EXHIBIT 4.1
EXECUTION
WARRANT AGREEMENT
WARRANT AGREEMENT, dated as of April 12, 2001 (this "AGREEMENT")
among KMC TELECOM HOLDINGS, INC., a Delaware corporation (the "COMPANY"), the
"Lenders" set listed on the signature pages hereto ( each a "LENDER", or,
together, "LENDERS"), FIRST UNION NATIONAL BANK, as administrative agent for the
Lenders (in such capacity, the "AGENT"), and FIRST UNION NATIONAL BANK, as
warrant agent (in such capacity, the "WARRANT AGENT").
W I T N E S S E T H:
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WHEREAS, KMC Telecom Inc., a Delaware corporation, KMC Telecom II,
Inc., a Delaware corporation, KMC Telecom III, Inc., a Delaware corporation, and
the other borrowers party thereto (collectively, the "Borrowers"), the Agent and
the Lenders are parties to that certain Amended and Restated Loan and Security
Agreement dated as of February 15, 2000, as amended by Amendment No. 1 thereto
dated as of March 28, 2000, Amendment No. 2 thereto dated as of July 28, 2000,
Amendment No. 3 and Limited Waiver thereto dated as of February 23, 2001 and
Amendment No. 4 and Limited Waiver thereto dated as of April 12, 2001 (the
"FOURTH AMENDMENT") (as so amended, the "LOAN AGREEMENT"; capitalized terms not
otherwise defined herein shall have the meanings assigned to them in the Loan
Agreement), pursuant to which the Lenders have agreed to make certain "Loans"
and other financial accommodations to the Borrowers; and
WHEREAS, pursuant to the terms of the Fourth Amendment, and as
described in Section 2.4 of this Agreement, Lenders are entitled to receive
certain warrants to purchase shares of common stock of the Company ("WARRANTS"),
unless certain conditions are satisfied;
WHEREAS, the Company desires to engage the Warrant Agent to act on
the Company's behalf, and the Warrant Agent desires to act on behalf of the
Company, in connection with the issuance of the Warrant Certificates (as defined
below) and the other matters as provided herein, including, without limitation,
for the purpose of defining the terms and provisions of the Warrants and the
respective rights and obligations thereunder of the Company and the record
holders thereof (together with the holders of shares of Common Stock (or other
securities) received upon exercise thereof, the "HOLDERS").
NOW, THEREFORE, in consideration of the foregoing and of the mutual
agreements contained herein and in the Fourth Amendment, the Company, the Agent,
the Lenders and the Warrant Agent hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
"AFFILIATE" means, as applied to any Person, any other Person
directly or indirectly controlling, 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 applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"AGENT" has the meaning specified in the recitals to this Agreement.
"AUDITORS" means, at any time, the independent auditors of the
Company at such time.
"BOARD" means the board of directors of the Company from time to
time.
"BORROWERS" has the meaning specified in the recitals to this
Agreement.
"BUSINESS DAY" means a day other than a Saturday or Sunday on which
commercial banks in The City of New York are open for business.
"COMMISSION" means the United States Securities and Exchange
Commission.
"COMMON SHARES" means the shares of the Common Stock of the Company.
"COMMON STOCK" means the common stock, par value $0.01 per share, of
the Company.
"COMPANY" has the meaning specified in the preamble to this
Agreement.
"CURRENT MARKET VALUE" has the meaning specified in Section 4.1(f)
hereof.
"EXCHANGE ACT" means the United States Securities Exchange Act of
1934, as amended.
"EXERCISE PRICE" has the meaning specified in Section 3.1 hereof.
"EXPIRATION DATE" means, with respect to any Warrant, the tenth
anniversary of the date such Warrant is countersigned by the Warrant Agent.
"FINANCIAL EXPERT" means one of the Persons listed in Appendix A
hereto.
"FIRST TRIGGER EVENT" has the meaning specified in Section 2.4(b) of
this Agreement.
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"FIRST TRIGGER EVENT DATE" has the meaning specified in Section
2.4(b) of this Agreement.
"FIRST TRIGGER EVENT NOTICE" has the meaning specified in Section
2.4(b) of this Agreement.
"HOLDERS" has the meaning specified in the recitals to this
Agreement.
