1
EXHIBIT 4.2
================================================================================
---------------------------------
WARRANT AGREEMENT
Dated as of May 27, 1998
by and among
PARK`N VIEW, INC.
and
STATE STREET BANK AND TRUST COMPANY
---------------------------------
================================================================================
2
WARRANT AGREEMENT dated as of May 27, 1998 (the "AGREEMENT")
between Park`N View, Inc., a Delaware corporation (the "COMPANY"), and State
Street Bank and Trust Company, as warrant agent (the "WARRANT AGENT").
WHEREAS, the Company proposes to issue Common Stock Purchase
Warrants, as hereinafter described (the "WARRANTS"), to purchase up to an
aggregate of 505,735 shares of Common Stock (as defined below), in connection
with the offering of an aggregate of $75,000,000 principal amount of the
Company's 13% Senior Notes due 2008 (the "NOTES") and 75,000 Warrants, each
Warrant entitling the holder thereof to purchase 6.73833 shares of Common Stock.
The Notes and Warrants will be sold in Units (the "UNITS"), each Unit consisting
of $1,000 principal amount of Notes and one Warrant.
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 (as defined below) and other matters
as provided herein.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, and for the purpose of defining the
respective rights and obligations of the Company, the Warrant Agent and the
Holders (as defined below), the parties hereto agree as follows:
SECTION 1. Certain Definitions. As used in this Agreement, the
following terms shall have the following respective meanings:
"Affiliate" of any person means any person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such person. For purposes of this definition, "control" (including,
with correlative meanings, the terms "controlling", "controlled by" and "under
common control with"), as used with respect to any person means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of such person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; provided that
beneficial ownership of 5% or more of the voting securities of a person shall be
deemed to be control.
"Closing Date" means the date hereof.
"Commission" means the Securities and Exchange Commission.
"Common Equity Securities" means Common Stock and securities
convertible into, or exercisable or exchangeable for, Common Stock or rights or
options to acquire Common Stock or such other securities, excluding the
Warrants.
"Common Stock" means the common stock, par value $.001 per
share, of the Company, and any other capital stock of the Company into which
such common stock may be converted or reclassified or that may be issued in
respect of, in exchange for, or in substitution for, such common stock by reason
of any stock splits, stock dividends, distributions, mergers, consolidations or
other like events.
"Company" means Park `N View, Inc., a Delaware corporation,
and its successors and assigns.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
3
"Exercise Date" means any time on or after the Separation Date
and prior to May 15, 2008.
"Exercise Price" means the purchase price per share of Common
Stock to be paid upon the exercise of each Warrant in accordance with the terms
hereof, which price shall initially be $.01 per share, subject to adjustment
from time to time pursuant to Section 13 hereof.
"Expiration Date" means May 15, 2008.
"Holder" means a person who owns Registrable Securities (as
defined in Section 7).
"Indenture" means the indenture, dated the date hereof,
between the Company and State Street Bank and Trust Company, as trustee.
"Initial Purchaser" means Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation.
"Notes" means the 13% Series A Senior Notes due 2008 of the
Company, being sold and issued pursuant to the Purchase Agreement and the
Indenture, or any notes exchanged therefor as contemplated by the Indenture and
the Registration Rights Agreement.
"person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of May 27, 1998, by and among the Company and the Initial
Purchaser relating to the Notes.
"Securities Act" means the Securities Act of 1933, as amended.
"Separation Date" means the earliest of (i) 180 days following
the Closing Date, (ii) the date on which a registration statement with respect
to a registered exchange offer for the Notes is declared effective under the
Securities Act, (iii) the date a shelf registration statement with respect to
the Notes is declared effective under the Securities Act, (iv) such date as the
Initial Purchaser shall determine and (v) in the event of a Change of Control
(as defined in the Indenture) occurs, the date the Company mails the required
notice thereof to the Note holders.
"Series B Preferred Stock" means Series B 7% Cumulative
Convertible Preferred Stock of the Company, as amended.
"Series C Preferred Stock" means the Series C 7% Cumulative
Convertible Preferred Stock of the Company, as amended.
"Trustee" means the trustee under the Indenture.
"Warrant Agent" means State Street Bank and Trust Company or
the successor or successors of such Warrant Agent appointed in accordance with
the terms hereof.
"Warrant Registration Rights Agreement" means the registration
rights agreement, dated as of May 27, 1998, by and among the Company and the
Initial Purchaser relating to the Warrants and the Warrant Shares.
3
4
"Warrant Shares" means the shares of Common Stock issued or
issuable upon the exercise of the Warrants.
SECTION 2. Appointment of Warrant Agent. The Company hereby
appoints the Warrant Agent to act as agent for the Company in accordance with
the instructions set forth hereinafter in this Agreement, and the Warrant Agent
hereby accepts such appointment.
SECTION 3. Issuance of Warrants; Warrant Certificates. The
Warrants will be issued in global form (the "GLOBAL WARRANTS"), substantially in
the form of Exhibit A (including footnotes 1 and 2 thereto) in definitive form
(the "DEFINITIVE WARRANTS"), substantially in the form of Exhibit A. Each Global
Warrant shall represent such of the outstanding Warrants as shall be specified
therein and each shall provide that it shall represent the aggregate amount of
outstanding Warrants from time to time endorsed thereon and that the aggregate
amount of outstanding Warrants represented thereby may from time to time be
reduced or increased, as appropriate. Any endorsement of a Global Warrant to
reflect the amount of any increase or decrease in the amount of outstanding
Warrants represented thereby shall be made by the Warrant Agent and the
depositary with respect to the Global Warrants (the "Depositary") in accordance
with written instructions given by the Holder thereof. The Depository Trust
Company shall act as the Depositary until a successor shall be appointed by the
Company and the Warrant Agent. Upon written request, a Holder may receive from
the Depositary and the Warrant Agent separate Definitive Warrants as set forth
in Section 7 below. Any certificates (the "WARRANT CERTIFICATES") evidencing the
Global Warrants or the Definitive Warrants to be delivered pursuant to this
Agreement shall be substantially in the form set forth in Exhibit A attached
hereto.
SECTION 4. Execution of Warrant Certificates. Warrant
Certificates shall be signed on behalf of the Company by its Chairman of the
Board, its President or a Vice President. The signature upon the Warrant
Certificates may be in the form of a facsimile signature of the present or any
future Chairman of the Board, President or Vice President 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, President or Vice President notwithstanding the fact
that at the time the Warrant Certificates shall be countersigned and delivered
or disposed of such person shall have ceased to hold such office.
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 nevertheless may be
countersigned and delivered or disposed of as though such person had not ceased
to be such officer of the Company; and any 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.
SECTION 5. Separation of Warrants. The Notes and Warrants
shall not be separately transferable prior to the Separation Date.
SECTION 6. Registration and Countersignature. The Warrant
Agent, on behalf of the Company, shall number and register the Warrant
Certificates in a register as they are issued by the Company.
4
5
Warrant Certificates shall be manually countersigned by the
Warrant Agent and shall not be valid for any purpose unless so countersigned.
The Warrant Agent shall, upon written instructions of the Chairman of the Board,
the President or the Treasurer of the Company, initially countersign, issue and
deliver Warrants entitling the Holders thereof to purchase not more than the
number of Warrant Shares referred to above in the first 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
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. Prior to a Separation Date, the
Depository Trust Company shall be deemed the registered Holder of such Warrants
for all purposes hereunder.
