EXHIBIT 10.37
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WARRANT AGREEMENT
Dated as of November 15, 1997
by and between
UIH AUSTRALIA/PACIFIC, INC.
and
FIRSTAR BANK OF MINNESOTA, N.A.,
as Warrant Agent
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WARRANT AGREEMENT
TABLE OF CONTENTS*
Page
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SECTION 1. Appointment of Warrant Agent................................. 1
SECTION 2. Issuance of Warrants......................................... 1
SECTION 3. Warrant Certificates......................................... 1
SECTION 4. Execution of Warrant Certificates............................ 1
SECTION 5. Registration of Transfers and Exchanges...................... 2
SECTION 6. Registration and Countersignature............................ 2
SECTION 7. Terms of Warrants; Exercise of Warrants...................... 2
SECTION 8. Reports...................................................... 4
SECTION 9. Payment of Taxes............................................. 4
SECTION 10. Mutilated or Missing Warrant Certificates.................... 4
SECTION 11. Reservation of Warrant Shares................................ 4
SECTION 12. Obtaining Stock Exchange Listings............................ 5
SECTION 13. Adjustment of Exercise Price and Number of
Warrant Shares Issuable...................................... 5
(a) Adjustment for Change in Capital Stock....................... 5
(b) Adjustment for Rights Issue.................................. 6
(c) Adjustment for Other Distributions........................... 6
(d) Adjustment for Common Stock Issue............................ 7
(e) Adjustment for Convertible Securities Issue.................. 8
(f) [Reserved]................................................... 9
(g) Consideration Received....................................... 9
(h) When De Minimis Adjustment May Be Deferred................... 9
(i) When No Adjustment Required.................................. 9
(j) Notice of Adjustment......................................... 10
(k) Voluntary Reduction.......................................... 10
(l) Notice of Certain Transactions............................... 10
(m) Reorganization of the Company................................ 10
(n) Determination Final.......................................... 11
(o) Warrant Agent's Disclaimer................................... 11
(p) When Issuance or Payment May Be Deferred..................... 11
(q) Adjustment in the Number of Shares........................... 11
(r) Form of Warrants............................................. 12
SECTION 14. No Dilution or Impairment.................................... 12
SECTION 15. Fractional Interests......................................... 12
SECTION 16. Notices to Warrant Holders................................... ▇▇
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▇▇▇▇▇▇▇ ▇▇. Merger, Consolidation or Change of Name of
Warrant Agent............................................... 13
SECTION 18. Warrant Agent............................................... 14
SECTION 19. Registration................................................ 15
(a) Shelf Registration of Warrant Shares........................ 15
(b) Registration Expenses....................................... 15
(c) Blackout Privilege.......................................... 15
(d) Liquidated Damages.......................................... 15
(e) Remedies.................................................... 16
SECTION 20. [Reserved].................................................. 16
SECTION 21. Merger, Consolidation or Change of Name of
Warrant Agent............................................... 16
SECTION 22. Change of Warrant Agent..................................... 16
SECTION 23. Notices to the Company and Warrant Agent.................... 16
SECTION 24. Supplements and Amendments.................................. 17
SECTION 25. Successors.................................................. 17
SECTION 26. Termination................................................. 17
SECTION 27. Governing Law; Jurisdiction................................. 17
SECTION 28. Benefits of This Agreement.................................. 17
SECTION 29. Counterparts................................................ 18
SECTION 30. Further Assurances.......................................... 18
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* This table of Contents does not constitute a part of this Agreement or have
any bearing upon the interpretation of any of its terms or provisions.
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This WARRANT AGREEMENT, dated as of November 15, 1997, is by and between
UIH Australia/Pacific, Inc., a Colorado corporation (the "Company"), and Firstar
Bank of Minnesota, N.A., an association organized and existing under the laws of
the United States of America, as Warrant Agent (the "Warrant Agent").
RECITALS
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WHEREAS, the Company has entered into an indenture (the "Indenture"),
dated September 23, 1997, with Firstar Bank of Minnesota, N.A., as trustee (the
"Trustee"), pursuant to which the Company has issued $45,000,000 principal
amount of its 14% Senior Discount Notes due 2006 (the "Notes"); and
WHEREAS, Section 4.21 of the Indenture provides that in the event the
Company does not effect an Equity Sale (as defined in the Indenture) the Company
is required to issue to the holders of the Notes Warrants (the "Warrants") to
purchase up to 0.4% of the common stock, par value $.01/per share, of the
Company (the "Common Stock") on a fully diluted basis after a giving effect to
the exercise of the Warrants; and
WHEREAS, each Warrant entitles the holder of the Warrant, upon exercise to
receive from the Company, as adjusted as provided herein, one fully paid and
nonassessable share of Common Stock of the Company at the Exercise Price (as
defined herein); and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing so to act, in connection with the
issuance of Warrant certificates and other matters as provided herein.
AGREEMENT
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NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereto agree as follows:
SECTION 1. Appointment of Warrant Agent. The Company hereby appoints the
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Warrant Agent to act as agent for the Company in accordance with the
instructions set forth hereinafter in this Agreement, and the Warrant Agent
hereby accepts such appointment.
SECTION 2. Issuance of Warrants. Warrants shall be issued originally by
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the Company to the extent required by Section 4.21 of the Indenture.
SECTION 3. Warrant Certificates. The certificates evidencing the
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Warrants to be delivered pursuant to this Agreement shall be in registered form
only and shall be substantially in the form set forth in Exhibit A attached
hereto.
SECTION 4. Execution of Warrant Certificates. Warrant certificates shall
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be signed on behalf of the Company by its Chairman of the Board, Chief Executive
Officer, Chief Financial Officer or President and Secretary or an Assistant
Secretary. Each such signature upon the Warrant certificates may be in the form
of a facsimile signature of the present or any future Chairman of the Board,
Chief Executive Officer, Chief Financial Officer or President and Secretary or
Assistant Secretary and may be imprinted or otherwise reproduced on the Warrant
certificates and for that purpose the Company may adopt and use the facsimile
signature of any person who shall have been Chairman of the Board, Chief
Executive Officer, Chief Financial Officer or President and Secretary or
Assistant Secretary, notwithstanding the fact that at the time the Warrant
certificates shall be countersigned and delivered or disposed of, he or she
shall have ceased to hold such office. The seal of the Company may be in the
form of a facsimile thereof and may be impressed, affixed, imprinted or
otherwise eproduced on the Warrant certificates.
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 certificates so
signed shall have been countersigned by the Warrant Agent, or disposed of by the
Company, such Warrant certificates nonetheless may be countersigned and
delivered or disposed of as though such person had not ceased to be such officer
of the Company; and any Warrant certificate may be signed on
behalf of the Company by any person who, at the actual date of the execution of
such Warrant certificate, shall be a proper officer of the Company to sign such
Warrant certificate, although at the date of the execution of this Warrant
Agreement any such person was not such officer.
Warrant certificates shall be dated the date of countersignature by the
Warrant Agent.
SECTION 5. Registration of Transfers and Exchanges. The Warrant Agent
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shall from time to time register the transfer of any outstanding Warrant
certificates upon the records to be maintained by it for that purpose, upon
surrender thereof accompanied by a written instrument or instruments of transfer
in form satisfactory to the Warrant Agent, duly executed by the registered
holder or holders thereof or by the duly appointed legal representative thereof
or by a duly authorized attorney. Upon any such registration of transfer, a new
Warrant certificate shall be issued to the transferee(s) and the surrendered
Warrant certificate shall be canceled by the Warrant Agent. Canceled Warrant
certificates shall thereafter be disposed of by the Company in accordance with
applicable law.
Warrant certificates may be exchanged at the option of the holder(s)
thereof, when surrendered to the Warrant Agent at its office for another Warrant
certificate or other Warrant certificates of like tenor and representing in the
aggregate a like number of Warrants. Warrant certificates surrendered for
exchange shall be canceled by the Warrant Agent. Such canceled Warrant
certificates shall then be disposed of by the Company in accordance with
applicable law.
No service change shall be made for any transfer or exchange of Warrant
certificates or any issuance of Warrant certificates in connection with a
Separation, but the Company may require payment of a sum sufficient to cover any
stamp or other governmental charge or tax that may be imposed in connection with
any such transfer or exchange.
The Warrant Agent is hereby authorized to countersign, in accordance with
the provisions of this Section 5, the Warrant certificates required pursuant to
the provisions of this Section 5.
