Exhibit 4.5
WARRANT AGREEMENT
CFW COMMUNICATIONS COMPANY
DATED AS OF JULY 11, 2000
Table of Contents
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Section Page
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1. Issue of Warrant to Purchasers; Form of Warrants................................. 1
2. Registration..................................................................... 1
3. Transfer of Warrants............................................................. 2
4. Term; Exercise................................................................... 2
5. Surrender of Warrant Certificates................................................ 3
6. Mutilated or Missing Warrant Certificate......................................... 3
7. Reservation of Common Stock, etc................................................. 3
8. Anti-dilution Adjustments........................................................ 3
9. Effect on Exercise Price of Certain Events....................................... 5
(a) Issuance of Rights or Options............................................. 5
(b) Issuance of Convertible Securities........................................ 6
(c) Change in Option Price or Conversion Rate................................. 6
(d) Treatment of Expired Options and Unexercised Convertible Securities....... 7
(e) Calculation of Consideration Received..................................... 7
(f) Integrated Transactions................................................... 7
(g) Record Date............................................................... 8
(h) Subdivision or Combination of Common Stock................................ 8
(i) Reorganization, Reclassification, Consolidation, Merger or Sale........... 8
(j) Certain Events............................................................ 9
(k) Notices................................................................... 9
10. Certain Events................................................................... 9
11. Absence of Registration.......................................................... 10
12. Information Covenants............................................................ 11
12.1. Notice of Stockholder Meetings.................................. 11
12.2. Notice of Distributions......................................... 11
12.3. Financial Statements, etc....................................... 11
12.4. Proper Books and Records; Inspection............................ 11
13. Certain Definitions.............................................................. 12
14. Notices.......................................................................... 13
15. Warrant Obligations Independent of Debt Obligations.............................. 13
16. Fractional Interests............................................................. 13
17. Binding Effect; Survival......................................................... 14
18. Counterparts..................................................................... 14
19. Governing Law.................................................................... 14
EXHIBITS
A - Warrant Certificate
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WARRANT AGREEMENT
WARRANT AGREEMENT dated as of July 11, 2000 between CFW Communications
Company, a Virginia corporation (the "Company"), and the purchasers set forth on
Schedule I attached hereto (each individually a "Purchaser" and collectively the
"Purchasers"). The Purchasers, so long as they are holders of any warrants
hereunder, together with any permitted transferees or assignees who are
registered holders of any warrant issued hereunder or a like warrant or warrants
issued upon the transfer of such warrant (each individually a "Warrant" and
collectively the "Warrants"), are referred to collectively as the "Holders" and
individually as a "Holder."
WHEREAS, pursuant to the terms of a Securities Purchase Agreement dated as
of July 11, 2000 among the Company and the Purchasers (the "Purchase
Agreement"), the Company has agreed to issue to each Purchaser a Warrant as
hereinafter described to purchase shares of the Company's Common Stock, no par
value per share (together with any other or additional classes of the Company's
capital stock for which the Warrants may become exercisable in accordance with
Section 9 of this Agreement, the "Common Stock"), upon the terms and subject to
the conditions set forth in the Purchase Agreement; and
WHEREAS, the Company wishes to set forth, among other things, the
provisions of such Warrants and the terms and conditions on which such Warrants
may be issued, exchanged, exercised and replaced;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereto agree as follows:
1. Issue of Warrant to Purchasers; Form of Warrants. The Company shall on the
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date hereof issue and deliver to the Purchasers for the consideration specified
in the Purchase Agreement, Warrants to purchase an aggregate of Five Hundred
Thousand (500,000) shares of Common Stock, subject to adjustment pursuant to
Section 8 hereof. Each Purchaser shall receive a Warrant to purchase that number
of shares of Common Stock set forth opposite such Purchaser's name on Schedule I
attached hereto. Each Warrant, and any additional Warrants which may be issued
upon partial exercise, replacement or transfer of such Warrant or Warrants,
shall be evidenced by, and subject to the terms of, a Warrant Certificate
(including the Forms of Election to Purchase and Assignment attached thereto, a
"Warrant Certificate") in the form of Exhibit A attached hereto, in each case
executed on behalf of the Company by the manual or facsimile signature of the
President or Vice President of the Company, under its corporate seal affixed or
in facsimile, and attested by the Secretary or an Assistant Secretary of the
Company. A Warrant Certificate evidencing the original Warrant issued to each
Purchaser shall be executed and delivered to such Purchaser simultaneously with
the issuance of the Company's Senior Cumulative Convertible Preferred Stock,
Series B, to such Purchaser pursuant to the Purchase Agreement. The Company will
pay any documentary stamp taxes attributable to the initial issuance of Warrants
and the issuance of Common Stock upon the exercise of Warrants.
2. Registration. All Warrant Certificates shall be numbered and shall be
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registered in a warrant register (the "Warrant Register") as they are issued.
Subject to its compliance with the
foregoing, the Company shall be entitled to treat the registered Holder of any
Warrant on the Warrant Register as the owner in fact of such Warrant for all
purposes and shall not be bound to recognize any equitable or other claim to or
interest in such Warrant on the part of any other person or entity, and shall
not be liable for any registration or transfer of Warrants which are registered
or to be registered in the name of a fiduciary or the nominee of a fiduciary
unless made with the actual knowledge that a fiduciary or nominee is committing
a breach of trust in requesting such registration or transfer, or with the
knowledge of such facts that its participation therein amounts to bad faith.