SECTION 7. Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Definitive Warrants. When
Definitive Warrants are presented to the Warrant Agent with a written request:
(i) to register the transfer of the Definitive Warrants; or
(ii) to exchange such Definitive Warrants for an equal number of
Definitive Warrants of other authorized denominations,
the Warrant Agent shall register the transfer or make the exchange as requested
if its usual and customary requirements for such transactions are met; provided
that the Definitive Warrants presented or surrendered for registration of
transfer or exchange:
(x) shall be duly endorsed or accompanied by a written instruction
of transfer in form reasonably satisfactory to the Warrant
Agent, duly executed by the Holder thereof or by his attorney,
duly authorized in writing; and
(y) in the case of Registrable Securities (as defined below), such
request shall be accompanied by the following additional
information and documents, as applicable:
(A) if such Registrable Security is being delivered to
the Warrant Agent by a Holder for registration in the
name of such Holder, without transfer, a
certification from such Holder to that effect (in
substantially the form of Exhibit B hereto);
(B) if such Registrable Security is being transferred (1)
to a "qualified institutional buyer" (as defined in
Rule 144A under the Securities Act) in accordance
with Rule 144A under the Securities Act or (2)
pursuant to an exemption from registration in
accordance with Rule 144 under the Securities Act
(and based on an opinion of counsel if the Company so
requests) or (3) pursuant to an effective
registration statement under the Securities Act, a
certification to that effect (in substantially the
form of Exhibit B hereto);
(C) if such Registrable Security is being transferred to
an institutional "accredited investor," within the
meaning of Rule 501(a)(l), (2), (3) or (7) under the
Securities Act pursuant to a private placement
exemption from the registration requirements of the
Securities Act (and based on an opinion of counsel
5
6
reasonably acceptable to the Company if the Company
so requests), a certification to that effect (in
substantially the form of Exhibit B hereto) and a
certification from the applicable transferee; or
(D) if such Registrable Security is being transferred in
reliance on another exemption from the registration
requirements of the Securities Act (and based on an
opinion of counsel reasonably acceptable to the
Company if the Company so requests), a certification
to that effect (in substantially the form of Exhibit
B hereto).
The term "REGISTRABLE SECURITIES" means the Warrants,
Warrant Shares and any other securities issued or issuable with respect
to the Warrants or the Warrant Shares by way of a stock dividend or
stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or
otherwise until such date as such security (i) is effectively
registered under the Securities Act and disposed of in accordance with
a registration statement covering it, (ii) is distributed to the public
pursuant to Rule 144 under the Securities Act or (iii) may be sold or
transferred under Rule 144(k) (or any similar provisions then in force)
under the Securities Act or otherwise.
(b) Restrictions on Exchange or Transfer of a Definitive
Warrant for a Beneficial Interest in a Global Warrant. A certificated Warrant
may not be exchanged for a beneficial interest in a Global Warrant except upon
satisfaction of the requirements set forth below. Upon receipt by the Warrant
Agent of a Definitive Warrant, duly endorsed or accompanied by appropriate
instruments of transfer, in form reasonably satisfactory to the Warrant Agent,
together with:
(A) if such Definitive Warrant is a Registrable Security,
certification from the Holder thereof (in
substantially the form of Exhibit B hereto) to the
effect that such Definitive Warrant is being
transferred by such Holder either (i) to a "qualified
institutional buyer" (as defined in Rule 144A under
the Securities Act) in accordance with Rule 144A
under the Securities Act who wishes to take delivery
thereof in the form of a beneficial interest in a
Global Warrant or (ii) to an "accredited investor,"
within the meaning of Rule 501(a)(l), (2), (3) or (7)
in accordance with Rule 144A under the Securities Act
(and based on an opinion of counsel if the Company so
requests) who wishes to take delivery thereof in the
form of a beneficial interest in a Global Warrant;
and
(B) whether or not such Definitive Warrant is a
Registrable Security, written instructions directing
the Warrant Agent to make, or to direct the
Depositary to make, an endorsement on the Global
Warrant to reflect an increase in the number of
Warrants and Warrant Shares represented by the Global
Warrant, then the Warrant Agent shall cancel such
Definitive Warrant and cause, or direct the
Depositary to cause, in accordance with the standing
instructions and procedures existing between the
Depositary and the Warrant Agent, the number of
Warrants and Warrant Shares represented by the Global
Warrant to be increased accordingly. If no Global
Warrants are then outstanding, the Company shall
issue and the Warrant Agent shall countersign a new
Global Warrant representing the appropriate number of
Warrants and Warrant Shares.
(c) Transfer and Exchange of Global Warrants. The
transfer and exchange of Global Warrants or beneficial interests therein shall
be effected through the Depositary, in accordance
6
7
with this Warrant Agreement and the procedures of the Depositary therefor.
(d) Exchange of a Beneficial Interest in a Global Warrant for
a Certificated Warrant.
(i) Any person having a beneficial interest in a Global Warrant
may upon written request exchange such beneficial interest for
a Definitive Warrant. Upon receipt by the Warrant Agent of
written instructions or such other form of instructions as is
customary for the Depositary from the Depositary or its
nominee on behalf of any person having a beneficial interest
in a Global Warrant and, in the case of a Registrable
Security, the following additional information and documents
(all of which may be submitted by facsimile):
(A) if such beneficial interest is being delivered to the
person designated by the Depositary as being the
beneficial owner, a certification to that effect (in
substantially the form of Exhibit B hereto);
(B) if such beneficial interest is being transferred (1)
to a "qualified institutional buyer" (as defined in
Rule 144A under the Securities Act) in accordance
with Rule 144A under the Securities Act or (2)
pursuant to an exemption from registration in
accordance with Rule 144 under the Securities Act
(and based on an opinion of counsel reasonably
acceptable to the Company, if the Company so
requests) or (3) pursuant to an effective
registration statement under the Securities Act, a
certification to that effect (in substantially the
form of Exhibit B hereto);
(C) if such beneficial interest is being transferred to
any institutional "accredited investor," within the
meaning of Rule 501(a)(1), (2), (3) and (7) under the
Securities Act pursuant to a private placement
exemption from the registration requirements of the
Securities Act (and based on an opinion of counsel
reasonably acceptable to the Company, if the Company
so requests), a certification to that effect (in
substantially the form of Exhibit B hereto) and a
certification from the applicable transferee;
(D) if such beneficial interest is being transferred in
reliance on another exemption from the registration
requirements of the Securities Act (and based on an
opinion of counsel reasonably acceptable to the
Company, if the Company so requests), a certification
to that effect (in substantially the form of Exhibit
B hereto).
then the Warrant Agent shall cause, in accordance with the
standing instructions and procedures existing between the
Depositary and Warrant Agent, the number of Warrants and
Warrant Shares represented by the Global Warrant to be reduced
and, following such reduction, the Company shall execute and
the Warrant Agent shall countersign and deliver to the
transferee, as the case may be, a Definitive Warrant.
(ii) Definitive Warrants issued in exchange for a beneficial
interest in a Global Warrant pursuant to this Section 7(d)
shall be registered in such names as the Depositary, pursuant
to instructions from its direct or indirect participants or
otherwise, shall instruct the Warrant Agent. The Warrant Agent
shall deliver such Definitive Warrants to the persons in whose
names such Warrants are so registered.
7
8
(e) Restrictions on Transfer and Exchange of Global Warrants.
Notwithstanding any other provisions of this Warrant Agreement (other than the
provisions set forth in subsection (f) of this Section 7), a Global Warrant may
not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(f) Countersigning of Definitive Warrants in Absence of
Depositary. If at any time:
(i) the Depositary for the Global Warrants notifies the Company
that the Depositary is unwilling or unable to continue as
Depositary for the Global Warrants and a successor Depositary
for the Global Warrants is not appointed by the Company within
90 days after delivery of such notice; or
(ii) The Company, in its sole discretion, notifies the Warrant
Agent in writing that it elects to cause the issuance of
Definitive Warrants under this Warrant Agreement,
then the Company shall execute, and the Warrant Agent, upon written instructions
signed by two officers of the Company, shall countersign and deliver Definitive
Warrants, in an aggregate number equal to the number of Warrants represented by
Global Warrants, in exchange for such Global Warrants.