SECTION 6. Registration and Countersignature. The Warrant Agent, on
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behalf of the Company, shall number and register the Warrant certificates in a
register as they are issued by the Company (the "Warrant Register").
Warrant certificates shall be countersigned manually by the Warrant Agent
and shall not be valid for any purpose unless so countersigned. The Warrant
Agent shall, upon written instructions of the Chairman of the Board, Chief
Executive Officer, President or the Chief Financial Officer of the Company,
initially countersign and deliver Warrants entitling the holders thereof to
purchase not more than the number of Warrant Shares referred to above in the
second recital hereof and shall countersign and deliver Warrants as otherwise
provided in this Agreement.
The Company and the Warrant Agent may deem and treat the registered
holder(s) of the Warrant certificates as the absolute owner(s) thereof
(notwithstanding any notation of ownership or other writing thereon made by
anyone), for all purposes, and neither the Company nor the Warrant Agent shall
be affected by any notice to the contrary.
SECTION 7. Terms of Warrants; Exercise of Warrants. Subject to the terms
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of this Agreement, each Warrant holder shall have the right, which may be
exercised on or after the date hereof until 5:00 p.m., New York City, New York
time on May 15, 2006 (the "Expiration Date"), to exercise each Warrant and
receive from the Company the number of fully paid and nonassessable Warrant
Shares which the holder may at the time be entitled to receive on exercise of
such Warrants and payment of the Exercise Price (as herein defined) then in
effect for such Warrant Shares; provided, however, that no Warrant holder shall
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be entitled to exercise such holder's Warrants at any time unless, at the time
of exercise, (i) a registration statement under the Securities Act of 1933, as
amended (the "Act"), relating to the Warrant Shares has been filed with, and
declared effective by, the Securities and Exchange Commission (the "SEC"), and
no stop order suspending the effectiveness of such registration statement has
been issued by the SEC or (ii) the issuance of the Warrant Shares is permitted
pursuant to an exemption from the registration requirements of the Act; and
provided, further, that if the Company or a holder of Warrants reasonably
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believes that the exercise of any Warrant requires prior compliance with the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976 and the rules and
regulations thereunder, any such exercise shall be contingent upon such prior
compliance. Each Warrant, when exercised will entitle the holder thereof to
purchase one (1) fully paid and nonassessable share of Common Stock at the
Exercise Price (as defined in the Indenture). Each Warrant not exercised prior
to the Expiration Date shall become void and all rights
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thereunder and all rights in respect thereof under this Agreement shall cease as
of such time. No adjustments as to dividends will be made upon exercise of the
Warrants.
A Warrant may be exercised upon surrender to the Company at the principal
office of the Warrant Agent of the certificate or certificates evidencing the
Warrants (or fractional interests in Warrants) to be exercised with the form of
election to purchase on the reverse thereof duly filled in and signed, which
signature shall be guaranteed by an "eligible guarantor" as defined in the
regulations promulgated under the Securities and Exchange Act of 1934, as
amended (the "Exchange Act"), and upon payment to the Warrant Agent for the
account of the Company of the Exercise Price, as adjusted as herein provided,
for each Warrant Share. Payment of the aggregate Exercise Price shall be made
(i) in United States dollars or (ii) by certified or official bank check payable
to the order of the Company or (iii) by tendering Notes having an Accreted Value
(as defined in the Indenture) at the time of tender equal to the Exercise Price
or (iv) by tendering Warrants having a Fair Market Value equal to the Exercise
Price or (v) with any combination of (i), (ii), (iii), or (iv). "Fair Market
Value" or "Current Market Value" per Warrant or per share of Common Stock or of
any other security at any date shall be (1) if the security is not listed on a
National Securities Exchange or quoted on the National Association of Securities
Dealers Automated Quotation System, (i) the value of the security determined
reasonably and in good faith by the Board of Directors of the Company and
certified in a board resolution which shall be certified by the Secretary or an
Assistant Secretary of the Company and filed with the Warrant Agent, based on
the most recently completed arm's-length transaction between the Company and a
person other than an Affiliate (as defined in Rule 144 under the Act) of the
Company and the closing of which occurs on such date or shall have occurred
within the four months preceding such date, (ii) if no such transaction shall
have occurred on such date or within such four-month period, the value of the
security most recently determined as of a date within the four months preceding
such date by a nationally recognized investment banking firm or appraisal firm
which is not an Affiliate of the Company ("Independent Financial Advisor") or
(iii) if neither clause (i) nor (ii) is applicable, the value of the security
determined as of such date by an Independent Financial Advisor, or (2) if the
security is listed on a National Securities Exchange or quoted on the National
Association of Securities Dealers Automated Quotation System, 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 listed on a National Securities Exchange or quoted
on the National Association of Securities Dealers Automated Quotation System 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 was not listed on a National
Securities Exchange or quoted on the National Association of Securities Dealers
Automated Quotation System.
If the Notes are surrendered in payment of the Exercise Price, the Warrant
Agent shall deliver such Notes to the Company and the Company shall deliver such
Notes to the Trustee for cancellation and the Trustee shall notify the Company
in writing whether such Notes were in good form and, if such Notes were in good
form the Company shall notify the Warrant Agent in writing that the Company has
received full and proper payment of the Exercise Price.
Subject to the provisions of Section 9 hereof, upon such surrender of
Warrants and payment of the Exercise Price, the Company shall issue and cause to
be delivered with all reasonable dispatch to or upon the written order of the
holder and in such name or names as the Warrant holder may designate, a
certificate or certificates for the number of full Warrant Shares issuable upon
the exercise of such Warrants together with cash as provided in Section 15
hereof; provided, however, that if any consolidation, merger or lease or sale of
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assets is proposed to be effected by the Company as described in subsection (m)
of Section 13 hereof, or a tender offer or an exchange offer for shares of
Common Stock of the Company shall be made, upon such surrender of Warrants and
payment of the Exercise Price as aforesaid, the Company shall, as soon as
possible, but in any event not later than two business days thereafter, issue
and cause to be delivered the full number of Warrant Shares issuable upon the
exercise of such Warrants in the manner described in this sentence together with
cash as provided in Section 15 hereof. Such certificate or certificates shall be
deemed to have been issued and any person so designated to be named therein
shall be deemed to have become a holder of record of such Warrant Shares as of
the date of the surrender of such Warrants and payment of the Exercise Price.
No fractional shares shall be issued upon exercise of any Warrants in accordance
with Section 15 hereof.
The Warrants shall be exercisable, at the election of the holders thereof,
either in full or from time to time in part (in whole shares) and, in the event
that a certificate evidencing Warrants is exercised in respect of fewer than all
of the Warrant Shares issuable on such exercise at any time prior to the date of
expiration of the Warrants, a new certificate
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evidencing the remaining Warrant or Warrants will be issued, and the Warrant
Agent is hereby irrevocably authorized to countersign and to deliver the
required new Warrant certificate or certificates pursuant to the provisions of
this Section and of Section 4 hereof, and the Company, whenever required by the
Warrant Agent, will supply the Warrant Agent with Warrant certificates duly
executed on behalf of the Company for such purpose.
All Warrant certificates surrendered upon exercise of Warrants shall be
canceled by the Warrant Agent. Such canceled Warrant certificates shall then be
disposed of by the Company in accordance with applicable law. The Warrant Agent
shall account promptly to the Company with respect to Warrants exercised and
concurrently pay to the Company all monies or surrender to the Company all Notes
received by the Warrant Agent for the purchase of the Warrant Shares through the
exercise of such Warrants.
The Warrant Agent shall keep copies of this Agreement and any notices given
or received hereunder available for inspection by the holders during normal
business hours at its office. The Company shall supply the Warrant Agent from
time to time with such numbers of copies of this Agreement as the Warrant Agent
may request.
SECTION 8. Reports. So long as any of the Warrants remain outstanding,
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the Company shall cause copies of all quarterly and annual financial reports and
of the information, documents and other reports (or copies of such portions of
any of the foregoing as the SEC may by rules and regulations prescribe) that the
Company is required to file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act ("SEC Reports") to be filed with the Warrant Agent and mailed to
the holders of Warrants, in each case, within 15 days after filing with the SEC.