3. Transfer of Warrants. Any Warrant may be transferred or endorsed to
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another party in whole or in part by giving written notice thereof to the
Company at its principal office. If a new Warrant Certificate is requested in
connection with such transfer, the Warrant Certificate being transferred shall
be surrendered for cancellation, endorsed or accompanied by a written instrument
of transfer, in form satisfactory to the Company, duly executed by the Holder
thereof in person or by a duly authorized representative, agent or attorney-in-
fact appointed in writing. Upon receipt thereof, the Company shall issue and
deliver, in the name of the transferee, a new Warrant Certificate containing the
same terms as the surrendered Warrant Certificate. In the case of the transfer
of fewer than all of the rights evidenced by the surrendered Warrant
Certificate, the Company shall issue a new Warrant Certificate to the Holder
thereof for the remaining number of shares specified in the Warrant Certificate
so surrendered.
4. Term; Exercise. A Warrant entitles the Holder thereof to purchase the
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number of shares of Common Stock specified in the Warrant Certificate held by
such Holder at a purchase price of Fifty Dollars ($50.00) per share (the
"Exercise Price") at any time on or after the date hereof and on or before 5:00
p.m. Eastern Time on the tenth anniversary of the date hereof (such date, the
"Expiration Date"). The Exercise Price and the number of shares issuable upon
exercise of any Warrant are subject to adjustment upon the occurrence of certain
events, pursuant to the provisions of Section 8 of this Agreement. Subject to
the provisions of this Agreement, the Holder of a Warrant shall have the right,
which may be exercised in whole or in part, to purchase from the Company, and
the Company shall issue and sell to such Holder, the number of fully paid and
non-assessable shares of Common Stock (together with any other shares of the
Company's Common Stock issuable upon exercise of Warrants, the "Shares")
specified in the Warrant Certificate held by such Holder. Such right shall be
exercised by surrender to the Company, or its duly authorized agent, of such
Warrant Certificate, with the Form of Election to Purchase attached thereto duly
completed and signed, and upon payment to the Company of the Exercise Price, as
adjusted in accordance with the provisions of Section 8, for the number of
Shares in respect of which the Warrant is then exercised. Payment of such
Exercise Price may be made (i) in cash, (ii) by certified check or bank draft
payable to the order of the Company, (iii) by wire transfer of immediately
available funds or (iv) by surrender of shares of Common Stock or by foregoing
the issuance of Shares pursuant to this Warrant, in either case, that have a
value as determined by reference to the Daily Price on the date of exercise
equal to the aggregate Exercise Price for the Shares for which the Warrant is
being exercised. Upon such surrender of the Warrant Certificate and payment of
the Exercise Price as aforesaid, the Company shall issue and cause to be
delivered with all reasonable dispatch to or upon the written order of the
Holder of such Warrant, in such name or names as such Holder may designate, a
certificate or
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certificates for the number of full Shares so purchased, together with cash, as
provided in Section 16 of this Agreement, in respect of any fraction of a Share
otherwise issuable upon such surrender. Such certificate or certificates shall
be deemed to have been issued and any person or entity so designated to be named
therein shall be deemed to have become a holder of record of such Shares as of
the date of the surrender of the Warrant Certificate and payment of the Exercise
Price as aforesaid. A Warrant shall be exercisable, at the election of the
Holder thereof, either for all or for part only of the Shares specified in the
Warrant Certificate and if any Warrant is exercised in part prior to the
Expiration Date, the Company shall issue a new Warrant Certificate for the
remaining number of Shares specified in the Warrant Certificate so surrendered.
The Company covenants that if any Shares issuable upon the exercise of Warrants
require (under any federal or state law or applicable governing rule or
regulation of any national securities exchange) registration with or approval of
any governmental authority before such Shares may be issued upon exercise, the
Company, upon receipt from any Purchaser of notice of intent to exercise, will
in good faith and as expeditiously as possible endeavor to cause such Shares to
be duly registered, approved or listed on the relevant national securities
exchange, as the case may be.
5. Surrender of Warrant Certificates. Any surrender of a Warrant Certificate
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for transfer pursuant to Section 3 above or upon exercise pursuant to Section 4
above shall be made (a) to the Company at its principal office or (b) to the
Company at such other place or to such agent of the Company as the Company shall
hereafter notify the Holders.
6. Mutilated or Missing Warrant Certificate. If a Warrant Certificate is
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mutilated, lost, stolen or destroyed, the Company shall issue and deliver (a) in
exchange and substitution for and upon cancellation of any mutilated Warrant
Certificate or (b) in lieu of and in substitution for any Warrant Certificate
lost, stolen or destroyed, a new Warrant Certificate of like tenor representing
an equivalent right or interest.
