fractional Shares,
there shall be paid to the registered holders of Warrant Certificates at the
time Warrants evidenced thereby are exercised as herein provided an amount in
-35-
cash equal to the same fraction of the Current Market Value, as defined in
paragraph (n) of Section 5.01 of this Agreement, per Share on the Business Day
preceding the date the Warrant Certificates evidencing such Warrants are
surrendered for exercise. Such payments will be made by check or by transfer to
an account maintained by such registered holder with a bank in The City of New
York. If any holder surrenders for exercise more than one Warrant Certificate,
the number of Shares deliverable to such holder may, at the option of the
Company, be computed on the basis of the aggregate amount of all the Warrants
exercised by such holder.
SECTION 5.03. CERTAIN DISTRIBUTIONS. If at any time the Company
grants, issues or sells options, convertible securities, or rights to purchase
Capital Stock, warrants or other securities pro rata to the record holders of
the Common Stock (the "DISTRIBUTION RIGHTS") or, without duplication, makes any
dividend or otherwise makes any distribution ("DISTRIBUTION") on shares of
Common Stock (whether in cash, property, evidences of indebtedness or
otherwise), then the Company shall grant, issue, sell or make to each registered
holder of Warrants the aggregate Distribution Rights or Distribution, as the
case may be, which such holder would have acquired if such holder had held the
maximum number of Shares acquirable upon complete exercise of such holder's
Warrants (regardless of whether the Warrants are then exercisable and without
giving effect to the Cashless Exercise option) immediately before the record
date for the grant, issuance or sale of such Distribution Rights or
Distribution, as the case may be, or, if there is no such record date, the date
as of which the record holders of Common Stock are to be determined for the
grant, issue or sale of such Distribution Rights or Distribution, as the case
may be.
ARTICLE VI.
CONCERNING THE WARRANT AGENT
SECTION 6.01. WARRANT AGENT. The Company hereby appoints The Bank
of New York as Warrant Agent of the Company in respect of the Warrants and the
Warrant Certificates upon the terms
-36-
and subject to the conditions herein and in the Warrant Certificates set forth;
and The Bank of New York hereby accepts such appointment. The Warrant Agent
shall have the powers and authority specifically granted to and conferred upon
it in the Warrant Certificates and hereby and such further powers and authority
to act on behalf of the Company as the Company may hereafter grant to or confer
upon it and it shall accept in writing. All of the terms and provisions with
respect to such powers and authority contained in the Warrant Certificates are
subject to and governed by the terms and provisions hereof.
SECTION 6.02. CONDITIONS OF WARRANT AGENT'S OBLIGATIONS. The Warrant
Agent accepts its obligations herein set forth upon the terms and conditions
hereof and in the Warrant Certificates, including the following, to all of which
the Company agrees and to all of which the rights hereunder of the holders from
time to time of the Warrant Certificates shall be subject:
(a) The Warrant Agent shall be entitled to compensation to be agreed
upon with the Company in writing for all services rendered by it and the Company
agrees promptly to pay such compensation and to reimburse the Warrant Agent for
its reasonable out-of-pocket expenses (including reasonable fees and expenses of
counsel) incurred without gross negligence or willful misconduct on its part in
connection with the services rendered by it hereunder. The Company also agrees
to indemnify the Warrant Agent and any predecessor Warrant Agent, their
directors, officers, affiliates, agents and employees for, and to hold them and
their directors, officers, affiliates, agents and employees harmless against,
any loss, liability or expense of any nature whatsoever (including, without
limitation, fees and expenses of counsel) incurred without gross negligence or
willful misconduct on the part of the Warrant Agent, arising out of or in
connection with its acting as such Warrant Agent hereunder and its exercise of
its rights and performance of its obligations hereunder. The obligations of the
Company under this Section 6.02 shall survive the exercise and the expiration of
the Warrant Certificates and the resignation and removal of the Warrant Agent.
-37-
(b) In acting under this Agreement and in connection with the Warrant
Certificates, the Warrant Agent is acting solely as agent of the Company and
does not assume any obligation or relationship of agency or trust for or with
any of the owners or holders of the Warrant Certificates.
(c) The Warrant Agent may consult with counsel of its selection and
any advice or written opinion of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance with such advice or
opinion.
(d) The Warrant Agent shall be fully protected and shall incur no
liability for or in respect of any action taken or omitted to be taken or thing
suffered by it in reliance upon any Warrant Certificate, notice, direction,
consent, certificate, affidavit, opinion of counsel, instruction, statement or
other paper or document reasonably believed by it to be genuine and to have been
presented or signed by the proper parties.