If the Company is not subject to the requirements of Section 13 or 15(d) of the
Exchange Act, the Company shall nonetheless continue to cause SEC Reports,
comparable to those that it would be required to file pursuant to Section 13 or
15(d) of the Exchange Act if it were then subject to the requirements of either
such Section, to be so filed with the SEC for public availability (unless the
SEC will not accept such a filing) and with the Warrant Agent and mailed to the
holders of Warrants, in each case, within the same time periods as would have
applied (including under the preceding sentence) had the Company then been
subject to the requirements of Section 13 or 15(d) of the Exchange Act. The
Company shall make all such information available to investors, securities
analysts and broker dealers who request it in writing.
SECTION 9. Payment of Taxes. No service charge shall be made to any
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holder of a Warrant for any exercise, exchange or registration of transfer of
Warrant certificates, and the Company will pay all documentary stamp taxes
attributable to the initial issuance of Warrant Shares upon the exercise of
Warrants; provided, however that the Company shall not be required to pay any
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Tax or taxes which may be payable in respect of any transfer involved in the
issue of any Warrant certificates or any certificates of Warrant 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 10. Mutilated or Missing Warrant Certificates. If any of the
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Warrant certificates shall be mutilated, lost, stolen or destroyed, the Company
may in its discretion issue and the Warrant Agent may countersign, in exchange
and substitution for and upon cancellation of the mutilated Warrant certificate,
or in lieu of and substitution for the Warrant certificate lost, stolen or
destroyed, a new Warrant certificate of like tenor and representing an
equivalent number of Warrants, but only upon receipt of evidence satisfactory to
the Company and the Warrant Agent of such loss, theft or destruction of such
Warrant certificate and indemnity and security thereof, if requested, also
satisfactory to them. Applicants for such substitute Warrant certificates shall
also comply with such other reasonable regulations and pay such other reasonable
charges as the Company or the Warrant Agent may prescribe.
SECTION 11. Reservation of Warrant Shares. The Company will at all
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times reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued Common Stock, for the purpose of
enabling it to satisfy any obligation to issue Warrant Shares upon exercise of
Warrants, the maximum number of shares of Common Stock which may then be
deliverable upon the exercise of all outstanding Warrants.
The Company or the transfer agent of the Common Stock (the "Transfer
Agent") and every subsequent transfer agent of any shares of the Company's
capital stock issuable upon the exercise of any of the rights of purchase
aforesaid will be irrevocably authorized and directed at all times to reserve
such number of authorized shares as shall be required
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for such purpose. The Company will keep a copy of this Agreement on file with
the Transfer Agent and with every subsequent transfer agent for any shares of
the Company's capital stock issuable upon the exercise of the rights of purchase
represented by the Warrants. The Warrant Agent is hereby irrevocably authorized
to requisition from time to time from such Transfer Agent the stock certificates
required to honor outstanding Warrants upon exercise thereof in accordance with
the terms of this Agreement. The Company will supply such Transfer Agent with
duly executed certificates for such purposes and will provide or otherwise make
available any cash which may be payable as provided in section 15 hereof. The
Company will furnish such Transfer Agent a copy of all notices of adjustments
and certificates related thereto, transmitted to each holder pursuant to Section
16 hereof.
Before taking any action which would cause an adjustment pursuant to
Section 13 hereof to reduce the Exercise Price below the then par value (if any)
of the Warrant Shares, the Company will take all corporate action necessary, in
the opinion of its counsel (which may be counsel employed by the Company), in
order that the Company may validly and legally issue fully paid and
nonassessable Warrant Shares at the Exercise Price as so adjusted.
The Company covenants that all Warrant Shares which may be issued upon
exercise of Warrants will be, upon payment of the Exercise Price and issuance
thereof, fully paid, nonassessable, free of preemptive rights and free from all
taxes, liens, charges and security interests with respect to the issue thereof.
SECTION 12. Obtaining Stock Exchange Listings. The Company shall also
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from time to time take all action necessary so that the Warrant Shares,
immediately upon their issuance upon the exercise of Warrants, will be listed on
the Nasdaq National Market or such other principal securities exchanges,
interdealer quotation systems and markets within the United States of America,
if any, on which other shares of Common Stock are then listed or quoted.
SECTION 13. Adjustment of Exercise Price and Number of Warrant Shares
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Issuable. The Exercise Price and the number of Warrant Shares issuable upon the
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exercise of each Warrant are subject to adjustment from time to time upon the
occurrence of the events enumerated in this Section 13. For purposes of this
Section 13, "Common Stock" means the Common Stock and any other stock of the
Company, however designated, for which the Warrants may be exercisable.
(a) Adjustment for Change in Capital Stock.
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If the Company:
(1) pays a dividend or makes a distribution on its Common
Stock in shares of its Common Stock;
(2) subdivides its outstanding shares of Common Stock into
a greater number of shares;
(3) combines its outstanding shares of Common Stock into a
smaller number of shares;
(4) makes a distribution on its Common stock in shares of
its capital stock other than Common Stock; or
(5) issues by reclassification of its Common Stock any
shares of its capital stock,
then the Exercise Price and the number and kind of shares of capital stock of
the Company issuable upon the exercise of a Warrant (as in effect immediately
prior to such action) shall be proportionately adjusted so that the holder of
any Warrant thereafter exercised may receive the aggregate number and kind of
shares of capital stock of the Company which he would have owned immediately
following such action if such Warrant had been exercised immediately prior to
such action.
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.
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If after an adjustment a holder of a Warrant upon exercise may receive
shares of two or more classes or series of capital stock of the Company, the
Company shall determine the allocation of the adjusted Exercise Price between
the classes or series of capital stock. After such allocation, the exercise
privilege and the Exercise Price of each class or series of capital stock shall
thereafter be subject to adjustment on terms comparable to those applicable to
Common Stock in this Section 13.
Such adjustment shall be made successively whenever any event listed above
shall occur.
(b) Adjustment for Rights Issue.
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If the Company distributes any rights, options or warrants to all holders
of its Common Stock entitling them for a period expiring within 60 days after
the record date mentioned below to purchase shares of Common Stock or securities
convertible into, or exchangeable or exercisable for, Common Stock at a price
per share (or with an initial conversion, exchange or exercise price) less than
the Fair Market Value per share on that record date, the Exercise Price shall be
adjusted in accordance with the following formula:
O + N x P
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E' = E x M
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O + N
where:
E'= the adjusted Exercise Price.
E = the current Exercise Price.
O = the number of shares of Common Stock outstanding on the record date.
N = the number of additional shares of Common Stock offered.
P = the offering price per share of the additional shares.
M = the Fair Market Value per share of Common Stock on the record date.
The adjustment shall be made successively whenever any such rights, options
or warrants are issued and shall become effective immediately after the record
date for the determination of stockholders entitled to receive the rights,
options or warrants. If at the end of the period during which such rights,
options or warrants are exercisable, not all rights, options or warrants shall
have been exercised, the Exercise Price shall be immediately readjusted to what
it would have been if "N" in the above formula had been the number of shares
actually issued.
(c) Adjustment for Other Distributions.
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If the Company distributes to all holders of its Common Stock any of its
assets (including cash), debt securities, preferred stock or any rights or
warrants to purchase debt securities, assets or other securities of the Company,
the Exercise Price shall be adjusted in accordance with the following formula:
E' = E x M - F
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M
where:
E'= the adjusted Exercise Price.
E = the current Exercise Price.
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M = the Fair Market Value per share of Common Stock on the record date
mentioned below.
F = the fair market value on the record date of the assets, securities,
rights or warrants applicable to one share of Common Stock, as determined
pursuant to Section 13(g).
The adjustment shall be made successively whenever any such distribution is
made and shall become effective immediately after the record date for the
determination of stockholders entitled to receive the distribution.
This subsection (c) does not apply to rights, options or warrants referred
to in subsection (b) of this Section 13.
(d) Adjustment for Common Stock Issue.
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If the Company issues shares of Common Stock for a consideration per share
less than the Fair Market Value per share of Common Stock on the date the
Company fixes the offering price of such additional shares, the Exercise Price
shall be adjusted in accordance with the formula:
P
--
E' = E x O + M
-----
A
where:
E'= the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares of Common Stock outstanding immediately prior to
the issuance of such additional shares.
P = the aggregate consideration received for the issuance of such
additional shares.
M = the Fair Market Value per share of Common Stock on the date of
issuance of such additional shares.
A = the number of shares of Common Stock outstanding immediately after the
issuance of such additional shares.
The adjustment shall be made successively whenever any such issuance is
made, and shall become effective immediately after such issuance.