7. Reservation of Common Stock, etc. The Company shall reserve for so long as
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any Warrant remains outstanding a number of authorized and unissued Shares
sufficient to provide for the exercise of all such Warrants, and the transfer
agent for the Common Stock, which may be the Company (the "Transfer Agent"), is
hereby irrevocably authorized and directed at all times until the Expiration
Date to reserve such number of authorized and unissued Shares as necessary for
such purpose. The Company shall keep copies of this Agreement on file with the
Transfer Agent and shall supply the Transfer Agent with duly executed stock
certificates for such purpose and will itself provide or otherwise make
available any cash payable as provided in Section 16 of this Agreement. All
Warrant Certificates surrendered upon the exercise of Warrants shall be
cancelled. The Company shall furnish to the Transfer Agent a copy of all notices
of adjustment, and certificates related thereto, required to be transmitted to
each Holder pursuant to Section 9(k) hereof.
8. Anti-dilution Adjustments.
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(a) In order to prevent dilution of the exercise rights granted
hereunder, the Exercise Price and the number of shares purchasable
upon exercise of the
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Warrants shall be subject to adjustment from time to time pursuant to
this Section 8.
(b) Subject to subparagraph 8(d) below, if and whenever on or after
the date hereof the Company issues or sells, or in accordance with
Section 9 is deemed to have issued or sold, any shares of its Common
Stock without consideration or at a price per share less than the
Exercise Price in effect immediately prior to such issuance or sale
(or deemed issuance or sale), then in each such case, the Exercise
Price, upon each such issuance or sale, except as hereinafter
provided, shall be lowered so as to be equal to an amount determined
by multiplying the Exercise Price in effect immediately prior to such
issuance or sale by the following fraction:
P + N
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P + F
where:
P = the number of shares of Common Stock outstanding immediately
prior to such issuance or sale, assuming the exercise or
conversion of all outstanding securities exercisable for or
convertible into Common Stock at any time on or after the date of
such calculation
N = the number of shares of Common Stock which the net aggregate
consideration, if any, received by the Company for the total
number of such additional shares of Common Stock so issued or
sold would purchase at the Exercise Price in effect immediately
prior to such issuance or sale
F = the number of additional shares of Common Stock so issued or sold
(c) Notwithstanding the foregoing, there shall be no adjustment in the
Exercise Price as a result of (i) any issue or sale (or deemed issue
or sale) of Options to acquire shares of Common Stock to employees of
the Company, or shares of Common Stock issuable pursuant to the
exercise of such Options, pursuant to stock option plans approved by
the Company's Board of Directors so long as the exercise price of such
Options is not less than the Daily Price on the date such Options are
issued as determined by the Company's Board of Directors in its good
faith judgment, or any issuance of shares of Common Stock pursuant to
the exercise of Options outstanding as of July 11, 2000; (ii) the
issuance of up to 3,716,400 shares of Common Stock to the sellers in
connection with the closing of the Company's acquisition of R&B
Communications, Inc. and the issuance to employees of R&B
Communications, Inc. of options to acquire shares of Common Stock (not
exceeding 65,000 shares in the aggregate) pursuant to the terms set
forth in Exhibit G to the Agreement and Plan of Merger, dated as of
June 16, 2000, by and among R&B Communications, Inc., R&B Combination
Company and the Company; (iii) Common Stock issued pursuant to and in
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accordance with the terms of the Company's Dividend Reinvestment Plan
(so long as such shares are issued at a price which is no less than
the Daily Price on the date of issuance) or 1997 Employee Stock
Purchase Plan, each as in effect as of July 11, 2000; and (iv) the
issuance of up to 600,000 shares of Common Stock in connection with
the purchase by the Company of minority interests in the Virginia PCS
Alliance, the West Virginia PCS Alliance and/or the Virginia RSA 6
Cellular Limited Partnership (assuming that the aggregate purchase
price for all such minority interests does not exceed $21 million).
(d) Unless the requisite approval of the holders of the Common Stock
has been obtained, in no event shall the Exercise Price be adjusted
below $35.50 (the "Minimum Exercise Price"). If the holders of the
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Common Stock so approve, this subsection (d) shall be of no further
force or effect and the Minimum Exercise Price shall no longer apply.
9. Effect on Exercise Price of Certain Events. For purposes of determining
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the adjusted Exercise Price under Section 8, the following shall be applicable:
(a) Issuance of Rights or Options. Except for Options granted in
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accordance with the provisions of Section 8(c) above or in accordance
with the Company's Rights Agreement dated as of February 26, 2000, if
the Company in any manner grants or sells any Options and the price
per share for which Common Stock is issuable upon the exercise of such
Options, or upon conversion or exchange of any Convertible Securities
issuable upon exercise of such Options, is less than the Exercise
Price in effect immediately prior to the time of the granting or sale
of such Options, then the total maximum number of shares of Common
Stock issuable upon the exercise of such Options or upon conversion or
exchange of the total maximum amount of such Convertible Securities
issuable upon the exercise of such Options shall be deemed to be
outstanding and to have been issued and sold by the Company at the
time of the granting or sale of such Options for such price per share.
For purposes of this paragraph, the "price per share for which Common
Stock is issuable" shall be determined by dividing (A) the total
amount, if any, received or receivable by the Company as consideration
for the granting or sale of such Options, plus the minimum aggregate
amount of additional consideration payable to the Company upon
exercise of all such Options, plus in the case of such Options which
relate to Convertible Securities, the minimum aggregate amount of
additional consideration, if any, payable to the Company upon the
issuance or sale of such Convertible Securities and the conversion or
exchange thereof, by (B) the total maximum number of shares of Common
Stock issuable upon the exercise of such Options or upon the
conversion or exchange of all such Convertible Securities issuable
upon the exercise of such Options. No further adjustment of the
Exercise Price shall be made when Convertible Securities are actually
issued upon the exercise of such Options or when Common Stock is
actually issued upon the exercise of such Options or the conversion or
exchange of such Convertible Securities.