"INDEPENDENT FINANCIAL EXPERT" means a Financial Expert that does
not (and whose directors, executive officers and 5% stockholders do not) have a
direct or indirect financial interest in the Company or any of its subsidiaries
or Affiliates, which has not been for at least five years and, at the time it is
called upon to give independent financial advice to the Company, is not (and
none of its directors, executive officers or 5% stockholders has been for at
least five years or is) a promoter, director, or officer of the Company or any
of its subsidiaries or Affiliates. The Independent Financial Expert may be
compensated and indemnified by the Company for opinions or services it provides
as an Independent Financial Expert.
"INSTITUTIONAL ACCREDITED INVESTOR" shall mean an institution that
is an "accredited investor" as that term is defined in Rule 501(a)(1), (2), (3)
or (7) of Regulation D under the Securities Act.
"LENDERS" has the meaning specified in the recitals to this
Agreement.
"LOAN AGREEMENT" has the meaning specified in the recitals to this
Agreement.
"OFFICER" means, with respect to the Company, (i) the Chairman of
the Board, the Vice Chairman of the Board, the President, the Chief Executive
Officer, the Chief Operating Officer or the Chief Financial Officer and (ii) the
Treasurer or any Assistant Treasurer, the Secretary or any Assistant Secretary
of the Company.
"OFFICERS' CERTIFICATE" means a certificate signed by one Officer
listed in clause (i) of the definition thereof and one Officer listed in clause
(ii) of the definition thereof; PROVIDED, HOWEVER, that any such certificate may
be signed by any two of the Officers listed in clause (i) of the definition
thereof in lieu of being signed by one Officer listed in clause (i) of the
definition thereof and one Officer listed in clause (ii) of the definition
thereof.
"OPINION OF COUNSEL" means a written opinion signed by outside legal
counsel to the Company or legal counsel to an applicable Holder.
"PERSON" means any individual, corporation, limited liability
company, partnership, joint venture, trust, unincorporated organization or other
entity or any government or any agency or political subdivision thereof.
"PRIVATE PLACEMENT LEGEND" means the legend set forth on the Warrant
Certificates in the form set forth in Section 2.2 hereof.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
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"RIGHT" has the meaning specified in Section 4.1(c) hereof.
"RULE 144A" means Rule 144A under the Securities Act.
"SECOND TRIGGER EVENT" has the meaning specified in Section 2.4(c)
of this Agreement.
"SECOND TRIGGER EVENT DATE" has the meaning specified in Section
2.4(c) of this Agreement.
"SECOND TRIGGER EVENT NOTICE" has the meaning specified in Section
2.4(c) of this Agreement.
"SECURITIES ACT" means the United States Securities Act of 1933, as
amended.
"SPREAD" means, with respect to any Warrant, as of any date of
determination, the Current Market Value less the Exercise Price of such Warrant,
as adjusted as provided herein.
"SUBSCRIPTION FORM" means the form on the reverse side of the
Warrant Certificate substantially in the form included in EXHIBIT A hereto.
"UNDERLYING SECURITIES" shall mean the Common Shares (or other
securities) issuable upon exercise of the Warrants.
"VALUE REPORT" has the meaning specified in Section 4.1(k) hereof.
"WARRANTS" has the meaning specified in the recitals to this
Agreement.
"WARRANT AGENT" has the meaning specified in the preamble to this
Agreement.
"WARRANT CERTIFICATES" has the meaning specified in Section 2.1
hereof.
"WARRANT REGISTRATION RIGHTS AGREEMENT" means the Warrant
Registration Rights Agreement, of even date herewith, between the Company, the
Agent and the Lenders.
"WARRANT REGISTRATION STATEMENT" means a shelf registration
statement on the appropriate form which will be filed by the Company pursuant to
the Warrant Registration Rights Agreement.
ARTICLE II
ORIGINAL ISSUE OF WARRANTS
SECTION 2.1 FORM OF WARRANT CERTIFICATES. Certificates representing
the Warrants (the "WARRANT CERTIFICATES") shall be substantially in the form
attached hereto as EXHIBIT A, shall be dated the date hereof, without regard to
the date the Warrant Certificates are countersigned by the Warrant Agent, and
shall have such insertions as are appropriate or required or permitted by this
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Agreement and may have such letters, numbers or other marks of identification
and such legends and endorsements stamped, printed, lithographed or engraved
thereon as the Company may deem appropriate and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply with any law or
with any rule or regulation pursuant thereto or with any rule or regulation of
any securities exchange on which the Warrants may be listed, or to conform to
usage.