This subsection (d) does not apply to:
(1) any of the transactions described in subsections (a), (b) and
(c) of this Section 13,
(2) the exercise of Warrants or other warrants outstanding on the
date of this Agreement, or the conversion or exchange of other securities
convertible or exchangeable for Common Stock,
(3) Common Stock issued to the Company's employees, consultants
or directors under bona fide benefit plans adopted by the Board of
Directors and approved by the holders of Common stock when required by law,
if such common stock would otherwise be covered by this subsection (d) (but
only to the extent that the aggregate number of shares excluded hereby and
issued after the date of this Agreement shall not exceed 10% of the Common
Stock outstanding at the time of issuance),
(4) Common Stock issuable upon the exercise of rights or warrants
issued to the holders of Common Stock,
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(5) Common Stock issued to shareholders of any person which
merges into the Company in proportion to their stock holdings of such
person immediately prior to such merger, upon such merger,
(6) Common Stock issued in a bona fide public offering pursuant
to a firm commitment underwriting,
(7) Common Stock issued in a bona fide private placement through
a placement agent which is a member firm of the National Association of
Securities Dealers, Inc. to Persons that are not Affiliates (as defined in
the Indenture) of the Company (except to the extent that any discount from
the current market price attributable to restrictions on transferability of
the Common Stock, as determined in good faith by the Board of Directors and
described in a Board resolution which shall be filed with the Warrant
Agent, shall exceed 20%), or
(8) Common Stock issued to Affiliates of the Company
simultaneously with, and resulting in at least the same net proceeds per
share of Common Stock to the Company as, an issuance referred to in
paragraphs (6) or (7) of this Section 13(d).
(e) Adjustment for Convertible Securities Issue.
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If the Company issues any securities convertible into or exchangeable for
Common Stock (other than securities issued in transactions described in
subsections (a), (b) and (c) of this Section 13) for a consideration per share
of Common Stock initially deliverable upon conversion or exchange of such
securities less than the Fair Market Value per share on the date of issuance of
such securities, the Exercise Price shall be adjusted in accordance with this
formula:
P
--
E' = E x O + M
-----
O + D
where:
E'= the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares of Common Stock outstanding immediately prior to
the issuance of such securities.
P = the aggregate consideration received for the issuance of such
securities.
M = the Fair Market Value per share on the date of issuance of such
securities.
D = the maximum number of shares of Common Stock deliverable upon
conversion of or in exchange for such securities at the initial conversion
or exchange rate.
The adjustment shall be made successively whenever any such issuance is
made, and shall become effective immediately after such issuance.
If all of the Common Stock deliverable upon conversion or exchange of such
securities has not been issued when such securities are no longer outstanding,
then the Exercise Price shall promptly be readjusted to the Exercise Price which
would then be in effect had the adjustment upon the issuance of such securities
been made on the basis of the actual number of shares of Common Stock issued
upon conversion or exchange of such securities.
This subsection (e) does not apply to:
-8-
(1) convertible securities issued to shareholders of any person
which merges into the Company, or with a subsidiary of the Company, in
proportion to their stock holdings of such person immediately prior to such
merger, upon such merger,
(2) convertible securities issued in a bona fide public offering
pursuant to a firm commitment underwriting,
(3) convertible securities issued in a bona fide private
placement through a placement agent which is a member firm of the National
Association of Securities Dealers, Inc. (except to the extent that any
discount from the current market price attributable to restrictions on
transferability of Common Stock issuable upon conversion, as determined in
good faith by the Board of Directors and described in a Board resolution
which shall be filed with the Warrant Agent, shall exceed 20%),
(4) convertible securities issued to Affiliates of the Company
simultaneous with, and resulting in at least the same net proceeds per
share of Common Stock to the Company as, an issuance referred to in
paragraphs (2) or (3) of this Section 13(e), or
(5) stock options issued to the Company's employees, consultant
or directors.
(f) [Reserved].
----------
(g) Consideration Received.
----------------------
For purposes of any computation respecting consideration received pursuant
to subsections (d) and (e) of this Section 13, the following shall apply:
(1) in the case of the issuance of shares of Common Stock for
cash, the consideration shall be the amount of such cash, provided that in
no case shall any deduction be made for any commissions, discounts or other
expenses incurred by the Company for any underwriting of the issue or
otherwise in connection therewith;
(2) in the case of the issuance of shares of Common Stock for a
consideration in whole or in part other than cash, the consideration other
than cash shall be deemed to be the fair market value thereof as determined
by (x) an Independent Financial Advisor at any time when the Common Stock
of the Company is not listed on a National Securities Exchange or quoted on
the National Association of Securities Dealers Automated Quotation System,
whose determination shall be conclusive, and (y) by the Board in good faith
at any time under the Common Stock of the Company is so listed or quoted as
described in a Board resolution which shall be filed with the Warrant
Agent; and
(3) in the case of the issuance of securities convertible into or
exchangeable for shares, the aggregate consideration received therefor
shall be deemed to be the consideration received by the Company for the
issuance of such securities plus the additional minimum consideration, if
any, to be received by the Company upon the conversion or exchange thereof
(the consideration in each case to be determined in the same manner as
provided in clauses (1) and (2) of this subsection).
(h) When De Minimis Adjustment May Be Deferred.
------------------------------------------
No Adjustment in the Exercise Price need be made unless the adjustment
would require an increase or decrease of at least 1% in the Exercise Price. Any
adjustments that are not made shall be carried forward and taken into account in
any subsequent adjustment.
All calculations under this Section 13 shall be made to the nearest cent or
to the nearest 1/100th of a share, as the case may be.
(i) When No Adjustment Required.
---------------------------
-9-
No adjustment need be made for a transaction referred to in subsections
(a), (b), (c), (d) or (e) of this Section 13 if Warrant holders are to
participate in the transaction on a basis and with notice that the Board of
Directors determines to be fair and appropriate in light of the basis and notice
on which holders of Common Stock participate in the transaction.
No adjustment need be made for rights to purchase Common Stock pursuant to
any of the Company's plans for reinvestment of dividends or interest.
No adjustment need be made for a change in the par value, or from par value
to no par value, or from no par value to par value, of the Common Stock.
To the extent the Warrants become convertible into cash, no adjustment
need be made thereafter as to the cash. Interest will not accrue on the cash.
(j) Notice of Adjustment.
--------------------
Whenever the Exercise Price is adjusted, the Company shall provide the
notices required by Section 16 hereof.
(k) Voluntary Reduction.
-------------------
The Company from time to time may, as the Board of Directors deems
appropriate, reduce the Exercise Price by any amount for any period of time if
the period is at least 20 days and if the reduction is irrevocable during the
period; provided, however, that in no event may the Exercise Price be less than
------- -------
the par value of a share of Common Stock.
Whenever the Exercise Price is reduced, the Company shall mail to Warrant
holders a notice of the reduction. The Company shall mail the notice at least
15 days before the date the reduced Exercise Price takes effect. The notice
shall state the reduced Exercise Price and the period it will be in effect.
A reduction of the Exercise Price pursuant to this Section 13(k), other
than a reduction which the Company has irrevocably committed will be in effect
for so long as any Warrants are outstanding, does not change or adjust the
Exercise Price otherwise in effect for purposes of subsections (a), (b), (c),
(d) and (e) of this Section 13.
(l) Notice of Certain Transactions.
------------------------------
If:
(1) The Company takes any action that would require an adjustment
in the Exercise Price pursuant to subsections (a), (b), (c), (d) or (e) of
this Section 13 and if the Company does not arrange for Warrant holders to
participate pursuant to subsection (i) of this Section 13;
(2) the Company takes any action that would require a
supplemental Warrant Agreement pursuant to subsection (m) of this Section
13; or
(3) there is a liquidation or dissolution of the Company,
the Company shall mail to Warrant holders a notice stating the proposed
record date for a dividend or distribution or the proposed effective date
of a subdivision, combination, reclassification, consolidation, merger,
transfer, lease, liquidation or dissolution. The Company shall mail the
notice at least 15 days before such date. Failure to mail the notice or any
defect in it shall not affect the validity of the transaction.
(m) Reorganization of the Company.