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(b) Issuance of Convertible Securities. If the Company in any manner
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issues or sells any Convertible Securities and the price per share for
which Common Stock is issuable upon conversion or exchange thereof is
less than (a) the Exercise Price in effect immediately prior to the
time of such issue or sale, then the maximum number of shares of
Common Stock issuable upon conversion or exchange of such Convertible
Securities shall be deemed to be outstanding and to have been issued
and sold by the Company at the time of the issuance or sale of such
Convertible Securities for such price per share. For the purposes of
this paragraph, the "price per share for which Common Stock is
issuable" shall be determined by dividing (A) the total amount
received or receivable by the Company as consideration for the issue
or sale of such Convertible Securities, plus the minimum aggregate
amount of additional consideration, if any, payable to the Company
upon the conversion or exchange thereof, by (B) the total maximum
number of shares of Common Stock issuable upon the conversion or
exchange of all such Convertible Securities. No further adjustment of
the Exercise Price shall be made when Common Stock is actually issued
upon the conversion or exchange of such Convertible Securities, and if
any such issue or sale of such Convertible Securities is made upon
exercise of any Options for which adjustments of the Exercise Price
had been or are to be made pursuant to other provisions of this
Section 9, no further adjustment of the Exercise Price shall be made
by reason of such issue or sale.
(c) Change in Option Price or Conversion Rate. Except for Options
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granted in accordance with the provisions of Section 8(c) above or in
accordance with the Company's Rights Agreement dated as of February
26, 2000, if the purchase price provided for in any Options, the
additional consideration, if any, payable upon the conversion or
exchange of any Convertible Securities or the rate at which any
Convertible Securities are convertible into or exchangeable for Common
Stock changes at any time, the Exercise Price in effect at the time of
such change shall be immediately adjusted to the Exercise Price which
would have been in effect at such time had such Options or Convertible
Securities still outstanding provided for such changed purchase price,
additional consideration or conversion rate, as the case may be, at
the time initially granted, issued or sold; provided that if such
adjustment would result in an increase of the Exercise Price then in
effect, such adjustment shall not be effective until 30 days after
written notice thereof has been given by the Company to all holders of
the Warrants. For purposes of Section 9, if the terms of any Option
or Convertible Security which was outstanding as of the date hereof
are changed in the manner described in the immediately preceding
sentence, then such Option or Convertible Security and the Common
Stock deemed issuable upon exercise, conversion or exchange thereof
shall be deemed to have been issued as of the date of such change;
provided that no such change shall at any time cause the Exercise
Price hereunder to be increased.
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(d) Treatment of Expired Options and Unexercised Convertible
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Securities. Upon the expiration of any Option or the termination of
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any right to convert or exchange any Convertible Security without the
exercise of any such Option or right, the Exercise Price then in
effect hereunder shall be adjusted immediately to the Exercise Price
which would have been in effect at the time of such expiration or
termination had such Option or Convertible Security, to the extent
outstanding immediately prior to such expiration or termination, never
been issued; provided that if such expiration or termination would
result in an increase in the Exercise Price then in effect, such
increase shall not be effective until 30 days after written notice
thereof has been given to all holders of the Warrants. For purposes
of Section 9, the expiration or termination of any Option or
Convertible Security which was outstanding as of the date of issuance
of the Warrants shall not cause the Exercise Price hereunder to be
adjusted unless, and only to the extent that, a change in the terms of
such Option or Convertible Security caused it to be deemed to have
been issued after the date.
(e) Calculation of Consideration Received. If any Common Stock,
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Option or Convertible Security is issued or sold or deemed to have
been issued or sold for cash, the consideration received therefor
shall be deemed to be the amount received by the Company therefor. If
any Common Stock, Option or Convertible Security is issued or sold for
a consideration other than cash, the amount of the consideration other
than cash received by the Company shall be the fair value of such
consideration, except where such consideration consists of securities,
in which case the amount of consideration received by the Company
shall be the Market Price thereof as of the date of receipt. If any
Common Stock, Option or Convertible Security is issued to the owners
of the non-surviving entity in connection with any merger in which the
Company is the surviving Company, the amount of consideration therefor
shall be deemed to be the fair value of such portion of the net assets
and business of the non-surviving entity as is attributable to such
Common Stock, Option or Convertible Security, as the case may be. The
fair value of any consideration other than cash and securities shall
be determined jointly by the Company and the holders of a majority of
the Shares. If such parties are unable to reach agreement within a
reasonable period of time, the fair value of such consideration shall
be determined by an independent appraiser experienced in valuing such
type of consideration jointly selected by the Company and the holders
of a majority of the outstanding Shares. The determination of such
appraiser shall be final and binding upon the parties, and the fees
and expenses of such appraiser shall be borne by the Company.