Warrants shall be issued initially in registered form substantially
in the form set forth in EXHIBIT A.
The definitive Warrant Certificates shall be typed, printed,
lithographed or engraved or produced by any combination of these methods or may
be produced in any other manner permitted by the rules of any securities
exchange on which the Warrants may be listed, all as determined by the officers
executing such Warrant Certificates, as evidenced by their execution of such
Warrant Certificates.
SECTION 2.2 RESTRICTIVE LEGENDS. The Warrant Certificates shall bear
the following legend on the face thereof:
"THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR
ANY STATE SECURITIES LAWS. THIS WARRANT AND THE SECURITIES ISSUABLE
UPON EXERCISE HEREOF MAY NOT BE SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED OR OTHERWISE ENCUMBERED OR DISPOSED OF IN THE ABSENCE
OF SUCH REGISTRATION OR AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF SUCH ACT AND ANY APPLICABLE STATE SECURITIES LAWS."
SECTION 2.3 EXECUTION AND DELIVERY OF WARRANT CERTIFICATES.
(a) Warrant Certificates evidencing Warrants to be issued under the
Agreement shall be executed on the date of this Agreement, by the Company and
delivered to the Warrant Agent for countersignature. Two Warrant Certificates
will be issued to each Lender, initially exercisable for the number of Common
Shares set forth on Schedule I with respect to such Lender aggregating 5% of the
Common Stock of the Company on a fully diluted basis. The Warrant Agent is
hereby authorized and shall thereupon countersign and deliver such Warrant
Certificates as required by this Section 2.3, Section 2.4, or by Section 3.3,
Article VI or Article VIII hereof.
(b) The Warrant Certificates shall be executed on behalf of the
Company by its Chairman of the Board, Vice Chairman of the Board, President,
Chief Operating Officer, Chief Financial Officer or Chief Executive Officer
either manually or by facsimile signature printed thereon. The Warrant
Certificates shall be countersigned by manual signature of the Warrant Agent and
shall not be valid for any purpose unless so countersigned. In case any officer
or director of the Company whose signature shall have been placed upon any of
the Warrant Certificates shall cease to be such officer or director of the
Company before countersignature by the Warrant Agent and the issuance and
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delivery thereof, such Warrant Certificates may nevertheless be countersigned by
the Warrant Agent and issued and delivered with the same force and effect as
though such person had not ceased to be such officer or director of the Company.
SECTION 2.4 TRIGGER EVENTS.
(a) On the date hereof, the Warrant Certificates duly executed by
the Company shall be delivered to the Warrant Agent together with a written
order directing the Warrant Agent to hold such Warrants Certificates until
either:
(i) the Warrant Agent has received a First Trigger Event Notice or a
Second Trigger Event Notice from the Agent, upon receipt of which the
Warrant Agent shall be authorized to promptly countersign and deliver one
of the two Warrant Certificates in the name of each Lender to such Lender;
or
(ii) the Warrant Agent has received written notice from the Agent
certifying that the First Trigger Event Date and the Second Trigger Event
Date have passed without the occurrence of the First Trigger Event or the
Second Trigger Event, as applicable, in which case the Warrant Agent shall
return the Warrant Certificates to the Company.