(g) Legends.
(i) Except for any Registrable Security sold or transferred
(including any Registrable Security represented by a Global
Warrant) as discussed in clause (ii) below, each Warrant
Certificate evidencing the Global Warrants and the Definitive
Warrants (and all Warrants issued in exchange therefor or
substitution thereof) and each certificate representing the
Warrant Shares shall bear a legend in substantially the
following form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY
WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER XXXXXXX 0 XX XXX XXXXXX XXXXXX
SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND
THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE
HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR
THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY
BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY
(1)(a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144
UNDER THE SECURITIES ACT OR (c) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" AS DEFINED
8
9
IN RULE 501(A)(1), (2), (3) OR (7) OF THE SECURITIES
ACT (AN "INSTITUTIONAL ACCREDITED INVESTOR") THAT,
PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE OR THE
WARRANT AGENT, AS APPLICABLE, A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
(THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE
OR THE WARRANT AGENT, AS APPLICABLE) AND, IF SUCH
TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL
AMOUNT OF SECURITIES LESS THAN $250,000, AN OPINION
OF COUNSEL THAT SUCH TRANSFER IS IN COMPLIANCE WITH
SECURITIES ACT OR (d) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND, IN THE CASE OF CLAUSE (b), (c)
or (d) BASED UPON AN OPINION OF COUNSEL IF THE
COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND,
IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR
ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER FROM IT OF THE SECURITY
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH
IN (A) ABOVE."
(ii) Upon any sale or transfer of a Registrable Security (including
any Registrable Security represented by a Global Warrant)
pursuant to an effective registration statement under the
Securities Act, pursuant to Rule 144 under the Securities Act
or pursuant to an opinion of counsel reasonably satisfactory
to the Company that no legend is required:
(A) in the case of any Registrable Security that is a
certificated Warrant, the Warrant Agent shall permit
the Holder thereof to exchange such Registrable
Security for a Definitive Warrant that does not bear
the legend set forth in clause (i) above and rescind
any restriction on the transfer of such Registrable
Security; and
(B) in the case of any Registrable Security represented
by a Global Warrant, such Registrable Security shall
not be required to bear the legend set forth in
clause (i) above but shall continue to be subject to
the provisions of Section 7(c) hereof; provided that
with respect to any request for an exchange of a
Registrable Security that is represented by a Global
Warrant for a Definitive Warrant that does not bear
the legend set forth in clause (i) above, which
request is made in reliance upon Rule 144 (and based
on an opinion of counsel reasonably acceptable to the
Company, if the Company so requests), the Holder
thereof shall certify in writing to the Warrant Agent
that such request is being made pursuant to Rule 144
(such certification to be substantially in the form
of Exhibit B hereto).
(h) Cancellation of Global Warrant. At such time as all
beneficial interests in Global Warrants have either been exchanged for
Definitive Warrants, redeemed, repurchased or cancelled, all Global Warrants
shall be returned to or retained and cancelled by the Warrant Agent.
(i) Obligations with respect to Transfers and Exchanges of
Warrants.
9
10
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Warrant Agent is hereby
authorized to countersign, in accordance with the provisions
of Section 6 and this Section 7, Definitive Warrants and
Global Warrants as required pursuant to the provisions of this
Section 7.
(ii) All Definitive Warrants and Global Warrants issued upon any
registration of transfer or exchange of Definitive Warrants or
Global Warrants shall be the valid obligations of the Company,
entitled to the same benefits under this Warrant Agreement, as
the Definitive Warrants or Global Warrants surrendered upon
such registration of transfer or exchange.
(iii) Notwithstanding any provisions in the Warrant Registration
Rights Agreement, prior to due presentment for registration of
transfer of any Warrant, the Warrant Agent and the Company may
deem and treat the person in whose name any Warrant is
registered as the absolute owner of such Warrant and neither
the Warrant Agent, nor the Company shall be affected by notice
to the contrary.
(iv) No service charge shall, notwithstanding any provisions in the
Warrant Registration Rights Agreement, be made to a Holder for
any registration, transfer or exchange.
SECTION 8. Terms of Warrants; Exercise of Warrants. Subject to
the terms of this Agreement, each Warrant Holder shall have the right, which may
be exercised commencing at the opening of business on the Exercise Date and
until 5:00 p.m., New York City time on the Expiration Date to receive from the
Company the number of fully paid and nonassessable Warrant Shares registered
under the Securities Act which the Holder may at the time be entitled to receive
on exercise of such Warrants and payment of the Exercise Price then in effect
for such Warrant Shares; provided that 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 Securities Act relating to the Warrant
Shares has been filed with, and declared effective by, the Commission, and no
stop order suspending the effectiveness of such registration statement has been
issued by the Commission or (ii) the issuance of the Warrant Shares is permitted
pursuant to an exemption from the registration requirements of the Securities
Act. Each Warrant not exercised prior to 5:00 p.m., New York City time, on the
Expiration Date shall become void and all rights thereunder and all rights in
respect thereof under this Agreement shall cease as of such time. No adjustments
as to dividends will be made upon exercise of the Warrants.
The Company shall give notice not less than 90, and not more
than 120, days prior to the Expiration Date to the Holders of all then
outstanding Warrants to the effect that the Warrants will terminate and become
void as of the 5:00 p.m., New York City time, on the Expiration Date. If the
Company fails to give such notice, the Warrants will not expire until 90 days
after the Company gives such notice, provided in no event will Holders be
entitled to any damages or other remedy for the Company's failure to give such
notice other than any such extension.
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 Warrant 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 a bank or trust company having an office or correspondent in the
United States or a broker or dealer which is a member of a registered securities
exchange or the National Association of Securities Dealers, Inc., and upon
payment to the Warrant Agent for the account of the Company of the Exercise
Price as adjusted as herein provided, for each of the Warrant Shares in respect
of which such Warrant is then exercised. Payment of the aggregate Exercise Price
shall be made in cash or by certified or official bank
10
11
check, payable to the order of the Company. In the alternative, each Holder may
exercise its right to receive Warrant Shares on a net basis, such that without
the exchange of any funds, the Holder receives that number of Warrant Shares
otherwise issuable upon exercise of its Warrants less that number of Warrant
Shares having a fair market value equal to the aggregate Exercise Price that
would otherwise have been paid by the Holder of the Warrant Shares. For purposes
of the foregoing sentence, "FAIR MARKET VALUE" of the Warrant Shares shall be
the current market price of the Warrant Shares on the date immediately preceding
the date of payment of the Exercise Price as determined by the procedures set
forth in Section 13(e). The exercise of Warrants by Holders of beneficial
interest in Global Warrants shall be effected in accordance with this Agreement
and the procedures of the Depositary therefor.
Subject to the provisions of Section 9 hereof, upon surrender
of Warrants and payment of the Exercise Price as provided above, the Warrant
Agent shall thereupon promptly notify the Company, and the Company shall
promptly transfer to the Holder of such Warrant Certificate a certificate or
certificates for the appropriate number of Warrant Shares or other securities or
property (including any money) to which the Holder is entitled, registered or
otherwise placed in, or payable to the order of, such name or names as may be
directed in writing by the Holder, and shall deliver such certificate or
certificates representing the Warrant Shares and any other securities or
property (including any money) to the person or persons entitled to receive the
same, together with an amount in cash in lieu of any fraction of a share as
provided in Section 15. Any such certificate or certificates representing the
Warrant Shares 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.