(f) Integrated Transactions. In case any Option is issued in
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connection with the issue or sale of other securities of the Company,
together comprising one integrated transaction in which no specific
consideration is allocated to such Option by the parties thereto, the
Option shall be deemed to have been issued for a consideration of
$.01.
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(g) Record Date. If the Company takes a record of the holders of
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Common Stock for the purpose of entitling them (a) to receive a
dividend or other distribution payable in Common Stock, Options or in
Convertible Securities or (b) to subscribe for or purchase Common
Stock, Options or Convertible Securities, then such record date shall
be deemed to be the date of the issue or sale of the shares of Common
Stock deemed to have been issued or sold upon the declaration of such
dividend or upon the making of such other distribution or the date of
the granting of such right of subscription or purchase, as the case
may be.
(h) Subdivision or Combination of Common Stock. If the Company at any
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time subdivides (by any stock split, stock dividend, recapitalization
or otherwise) one or more classes of its outstanding shares of Common
Stock into a greater number of shares, the Exercise Price in effect
immediately prior to such subdivision shall be proportionately
reduced, and if the Company at any time combines (by reverse stock
split or otherwise) one or more classes of its outstanding shares of
Common Stock into a smaller number of shares, the Exercise Price in
effect immediately prior to such combination shall be proportionately
increased.
(i) Reorganization, Reclassification, Consolidation, Merger or Sale.
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Any recapitalization, reorganization, reclassification, consolidation,
merger, sale of all or substantially all of the Company's assets or
other transaction, in each case which is effected in such a manner
that the holders of Common Stock are entitled to receive (either
directly or upon subsequent liquidation) stock, securities or assets
with respect to or in exchange for Common Stock, is referred to herein
as an "Organic Change". Prior to the consummation of any Organic
Change, the Company shall make appropriate provisions (in form and
substance reasonably satisfactory to the holders of a majority of the
Shares) to insure that each of the holders of Warrants shall
thereafter have the right to acquire and receive, in lieu of or in
addition to (as the case may be) the Shares immediately theretofore
acquirable and receivable upon the exercise of such holder's Warrants,
such shares of stock, securities or assets as such holder would have
received in connection with such Organic Change if such holder had
exercised its Warrants immediately prior to such Organic Change. In
each such case, the Company shall also make appropriate provisions (in
form and substance reasonably satisfactory to the holders of a
majority of the Shares then outstanding) to insure that the provisions
of Sections 8 and 9 hereof shall thereafter be applicable to the
Warrants (including, in the case of any such consolidation, merger or
sale in which the successor entity or purchasing entity is other than
the Company, an immediate adjustment of the Exercise Price pursuant to
the provisions of this Section 9 to give effect to the value for the
Common Stock reflected by the terms of such consolidation, merger or
sale, and a corresponding immediate adjustment in the number of Shares
acquirable and receivable upon exercise of Warrants, if the value so
reflected is less than the Exercise Price in effect immediately prior
to such consolidation, merger or sale). The Company shall not effect
any such consolidation, merger or sale, unless prior to the
consummation thereof, the
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successor entity (if other than the Company) resulting from
consolidation or merger or the entity purchasing such assets assumes
by written instrument (in form and substance reasonably satisfactory
to the holders of a majority of the Shares then outstanding), the
obligation to deliver to each such holder such shares of stock,
securities or assets as, in accordance with the foregoing provisions,
such holder may be entitled to acquire.
(j) Certain Events. If any event occurs of the type contemplated by
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the provisions of Sections 8 and 9 but not expressly provided for by
such provisions (including, without limitation, the granting of stock
appreciation rights, phantom stock rights or other rights with equity
features), then the Company's Board of Directors shall make an
appropriate adjustment in the Exercise Price so as to protect the
rights of the holders of Warrants; provided that no such adjustment
shall increase the Exercise Price as otherwise determined pursuant to
Sections 8 and 9 or decrease the number of Shares issuable upon
exercise of each Warrant.
(k) Notices.
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(i) Immediately upon any adjustment of the Exercise Price, the
Company shall give written notice thereof to all holders of
Warrants, setting forth in reasonable detail and certifying the
calculation of such adjustment.
(ii) The Company shall give written notice to all holders of
Warrants at least 20 days prior to the date on which the Company
closes its books or takes a record (a) with respect to any
dividend or distribution upon Common Stock (other than the
Company's ordinary Common Stock dividend), (b) with respect to
any pro rata subscription offer to holders of Common Stock or (c)
for determining rights to vote with respect to any Organic
Change, dissolution or liquidation.
(iii) The Company shall also give written notice to the holders
of Warrants at least 20 days prior to the date on which any
Organic Change shall take place.