(b) If (i) on or before October 31, 2001 the Borrowers shall have
failed to prepay the Term Loans and permanently reduce the Revolving Loan
Commitment Amount (and prepay the Revolving Loans in connection with such
reduction to the extent required pursuant to the Loan Agreement), each on a pro
rata basis by a cash amount equal to $50,000,000 from the proceeds of events
described in Section 6.03(a)(iii) of the Loan Agreement and (ii) on or before
January 31, 2002 (the "FIRST TRIGGER EVENT DATE"), the Borrowers shall have
failed to (A) prepay the Term Loans and permanently reduce the Revolving Loan
Commitment Amount (and prepay the Revolving Loans in connection with such
reduction to the extent required pursuant to the Loan Agreement), each on a pro
rata basis by a cash amount equal to $50,000,000 from the proceeds of events
described in Section 6.03(a)(iii) of the Loan Agreement and (B) generate or
receive an additional $50,000,000 in cash from either (1) Net Asset Sale
Proceeds or (2) a contribution by the Company to one or more Borrowers of cash
proceeds consisting of additional equity or cash from Data Holdco or its
Subsidiaries or any other source, in the case of clauses (b)(ii)(B)(1) and
(b)(ii)(B)(2) over and above, and in addition to, any amounts previously applied
to prepay the Loans under the Loan Agreement pursuant to clauses (b)(i) and
(b)(ii)(A) above (the "FIRST TRIGGER EVENT"), the Agent shall at any time after
the First Trigger Event Date deliver a notice to the Warrant Agent in the form
set forth in EXHIBIT B hereto (the "FIRST TRIGGER EVENT NOTICE"), indicating
that the First Trigger Event has occurred and directing the Warrant Agent to
countersign and deliver one of the two Warrant Certificates in the name of each
Lender to such Lender.
(c) If on or before March 31, 2002 (the "SECOND TRIGGER EVENT
DATE"), the Borrowers shall have failed to generate or receive an additional
$50,000,000 in cash from either (1) Net Asset Sale Proceeds or (2) a
contribution by the Company to one or more Borrowers of cash proceeds consisting
of additional equity or cash from Data Holdco or its Subsidiaries or any other
source, in the case of clauses (c)(1) and (c)(2) over and above, and in addition
to, any amounts previously applied to either prepay the Loans under the Loan
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Agreement pursuant to clauses (b)(i) and (b)(ii)(A) above or satisfy the
requirement of clause b(ii)(B) above (the "SECOND TRIGGER EVENT"), the Agent
shall thereupon deliver a notice to the Warrant Agent in the form set forth in
EXHIBIT B hereto (the "SECOND TRIGGER EVENT NOTICE"), indicating that the Second
Trigger Event has occurred and directing the Warrant Agent to countersign and
deliver one of the two Warrant Certificates in the name of each Lender to such
Lender.
ARTICLE III
EXERCISE PRICE AND EXERCISE OF WARRANTS
SECTION 3.1 EXERCISE PRICE. Each Warrant Certificate shall, when
countersigned by the Warrant Agent, initially entitle the Holder thereof,
subject to the provisions of this Agreement, to purchase the number of Common
Shares indicated thereon at a purchase price (the "EXERCISE PRICE") of $.01 per
Common Share, subject to adjustment as provided in Section 4.1 and Article V
hereof.
SECTION 3.2 EXERCISE; RESTRICTIONS ON EXERCISE. At any time or from
time to time, any outstanding Warrants may be exercised, in whole or in part, on
any Business Day by the Holders thereof; PROVIDED, that the Warrant Registration
Statement is, at the time of exercise, effective and available for the exercise
of the Warrants or the exercise of such Warrants is exempt from the registration
requirements of the Securities Act. Any Warrants not exercised by 5:00 p.m., New
York City time, on the Expiration Date shall expire and all rights of the
Holders of such Warrants shall terminate. Additionally, pursuant to Section
4.1(j)(ii) hereof and subject to the conditions set forth therein, the Warrants
shall expire and all rights of the Holders of such Warrants shall terminate in
the event the Company merges or consolidates with or sells all or substantially
all of its property and assets to a Person (other than an Affiliate of the
Company) if the consideration payable to holders of Common Stock in exchange for
their Common Stock in connection with such merger, consolidation or sale
consists solely of cash or in the event of the dissolution, liquidation or
winding up of the Company.