The Warrants shall be exercisable commencing on the Exercise
Date, at the election of the Holders thereof, either in full or from time to
time in part 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 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 cancelled by the Warrant Agent. Such cancelled Warrant Certificates
shall then be disposed of by the Warrant Agent in a manner satisfactory to the
Company. The Warrant Agent shall account promptly to the Company with respect to
Warrants exercised and concurrently pay to the Company all monies 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 by or from the Company 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 reasonably request.
SECTION 9. Payment of Taxes. The Company will pay all
documentary stamp taxes attributable to the initial issuance of Warrant Shares
upon the exercise of Warrants or to any Separation; provided that the Company
shall not be required to pay any tax or taxes which may be payable in respect of
any transfer involved in the issue of any Warrant Certificates or any
certificates for Warrant Shares in a name other than that of the Holder of a
Warrant Certificate surrendered upon the exercise of a Xxxxxxx,
00
00
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. In case
any of the 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 reasonably
satisfactory to the Company and the Warrant Agent of such loss, theft or
destruction of such Warrant Certificate and indemnity, if requested, also
reasonably 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 times reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued Common Stock or its authorized and
issued Common Stock held in its treasury, 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 transfer agent for the Common Stock (the "TRANSFER AGENT")
and every subsequent transfer agent for any shares of the Company's capital
stock issuable upon the exercise of any of the rights of purchase aforesaid will
be irrevocably authorized and directed at all times to reserve such number of
authorized shares as shall be required for such purpose. The Company will keep a
copy of this Agreement on file with the Transfer Agent and with every subsequent
transfer agent for any shares of the Company's capital stock issuable upon the
exercise of the rights of purchase represented by the Warrants. 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. The Company will furnish such Transfer Agent a copy of
all notices of adjustments and certificates related thereto, transmitted to each
Holder of the Warrants 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 any corporate action
which may, in the opinion of its counsel (which may be counsel employed by the
Company), be necessary 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 in accordance with the terms of this Agreement
(including the terms of the Exercise Price) will, upon issue, be duly and
validly issued, fully paid and 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
will from time to time take all action which may be necessary so that the
Warrant Shares, immediately upon their issuance upon the exercise of Warrants,
will be listed on the principal securities exchanges and markets (including,
without limitation, the Nasdaq National Market) within the United States of
America, if any, on which other shares of Common Stock are then listed. Upon the
listing of such Warrant Shares, the Company shall notify the Warrant Agent in
writing. The Company will obtain and keep all required
12
13
permits and records in connection with such listing.
SECTION 13. Adjustment of Exercise Price and Number of Warrant
Shares Issuable. The number and kind of shares purchasable upon the exercise of
Warrants and the Exercise Price shall be subject to adjustment from time to time
as follows:
(a) Stock Splits, Combinations, etc. In case the Company shall
hereafter (A) pay a dividend or make a distribution on its Common Stock in
shares of its capital stock (whether shares of Common Stock or of capital stock
of any other class), (B) subdivide its outstanding shares of Common Stock, (C)
combine its outstanding shares of Common Stock into a smaller number of shares
or (D) issue by reclassification of its shares of Common Stock any shares of
capital stock of the Company, the Exercise Price in effect immediately prior to
such action shall be adjusted so that the Holder of any Warrant thereafter
exercised shall be entitled to receive the number of shares of capital stock of
the Company which such Holder would have owned immediately following such action
had such Warrant been exercised immediately prior thereto. An adjustment made
pursuant to this paragraph shall become effective immediately after the record
date in the case of a dividend and shall become effective immediately after the
effective date in the case of a subdivision, combination or reclassification.
If, as a result of an adjustment made pursuant to this paragraph, the Holder of
any Warrant thereafter exercised shall become entitled to receive shares of two
or more classes of capital stock of the Company, the Board of Directors of the
Company (whose determination shall be conclusive) shall determine the allocation
of the adjusted Exercise Price between or among shares of such classes of
capital stock.
(b) Reclassification, Combinations, Mergers, etc. In case of
any reclassification or change of outstanding shares of Common Stock issuable
upon exercise of the Warrants (other than as set forth in paragraph (a) above
and 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 in
case of any consolidation or merger of the Company with or into another
corporation (other than a merger in which the Company is the continuing
corporation and which does not result in any reclassification or change of the
then outstanding shares of Common Stock or other capital stock issuable upon
exercise of the Warrants) or in case of any sale or conveyance to another
corporation of the property of the Company as an entirety or substantially as an
entirety, then, as a condition of such reclassification, change, consolidation,
merger, sale or conveyance, the Company or such a successor or purchasing
corporation, as the case may be, shall forthwith make lawful and adequate
provision whereby the Holder of such Warrant then outstanding shall have the
right thereafter to receive on exercise of such Warrant the kind and amount of
shares of stock or other securities or property receivable upon such
reclassification, change, consolidation, merger, sale or conveyance by a Holder
of the number of shares of Common Stock issuable upon exercise of such Warrant
immediately prior to such reclassification, change, consolidation, merger, sale
or conveyance and enter into a supplemental warrant agreement so providing. Such
provisions shall include provision for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Section
13. If the issuer of securities deliverable upon exercise of Warrants under the
supplemental warrant agreement is an affiliate of the formed, surviving or
transferee corporation, that issuer shall join in the supplemental warrant
agreement. The above provisions of this paragraph (b) shall similarly apply to
successive reclassifications and changes of shares of Common Stock and to
successive consolidations, mergers, sales or conveyances.
(c) Issuance of Options or Convertible Securities. In the
event the Company shall, at any time or from time to time after the date hereof,
issue, sell, distribute or otherwise grant in any manner (including by
assumption) to all holders of the Common Stock any rights to subscribe for or to
purchase, or any warrants or options for the purchase of, Common Stock or any
stock or securities
13
14
convertible into or exchangeable for Common Stock (any such rights, warrants or
options being herein called "OPTIONS" and any such convertible or exchangeable
stock or securities being herein called "CONVERTIBLE SECURITIES") or any
Convertible Securities (other than upon exercise of any Option), whether or not
such Options or the rights to convert or exchange such Convertible Securities
are immediately exercisable, and the price per share at which Common Stock is
issuable upon the exercise of such Options or upon the conversion or exchange of
such Convertible Securities (determined by dividing (i) the aggregate amount, if
any, received or receivable by the Company as consideration for the issuance,
sale, distribution or granting of such Options or any such Convertible Security,
plus the minimum aggregate amount of additional consideration, if any, payable
to the Company upon the exercise of all such Options or upon conversion or
exchange of all such Convertible Securities, plus, in the case of Options to
acquire Convertible Securities, the minimum aggregate amount of additional
consideration, if any, payable upon the conversion or exchange of all such
Convertible Securities, by (ii) the total maximum number of shares of Common
Stock issuable upon the exercise of all such Options or upon the conversion or
exchange of all such Convertible Securities or upon the conversion or exchange
of all Convertible Securities issuable upon the exercise of all such Options)
shall be less than the current market price per share of Common Stock on the
record date for the issuance, sale, distribution or granting of such Options or
Convertible Securities (any such event being herein called a "DISTRIBUTION"),
then, effective upon such Distribution, (I) the Exercise Price shall be reduced
to the price (calculated to the nearest 1/1,000 of one cent) determined by
multiplying the Exercise Price in effect immediately prior to such Distribution
by a fraction, the numerator of such shall be the sum of (1) the number of
shares of Common Stock outstanding (exclusive of any treasury shares)
immediately prior to such Distribution multiplied by the current market price
per share of Common Stock on the date of such Distribution plus (2) the
consideration, if any, received by the Company upon such Distribution, and the
denominator of which shall be the product of (A) the total number of shares of
Common Stock outstanding (exclusive of any treasury shares) immediately after
such Distribution multiplied by (B) the current market price per share of Common
Stock on the record date for such Distribution and (II) the number of shares of
Common Stock purchasable upon the exercise of each Warrant shall be increased to
a number determined by multiplying the number of shares of Common Stock so
purchasable immediately prior to the record date for such Distribution by a
fraction, the numerator of which shall be the Exercise Price in effect
immediately prior to the adjustment required by clause (I) of this sentence and
the denominator of which shall be the Exercise Price in effect immediately after
such adjustment (for the purposes of this clause (ii) without giving effect to
the provisions of Section 13(h)). For purposes of the foregoing, the total
maximum number of shares of Common Stock issuable upon exercise of all such
Options or upon conversion or exchange of all such Convertible Securities or
upon the conversion or exchange of the total maximum amount of the Convertible
Securities issuable upon the exercise of all such Options shall be deemed to
have been issued as of the date of such Distribution and thereafter shall be
deemed to be outstanding and the Company shall be deemed to have received as
consideration therefor such price per share, determined as provided above.