-----------------------------
(1) If the Company consolidates or mergers with or into, or
transfers or leases all or substantially all its assets to, any person,
upon consummation of such transaction, the Warrants shall automatically
become exercisable for the kind and amount of securities, cash or other
assets which the holder
-10-
of a Warrant would have owned immediately after the consolidation, merger,
transfer or lease if the holder had exercised the Warrant immediately
before the effective date of the transaction. Concurrently with the
consummation of such transaction, the corporation formed by or surviving
any such consolidation or merger if other than the Company, or the person
to which such sale or conveyance shall have been made (any such person, the
"Successor Guarantor"), shall enter into a supplemental Warrant Agreement
so providing and further providing for adjustments which shall be as nearly
equivalent as may be practical to the adjustments provided for in this
Section 13. The Successor Guarantor shall mail to Warrant holders a notice
describing the supplemental Warrant Agreement. If the issuer of securities
deliverable upon exercise of Warrants under the supplemental Warrant
Agreement is an affiliate of the formed, surviving, transferee or lessee
corporation, that issuer shall join in the supplemental Warrant Agreement.
(2) Notwithstanding paragraph (1) of this Section 13(m), in the
case of any merger, reverse stock split, or other transaction in which the
publicly held Common Stock shall be converted into the right to receive a
consideration consisting solely of cash, (A) this Warrant Agreement and
each Warrant shall terminate and (B) each holder of a Warrant, without
having to take any other action than the surrendering of such Warrant to
the Company, shall receive an amount equal to the amount (if any) by which
the price per share payable to, or which would be received by, any public
holder of Common Stock in connection with such transaction exceeds the
Exercise Price effective at that time.
(3) If this subsection (m) applies, subsections (a), (b), (c),
(d) and (e) of this Section 13 do not apply.
(n) Determination Final.
-------------------
Any determination that the Company or the Board of Directors or an
Independent Financial Advisor must make pursuant to subsection (a), (c), (d),
(e), (g) or (i) of this Section 13 is conclusive.
(o) Warrant Agent's Disclaimer.
--------------------------
The Warrant Agent has no duty to determine when an adjustment under this
Section 13 should be made, how it should be made or what it should be. The
Warrant Agent has no duty to determine whether any provisions of a supplemental
Warrant Agreement under subsection (m) of this Section 13 are correct. The
Warrant Agent 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 Section 13.
(p) When Issuance or Payment May Be Deferred.
----------------------------------------
In any case in which this Section 13 shall require that an adjustment in
the Exercise Price be made effective as of a record date for a specified event,
the Company may elect to defer until the occurrence of such event (i) issuing to
the holder of any Warrant exercised after such record date the Warrant Shares
and other capital stock of the Company, if any, issuable upon such exercise over
and above the Warrant Shares and other capital stock of the Company, if any,
issuable upon such exercise on the basis of the Exercise Price and (ii) paying
to such holder any amount in cash in lieu of a fractional share pursuant to
Section 15 hereof; provided, however, that the Company shall deliver to such
holder a due ▇▇▇▇ or other appropriate instrument evidencing such holder's right
to receive such additional Warrant Shares, other capital stock and cash upon the
occurrence of the event requiring such adjustment.
(q) Adjustment in the Number of Shares.
----------------------------------
Upon each adjustment of the Exercise Price pursuant to this Section 13,
each Warrant outstanding prior to the making of the adjustment in the Exercise
Price shall thereafter evidence the right to receive upon payment of the
adjusted Exercise Price that number of shares of Common Stock (calculated to
the nearest hundredth) obtained from the following formula:
N' = N x E
---
E'
-11-
where:
N'= the adjusted number of Warrant Shares issuable upon exercise of a
Warrant by payment of the adjusted Exercise Price.
N = the number of Warrant Shares previously issuable upon exercise of a
Warrant by payment of the Exercise Price prior to adjustment.
E'= the adjusted Exercise Price.
E = the Exercise Price prior to adjustment.
(r) Form of Warrants.
----------------
Irrespective of any adjustments in the Exercise Price or the number or kind
of shares purchasable upon the exercise of the Warrants, Warrants theretofore or
thereafter issued may continue to express the same price and number and kind of
shares as are stated in the Warrants initially issuable pursuant to this
Agreement.
SECTION 14. No Dilution or Impairment. (a) If any event shall occur as
-------------------------
to which the provisions of Section 13 are not strictly applicable but the
failure to make any adjustment would adversely affect the purchase rights
represented by the Warrants in accordance with the essential intent and
principles of such Section, then, in each such case, the Company shall appoint
an Independent Financial Advisor, which shall give their opinion upon the
adjustment, if any, on a basis consistent with the essential intent and
principles established in Section 13, necessary to preserve, without dilution,
the purchase rights, represented by this Warrant. Upon receipt of such opinion,
the Company will promptly mail a copy thereof to the holders of the Warrants and
shall make the adjustments described therein.
(b) The Company will not, by amendment of its certificate of
incorporation or through any consolidation, merger, reorganization, transfer of
assets, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of the
Warrants, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the holder of the Warrants against
dilution or other impairment. Without limiting the generality of the foregoing,
the Company (1) will take all such action as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock on the exercise of the Warrants from time
to time outstanding and (2) will not take any action which results in any
adjustment of the Exercise Price if the total number of Warrant Shares issuable
after the action upon the exercise of all of the Warrants would exceed the total
number of shares of Common Stock then authorized by the Company's certificate of
incorporation and available for the purposes of issue upon such exercise. A
consolidation, merger, reorganization or transfer of assets involving the
Company covered by Section 13(m) shall not be prohibited by or require any
adjustment under this Section 14.
SECTION 15. Fractional Interests. The Company shall not be required to
--------------------
issue fractional Warrant Shares on the exercise of Warrants. If more than one
Warrant shall be presented for exercise in full at the same time by the same
holder, the number of full Warrant Shares which shall be issuable upon the
exercise thereof shall be computed on the basis of the aggregate number of
Warrant Shares purchasable on exercise of the Warrants so presented. If any
fraction of a Warrant Share would, except for the provisions of this Section 15,
be issuable on the exercise of any Warrants (or specified portion thereof), the
Company shall notify the Warrant Agent in writing of the amount to be paid in
lieu of the fraction of a Warrant Share and concurrently pay or provide to the
Warrant Agent for payment to the Warrant holder an amount in cash equal to the
product of (i) such fraction of a Warrant Share and (ii) the difference of the
Fair Market Value of a share of Common Stock over the Exercise Price.
SECTION 16. Notices to Warrant Holders. Upon any adjustment of the
--------------------------
Exercise Price pursuant to Section 13 hereof, the Company shall within 15 days
thereafter (i) cause to be filed with the Warrant Agent a certificate of a firm
of independent public accountants of recognized standing selected by the Board
of Directors of the Company (who may be the regular auditors of the Company)
setting forth the Exercise Price after such adjustment and setting forth in
reasonable detail the method of calculation and the facts upon which such
calculations are based and setting forth the
-12-
number of Warrant Shares (or portion thereof) issuable after such adjustment in
the Exercise Price, upon exercise of a Warrant and payment of the adjusted
Exercise Price, which certificate shall be conclusive evidence of the
correctness of the matters set forth therein, and (ii) cause to be given to each
of the registered holders of the Warrant certificates at such registered
holder's address appearing on the Warrant Register written notice of such
adjustments by first-class mail, postage prepaid. Where appropriate, such notice
may be give in advance and included as a part of the notice required to be
mailed under the other provisions of this Section 16.
In case:
(a) The Company shall authorize the issuance to all holders of
shares of Common Stock of rights, options or warrants to subscribe for or
purchase shares of Common Stock or of any other subscription rights or warrants;
or
(b) The Company shall authorize the distribution to all holders
of shares of Common Stock of evidences of its indebtedness or assets (other than
cash dividends or cash distributions payable out of consolidated earnings or
earned surplus or dividends payable in shares of Common Stock or distributions
referred to in subsection (a) of Section 13 hereof); or
(c) of any consolidation or merger to which the Company is a
party and for which approval of any shareholders of the Company is required, or
of the conveyance or transfer of the properties and assets of the Company
substantially as an entirety, or of any reclassification or change of Common
Stock issuable upon exercise of the Warrants (other than a change in par value,
or from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination), or a tender offer or exchange offer for
shares of Common Stock; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(e) The Company proposes to take any action (other than actions
of the character described in Section 13(a)) which would require an adjustment
of the Exercise Price pursuant to Section 14; then the Company shall cause to be
filed with the Warrant Agent and shall cause to be given to each of the
registered holders of the Warrant certificates at his address appearing on the
Warrant register, at least 20 days (or 10 days in any case specified in clause
(a) or (b) above) prior to the applicable record date hereinafter specified, or
promptly in the case of events for which there is no record date, by first-class
mail, postage prepaid, a written notice stating (i) the date as of which the
holders of record of shares of Common Stock to be entitled to receive any such
rights, options, warrants or distribution are to be determined, or (ii) the
initial expiration date set forth in any tender offer or exchange offer for
shares of Common Stock, or (iii) the date on which any such consolidation,
merger, conveyance, transfer, dissolution, liquidation or winding up is expected
to become effective or consummated, and the date as of which it is expected that
holders of record of shares of Common Stock shall be entitled to exchange such
shares for securities or other property, if any, deliverable upon such
reclassification, consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding up. The failure to give the notice required by this
Section 16 or any defect therein shall not affect the legality or validity of
any distribution, right, option, warrant, consolidation, merger, conveyance,
transfer, lease, dissolution, liquidation or winding up, or the vote upon any
action.