SECTION 3.3 METHOD OF EXERCISE; PAYMENT OF EXERCISE PRICE. In order
to exercise all or any of the Warrants represented by a Warrant Certificate, the
Holder thereof must surrender for exercise the Warrant Certificate to the
Warrant Agent at its corporate trust office address set forth in Section 12.5
hereof, with the Subscription Form set forth on the reverse of the Warrant
Certificate duly executed, together with payment in full of the Exercise Price
then in effect for each Common Share (or other securities) issuable upon
exercise of the Warrants as to which a Warrant is exercised; such payment may be
made by wire transfer, in cash or by certified or official bank or bank
cashier's check payable to the order of the Company and shall be made to the
Warrant Agent at its corporate trust office address set forth in Section 12.5
hereof prior to the close of business on the date the Warrant Certificate is
surrendered to the Warrant Agent for exercise. Notwithstanding the foregoing,
the Exercise Price may be paid by surrendering additional Warrants to the
Warrant Agent having an aggregate Spread equal to the aggregate Exercise Price
of the Warrants being exercised. All payments received upon exercise of Warrants
shall be delivered to the Company by the Warrant Agent as instructed in writing
by the Company. If less than all the Warrants represented by a Warrant
Certificate are exercised or surrendered (in connection with a cashless
exercise), such Warrant Certificate shall be surrendered and a new Warrant
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Certificate of the same tenor and for the number of Warrants which were not
exercised or surrendered shall be executed by the Company and delivered to the
Warrant Agent and the Warrant Agent shall countersign the new Warrant
Certificate, registered in such name or names as may be directed in writing by
the Holder, and shall deliver the new Warrant Certificate to the Person or
Persons entitled to receive the same. Upon the exercise of any Warrants
following the surrender of a Warrant Certificate in conformity with the
foregoing provisions, the Warrant Agent shall instruct the Company to transfer
promptly to the Holder or, upon the written order of the Holder of such Warrant
Certificate, appropriate evidence of ownership of any Common Shares or other
security or property to which it is entitled, registered or otherwise placed in
such name or names as may be directed in writing by the Holder, and to deliver
such evidence of ownership to the Person or Persons entitled to receive the same
and fractional shares, if any, or an amount in cash, in lieu of any fractional
shares, as provided in Section 4.5 hereof; PROVIDED that the Holder of such
Warrant shall be responsible for the payment of any transfer taxes required as
the result of any change in ownership of such Warrants or the issuance of such
Common Shares other than to the Holder of such Warrants and any such transfer
shall comply with applicable law. Upon the exercise of a Warrant or Warrants,
the Warrant Agent is hereby authorized and directed to requisition from any
transfer agent of the Common Shares (and all such transfer agents are hereby
authorized to comply with all such requests) certificates (bearing the legend
set forth in Section 12.10 hereof, if applicable, unless a registration
statement relating to such Common Shares filed with the Commission shall then be
in effect or the Company and the Holder exercising such Warrant or Warrants
otherwise agree) for the necessary number of Common Shares to which said Holder
may be entitled. The Company shall enter, or shall cause any transfer agent of
the Common Shares to enter, the name of the Person entitled to receive the
Common Shares upon exercise of the Warrants into the Company's register of
shareholders within 3 days of such exercise. A Warrant shall be deemed to have
been exercised immediately prior to the close of business on the date of the
surrender for exercise, as provided above, of the Warrant Certificate
representing such Warrant together with payment in full of the Exercise Price
(or surrender of sufficient Warrant Certificates in connection with a cashless
exercise) and, for all purposes under this Agreement, the Person entitled to
receive any Common Shares deliverable upon such exercise shall, as between such
Person and the Company, be deemed to be the Holder of such Common Shares of
record as of the close of business on such date, notwithstanding that the stock
transfer books of the Company shall then be closed or that certificates
representing such Common Shares shall not actually be delivered to the Holder at
such time, and shall be entitled to receive, and the Warrant Agent shall deliver
to such Person, any Common Shares to which such Person would have been entitled
had such Person been the registered holder on such date.
ARTICLE IV
ADJUSTMENTS
SECTION 4.1 ADJUSTMENTS. The Exercise Price and the number of Common
Shares issuable upon exercise of each Warrant shall be subject to adjustment
from time to time from and after the date hereof as follows, and each Holder
shall otherwise have the rights set forth in this Section 4.1 from and after the
date hereof, without regard to the date on which the Warrant Agent countersigns
and delivers such Warrant:
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(a) DIVISIONS; CONSOLIDATIONS; RECLASSIFICATIONS. In case the
Company shall, on or before the Expiration Date, (i) issue any Common Shares in
payment of a dividend or other distribution with respect to its Common Stock,
(ii) subdivide its issued and outstanding Common Shares, (iii) consolidate its
issued and outstanding Common Shares into a smaller number of shares, or (iv)
reclassify or convert the Common Shares (other than a reclassification in
connection with a merger, consolidation or other business combination which will
be governed by Section 4.1(j)), then the number of Common Shares purchasable
upon exercise of each Warrant immediately prior to the record date for such
issue or distribution or the effective date of such subdivision, consolidation,
reclassification or conversion shall be adjusted so that the Holder of each
Warrant shall thereafter be entitled to receive the kind and number of Common
Shares which such Holder would have been entitled to receive after the happening
of any of the events described above had such Warrant been exercised immediately
prior to the happening of such event or any record date with respect thereto. An
adjustment made pursuant to this Section 4.1(a) shall become effective
immediately after the effective date of such event retroactive to the record
date, if any, for such event.