(e) The Warrant Agent, and its officers, directors, affiliates and
employees ("RELATED PARTIES"), may become the owners of, or acquire any interest
in, Warrant Certificates, shares or other obligations of the Company with the
same rights that it or they would have it if were not the Warrant Agent
hereunder and, to the extent permitted by applicable law, it or they may engage
or be interested in any financial or other transaction with the Company and may
act on, or as depositary, trustee or agent for, any committee or body of holders
of shares or other obligations of the Company as freely as if it were not the
Warrant Agent hereunder. Nothing in this Agreement shall be deemed to prevent
the Warrant Agent or such Related Parties from acting in any other capacity for
the Company.
(f) The Warrant Agent shall not be under any liability for interest
on, and shall not be required to invest, any monies at any time received by it
pursuant to any of the provisions of this Agreement or of the Warrant
Certificates.
-38-
(g) The Warrant Agent shall not be under any responsibility in
respect of the validity of this Agreement (or any term or provision hereof) or
the execution and delivery hereof (except the due execution and delivery hereof
by the Warrant Agent) or in respect of the validity or execution of any Warrant
Certificate (except its authentication thereof).
(h) The recitals and other statements contained herein and in the
Warrant Certificates (except as to the Warrant Agent's authentication thereon)
shall be taken as the statements of the Company and the Warrant Agent assumes no
responsibility for the correctness of the same. The Warrant Agent does not make
any representation as to the validity or sufficiency of this Agreement or the
Warrant Certificates, except for its due execution and delivery of this
Agreement; PROVIDED, HOWEVER, that the Warrant Agent shall not be relieved of
its duty to authenticate the Warrant Certificates as authorized by this
Agreement. The Warrant Agent shall not be accountable for the use or
application by the Company of the proceeds of the exercise of any Warrant.
(i) Before the Warrant Agent acts or refrains from acting with
respect to any matter contemplated by this Warrant Agreement, it may require:
(1) an Officers' Certificate (as defined in the Indenture) stating on
behalf of the Company that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Warrant Agreement relating to the
proposed action have been complied with; and
(2) if reasonably necessary in the sole judgment of the Warrant
Agent, an opinion of counsel for the Company stating that, in the opinion
of such counsel, all such conditions precedent have been complied with
provided that such matter is one customarily opined on by counsel.
Each Officers' Certificate or, if requested, an opinion of counsel
with respect to compliance with a condition or covenant provided for in this
Warrant Agreement shall include:
-39-
(1) a statement that the person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such person, he or she has
made such examination or investigation as is necessary to enable him or her
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with.
(j) The Warrant Agent shall be obligated to perform such duties as
are herein and in the Warrant Certificates specifically set forth and no
implied duties or obligations shall be read into this Agreement or the Warrant
Certificates against the Warrant Agent. The Warrant Agent shall not be
accountable or under any duty or responsibility for the use by the Company of
any of the Warrant Certificates authenticated by the Warrant Agent and delivered
by it to the Company pursuant to this Agreement. The Warrant Agent shall have
no duty or responsibility in case of any default by the Company in the
performance of its covenants or agreements contained in the Warrant Certificates
or in the case of the receipt of any written demand from a holder of a Warrant
Certificate with respect to such default, including, without limiting the
generality of the foregoing, any duty or responsibility to initiate or attempt
to initiate any proceedings at law or otherwise or, except as provided in
Section 7.02 hereof, to make any demand upon the Company.
(k) Unless otherwise specifically provided herein, any order,
certificate, notice, request, direction or other communication from the Company
made or given under any provision of this Agreement shall be sufficient if
signed by its chairman of the
-40-
Board of Directors, its president, its treasurer, its controller or any vice
president or its secretary or any assistant secretary.
(l) The Warrant Agent shall have no responsibility in respect of any
adjustment pursuant to Article V hereof.
(m) The Company agrees that it will perform, execute, acknowledge and
deliver, or cause to be performed, executed, acknowledged and delivered, all
such further and other acts, instruments and assurances as may reasonably be
required by the Warrant Agent for the carrying out or performing by the Warrant
Agent of the provisions of this Agreement.
(n) The Warrant Agent is hereby authorized and directed to accept
written instructions with respect to the performance of its duties hereunder
from any one of the chairman of the Board of Directors, the president, the
treasurer, the controller, any vice president or the secretary of the Company or
any other officer or official of the Company reasonably believed to be
authorized to give such instructions and to apply to such officers or officials
for advice or instructions in connection with its duties, and it shall not be
liable for any action taken or suffered to be taken by it in good faith in
accordance with instructions with respect to any matter arising in connection
with the Warrant Agent's duties and obligations arising under this Agreement.
Such application by the Warrant Agent for written instructions from the Company
may, at the option of the Warrant Agent, set forth in writing any action
proposed to be taken or omitted by the Warrant Agent with respect to its duties
or obligations under this Agreement and the date on or after which such action
shall be taken and the Warrant Agent shall not be liable for any action taken or
omitted in accordance with a proposal included in any such application on or
after the date specified therein (which date shall be not less than 10 Business
Days after the Company receives such application unless the Company consents to
a shorter period), provided that (i) such application includes a statement to
the effect that it is being made pursuant to this paragraph (m) and that unless
objected to prior to such date specified in the application, the Warrant Agent
will not be liable for any such action or omission to the extent
-41-
set forth in such paragraph (m) and (ii) prior to taking or omitting any such
action, the Warrant Agent has not received written instructions objecting to
such proposed action or omission.