Nothing contained in this Agreement or in any of the Warrant certificates
shall be construed as conferring upon the holders thereof the right to vote or
to consent or to receive notice as shareholders in respect of the meetings of
shareholders or the election of Directors of the Company or any other matter,
or any rights whatsoever as shareholders of the Company.
SECTION 17. [Reserved].
----------
-13-
SECTION 18. Warrant Agent. The Warrant Agent undertakes the duties and
-------------
obligations imposed by this Agreement upon the following terms and conditions,
by all of which the Company and the holders of Warrants, by their acceptance
thereof, shall be bound:
(a) The statements contained herein and in the Warrant
certificates shall be taken as statements of the Company. The Warrant Agent
assumes no responsibility for the correctness of any of the same except such as
describe the Warrant Agent or action taken or to be taken by it. The Warrant
Agent assumes no responsibility with respect to the distribution of the Warrant
certificates except as herein otherwise provided.
(b) The Warrant Agent shall not be responsible for any failure
of the Company to comply with any of the covenants contained in this Agreement
or in the Warrant certificates to be complied with by the Company.
(c) The Warrant Agent may consult at any time with counsel
satisfactory to it (who may be counsel for the Company) and the Warrant Agent
shall incur no liability or responsibility to the Company or to any holder of
any Warrant certificate in respect of any action taken, suffered or omitted by
it hereunder in good faith and in accordance with the opinion or the advice of
such counsel.
(d) The Warrant Agent shall incur no liability or responsibility
to the Company or to any holder of any Warrant certificate for any action taken
in reliance on any Warrant certificate, certificate of shares, notice,
resolution, waiver, consent, order, certificate, or other paper, document or
instrument believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties. The Warrant Agent shall not be bound
by any notice or demand, or any waiver, modification, termination or revision of
this Agreement or any of the terms hereof, unless evidenced by a writing between
the Company and the Warrant Agent.
(e) The Company agrees to pay to the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent in the execution of
this Agreement, to reimburse the Warrant Agent for all expenses, taxes
(including withholding taxes) and governmental charges and other charges of any
kind and nature incurred by the Warrant Agent in the execution, delivery and
performance of its responsibilities under this Agreement and to indemnify the
Warrant Agent and save it harmless against any and all liabilities, including
judgments, costs and counsel fees, for anything done or omitted by the Warrant
Agent in the execution, delivery and performance of its responsibilities under
this Agreement except as a result of its negligence or bad faith.
(f) The Warrant Agent shall be under no obligation to institute
any action, suit or legal proceeding or to take any other action likely to
involve expense unless the Company or one or more registered holders of Warrant
certificates shall furnish the Warrant Agent with reasonable security and
indemnity for any costs and expenses which may be incurred, but this provision
shall not affect the power of the Warrant Agent to take such action as it may
consider proper, whether with or without any such security or indemnity. All
rights of action under this Agreement or under any of the Warrants may be
enforced by the Warrant Agent without the possession of any of the Warrant
certificates or the production thereof at any trial or other proceeding relative
thereto, and any such action, suit or proceeding instituted by the Warrant Agent
shall be brought in its name as Warrant Agent and any recovery of judgment shall
be for the ratable benefit of the registered holders of the Warrants, as their
respective rights or interests may appear.
-14-
(g) Except as required by law, the Warrant Agent, and any
stockholder, director, officer or employee of the Warrant Agent, may buy, sell
or deal in any of the Warrants or other securities of the Company or become
pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or otherwise act as
fully and freely as though it were not Warrant Agent under this Agreement.
Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.
(h) The Warrant Agent shall act hereunder solely as agent for
the Company, and its duties shall be determined solely by the provisions hereof.
The Warrant Agent shall not be liable for anything which it may do or refrain
from doing in connection with this Agreement except for its own negligence or
bad faith.
(i) The Warrant Agent shall not at any time be under any duty or
responsibility to any holder of any Warrant certificate to make or cause to be
made any adjustment of the Exercise Price or number of the Warrant Shares or
other securities or property deliverable as provided in this Agreement, or to
determine whether any facts exist which may require any of such adjustments, or
with respect to the nature or extent of any such adjustments, when made, or with
respect to the method employed in making the same. The Warrant Agent shall not
be accountable with respect to the validity or value or the kind or amount of
any Warrant Shares or of any securities or property which may at any time be
issued or delivered upon the exercise of any Warrant or with respect to whether
any such Warrant Shares or other securities will when issued be validly issued
and fully paid and nonassessable, and makes no representation with respect
thereto.
SECTION 19. Registration.
------------
(a) Shelf Registration of Warrant Shares. The Company shall
------------------------------------
have caused to be filed prior to the date hereof pursuant to rule 415 under the
Act a shelf registration statement on the appropriate form (the "Warrant Shelf
Registration Statement") covering the issuance of the Warrant Shares and, to the
extent applicable, the Warrants, and shall have caused such Warrant Shelf
Registration Statement to become effective by the date hereof. The Company shall
use its best efforts to keep such Warrant Shelf Registration Statement
continuously effective until 30 days after the Expiration Date.
(b) Registration Expenses. All expenses incident to the
---------------------
Company's performance of or compliance with this Agreement will be borne by the
Company, regardless of whether a Warrant Shelf Registration Statement becomes
effective, including without limitation: (i) all registration and filing fees
and expenses; (ii) all fees and expenses of compliance with federal securities
and state Blue Sky or securities laws; (iii) all expenses of printing (including
printing certificates for the Warrant Shares and printing of Prospectuses),
messenger and delivery services and telephone calls; (iv) all fees and
disbursements of counsel for the Company; (v) all fees and disbursements of
independent certified public accountants of the Company (including the expenses
of any special audit and comfort letters required by or incident to such
performance); and (vi) the Company's internal expense (including, without
limitation, all salaries and expenses of their officers and employees performing
legal or accounting duties), the expenses of any annual audit, rating agency
fees and the fees and expenses of any person, including special experts,
retained by the Company.
(c) Blackout Privilege. Notwithstanding the foregoing, during
------------------
any consecutive 365-day period, the Company shall have the privilege to suspend
availability of the Warrant Shelf Registration Statement for up to two
consecutive 30-day periods, except for the consecutive 30-day period immediately
prior to the Expiration Date, if the Company's Board of Directors determines in
the exercise of its reasonable judgment that there is a valid business purpose
for such suspension.
(d) Liquidated Damages. If the Shelf Registration Statement:
------------------
(i) has not been declared effective by the SEC on or prior to the date hereof,
or (ii) following the date hereof, shall cease to be effective without being
restored to effectiveness by amendment or otherwise within 10 Business Days
(each such event referred to in clauses (i) and (ii), a "Shelf Registration
Default") other than for such period in which the Shelf Registration Statement
shall cease to be effective as a result of post-effective amendment to
incorporate annual filings which the Company is required to file with the SEC,
provided the Company in good faith attempts to cause such Shelf Registration
Statement to be declared effective as soon as practicable, to the extent
permitted by applicable law, the Company shall pay as liquidated
-15-
damages and not as a penalty during the first 90-day period immediately
following the occurrence, and during the continuance, of such Shelf Registration
Default, an aggregate amount equal to $750 per week to be paid pro rata to
registered holders of Warrants for each week or portion thereof that the Shelf
Registration Default continues. To the extent permitted by applicable law, the
amount of the liquidated damages will increase by an additional $750 per week
with respect to each subsequent 90-day period until all Shelf Registration
Defaults have been cured, up to a maximum amount of liquidated damages of $3,750
per week. All accrued liquidated damages shall be paid to record holders of
Warrants by the Company by wire transfer of immediately available funds, or by
mailing a federal funds check, on each May 15 and November 15. Following the
cure of all Shelf Registration Defaults relating to any Warrants, the accrual of
liquidated damages with respect to such security will cease.