Except as provided in paragraphs (j) and (k) below, no additional adjustment of
the Exercise Price shall be made upon the actual exercise of such Options or
upon conversion or exchange of the Convertible Securities or upon the conversion
or exchange of the Convertible Securities issuable upon the exercise of such
Options. Notwithstanding the provisions of this Section 13, no adjustment shall
be required upon the conversion of the Series B Preferred Stock and Series C
Preferred Stock into Common Stock or upon the issuance of Common Stock pursuant
to employee stock option plans or warrants to purchase shares of Common Stock
outstanding as of the date hereof.
(d) Dividends and Distributions. In the event the Company
shall, at any time or from time to time after the date thereof, distribute to
all the holders of Common Stock any dividend or other distribution of cash,
evidences of its indebtedness, other securities or other properties or assets
(in
14
15
each case other than (i) dividends payable in Common Stock, Options or
Convertible Securities and (ii) any cash dividend that, when added to all other
cash dividends paid in the one year prior to the declaration date of such
dividend (excluding any such other dividend included in a previous adjustment of
the Exercise Price pursuant to this paragraph (d)), does not exceed 5% of the
current market price per share of Common Stock on such declaration date), or any
options, warrants or other rights to subscribe for or purchase any of the
foregoing, then (A) the Exercise Price shall be decreased to a price determined
by multiplying the Exercise Price then in effect by a fraction, the numerator of
which shall be the current market price per share of Common Stock on the record
date for such distribution less the sum of (X) the cash portion, if any, of such
distribution per share of Common Stock outstanding (exclusive of any treasury
shares) on the record date for such distribution plus (Y) the then fair market
value (as determined in good faith by the Board of Directors of the Company) per
share of Common Stock outstanding (exclusive of any treasury shares) on the
record date for such distribution of that portion, if any, of such distribution
consisting of evidences of indebtedness, other securities, properties, assets,
options, warrants or subscription or purchase rights, and the denominator of
which shall be such current market price per share of Common Stock and (B) the
number of shares of Common Stock purchasable upon the exercise of each Warrant
shall be increased to a number determined by multiplying the number of shares of
Common Stock so purchasable immediately prior to the record date for such
distribution by a fraction, the numerator of which shall be the Exercise Price
in effect immediately prior to the adjustment required by clause (A) of this
sentence and the denominator of which shall be the Exercise Price in effect
immediately after such adjustment (for the purposes of this clause (B) without
giving effect to the provisions of Section 13(h)). The adjustments required by
this paragraph (d) shall be made whenever any such distribution occurs
retroactive to the record date for the determination of stockholders entitled to
receive such distribution.
(e) Current Market Price.
For the purpose of any computation of current market price
under this Section 13 and Section 15, the current market price per share of
Common Stock at any date shall be (x) for purposes of Section 15, the closing
price on the business day immediately prior to the exercise of the applicable
Warrant pursuant to Section 8 and (y) in all other cases, the average of the
daily closing prices for the shorter of (i) the 20 consecutive trading days
ending on the last full trading day on the exchange or market specified in the
second succeeding sentence prior to the Time of Determination (as defined below)
and (ii) the period commencing on the date next succeeding the first public
announcement of the issuance, sale, distribution or granting in question through
such last full trading day prior to the Time of Determination. The term "TIME OF
DETERMINATION" as used herein shall be the time and date of the earlier to occur
of (A) the date as of which the current market price is to be computed and (B)
the last full trading day on such exchange or market before the commencement of
"ex-dividend" trading in the Common Stock relating to the event giving rise to
the adjustment required by paragraph (a), (b), (c) or (d). The closing price for
any day shall be the last reported sale price regular way or, in case no such
reported sale takes place on such day, the average of the closing bid and asked
prices regular way for such day, in each case (1) on the principal national
securities exchange on which the shares of Common Stock are listed or to which
such shares are admitted to trading or (2) if the Common Stock is not listed or
admitted to trading on a national securities exchange, in the over-the-counter
market as reported by Nasdaq National Market or any comparable system or (3) if
the Common Stock is not listed on Nasdaq National Market or a comparable system,
as furnished by two members of the NASD selected from time to time in good faith
by the Board of Directors of the Company for that purpose. In the absence of all
of the foregoing, or if for any other reason the current market price per share
cannot be determined pursuant to the foregoing provisions of this paragraph (e),
the current market price per share shall be the fair market value thereof as
determined in good faith by the Board of Directors of the Company.
15
16
(f) Certain Distributions. If the Company shall pay a dividend
payable in Options or Convertible Securities or make any other distribution
payable in Options or Convertible Securities, then, for purposes of paragraph
(c) above, such Options or Convertible Securities shall be deemed to have been
issued or sold without consideration.
(g) Consideration Received. If any shares of Common Stock,
Options or Convertible Securities shall be issued, sold or distributed for a
consideration other than cash, the amount of the consideration other than cash
received by the Company in respect thereof shall be deemed to be the then
current market price of such consideration (as determined in good faith by the
Board of Directors of the Company). If any Options shall be issued in connection
with the issuance and sale of other securities of the Company, together
comprising one integral transaction in which no specific consideration is
allocated to such Options by the parties thereto, such Options shall be deemed
to have been issued without consideration; provided, that if such Options have
an exercise price equal to or greater than the fair market value of the Common
Stock on the date of issuance of such Options, then such Options shall be deemed
to have been issued for consideration equal to such exercise price.
(h) Deferral of Certain Adjustments. No adjustment to the
Exercise Price (including the related adjustment to the number of shares of
Common Stock purchasable upon the exercise of each Warrant) shall be required
hereunder unless such adjustment, together with other adjustments carried
forward as provided below, would result in an increase or decrease of at least
one percent of the Exercise Price; provided that any adjustments which by reason
of this paragraph (i) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. No adjustment need be made for
a change in the par value of the Common Stock. All calculations under this
Section shall be made to the nearest 1/1,000 of one cent or to the nearest
1/1000 of a share, as the case may be.