(o) Whenever in the performance of its duties under this Agreement
the Warrant Agent shall deem it necessary or desirable that any fact or matter
be proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed on behalf of the Company by any one of the
chairman of the Board of Directors, the president, the treasurer, the
controller, any vice president or the secretary of the Company or any other
officer or official of the Company reasonably believed to be authorized to give
such instructions and delivered to the Warrant Agent; and such certificate shall
be full authorization to the Warrant Agent for any action taken or suffered in
good faith by it under the provisions of this Agreement in reliance upon such
certificate.
(p) The Warrant Agent shall not be required to risk or expend its own
funds in the performance of its obligations and duties hereunder.
SECTION 6.03. RESIGNATION AND APPOINTMENT OF SUCCESSOR.
(a) The Company agrees, for the benefit of the holders from time to
time of the Warrant Certificates, that there shall at all times be a Warrant
Agent hereunder.
(b) The Warrant Agent may at any time resign as Warrant Agent by
giving written notice to the Company of such intention on its part, specifying
the date on which its desired resignation shall become effective; PROVIDED,
HOWEVER, that such date shall be at least 60 days after the date on which such
notice is given unless the Company agrees to accept less notice. Upon receiving
such notice of resignation, the Company shall promptly appoint a successor
Warrant Agent, qualified as provided in Section 6.03(d) hereof, by written
instrument in duplicate signed on behalf of the
-42-
Company, one copy of which shall be delivered to the resigning Warrant Agent and
one copy to the successor Warrant Agent. As provided in Section 6.03(d) hereof,
such resignation shall become effective upon the earlier of (x) the acceptance
of the appointment by the successor Warrant Agent or (y) 60 days after receipt
by the Company of notice of such resignation. The Company may, at any time and
for any reason, and shall, upon any event set forth in the next succeeding
sentence, remove the Warrant Agent and appoint a successor Warrant Agent by
written instrument in duplicate, specifying such removal and the date on which
it is intended to become effective, signed on behalf of the Company, one copy of
which shall be delivered to the Warrant Agent being removed and one copy to the
successor Warrant Agent. The Warrant Agent shall be removed as aforesaid if it
shall become incapable of acting, or shall be adjudged a bankrupt or insolvent,
or a receiver of the Warrant Agent or of its property shall be appointed, or any
public officer shall take charge or control of it or of its property or affairs
for the purpose of rehabilitation, conservation or liquidation. Any removal of
the Warrant Agent and any appointment of a successor Warrant Agent shall become
effective upon acceptance of appointment by the successor Warrant Agent as
provided in Section 6.03(d). As soon as practicable after appointment of the
successor Warrant Agent, the Company shall cause written notice of the change in
the Warrant Agent to be given to each of the registered holders of the Warrants
in the manner provided for in Section 7.04 hereof.
(c) Upon resignation or removal of the Warrant Agent, if the Company
shall fail to appoint a successor Warrant Agent within a period of 60 days after
receipt of such notice of resignation or removal, then the holder of any Warrant
Certificate or the retiring Warrant Agent may apply to a court of competent
jurisdiction for the appointment of a successor to the Warrant Agent. Pending
appointment of a successor to the Warrant Agent, either by the Company or by
such a court, the duties of the Warrant Agent shall be carried out by the
Company.
(d) Any successor Warrant Agent, whether appointed by the Company or
by a court, shall be a bank or trust company in good
-43-
standing, incorporated under the laws of the United States of America or any
State thereof and having, at the time of its appointment, a combined capital
surplus of at least $50 million. Such successor Warrant Agent shall execute and
deliver to its predecessor and to the Company an instrument accepting such
appointment hereunder and all the provisions of this Agreement, and thereupon
such successor Warrant Agent, without any further act, deed or conveyance, shall
become vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if originally named as Warrant Agent
hereunder, and such predecessor shall thereupon become obligated to (i) transfer
and deliver, and such successor Warrant Agent shall be entitled to receive, all
securities, records or other property on deposit with or held by such
predecessor as Warrant Agent hereunder and (ii) upon payment of the amounts then
due it pursuant to Section 6.02(a) hereof, pay over, and such successor Warrant
Agent shall be entitled to receive, all monies deposited with or held by any
predecessor Warrant Agent hereunder.