10. Certain Events. If any of the following occurs on or before the Expiration
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Date:
(a) a consolidation or merger of the Company with or into another
entity (other than any merger as to which the Company is the surviving
corporation and there is no change in the Common Stock in connection
therewith),
(b) a liquidating dividend with respect to the Common Stock, or
(c) a tender offer or exchange offer with respect to the Common Stock
(other than a tender offer opposed by the Company's board of
directors),
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(each, an "Event"), then, in connection with any such Event, each Holder of a
Warrant shall have the right, in lieu of exercising such Warrant in advance of
such Event and receiving the consideration which a Holder of the Shares issuable
upon exercise of such Warrant would receive in connection with such
consolidation or merger, liquidating dividend or tender offer (the "Event
Consideration"), upon surrender of the Warrant Certificate evidencing such
Warrant to the Company or its duly authorized agent or to the depositary or
exchange agent, as the case may be, to receive the Event Consideration with
respect to the Shares for which such Warrant is exercisable reduced by the
Exercise Price. Such reduction in the Event Consideration shall first be
applied to any cash included in the Event Consideration and, to the extent that
such cash is less than the Exercise Price, the amount of the securities or other
property to be received by such Holder shall be reduced by an amount that,
together with any such cash, is (in the reasonable judgment of the Company's
board of directors) equal to the Exercise Price. The Company hereby covenants
(A) to give notice of any Event specified in (a) or (b)
above to each Holder of Warrants at least twenty (20) days
in advance of the record date for determining stockholders'
rights with respect to such Event, and
(B) that any agreements, resolutions, offers or other
documents with respect to any Event shall contain terms
consistent with the provisions of this Section 10 and, in
the case of any Event specified in (c) above, shall be
forwarded to each Holder of Warrants.
The provisions of this Section 10 shall also apply to successive Events.
11. Absence of Registration. By acceptance of a Warrant Certificate evidencing
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the Warrant, each Holder represents and agrees that such Holder is acquiring the
Warrant, and that upon exercise thereof it will acquire the Shares, with its own
funds for its own account for investment, and not with a view to any sale,
distribution or transfer thereof in violation of the Securities Act of 1933 (the
"Securities Act").
Each Holder acknowledges that such Holder has been informed by the Company
or by the previous Holder of the Warrant that the Warrant may not, under the
Securities Act and applicable regulations thereunder, be re-sold, transferred or
otherwise disposed of without registration under the Securities Act or an
applicable exemption from the registration requirements of the Securities Act
and, if sold pursuant to an applicable exemption and if requested by the
Company, an opinion of counsel that registration under the Securities Act is not
required.
Warrant Certificates shall bear the following legend:
THE WARRANT REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). IT MAY NOT
BE SOLD OR OFFERED FOR
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SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT.
12. Information Covenants.
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12.1 Notice of Stockholder Meetings. Nothing contained in this Agreement
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shall be construed as conferring upon any Holder the right to vote or to
consent to or receive notice as a stockholder in respect of the meetings of
stockholders or the election of directors of the Company or any other
matter, or any rights whatsoever as a stockholder of the Company; provided,
however, that if a meeting of the stockholders of the Company is called or
if consents of the Company's stockholders are solicited to consider and
take action on a proposal for (i) the declaration of a dividend with
respect to Shares, other than in cash, (ii) the redemption or repurchase of
any Shares, other than pursuant to repurchase agreements with employees,
(iii) the voluntary dissolution of the Company or (iv) any consolidation,
merger or sale of all or substantially all of its property, assets,
business and good will as an entirety, then the Company shall cause a
notice thereof to be sent by first class mail, postage prepaid, at least
twenty (20) business days prior to the record date for determining
stockholders entitled to vote at such meeting or to take action with
respect to such consent, to each Holder of Warrants at such Holder's
address appearing on the Warrant Register; but failure to mail or to
receive such notice or any defect therein or in the mailing thereof shall
not affect the validity of any action taken at such meeting or by such
consent.
12.2 Notice of Distributions. If the Company determines to make any
-----------------------
distribution on its Common Stock, then the Company shall deliver a notice
of its intention to make such distribution by first class mail, postage
prepaid, at least twenty (20) business days prior to the record date for
such distribution to each registered Holder of Warrants at such Holder's
address appearing on the Warrant Register, but failure to mail or to
receive such notice or any defect therein or in the mailing thereof shall
not affect the validity of any action taken in connection with such
distribution.
12.3 Financial Statements, etc. Notwithstanding Section 12.1 above, the
-------------------------
Company shall promptly deliver to each Holder copies of all regular and
periodic financial information, proxy materials and other information and
reports, if any, which the Company or any of its subsidiaries shall file
with the Securities and Exchange Commission. In addition, the Company
shall deliver to each Holder all financial statements and other reports
required to be delivered to holders of Senior Cumulative Preferred Stock,
Series B, pursuant to the Purchase Agreement.
12.4 Proper Books and Records; Inspection. The Company covenants that it
------------------------------------
will keep proper books and records in which full, true and correct entries
in conformity with generally accepted accounting principles shall be made
of all dealings and transactions in relation to its business and
activities. The Company further covenants that it will permit,
-11-
and will cause each of its subsidiaries to permit, any person designated in
writing by any Holder to visit and inspect any of its properties, to
examine its corporate, financial and operating records and to make copies
thereof or extracts therefrom, and to discuss its affairs, finances and
accounts with its directors, officers, employees and independent
accountants, all at such times, upon reasonable notice, as may reasonably
be desired.
13. Certain Definitions. The following terms, as used herein, shall have the
-------------------
following meanings:
"Convertible Securities" means any stock or securities directly or
----------------------
indirectly convertible into or exchangeable for Common Stock.
"Daily Price" means, as of any date, (i) if the shares of such class of
-----------
Common Stock then are listed and traded on the New York Stock Exchange, Inc.