(i) Changes in Options and Convertible Securities. If the
exercise price provided for in any Options referred to in paragraph (c) above,
the additional consideration, if any, payable upon the conversion or exchange of
any Convertible Securities referred to in paragraph (c) above, or the rate at
which any Convertible Securities referred to in paragraph (c) above are
convertible into or exchangeable for Common Stock shall change at any time
(other than under or by reason of provisions designed to protect against
dilution upon an event which results in a related adjustment pursuant to this
Section 13), the Exercise Price then in effect and the number of shares of
Common Stock purchasable upon the exercise of each Warrant shall forthwith be
readjusted (effective only with respect to any exercise of any Warrant after
such readjustment) to the Exercise Price and number of shares of Common Stock so
purchasable that would then be in effect had the adjustment made upon the
issuance, sale, distribution or granting of such Options or Convertible
Securities been made based upon such changed purchase price, additional
consideration or conversion rate, as the case may be, but only with respect to
such Options and Convertible Securities as then remain outstanding.
(j) Expiration of Options and Convertible Securities. If, at
any time after any adjustment to the number of shares of Common Stock
purchasable upon the exercise of each Warrant shall have been made pursuant to
paragraph (c) or (i) above or this paragraph (j), any Options or Convertible
Securities shall have expired unexercised, the number of such shares so
purchasable shall, upon such expiration, be readjusted and shall thereafter be
such as they would have been had they been originally adjusted (or had the
original adjustment not been required, as the case may be) as if (i) the only
shares of Common Stock deemed to have been issued in connection with such
Options or Convertible Securities were the shares of Common Stock, if any,
actually issued or sold upon the exercise of such Options or Convertible
Securities and (ii) such shares of Common Stock, if any, were issued or sold for
the consideration actually received by the Company upon such exercise plus the
16
17
aggregate consideration, if any, actually received by the Company for the
issuance, sale, distribution or granting of all such Options or Convertible
Securities, whether or not exercised; provided that no such readjustment shall
have the effect of decreasing the number of such shares so purchasable by an
amount (calculated by adjusting such decrease to account for all other
adjustments made pursuant to this Section 13 following the date of the original
adjustment referred to above) in excess of the amount of the adjustment
initially made in respect of the issuance, sale, distribution or granting of
such Options or Convertible Securities.
(k) Other Adjustments. In the event that at any time, as a
result of an adjustment made pursuant to this Section 13, the Holders shall
become entitled to receive any securities of the Company other than shares of
Common Stock, thereafter the number of such other securities so receivable upon
exercise of the Warrants and the Exercise Price applicable to such exercise
shall be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the shares of
Common Stock contained in this Section 13.
(l) Adjustment in Number of Shares. Upon each adjustment of
the Exercise Price pursuant to this Section 13 or upon the occurrence of any
event or action which would require an adjustment of the Exercise Price pursuant
to this Section 13 but for Section 13(h), 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
share of Common Stock obtained by dividing (i) the sum of the adjusted number of
Warrant Shares issuable upon exercise of a Warrant by payment of the adjusted
Exercise Price plus the Exercise Price prior to adjustment by (ii) the adjusted
Exercise Price (without giving effect to the provisions of Section 13(h)).
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. Statement on Warrants. Irrespective of any
adjustment in the number or kind of shares issuable upon the exercise of the
Warrants or the Exercise Price, Warrants theretofore or thereafter issued may
continue to express the same number and kind of shares as are stated in the
Warrants initially issuable pursuant to this Agreement.
SECTION 15. Fractional Interest. The Company shall not be
required to issue fractional shares of Common Stock 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 shares of Common Stock which shall
be issuable upon such exercise shall be computed on the basis of the aggregate
number of shares of Common Stock acquirable on exercise of the Warrants so
presented. If any fraction of a share of Common Stock would, except for the
provisions of this Section, be issuable on the exercise of any Warrant (or
specified portion thereof), the Company shall direct the Transfer Agent to pay
an amount in cash calculated by it to equal the then current market price per
share multiplied by such fraction computed to the nearest whole cent less such
fraction of the Exercise Price. The Holders, by their acceptance of the Warrant
Certificates, expressly waive any and all rights to receive any fraction of a
share of Common Stock or a stock certificate representing a fraction of a share
of Common Stock.
SECTION 16. Notices to Warrant Holders. Upon any adjustment of
the Exercise Price pursuant to Section 13, the Company shall promptly 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
17
18
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 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 (or the DTC participants with interests in the Global
Warrant) at his address appearing on the Warrant register written notice of such
adjustments by first-class mail, postage prepaid. The Warrant Agent shall be
entitled to rely on the above-referenced accountant's certificate and shall be
under no duty or responsibility with respect to any such certificate, except to
exhibit the same from time to time to any Holder desiring an inspection thereof
during reasonable business hours. The Warrant Agent shall not at any time be
under any duty or responsibility to any Holder to determine whether any facts
exist that may require any adjustment of the number of shares of Common Stock or
other stock or property issuable on exercise of the Warrants or the Exercise
Price, or with respect to the nature or extent of any such adjustment when made,
or with respect to the method employed in making such adjustment or the validity
or value (or the kind or amount) of any shares of Common Stock or other stock or
property which may be issuable on exercise of the Warrants. The Warrant Agent
shall not be responsible for any failure of the Company to make any cash payment
or to issue, transfer or deliver any shares of Common Stock or stock
certificates or other common stock or property upon the exercise of any Warrant.
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 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) a Change of Control (as defined in the Indenture) occurs;
or
(f) the Company proposes to take any other action that would
require an adjustment of the Exercise Price or the number of Warrant
Shares pursuant to Section 13;
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
such Holder's address appearing on the Warrant register, at least 20 days (or 10
days in any case specified in clauses (a) or (b) above) prior to the
18
19
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 or Change of Control 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 or Change of Control. 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, dissolution, liquidation or winding up, or Change of Control 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. Merger, Consolidation or Change of Name of Warrant
Agent. Any corporation into which the Warrant Agent may be merged or with which
it may be consolidated, or any corporation resulting from any merger or
consolidation to which the Warrant Agent shall be a party, or any corporation
succeeding to the business of the Warrant Agent, shall be the successor to the
Warrant Agent hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor warrant agent under
the provisions of Section 19. Any such successor Warrant Agent shall promptly
cause notice of its succession as Warrant Agent to be mailed (by first class
mail, postage prepaid) to each Holder at such Holder's last address as shown on
the register maintained by the Warrant Agent pursuant this Agreement. 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 original 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 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 and the
Warrant Agent assumes no responsibility for the correctness
19
20
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) Before the Warrant Agent acts or refrains from acting, it
may require an officer's certificate or an opinion of counsel, or both.
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.
(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 and governmental charges and other charges of any kind
and nature reasonably incurred by the Warrant Agent in the execution of
this Agreement and to indemnify the Warrant Agent and save it harmless
against any and all liabilities, including judgments, reasonable costs
and counsel fees, for anything done or omitted by the Warrant Agent in
the execution of this Agreement or arising out of or in connection with
its performance of its obligations or duties under this Agreement,
except to the extent such liabilities are attributable to its gross
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
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 Holders of
the Warrants, as their respective rights or interests may appear.
(g) The Warrant Agent, and any stockholder, director, officer
or employee of it, 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.
20
21
(h) The Warrant Agent shall act hereunder solely as agent for
the Company, and its duties shall be determined solely by the
provisions hereof. The Warrant Agent shall not be liable for anything
which it may do or refrain from doing in connection with this Agreement
except for its own gross negligence or bad faith.
(i) The Warrant Agent shall not at any time be under any duty
or responsibility to any Holder of any 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.
(j) Each Holder of Warrants, by its acceptance thereof,
acknowledges and agrees that the Trustee may also act as Escrow Agent
pursuant to the terms of the Escrow Agreement and Trustee pursuant to
the terms of the Indenture.