(e) Any corporation or bank into which the Warrant Agent hereunder
may be merged or converted, or any corporation or bank with which the Warrant
Agent may be consolidated, or any corporation or bank resulting from any merger,
conversion or consolidation to which the Warrant Agent shall be a party, or any
corporation or bank to which the Warrant Agent shall sell or otherwise transfer
all or substantially all of its corporate trust business, shall be the successor
to the Warrant Agent under this Agreement (provided that such corporation or
bank shall be qualified as aforesaid) without the execution or filing of any
document or any further act on the part of any of the parties hereto.
(f) No Warrant Agent under this Warrant Agreement shall be personally
liable for any action or omission of any successor Warrant Agent.
-44-
ARTICLE VII.
MISCELLANEOUS
SECTION 7.01. AMENDMENT. This Agreement and the terms of the
Warrants may be amended by the Company and the Warrant Agent, without the
consent of the holder of any Warrant Certificate, for the purpose of curing any
ambiguity, or of curing, correcting or supplementing any defective or
inconsistent provision contained herein or therein, or to effect any assumptions
of the Company's obligations hereunder and thereunder by a successor corporation
under the circumstances described in Section 5.01(d) hereof or in any other
manner which the Company may deem necessary or desirable and which shall not
adversely affect the interests of the holders of the Warrant Certificates.
The Company and the Warrant Agent may modify this Agreement and the
terms of the Warrants with the consent of not less than a majority in number of
the then outstanding Warrants for the purpose of adding any provision to or
changing in any manner or eliminating any of the provisions of this Agreement or
modifying in any manner the rights of the holders of the outstanding Warrants;
PROVIDED, HOWEVER, that no such modification that decreases the Exercise Rate,
reduces the period of time during which the Warrants are exercisable hereunder,
otherwise materially and adversely affects the exercise rights of the holders of
the Warrants, reduces the percentage required for modification, or effects any
change to this Section 7.01 may be made with respect to an outstanding Warrant
without the consent of the holder of such Warrant. Notwithstanding any other
provision of this Agreement, the Warrant Agent's consent must be obtained
regarding any supplement or amendment which alters the Warrant Agent's rights or
duties (it being expressly understood that the foregoing shall not be in
derogation of the right of the Company to remove the Warrant Agent in accordance
with Section 6.03 hereof).
Any modification or amendment made in accordance with this Agreement
will be conclusive and binding on all present and future holders of Warrant
Certificates whether or not they have
-45-
consented to such modification or amendment or waiver and whether or not
notation of such modification or amendment is made upon such Warrant
Certificates. Any instrument given by or on behalf of any holder of a Warrant
Certificate in connection with any consent to any modification or amendment will
be conclusive and binding on all subsequent holders of such Warrant Certificate.
SECTION 7.02. NOTICES AND DEMANDS TO THE COMPANY AND WARRANT AGENT.
If the Warrant Agent shall receive any notice or demand addressed to the Company
by the holder of a Warrant Certificate pursuant to the provisions hereof or of
the Warrant Certificates, the Warrant Agent shall promptly forward such notice
or demand to the Company.
SECTION 7.03. ADDRESSES FOR NOTICES TO PARTIES AND FOR TRANSMISSION
OF DOCUMENTS. All notices hereunder to the parties hereto shall be deemed to
have been given when sent by certified or registered mail, postage prepaid, or
by facsimile transmission, confirmed by first class mail, postage prepaid,
addressed to any party hereto as follows:
To the Company:
Cellnet Data Systems, Inc.
000 Xxxxxxxx Xxxx
Xxx Xxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: General Counsel
with copies to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
To the Warrant Agent:
-00-
Xxx Xxxx xx Xxx Xxxx
000 Xxxxxxx Xxxxxx Xxxxx 00X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Trustee Administration
or at any other address of which either of the foregoing shall have notified the
other in writing.
SECTION 7.04. NOTICES TO HOLDERS. Notices to holders of Warrants
shall be mailed to such holders at the addresses of such holders as they appear
in the Warrant Register. Any such notice shall be sufficiently given if sent by
first-class mail, postage prepaid.
SECTION 7.05. APPLICABLE LAW. THE VALIDITY, INTERPRETATION AND
PERFORMANCE OF THIS AGREEMENT AND EACH WARRANT CERTIFICATE ISSUED HEREUNDER AND
OF THE RESPECTIVE TERMS AND PROVISIONS THEREOF SHALL BE GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PROVISIONS
THEREOF.
SECTION 7.06. PERSONS HAVING RIGHTS UNDER AGREEMENT. Nothing in this
Agreement expressed or implied and nothing that may be inferred from any of the
provisions hereof is intended, or shall be construed, to confer upon, or give
to, any person or corporation other than the Company, the Warrant Agent and the
holders of the Warrant Certificates any right, remedy or claim under or by
reason of this Agreement or of any covenant, condition, stipulation, promise or
agreement hereof; and all covenants, conditions, stipulations, promises and
agreements in this Agreement contained shall be for the sole and exclusive
benefit of the Company and the Warrant Agent and their successors and of the
holders of the Warrant Certificates.