("NYSE"), the closing price on such date as reported on the NYSE Composite
----
Transactions Tape; (ii) if the shares of such class of Common Stock then are not
listed and traded on the NYSE, the closing price on such date as reported by the
principal national securities exchange on which the shares are listed and
traded; (iii) if the shares of such class of Common Stock then are not listed
and traded on any such securities exchange, the last reported sale price on such
date on the National Market of the National Association of Securities Dealers,
Inc. Automated Quotation System ("NASDAQ"); or (iv) if the shares of such class
------
of Common Stock then are not traded on the NASDAQ National Market, the average
of the highest reported bid and lowest reported asked price on such date as
reported by NASDAQ.
"Market Price" of any security means the average of the closing prices of
------------
such security's sales on all securities exchanges on which such security may at
the time be listed, or, if there has been no sales on any such exchange on any
day, the average of the highest bid and lowest asked prices on all such
exchanges at the end of such day, or, if on any day such security is not so
listed, the average of the representative bid and asked prices quoted in the
NASDAQ System as of 4:00 P.M., New York time, or, if on any day such security is
not quoted in the NASDAQ System, the average of the highest bid and lowest asked
prices on such day in the domestic over-the-counter market as reported by the
National Quotation Bureau, Incorporated, or any similar successor organization,
in each such case averaged over a period of 21 days consisting of the day as of
which "Market Price" is being determined and the 20 consecutive business days
prior to such day. If at any time such security is not listed on any securities
exchange or quoted in the NASDAQ System or the over-the-counter market, the
"Market Price" shall be the fair value thereof determined jointly by the Company
and the holders of a majority of the Shares. If such parties are unable to reach
agreement within a reasonable period of time, such fair value shall be
determined by an independent appraiser experienced in valuing securities jointly
selected by the Company and the holders of a majority of the Shares. The
determination of such appraiser shall be final and binding upon the parties, and
the Company shall pay the fees and expenses of such appraiser.
"Options" means any rights, warrants or options to subscribe for or
-------
purchase Common Stock or Convertible Securities.
-12-
"Person" as used herein means any corporation, limited liability company,
------
partnership, trust, organization, association, other entity or individual.
14. Notices. Any notice pursuant to this Agreement to be given or made by any
-------
Holder to or on the Company shall be made by hand delivery, prepaid first-class
mail (registered or certified, return receipt requested), telegraph, facsimile
transmission (receipt confirmed), or overnight air courier guaranteeing next day
delivery, addressed to the Company at:
CFW Communications Company
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chief Executive Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Hunton & ▇▇▇▇▇▇▇▇
Bank of America Plaza
Suite 4100
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Any notice or demand authorized by this Agreement to be given or made by
the Company to any Holder shall be sufficiently given or made (except as
otherwise provided in this Agreement) if sent as provided above, addressed to
such Holder's address appearing on the Warrant Register, with a copy, in the
case of a Purchaser, to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
15. Warrant Obligations Independent of Debt Obligations. Pursuant to the
---------------------------------------------------
Purchase Agreement, the Company has issued shares of its Senior Cumulative
Convertible Preferred Stock, Series B, to the Purchasers. The obligations of the
Company or its affiliates with respect to the Warrants, including, without
limitation, the obligations set forth in this Agreement, are independent of any
obligations of the Company under the Purchase Agreement, and such obligations
with respect to the Warrants shall remain valid and binding notwithstanding the
performance of, or any breach by the Company or its affiliates with respect to,
their obligations under the Purchase Agreement.
16. Fractional Interests. The Company shall not be required to issue fractions
--------------------
of Shares on the exercise of Warrants. If the Company elects not to issue
fractions of Shares, then with respect to
-13-
any fraction of a Share that would otherwise have been issuable on the exercise
of a Warrant, the Company shall purchase such fraction for an amount in cash
equal to the fraction of the then current Daily Price attributable to such
fractional share.
17. Binding Effect; Survival. This Agreement shall survive the exercise of the
------------------------
Warrants and shall be binding upon the Company and its successors and assigns
and shall be binding upon and inure to the benefit of the Holders of the
Warrants and each holder of Shares issued upon exercise of the Warrants.
18. 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 together shall constitute but one and the same instrument.
19. Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the internal laws of the Commonwealth of Virginia.
* * * *
-14-
IN WITNESS WHEREOF, each of the parties hereto has caused this Warrant
Agreement to be duly executed as a sealed instrument as of the day, month and
year first above written.
THE COMPANY:
CFW COMMUNICATIONS COMPANY
By: __________________________
Name:
Title:
PURCHASERS:
WELSH, CARSON, ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇ VIII, L.P.
By: WCAS VIII Associates, LLC,
as General Partner
By: _______________________________
Name:
Title: Managing Member
By: _______________________________
Name: ▇▇▇▇▇▇▇▇ ▇. Rather
as Attorney-in-fact for the individual
investors listed below:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. Rather
D. ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇ ▇▇▇
Address for notices:
----------------------
c/o Welsh, Carson, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. Rather
with a copy to:
--------------
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
Citigroup Center
▇▇▇ ▇▇▇▇ ▇▇/▇▇/ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ EQUITY FUNDING, INC.