SECTION 19. Resignation and Removal of Warrant Agent;
Appointment of Successor. No resignation or removal of the Warrant Agent and no
appointment of a successor warrant agent shall become effective until the
acceptance of appointment by the successor warrant agent as provided herein. The
Warrant Agent may resign its duties and be discharged from all further duties
and liability hereunder (except liability arising as a result of the Warrant
Agent's own negligence of willful misconduct) after giving written notice to the
Company. The Company may remove the Warrant Agent upon written notice, and the
Warrant Agent shall thereupon in like manner be discharged from all further
duties and liabilities hereunder, except as aforesaid. The Warrant Agent shall,
at the Company's expense, cause to be mailed (by first class mail, postage
prepaid) to each Holder of a Warrant at his last address as shown on the
register of the Company maintained by the Warrant Agent a copy of said notice of
resignation or notice of removal, as the case may be. Upon such resignation or
removal, the Company shall appoint in writing a new 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 resignation by the resigning Warrant Agent
or after such removal, then the resigning Warrant Agent or the Holder of any
Warrant may apply to any court of competent jurisdiction for the appointment of
a new warrant agent. Any new warrant agent, whether appointed by the Company or
by such a court, shall be a corporation doing business under the laws of the
United States or any state thereof, in good standing and having a combined
capital and surplus of not less than $50,000,000. The combined capital and
surplus of any such new warrant agent shall be deemed to be the combined capital
and surplus as set forth in the most recent annual report of its condition
published by such warrant agent prior to its appointment, provided that such
reports are published at least annually pursuant to law or to the requirements
of a federal or state supervising or examining authority. After acceptance in
writing of such appointment by the new warrant agent, it shall be vested with
the same powers, rights, duties and responsibilities as if it had been
originally named herein as the Warrant Agent, without any further assurance,
conveyance, act or deed; but if for any reason it shall be necessary or
expedient to execute and deliver any further assurance, conveyance, act or deed,
the same shall be done at the expense of the Company and shall be legally and
validly executed and delivered by the resigning or removed Warrant Agent. Not
later than the effective date of any such appointment, the Company shall give
notice thereof to the resigning or removed Warrant Agent. Failure to give any
21
22
notice provided for in this Section, however, or any defect therein, shall not
affect the legality or validity of the resignation of the Warrant Agent or the
appointment of a new warrant agent, as the case may be.
SECTION 20. Registration. The Company and the Warrant Agent
acknowledge that Holders shall have the registration rights set forth in the
Warrant Registration Rights Agreement.
SECTION 21. Reports.
(a) So long as any of the Warrants remain outstanding, and to
the extent the Company is required to send such documents to the holders of its
outstanding Common Stock, whether or not required by the rules and regulations
of the Securities and Exchange Commission (the "COMMISSION"), the Company shall
furnish to the registered Holders of the Warrants (and to the beneficial
Holders, upon request) (i) all quarterly and annual financial information that
would be required to be contained in a filing with the Commission on Forms l0-Q
and 10-K if the Company were required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and, with respect to the annual information only, a report thereon
by the Company's certified independent accountants; and (ii) all current reports
that would be required to be filed with the Commission on Form 8-K if the
Company were required to file such reports. In addition, whether or not required
by the rules and regulations of the Commission, the Company will file a copy of
all such information and reports with the Commission for public availability
(unless the Commission will not accept such a filing) and make such information
available to securities analysts and prospective investors upon request.
(b) The Company shall provide the Warrant Agent with a
sufficient number of copies of all SEC Reports that the Warrant Agent may be
required to deliver to the Holders of the Warrants under this Section 21.
SECTION 22. Rule 144A. The Company hereby agrees with each
Holder, for so long as any Registrable Securities remain outstanding, to make
available, upon request of any Holder of Registrable Securities, to any Holder
or beneficial owner of Registrable Securities in connection with any sale
thereof and any prospective purchaser of such Registrable Securities designated
by such Holder or beneficial owner, the information required by Rule 144A(d)(4)
under the Securities Act in order to permit resales of such Registrable
Securities pursuant to Rule 144A.
SECTION 23. Notices to Company and Warrant Agent. Any notice
or demand authorized by this Agreement to be given or made by the Warrant Agent
or by the 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:
Park `N View, Inc.
00000 XX 00xx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx
In case the Company shall fail to maintain such office or
agency or shall fail to give such notice of the location or of any change in the
location thereof, presentations may be made and notices and demands may be
served at the principal office of the Warrant Agent.
22
23
Any notice pursuant to this Agreement to be given by the
Company or by the 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 as follows:
State Street Bank and Trust Company
Xxxxxxx Square, 000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxxxx Xxxxxx
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 any Holder 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 Holders representing 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
pursuant to adjustments provided by this Agreement). The Warrant Agent shall be
entitled to receive and, subject to Section 18, shall be fully protected in
relying upon, an officers' certificate and opinion of counsel as conclusive
evidence that any such amendment or supplement is authorized or permitted
hereunder, that it is not inconsistent herewith, and that it will be valid and
binding upon the Company in accordance with its terms.
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 (other than the
Company's obligations with respect to Warrants previously exercised and with
respect to indemnification under Section 18) shall terminate at 5:00 p.m., New
York City time on the Expiration Date.
SECTION 27. Governing Law. 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 FOR ALL PURPOSES SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF SAID STATE WITHOUT GIVING EFFECT TO
CONFLICTS OF LAWS PRINCIPLES.
SECTION 28. Benefits of This Agreement.
(a) Nothing in this Agreement shall be construed to give to
any person or corporation other than the Company, the Warrant Agent and
the 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 Holders of the Warrant Certificates.
23
24
(b) Prior to the exercise of the Warrants, no Holder of a
Warrant Certificate, as such, shall be entitled to any rights of a
stockholder of the Company, including, without limitation, the right to
receive dividends or subscription rights, the right to vote, to
consent, to exercise any preemptive right, to receive any notice of
meetings of stockholders for the election of directors of the Company
or any other matter or to receive any notice of any proceedings of the
Company, except as may be specifically provided for herein. The Holders
of the Warrants are not entitled to share in the assets of the Company
in the event of the liquidation, dissolution or winding up of the
Company's affairs.
(c) All rights of action in respect of this Agreement are
vested in the Holders of the Warrants, and any Holder of any Warrant,
without the consent of the Warrant Agent or the Holder of any other
Warrant, may, on such Holder's own behalf and for such Holder's own
benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company suitable to enforce, or otherwise in
respect of, such Holder's rights hereunder, including the right to
exercise, exchange or surrender for purchase such Holder's Warrants in
the manner provided in this Agreement.
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.
[Signature Page Follows]
24
25
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above written.
PARK`N VIEW, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: CFO, COO
STATE STREET BANK AND TRUST COMPANY
By: /s/ Xxxxxxx Xxxxxxxx
----------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
25
26
EXHIBIT A
[Form of Warrant Certificate]
[Face]
EXERCISABLE ON OR AFTER THE SEPARATION DATE (AS DEFINED HEREIN) AND ON OR
AFTER THE EXERCISE DATE (AS DEFINED HEREIN). THE WARRANTS EVIDENCED BY THIS
CERTIFICATE ARE NOT TRANSFERABLE SEPARATELY FROM THE NOTES ORIGINALLY SOLD AS A
UNIT WITH SUCH WARRANTS UNTIL THE SEPARATION DATE.
No. _______ ____ Warrants
CUSIP No. ________
Warrant Certificate
PARK`N VIEW, INC.