SECTION 7.07. HEADINGS. The descriptive headings of the several
Articles and Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the provisions
hereof.
-47-
SECTION 7.08. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original; but such counterparts shall together constitute but one and the same
instrument.
SECTION 7.09. INSPECTION OF AGREEMENT. A copy of this Agreement
shall be available during regular business hours at the principal corporate
trust office of the Warrant Agent, for inspection by the holder of any Warrant
Certificate. The Warrant Agent may require such holder to submit his Warrant
Certificate for inspection by it.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-48-
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the day and year first above written.
CELLNET DATA SYSTEMS, INC.
By: /s/ Xxxx Xxxxx
---------------------------------------------
Name: Xxxx Xxxxx
Title: CFO
THE BANK OF NEW YORK,
as Warrant Agent
By: /s/ Xxxxxx Xxxxxxx
---------------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Assistant Vice President
-49-
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
[FACE]
[Unless and until it is exchanged in whole or in part for Warrants in
certificated form, this Warrant may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC"),
to the issuer or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or such other
name as requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS THREE YEARS AFTER
THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE
COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR
_____________________
1 This paragraph is to be included only if the Warrant is in global form.
-2-
SECURITY) ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS
THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF SUBPARAGRAPHS (a)(1), (a)(2), (a)(3) OR (a)(7) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE
ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE COMPANY'S RIGHT IN ITS SOLE DISCRETION PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF
A WRITTEN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION
SATISFACTORY TO THE COMPANY, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE
OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE COMPANY AND THE WARRANT AGENT.
THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE.
CUSIP #[ ]
No. [ ] [ ] Warrants
WARRANT CERTIFICATE
CELLNET DATA SYSTEMS, INC.
-3-
This Warrant Certificate certifies that [ ], or registered
assigns, is the registered holder of [ ] Warrants (the "WARRANTS") to purchase
shares of Common Stock, no par value per share (the "COMMON STOCK"), of CELLNET
DATA SYSTEMS, INC., a California corporation (the "COMPANY"). Each Warrant
entitles the holder to purchase from the Company at any time from 9:00 a.m. New
York City time on or after the occurrence of an Exercise Event until 5:00 p.m.,
New York City time, on the earlier to occur of (a) 90 days after an Exercise
Event and (b) June 15, 2005 (the "EXPIRATION DATE"), one fully paid and
nonassessable share of Common Stock (a "SHARE", or, if adjusted, the "SHARES",
which may also include any other securities or property purchasable upon
exercise of a Warrant, such adjustment and inclusion each as provided in the
Warrant Agreement) at the exercise price (the "EXERCISE PRICE") of $.01 per
Warrant upon surrender of this Warrant Certificate and payment of the Exercise
Price at any office or agency maintained for that purpose by the Company (the
"WARRANT AGENT OFFICE"), subject to the conditions set forth herein and in the
Warrant Agreement. Notwithstanding the foregoing, a Warrant may also be
exercised solely by the surrender of the Warrant, and without the payment of the
Exercise Price in cash, for such number of Shares equal to the product of
(1) the number of Shares for which such Warrant is exercisable with payment of
the Exercise Price as of the date of exercise and (2) the Cashless Exercise
Ratio. For purposes of this Warrant, the "CASHLESS EXERCISE RATIO" shall equal
a fraction, the numerator of which is the excess of the Current Market Value of
the Common Stock on the date of exercise (calculated as set forth in
Section 5.01(n) of the Warrant Agreement) over the Exercise Price Per Share as
of the date of exercise and the denominator of which is the Current Market Value
of the Common Stock on the date of exercise (calculated as set forth in Section
5.01(n) of the Warrant Agreement). An exercise of a Warrant in accordance with
the immediately preceding sentences is herein called a "CASHLESS EXERCISE."
Upon surrender of a Warrant Certificate representing more than one Warrant in
connection with the Holder's option to elect a Cashless Exercise, the number of
Shares deliverable upon a Cashless Exercise shall be equal to the number of
Warrants that the Holder specifies is to be exercised pursuant to a Cashless
Exercise multiplied by the Cashless Exercise
-4-
Ratio. All provisions of this Agreement shall be applicable with respect to an
exercise of a Warrant Certificate pursuant to a Cashless Exercise for less than
the full number of Warrants represented thereby.
"Exercise Event" means, with respect to each Warrant as to which such
event is applicable (but not with respect to any other Warrant), the date of the
earliest of: (1) the seventh day prior to the occurrence of a Change of
Control, (2) the consummation of a Public Equity Offering and (3) the 90th day
prior to June 15, 2005.
To the extent an exercise of a Warrant is not in effect through the
Cashless Exercise, the Exercise Price shall be payable by certified check or
official bank check or by such other means as is acceptable to the Company in
the lawful currency of the United States of America which as of the time of
payment is legal tender for payment of public or private debts. The Company has
initially designated the principal corporate trust office of the Warrant Agent
in the Borough of Manhattan, The City of New York, as the initial Warrant Agent
Office. The number of Shares issuable upon exercise of the Warrants ("EXERCISE
RATE") is subject to adjustment upon the occurrence of certain events set forth
in the Warrant Agreement.