All obligations of the Company set forth in the preceding paragraph that
are outstanding with respect to any Warrants at the time such security has been
effectively registered under the Act shall survive until such time as all
registration requirements with respect to such security shall have been
satisfied in full.
(e) Remedies. In the event of a breach by the Company of any
--------
of its obligations under this Agreement, each holder of Warrants, in addition to
being entitled to exercise all rights granted by law, including recovery of
damages pursuant to Section 19(d), will be entitled to specific performance of
its rights under this Agreement. The Company agrees that monetary damages would
not be adequate compensation for any loss incurred by reason of a breach by it
of any of the provisions of this Agreement and hereby further agrees that, in
the event of any action for specific performance in respect of such breach, it
shall waive the defense that a remedy at law would be adequate.
SECTION 20. [Reserved].
----------
SECTION 21. Merger, Consolidation or Change of Name of Warrant Agent.
--------------------------------------------------------
Any corporation into which the Warrant Agent may be merged or with which it may
be consolidated, or any corporation resulting from any merger or consolidation
to which the Warrant Agent shall be a party, or any corporation succeeding to
all or substantially all of the corporate trust business of the Warrant Agent,
shall be the successor to the Warrant Agent hereunder without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as a successor
warrant agent under the provisions of Section 22. In case at the time such
successor to the Warrant Agent shall succeed to the agency created by this
Agreement, and in case at that time any of the Warrant certificates shall have
been countersigned but not delivered, any such successor to the Warrant Agent
may adopt the countersignature of the predecessor Warrant Agent; and in case at
that time any of the Warrant certificates shall not have been countersigned, any
successor to the Warrant Agent may countersign such Warrant certificates either
in the name of the predecessor Warrant Agent or in the name of the successor to
the Warrant Agent; and in all such cases such Warrant certificates shall have
the full force and effect provided in the Warrant certificates and in this
Agreement.
In case at any time the name of the Warrant Agent shall be changed and at
such time any of the Warrant certificates shall have been countersigned but not
delivered, the Warrant Agent whose name has been changed may adopt the
countersignature under its prior name, and in case at that time any of the
Warrant certificates shall not have been countersigned, the Warrant Agent may
countersign such Warrant certificates either in its prior name or in its changed
name, and in all such cases such Warrant certificates shall have the full force
and effect provided in the Warrant certificates and in this Agreement.
SECTION 22. Change of Warrant Agent. If the Warrant Agent shall become
-----------------------
incapable of acting as Warrant Agent or shall resign as provided below, the
Company shall appoint a successor to such Warrant Agent. If the Company shall
fail to make such appointment within a period of 30 days after it has been
notified in writing of such incapacity by the Warrant Agent or by the registered
holders of a majority of Warrant certificates, then the registered holder of any
Warrant certificate may apply to any court of competent jurisdiction for the
appointment of a successor to the Warrant Agent. Pending appointment of a
successor to such Warrant Agent, either by the Company or by such a court, the
duties of the Warrant Agent shall be carried out by the Company. The holders of
a majority of the unexercised Warrants shall be entitled at any time to remove
the Warrant Agent and appoint a successor to such Warrant Agent. Such successor
to the Warrant Agent need not be approved by the Company or the former Warrant
Agent. After appointment the successor to the Warrant Agent shall be vested
with same powers, rights, duties and responsibilities as if it had been
originally named as Warrant Agent without further act or deed; but the former
Warrant Agent shall deliver and transfer to the
-16-
successor to the Warrant Agent any property at the time held by it hereunder and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Failure to give any notice provided for in this Section 22,
however, or any defect therein, shall not affect the legality or validity of the
appointment of a successor to the Warrant Agent.
The Warrant Agent may resign at any time and be discharged from the
obligations hereby created by so notifying the Company in writing at least 30
days in advance of the proposed effective date of its resignation. If no
successor Warrant Agent accepts the engagement hereunder by such time, the
Company shall act as Warrant Agent.
SECTION 23. Notices to the Company and Warrant Agent. Any notice or
----------------------------------------
demand authorized by this Agreement to be given or made by the Warrant Agent or
by the registered holder of any Warrant certificate to or on the Company shall
be sufficiently given or made when and if deposited in the mail, first class or
registered, postage prepaid, addressed (until another address is filed in
writing by the Company with the Warrant Agent), as follows:
UIH Australia/Pacific, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
with a copy to:
Holme ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Any notice pursuant to this Agreement to be given by the Company or by the
registered holder(s) of any Warrant certificate to the Warrant Agent shall be
sufficiently given when and if deposited in the mail, first-class or
registered, postage prepaid, addressed (until another address is filed in
writing by the Warrant Agent with the Company) to the Warrant Agent at the
Warrant Agent Office as follows:
Firstar Bank of Minnesota, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
Notice may also be given by facsimile transmission (effective when receipt
is acknowledged) or by overnight delivery service (effective the next business
day).
SECTION 24. Supplements and Amendments. The Company and the Warrant
--------------------------
Agent may from time to time supplement or amend this Agreement without the
approval of any holders of Warrant certificates in order to cure any ambiguity
or to correct or supplement any provision contained herein which may be
defective or inconsistent with any other provision herein, or to make any other
provisions in regard to matters or questions arising hereunder which the Company
and the Warrant Agent may deem necessary or desirable and which shall not in any
way materially adversely affect the interests of the holders of Warrant
certificates. Any amendment or supplement to this Agreement that has a material
adverse effect on the interests of holders shall require the written consent of
registered holders of a majority of the then outstanding Warrants (excluding
Warrants held by the Company or any of its Affiliates). The consent of each
holder of a warrant affected shall be required for any amendment pursuant to
which the Exercise Price would be increased or the number of Warrant Shares
purchasable upon exercise of Warrants would be decreased (other than in
accordance with Section 13 or 15 hereof).
SECTION 25. Successors. All the covenants and provisions of this
----------
Agreement by or for the benefit of the Company or the Warrant Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
SECTION 26. Termination. This Agreement shall terminate at 5:00 p.m.,
-----------
New York, New York time on May 15, 2006. Notwithstanding the foregoing, this
Agreement will terminate on such earlier date on which all
-17-
outstanding Warrants have been exercised. The provisions of Section 18 hereof
shall survive such termination, and the provisions of Section 19 hereof shall
survive for 30 days after such termination.
SECTION 27. Governing Law; Jurisdiction. This Agreement and each
---------------------------
Warrant certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of New York and any federal court located in such state in
connection with any action, suit or proceeding arising out of or relating to
this Agreement.
SECTION 28. Benefits of This Agreement. Nothing in this Agreement shall
--------------------------
be construed to give to any person or corporation other than the Company, the
Warrant Agent and the registered holders of the Warrant certificates any legal
or equitable right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the Warrant Agent
and the registered holders of the Warrant certificates.
SECTION 29. Counterparts. This Agreement may be executed in any number
------------
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
SECTION 30. Further Assurances. From time to time on and after the date
------------------
hereof, the Company shall deliver or cause to be delivered to the Warrant Agent
such further documents and instruments and shall do and cause to be done such
further acts as the Warrant Agent shall reasonably request (it being understood
that the Warrant Agent shall have no obligation to make such request) to carry
out more effectively the provisions and purposes of this Agreement, to evidence
compliance herewith or to assure itself that it is protected hereunder.
[Signature Page Follows]
-18-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of.the.day.and year first above written.
UIH AUSTRALIA/PACIFIC, INC
By: /s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Chief Financial Officer
FIRSTAR BANK OF MINNESOTA, N.A.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
-------------------------------
Authorized Signatory
-19-
EXHIBIT A
EXERCISABLE ON OR BEFORE MAY 15, 2006
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.]*
No. ____ _______Warrants
Warrant Certificate
UIH AUSTRALIA/PACIFIC, INC.