This Warrant Certificate certifies that Cede & Co., or its
registered assigns, is the registered holder of Warrants expiring May 15, 2008
(the "WARRANTS") to purchase Common Stock, par value $.001 (the "COMMON STOCK"),
of Park `N View, Inc., a Delaware corporation (the "COMPANY"). Each Warrant
entitles the registered holder upon exercise at any time from 9:00 a.m. on the
Separation Date referred to below (the "EXERCISE DATE") until 5:00 p.m. New York
City Time on May 15, 2008, to receive from the Company 6.73833 fully paid and
nonassessable shares of Common Stock (the "WARRANT SHARES") at the initial
exercise price (the "EXERCISE PRICE") of $0.01 per share payable in lawful money
of the United States of America upon surrender of this Warrant Certificate and
payment of 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 on the reverse hereof. 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.
No Warrant may be exercised before the Exercise Date. No
Warrant may be exercised after 5:00 p.m., New York City Time on May 15, 2008,
and to the extent not exercised by such time such Warrants shall become void.
Reference is hereby made to the further provisions of this
Warrant Certificate set forth on the reverse hereof and such further provisions
shall for all purposes have the same effect as though fully set forth at this
place.
This Warrant Certificate shall not be valid unless
countersigned by the Warrant Agent, as such term is used in the Warrant
Agreement.
This Warrant Certificate shall be governed by and construed in
accordance with the internal laws of the State of New York.
A-1
27
IN WITNESS WHEREOF, Park `N View, Inc. has caused this Warrant
Certificate to be signed by its President and by its Secretary, each by a
signature or a facsimile thereof, and has caused a facsimile of its corporate
seal to be affixed hereunto or imprinted hereon.
Dated:
-------------------
PARK `N VIEW, INC.
By:
---------------------------
Name:
Title:
Countersigned:
------------------------------
as Warrant Agent
By:
---------------------------
Authorized Signature
A-2
28
[Form of Warrant]
[Reverse]
[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. The Depository Trust Company ("DTC"), (55 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx) shall act as the depositary until a successor shall be
appointed by the Company and the Warrant Agent. Unless this certificate is
presented by an authorized representative of 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.](1)
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX
XXXXXX XXXXXX SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM
THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE
BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (1)(a) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT OR (c) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) OF THE SECURITIES ACT (AN "INSTITUTIONAL ACCREDITED
INVESTOR") THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE OR THE
WARRANT, AS APPLICABLE, A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH CAN BE OBTAINED FROM
THE TRUSTEE, AS APPLICABLE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE PRINCIPAL AMOUNT OF SECURITIES LESS THAN $250,000, AN OPINION
OF COUNSEL THAT SUCH TRANSFER IS IN COMPLIANCE WITH SECURITIES ACT OR
(d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND, IN THE CASE OF CLAUSE (b), (c)
or (d) BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS),
(2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
----------------------
(1) This paragraph is to be included only if the Warrant is in global form.
A-3
29
OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE
SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A)
ABOVE.
The Warrants evidenced by this Warrant Certificate are part of
a duly authorized issue of Warrants expiring May 15, 2008 entitling the holder
on exercise to receive shares of Common Stock, par value $.001, of the Company
(the "COMMON STOCK"), and are issued or to be issued pursuant to a Warrant
Agreement dated as of May 15, 1998 (the "WARRANT AGREEMENT"), duly executed and
delivered by the Company to State Street Bank and Trust Company, as warrant
agent (the "WARRANT AGENT"), which Warrant Agreement is hereby incorporated by
reference in and made a part of this instrument and is hereby referred to for a
description of the rights, limitation of rights, obligations, duties and
immunities thereunder of the Warrant Agent, the Company and the holders (the
words "holders" or "holder" meaning the registered holders or registered holder)
of the Warrants. A copy of the Warrant Agreement may be obtained by the holder
hereof upon written request to the Company. Capitalized terms used herein
without definition shall have the meanings ascribed to them in the Warrant
Agreement.
Warrants may be exercised at any time from 9:00 a.m. on or
after the Exercise Date and until 5:00 p.m., New York City Time on May 15, 2008.
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 in lawful money of the United States of America 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 and/or the number
of shares of Common Stock issuable upon the exercise of each Warrant shall,
subject to certain conditions, 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.
The Warrant Agreement provides that the Company shall be bound
by certain registration obligations with respect to the Common Stock issuable
upon exercise of the Warrants.
[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.]
[Upon due presentation for registration of transfer of this
Warrant Certificate at the office of the Warrant Agent a new Warrant 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.]
A-4
30
The Company and the Warrant Agent may deem and treat the
registered holder(s) thereof 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 neither the Company nor
the Warrant Agent shall be affected by any notice to the contrary. Neither the
Warrants nor this Warrant Certificate entitles any holder hereof to any rights
of a stockholder of the Company.
A-5
31
[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 tenders payment for such shares to the order of
PARK`N VIEW, INC., in the amount of $__________ in accordance with the terms
hereof. The undersigned requests that a certificate for such shares be
registered in the name of _______________, whose address is __________________
and that such shares be delivered to ___________, whose address is
____________________________. If said number of shares is less than all of the
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 ___________________.
--------------------------------
Signature
Date:
--------------------------------
Signature Guaranteed
A-6
32
SCHEDULE OF EXCHANGES OF DEFINITIVE WARRANTS(2)
The following exchanges of a part of this Global Warrant for definitive Warrants
have been made:
Number of Warrants in
Amount of decrease Amount of increase this Global Warrant
in Number of in Number of following such Signature of
warrants in this Warrants in this decrease or authorized officer
Date of Exchange Global Warrant Global Warrant increase of Warrant Agent
------------------------------------------------------------------------------------------------------------------
----------------------------------
(2) This is to be included only if the Warrant is in global form.
A-7
33
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER OF
WARRANTS
Re: _____________ Warrants to Purchase Common Stock (the "WARRANTS") of PARK`N
VIEW, INC.
This Certificate relates to ______ Warrants held in *__________
book-entry or * _____________ definitive form by __________ (the
"TRANSFEROR").
The Transferor*:
[ ] has requested the Warrant Agent by written order to deliver in
exchange for its beneficial interest in the Global Warrants held by the
depositary a Warrant or Warrants in definitive, registered form equal to its
beneficial interest in such Global Warrant (or the portion thereof indicated
above); or
[ ] has requested the Warrant Agent by written order to exchange
or register the transfer of a Warrant or Warrants.
In connection with such request and in respect of each such
Warrant, the Transferor does hereby certify that the Transferor is familiar with
the Warrant Agreement relating to the above captioned Warrants and that the
transfer of this Warrant does not require registration under the Securities Act
of 1933, as amended (the "SECURITIES ACT") because:
[ ] Such Warrant is being acquired for the Transferor's own
account without transfer (in satisfaction of Section 7 of the Warrant
Agreement).
[ ] Such Warrant is being transferred (i) to a qualified
institutional buyer (as defined in Rule 144A under the Securities Act), in
reliance on Rule 144A.
[ ] Such Warrant is being transferred (i) in accordance with Rule
144 under the Securities Act (and based on an opinion of counsel if the Company
so requests) or (ii) pursuant to an effective registration statement under the
Securities Act and the Transferor is named as a selling security holder in the
prospectus that forms a part of such registration statement or a supplement
thereto and the Transferor has complied with prospectus delivery requirement if
required to do so.
[ ] Such Warrant is being transferred to an institutional
accredited investor within the meaning of Rule 50l(a)(1), (2), (3) or (7) under
the Securities Act pursuant to a private placement exemption from the
registration requirements of the Securities Act (together with a certification).
----------
* Check applicable box.
B-1
34
[ ] Such Warrant is being transferred in reliance on and in
compliance with another exemption from the registration requirements of the
Securities Act (and based on an opinion of counsel if the Company so requests).
[INSERT NAME OF TRANSFEROR]
By:
-----------------------------
Date:
----------
* Check applicable box.
B-2