Any Warrants not exercised on or prior to 5:00 p.m., New York City
time, on June 15, 2005 shall thereafter be void.
Reference is hereby made to the further provisions on the reverse
hereof which provisions shall for all purposes have the same effect as though
fully set forth at this place.
This Warrant Certificate shall not be valid unless authenticated by
the Warrant Agent, as such term is used in the Warrant Agreement.
THIS WARRANT CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
PROVISIONS THEREOF.
-5-
WITNESS the facsimile seal of the Company and facsimile signatures of
its duly authorized officers.
Dated:
CELLNET DATA SYSTEMS, INC.
By:
---------------------------------
Name:
Title:
Attest:
By:
---------------------------------
Name:
Title:
Certificate of Authentication:
This is one of the Warrants
referred to in the within
mentioned Warrant Agreement:
THE BANK OF NEW YORK,
as Warrant Agent
By:
---------------------------------
Authorized Signatory
[FORM OF WARRANT CERTIFICATE]
[REVERSE]
CELLNET DATA SYSTEMS, INC.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants expiring at 5:00 p.m., New York City time, on the
earlier to occur of (a) 90 days after an Exercise Event which causes such
Warrants to become exercisable and (b) June 15, 2005, each of which represents
the right to purchase at any time on or after the Exercisability Date (as
defined in the Warrant Agreement) and on or prior to such date one share of
Common Stock of the Company, subject to adjustment as set forth in the Warrant
Agreement. The Warrants are issued pursuant to a Warrant Agreement dated as of
June 15, 1995 (the "WARRANT AGREEMENT"), duly executed and delivered by the
Company to The Bank of New York, a New York banking corporation, as Warrant
Agent (the "WARRANT AGENT"), which Warrant Agreement is hereby incorporated by
reference in and made a part of this instrument and is hereby referred to for a
description of the rights, limitation of rights, obligations, duties and
immunities thereunder of the Warrant Agent, the Company and the holders (the
words "holders" or holder" meaning the registered holders or registered holder)
of the Warrants.
Warrants may be exercised by (i) surrendering at any Warrant Agent
Office this Warrant Certificate with the form of Election to Exercise set forth
hereon duly completed and executed and (ii) to the extent such exercise is not
being effected through a Cashless Exercise, paying in full the Warrant Exercise
Price for each such Warrant exercised and any other amounts required to be paid
pursuant to the Warrant Agreement.
If all of the items referred to in the last sentence of the preceding
paragraph are received by the Warrant Agent at or prior to 11:00 a.m., New York
City time, on a Business Day, the exercise of the Warrant to which such items
relate will be effective on such Business Day. If any items referred to in the
last sentence of the preceding paragraph are received after 11:00 a.m., New York
City time, on a Business Day, the exercise of the Warrants to which such item
relates will be deemed to be effective
-2-
on the next succeeding Business Day. Notwithstanding the foregoing, in the case
of an exercise of Warrants on June 15, 2005, if all of the items referred to in
the last sentence of the preceding paragraph are received by the Warrant Agent
at or prior to 5:00 p.m., New York City time, on such Expiration Date, the
exercise of the Warrants to which such items relate will be effective on the
Expiration Date.
As soon as practicable after the exercise of any Warrant or Warrants,
the Company shall issue or cause to be issued to or upon the written order of
the registered holder of this Warrant Certificate, a certificate or certificates
evidencing the Share or Shares to which such holder is entitled, in fully
registered form, registered in such name or names as may be directed by such
holder pursuant to the Election to Exercise, as set forth on the reverse of this
Warrant Certificate. Such certificate or certificates evidencing the Share or
Shares shall be deemed to have been issued and any persons who are designated to
be named therein shall be deemed to have become the holder of record of such
Share or Shares as of the close of business on the date upon which the exercise
of this Warrant was deemed to be effective as provided in the preceding
paragraph.
The Company will not be required to issue fractional shares of Common
Stock upon exercise of the Warrants or distribute Share certificates that
evidence fractional shares of Common Stock. In lieu of fractional shares of
Common Stock, there shall be paid to the registered Holder of this Warrant
Certificate at the time such Warrant Certificate is exercised an amount in cash
equal to the same fraction of the Current Market Value (as defined in the
Warrant Agreement) per share on the Business Day preceding the date this Warrant
Certificate is surrendered for exercise.
Warrant Certificates, when surrendered at any office or agency
maintained by the Company for that purpose by the registered holder thereof in
person or by legal representative or attorney duly authorized in writing, may be
exchanged for a new Warrant Certificate or new Warrant Certificates evidencing
in the aggregate a like number of Warrants, in the manner and subject to the
-3-
limitations provided in the Warrant Agreement, without charge except for any tax
or other governmental charge imposed in connection therewith.