By:_______________________________________
Name:
Title:
EXHIBIT A
WARRANT CERTIFICATE
THE WARRANT REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). IT MAY NOT BE SOLD OR
OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
ACT OR AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT.
THE TRANSFER OR EXCHANGE OF THIS WARRANT MUST BE REGISTERED IN ACCORDANCE
WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.
NO. W-___ JULY 11, 2000
VOID AFTER 5:00 P.M. EASTERN TIME
TIME ON JULY 11, 2010
CFW COMMUNICATIONS COMPANY
WARRANT CERTIFICATE
THIS CERTIFIES THAT for value received, _________________, or its
registered assigns, is the owner of a Warrant which entitles it to purchase at
any time on or after July 11, 2000, and on or before 5:00 p.m. Eastern Time on
the tenth anniversary of the date hereof or on such later date, if any, as
provided in the Warrant Agreement (as hereinafter defined) (the "Expiration
Date"), ___________ fully paid and nonassessable Shares of the Common Stock, no
par value (the "Common Stock") of the Company, at the purchase price of $50.00
per share (the "Exercise Price") upon presentation and surrender of this Warrant
Certificate with the Form of Election to Purchase attached hereto duly executed.
The Expiration Date is subject to extension as provided in said Warrant
Agreement. The number of Shares which may be purchased upon exercise of the
Warrant evidenced by this Warrant Certificate is the number as of the date of
the original issue of such Warrant, based on the Shares of Common Stock of the
Company as constituted at such date. As provided in the Warrant Agreement, the
number and kind of Shares which may be purchased upon the exercise of the
Warrant evidenced by this Warrant Certificate, and the Exercise Price at which
such shares are purchasable, are, upon the happening of certain events, subject
to modification and adjustment.
This Warrant Certificate and the Warrant it represents are subject to, and
entitled to the benefits of, all of the terms, provisions and conditions of a
certain Warrant Agreement dated as of July 11, 2000 (the "Warrant Agreement")
between the Company and the original holder hereof, which Warrant Agreement is
hereby incorporated herein by reference and made a part hereof and to which
Warrant Agreement reference is hereby made for a full description of the rights,
limitation of rights, obligations, duties and immunities hereunder of the
Company and the holder of this Warrant Certificate. Copies of the Warrant
Agreement are on file at the principal office of the Company.
A-1
Subject to the terms of the Warrant Agreement, this Warrant Certificate,
upon surrender at the principal office of the Company, may be exchanged for
another Warrant Certificate or Warrant Certificates of like tenor and date
evidencing a Warrant or Warrants entitling the holder to purchase a like
aggregate number of Shares of Common Stock as the Warrant evidenced by the
Warrant Certificate surrendered entitled such holder to purchase.
No fractional Shares of Common Stock need be issued upon the exercise of
any Warrant evidenced hereby, but in lieu thereof a cash payment may be made, as
provided in the Warrant Agreement.
No holder of this Warrant Certificate shall be entitled to vote or receive
dividends or be deemed the holder of Common Stock or any other securities of the
Company which may at any time be issuable on the exercise hereof for any
purpose, nor shall anything contained in the Warrant Agreement or herein be
construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, to give or
withhold consent to any corporate action (whether upon any recapitalization,
issue of stock, reclassification of stock, change of par value or change of
stock to no par value, consolidation, merger, conveyance or otherwise), to
receive notice of meetings (except as provided in the Warrant Agreement), or to
receive dividends or subscription rights or otherwise, until the Warrant
evidenced by this Warrant Certificate shall have been exercised and the Common
Stock purchasable upon the exercise thereof shall have become deliverable as
provided in the Warrant Agreement.
If this Warrant Certificate shall be surrendered for exercise within any
period during which the transfer books for the Company's Common Stock are closed
for any purpose, the Company shall not be required to make delivery of
certificates for Shares purchasable upon such exercise until the date of the
reopening of said transfer books.
A-2
IN WITNESS WHEREOF, the Company has caused the signature (or facsimile
signature) of its President and Secretary to be printed herein and its corporate
seal (or facsimile) to be printed herein.
Attest: CFW COMMUNICATIONS COMPANY
By: ___________________________ By: ___________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Secretary Chief Executive Officer
A-3
FORM OF ELECTION TO PURCHASE
To be executed if the Holder desires to exercise the Warrant.
TO CFW COMMUNICATIONS COMPANY:
The undersigned hereby irrevocably elects to exercise the Warrant evidenced
by this Warrant Certificate No. W- to purchase ____________
Shares of Common Stock issuable upon the exercise of such Warrant and requests
that certificates for such Shares be issued in the name of:
Name
Address
Social Security Number
If such number of Shares shall not be all the Shares with respect to which
this Warrant is exercisable, a new Warrant for the balance remaining of such
Shares will be registered in the name of and delivered to:
Name
Address
Social Security Number
Date: _______________________________
Signature
(Signature must conform in all respects to name of
holder as specified on the face of this Warrant
Certificate)
A-4
ASSIGNMENT
(To be executed only upon assignment of Warrant Certificates)
For value received, the undersigned 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.
Dated:
_________________________________________
Name:
NOTE: The above signature should correspond
exactly with the name on the face of this Warrant
Certificate.
A-5
SCHEDULE I
Warrant Purchasers Shares of Common Stock
A-6