This Warrant Certificate certifies that _______________, or registered
assigns, is the registered holder of _______________ Warrants expiring May 15,
2006 (the "Warrants"), to purchase shares of the Common Stock, par value $.01
(the "Common Stock"), of UIH Australia/Pacific, Inc., a Colorado corporation
("the Company"). Each Warrant entitles the holder upon exercise to receive from
the Company, at any time from 9:00 a.m. on the date hereof to 5:00 p.m. New
York, New York time on May 15, 2006, one (1) fully paid and nonassessable share
of Common Stock (each a "Warrant Share") at the Exercise Price payable (i) in
United States dollars, (ii) by certified or official bank check to the order of
the Company, (iii) by tendering Notes having an Accreted Value at the time of
tender equal to the Exercise Price, (iv) by tendering Warrants having a Fair
Market Value equal to the Exercise Price at the office or agency of the Warrant
Agent, but only subject to the conditions set forth herein and in the Warrant
Agreement referred to herein. The Exercise Price and number of Warrant Shares
issuable upon exercise of the Warrants are subject to adjustment upon the
occurrence of certain events set forth in the Warrant Agreement. All
capitalized terms not defined herein shall have the meanings assigned to such
terms in the Warrant Agreement.
No Warrant may be exercised after 5:00 p.m., New York, New York Time on May
15, 2006 and to the extent not exercised by such time such warrants shall become
void.
Reference is hereby made to the further provision of this Warrant
Certificate set forth on the reverse hereof and such further provisions shall
for all purpose have the same effect as though fully set forth at this place.
This Warrant Certificate shall not be valid unless countersigned by the
Warrant Agent, as such term is used in the Warrant Agreement.
This Warrant Certificate shall be governed and construed in accordance with
the internal laws of the State of New York.
----------------------
* This paragraph is to be included only if the Warrant is in global form.
A-1
IN WITNESS WHEREOF, UIH Australia/Pacific, Inc. has caused this Warrant
Certificate to be signed by its Chief Executive Officer and by its Secretary,
each by a facsimile of his signature, and has caused a facsimile of its
corporate seal to be affixed hereunto or imprinted hereon.
Dated:
UIH AUSTRALIA/PACIFIC, INC.
By:
-----------------------------
Authorized Signatory
By:
-----------------------------
Authorized Signatory
(seal)
Countersigned:
FIRSTAR BANK OF MINNESOTA, N.A.,
as Warrant Agent
By:
-----------------------------
Authorized Signatory
A-2
Form of Warrant Certificate
[Reverse]
THE COMMON STOCK, PAR VALUE $.01, OF THE COMPANY (THE "COMMON STOCK") FOR
WHICH THIS WARRANT IS EXERCISABLE MAY NOT BE OFFERED OR SOLD IN THE UNITED
STATES ABSENT REGISTRATION UNDER THE SECURITIES AND EXCHANGE ACT OF 1933,
AS AMENDED (THE "ACT"), AND ANY APPLICABLE STATE SECURITIES LAWS OR AN
APPLICABLE EXEMPTION FROM REGISTRATION REQUIREMENTS. ACCORDINGLY, NO
WARRANT HOLDER SHALL BE ENTITLED TO EXERCISE SUCH HOLDER'S WARRANTS AT ANY
TIME UNLESS, AT THE TIME OF EXERCISE, (i) A REGISTRATION STATEMENT UNDER
THE ACT RELATING TO THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE
OF THIS WARRANT (THE "WARRANT SHARES") HAS BEEN FILED WITH, AND DECLARED
EFFECTIVE BY, THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC"), AND NO
STOP ORDER SUSPENDING THE EFFECTIVENESS OF SUCH REGISTRATION STATEMENT HAS
BEEN ISSUED BY THE SEC OR (ii) THE ISSUANCE OF THE WARRANT SHARES IS
PERMITTED PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE ACT.
By accepting this Warrant certificate, each holder shall be bound by all of the
terms and provisions of the Warrant Agreement ( a copy of which is available on
request to the Company or the warrant Agent) as fully and effectively as if such
holder had signed the same.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants expiring May 15, 2006 entitling the holder upon
exercise to receive shares of Common Stock of the Company (the "Common Stock"),
and are issued or to be issued pursuant to a Warrant Agreement dated as of
November 15, 1997 (the "Warrant Agreement"), duly executed and delivered by the
Company to Firstar Bank of Minnesota, N.A., 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 worlds "holders" or "holder"
meaning the registered holders or registered holder) of the Warrants.
Warrants may be exercised at any time from 9:00 a.m. on the date hereof to
5:00 p.m. New York, New York time on May 15, 2006. The holder of Warrants
evidenced by this Warrant Certificate may exercise them by surrendering this
Warrant Certificate, with the form of election to purchase set forth hereon
properly completed and executed, together with payment of the Exercise Price (i)
in United States dollars or (ii) by certified or official bank check payable to
the order of the Company or (iii) by tendering Notes having an Accreted Value
(as defined in the Indenture) at the time of tender equal to the Exercise Price
or (iv) by tendering Warrants having a Fair Market Value equal to the Exercise
Price or (v) with any combination of (i), (ii), (iii), or (iv) at the office of
the Warrant Agent. In the event that upon any exercise of Warrants evidenced
hereby the number of Warrants exercised shall be less than the total number of
Warrants evidenced hereby, there shall be issued to the holder hereof or his
assignee a new Warrant Certificate evidencing the number of Warrants not
exercised. No adjustment shall be made for any dividends on any Common Stock
issuable upon exercise of this Warrant.
The Warrant Agreement provides that upon the occurrence of certain events
the Exercise Price set forth on the face hereof may, subject to certain
conditions, be adjusted. If the Exercise Price is adjusted, the Warrant
Agreement provides that the number of shares of Common Stock issuable upon the
exercise of each Warrant shall be adjusted. No fractions of a share of Common
Stock will be issued upon the exercise of any Warrant, but the Company will pay
the cash value thereof determined as provided in the Warrant Agreement.
Warrant Certificates, when surrendered at the office of the Warrant Agent
by the registered holder thereof in person or by legal representative or
attorney duly authorized in writing, may be exchanged, in the manner and subject
to the limitations provided in the Warrant Agreement, but without payment of any
service charge, for another Warrant Certificate or Warrant Certificates of like
tenor evidencing in the aggregate a like number of Warrants.
A-3
Upon due presentation for registration of transfer of this Warrant
Certificate at the office of the Warrant Agent a new Certificate or Warrant
Certificates of like tenor and evidencing in the aggregate a like number of
Warrants shall be issued to the transferee(s) 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(s) hereon as the absolute owner(s) of this Warrant Certificate
(notwithstanding any notation of ownership or other writing hereon made by
anyone), for the purpose of any exercise hereof, of any distribution to the
holder(s) hereof, and for all other purposes, and the Company and the Warrant
Agent shall not be affected by any notice to the contrary.
A-4
Form of Election to Purchase
(To Be Executed Upon Exercise Of Warrant)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to receive ________ shares of Common
Stock and herewith (check item) tenders payment for such shares to the order of
UIH Australia/Pacific, Inc. in the amount of $ _____ per share of Common Stock
in accordance with the terms hereof, as follows:
[_] $___________ in cash or by certified or official bank check to the
order of the Company;
[_] by surrender of Notes with an aggregate Accreted Value $______ ; or
[_] by surrender of Warrants having a Fair Market Value of $______.
Capitalized terms have the meanings assigned to such terms in the Warrant
Agreement.
The undersigned requests that a certificate for such shares be registered
in the name of __________________, whose address is ___________________________
and that such shares be delivered to __________________________ whose address
is _________________________________________.
If said number of shares is less than all of the shares of Common Stock
purchasable hereunder, the undersigned requests that a new Warrant Certificate
representing the remaining balance of such shares be registered in the name of
_____________________, whose address is _______________________, and that such
Warrant Certificate be delivered to _______________________ , whose address is
__________________________________.
Date:
Your Signature: __________________________
(Sign exactly as your name appears on the
face of this Warrant)
Signature Guarantee:
____________________________
Signature Guaranteed
Participant in a recognized
Signature Guarantee
Medallion Program (or other
signature guarantor program
reasonably acceptable to the
Warrant Agent)
A-5
ASSIGNMENT FORM
To assign this Warrant, fill in the form below: (I) or (we) assign and transfer
this Warrant to
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint _______________________________________ to transfer this
Warrant on the books of the Company. The agent may substitute another to act for
him.
________________________________________________________________________________
Date: _____________________
Your Signature:
--------------------------
(Sign exactly as your name appears on the
face of this Warrant)
Signature Guarantee:
----------------------------------
Signature Guaranteed
Participant in a recognized
Signature Guarantee
Medallion Program (or other
signature guarantor program
reasonably acceptable to the
Warrant Agent)
A-6