Upon due presentment for registration of transfer of this Warrant
Certificate at any office or agency maintained by the Company for that purpose,
a new Warrant Certificate evidencing in the aggregate a like number of Warrants
shall be issued to the transferee in exchange for this Warrant Certificate,
subject to the limitations provided in the 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 hereof as the absolute owner of this Warrant Certificate (notwithstanding
any notation of ownership or other writing hereon made by anyone) for the
purpose of any exercise hereof and for all other purposes, and neither the
Company nor the Warrant Agent shall be affected by any notice to the contrary.
The term "Business Day" shall mean any day on which (i) banks in New
York City, (ii) the principal national securities exchange or market on which
the Common Stock is listed or admitted to trading and (iii) the principal
national securities exchange or market on which the Warrants are listed or
admitted to trading are open for business.
(FORM OF ELECTION TO EXERCISE)
(To be executed upon exercise of Warrants on the Exercise Date)
The undersigned hereby irrevocably elects to exercise [ ] of the
Warrants represented by this Warrant Certificate and purchase the whole number
of Shares issuable upon the exercise of such Warrants and herewith tenders
payment for such Shares in the amount of $[ ] in cash or by certified or
official bank check, in accordance with the terms hereof. In lieu of payment of
the cash exercise price, the holder hereof is electing to exercise [ ]
Warrants pursuant to a Cashless Exercise (as defined in the Warrant Agreement)
for [ ] shares of Common Stock at the current Cashless Exercise Ratio. The
undersigned requests that a certificate representing such Shares be registered
in the name of _____________ whose address is _____________________________ and
that such certificate be delivered to ___________________________ whose address
is __________________________. Any cash payments to be paid in lieu of a
fractional Share should be made to __________________ whose address is
________________________ and the check representing payment thereof should be
delivered to ______________________ whose address is ______________________.
Dated __________________, 19__
Name of holder of
Warrant Certificate: ________________________________________________
(Please Print)
Tax Identification or
Social Security Number: _____________________________________________
Address: __________________________________________________________
__________________________________________________________
Signature: __________________________________________________________
Note: The above signature must correspond with the name
as written upon the face of this Warrant
Certificate in
-2-
every particular, without alteration or
enlargement or any change whatever and if the
certificate representing the Shares or any Warrant
Certificate representing Warrants not exercised
is to be registered in a name other than that in
which this Warrant Certificate is registered, or
if any cash payment to be paid in lieu of a
fractional share is to be made to a person other
than the registered holder of this Warrant
Certificate, the signature of the holder hereof
must be guaranteed as provided in the Warrant
Agreement.
Dated ____________________, 19__
Signature: __________________________________________________________
Note: The above signature must correspond with the name
as written upon the face of this Warrant
Certificate in every particular, without
alteration or enlargement or any change whatever.
Signature Guaranteed: _______________________________________________
[FORM OF ASSIGNMENT]
For value received _______________________ hereby sells, assigns and
transfers unto _____________________ the within Warrant Certificate, together
with all right, title and interest therein, and does hereby irrevocably
constitute and appoint __________________________ attorney, to transfer said
Warrant Certificate on the books of the within-named Company, with full power of
substitution in the premises.
-3-
Dated ____________________, 199__
Signature: __________________________________________________________
Note: The above signature must correspond with the name
as written upon the face of this Warrant
Certificate in every particular, without
alteration or enlargement or any change whatever.
Signature Guaranteed: _______________________________________________
-4-
SCHEDULE OF EXCHANGES OF CERTIFICATED WARRANTS (2)
--------------------------------------------------
The following exchanges of a part of this Global Warrant for certificated
Warrants have been made:
Number of
Warrants of
Amount of Amount of this Global
decrease in increase in Warrant Signature of
Number of Number of following authorized
Date of Warrants of this Warrants of this such decrease officer of
Exchange Global Warrant Global Warrant (or increase) Warrant Agent
-------------------------------------------------------------------------------
______________________________
2 This is to be included only if the Warrant is in global form.
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF WARRANTS
Re: Warrants to Purchase Common Stock (the "Warrants")
of CELLNET DATA SYSTEMS, INC.
This Certificate relates to ____ Warrants held in* ___ book-entry or*
_______ certificated form by ______ (the "Transferor").
The Transferor:*
/ / has requested the Warrant Agent by written order to deliver in
exchange for its beneficial interest in the Global Warrant held by the
Depositary a Warrant or Warrants in definitive, registered form of authorized
denominations and an aggregate number equal to its beneficial interest in such
Global Warrant (or the portion thereof indicated above); or
/ / has requested the Warrant Agent by written order to exchange or
register the transfer of a Warrant or Warrants.
In connection with such request and in respect of each such Warrant,
the Transferor does hereby certify that Transferor is familiar with the Warrant
Agreement relating to the above captioned Warrants and the restrictions on
transfers thereof as provided in Section 1.08 of such Warrant Agreement, and
that the transfer of this Warrant does not require registration under the
Securities Act of 1933, as amended (the "ACT") because[*]:
/ / Such Warrant is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 1.08(a)(y)(A) or Section
1.08(d)(i)(A) of the Warrant Agreement).
/ / Such Warrant is being transferred to a qualified institutional buyer
(as defined in Rule 144A under the Act), in reliance on Rule 144A or in
accordance with Regulation S under the Act.
B-1
/ / Such Warrant is being transferred in accordance with Rule 144 under
the Act.
/ / Such Warrant is being transferred in reliance on and in compliance
with an exemption from the registration requirements of the Act, other than Rule
144A or Rule 144 or Regulation S under the Act. An opinion of counsel to the
effect that such transfer does not require registration under the Act
accompanies this Certificate.
__________________________________________________
[INSERT NAME OF TRANSFEROR]
By: _________________________
Date: _____________
*Check applicable box.
B-2
EXHIBIT C
Transferee Letter of Representation
CELLNET DATA SYSTEMS, INC.
000 Xxxxxxxx Xxxx
Xxx Xxxxxx, XX 00000
Ladies and Gentlemen:
In connection with our proposed purchase of warrants to purchase
Common Stock, par value $.01 per share, (the "SECURITIES") of Cellnet Data
Systems, Inc. (the "COMPANY") we confirm that:
1. We understand that the Securities have not been registered under
the Securities Act of 1933, as amended (the "SECURITIES ACT") and, unless
so registered, may not be sold except as permitted in the following
sentence. We agree on our own behalf and on behalf of any investor account
for which we are purchasing Securities to offer, sell or otherwise transfer
such Securities prior to the date which is three years after the later of
the date of original issue and the last date on which the Company or any
affiliate of the Company was the owner of such Securities, or any
predecessor thereto (the "RESALE RESTRICTION TERMINATION DATE") only (a) to
the Company, (b) pursuant to a registration statement which has been
declared effective under the Securities Act, (c) so long as the Securities
are eligible for resale pursuant to Rule 144A, under the Securities Act, to
a person we reasonably believe is a qualified institutional buyer under
Rule 144A (a "QIB") that purchases for its own account or for the account
of a QIB and to whom notice is given that the transfer is being made in
reliance on Rule 144A, (d) pursuant to offers and sales that occur outside
the United States within the meaning of Regulation S under the Securities
Act, (e) to an institutional "accredited investor" within the meaning of
subparagraphs (a)(1), (2), (3) or (7) of Rule 501 under the Securities Act
that is purchasing for his own account or for the account of such an
institutional "accredited investor," or (f) pursuant to any other available
exemption from the
C-1
registration requirements of the Securities Act, subject in each of the
foregoing cases to any requirement of law that the disposition of our
property or the property of such investor account or accounts be at all
times within our or their control and to compliance with any applicable
state securities laws. The foregoing restrictions on resale will not apply
subsequent to the Resale Restriction Termination Date. If any resale or
other transfer of the Securities is proposed to be made pursuant to
clause (e) above prior to the Resale Restriction Termination Date, the
transferor shall deliver a letter from the transferee substantially in the
form of this letter to the warrant agent under the Warrant Agreement
pursuant to which the Securities were issued (the "WARRANT AGENT") which
shall provide, among other things, that the transferee is an institutional
"accredited investor" within the meaning of subparagraphs (a)(1), (2), (3)
or (7) of Rule 501 under the Securities Act and that it is acquiring such
Securities for investment purposes and not for distribution in violation of
the Securities Act. The Warrant Agent and the Company reserve the right
prior to any offer, sale or other transfer prior to the Resale Restriction
Termination Date of the Securities pursuant to clauses (c), (d), (e) or (f)
above to require the delivery of a written opinion of counsel,
certifications, and or other information satisfactory to the Company and
the Warrant Agent.
2. We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act)
purchasing for our own account or for the account of such an institutional
"accredited investor," and we are acquiring the Securities for investment
purposes and not with a view to, or for offer or sale in connection with,
any distribution in violation of the Securities Act and we have such
knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Securities, and
we and any accounts for which we are acting are each able to bear the
economic risk of our or its investment for an indefinite period.
3. We are acquiring the Securities purchased by us for our own
account or for one or more accounts as to each of which we exercise sole
investment discretion.
C-2
4. You and your counsel are entitled to rely upon this letter and you
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official
inquiry with respect to the matters covered hereby.
Very truly yours,
__________________________________________________
(Name of Purchaser)
By: ______________________________________________
Date: ____________________________________________
Upon transfer the Securities would be registered in the name of the
new beneficial owner as follows:
Name:______________________________
Address:___________________________
Taxpayer ID Number:________________
C-3