(b) RIGHTS; OPTIONS; WARRANTS. In case the Company shall issue
rights, options, warrants or convertible or exchangeable securities (other than
convertible or exchangeable securities subject to Section 4.1(a)) to all holders
of its Common Shares, entitling them to subscribe for or purchase Common Shares
at a price per share which is lower (at the record date for such issuance) than
the then Current Market Value per Common Share, then the Company shall ensure
that at the time of such issuance, the same or a like offer or invitation is
made to the Holders of the Warrants as if their Warrants had been exercised on
the day immediately preceding the record date of such offer or invitation on the
terms (subject to any adjustment pursuant to Section 4.1(a) for a prior event)
on which such Warrants could have been exercised on such date (whether or not
such Warrant was then exercisable); PROVIDED that if the Board so resolves, the
Company shall not be required to ensure that the same offer or invitation is
made to the Holders of the Warrants, but the number of Common Shares thereafter
purchasable upon the exercise of each Warrant shall instead be adjusted and
shall be determined by multiplying the number of Common Shares theretofore
purchasable upon exercise of each Warrant by a fraction, the numerator of which
shall be the sum of (i) the number of Common Shares outstanding immediately
prior to the issuance of such rights, options, warrants or convertible or
exchangeable securities plus (ii) the number of additional Common Shares which
may be purchased or subscribed for upon exercise, exchange or conversion of such
rights, options, warrants or convertible or exchangeable securities and the
denominator of which shall be the sum of (x) the number of Common Shares
outstanding immediately prior to the issuance of such rights, options, warrants
or convertible or exchangeable securities plus (y) the number of shares which
the total consideration received by the Company for such rights, options,
warrants or convertible or exchangeable securities so offered would purchase at
the then Current Market Value per Common Share. Except as otherwise provided
above, such adjustment shall be made whenever such rights, options, warrants or
convertible or exchangeable securities are issued, and shall become effective
retroactively immediately after the record date for the determination of
shareholders entitled to receive such rights, options, warrants or convertible
or exchangeable securities.
(c) ISSUANCE OF COMMON SHARES AT LOWER VALUES. In case the Company
shall sell and issue any Common Share or Right (as defined below) (excluding (i)
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any Right issued in any of the transactions described in Section 4.1(a) or (b)
above, (ii) Common Shares issued pursuant to (x) any Rights outstanding on the
date of this Agreement and set forth on Schedule 4.1(c) hereto or any Rights
issued in any transaction described in Section 4.1(a) or (b) above and (y) a
Right, if on the date such Right was issued, the exercise, conversion or
exchange price per Common Share with respect thereto was at least equal to the
then Current Market Value per Common Share, (iii) any Common Shares or Rights
issued (A) as consideration when any corporation or business is acquired, merged
into or becomes part of the Company or a subsidiary of the Company or (B) in
good faith in connection with any other acquisition of assets, in each case in
an arm's-length transaction between the Company and a Person other than an
Affiliate of the Company, (iv) grants or exercises of Rights granted to or
exercised by employees, directors, consultants or advisors of the Company or any
of its subsidiaries for issuances of shares of Common Stock to such Persons
(only to the extent securities under this clause (iv) plus securities under
clause (v) below do not have an aggregate value in excess of 15% of the equity
value of the Company on a fully diluted basis, as determined in good faith by
the Board) and (v) exercises of Rights by former employees, former directors,
former consultants or former advisors of the Company or any of its subsidiaries
for issuances of shares of Common Stock to such Persons) at a price per Common
Share (determined in the case of any such Right, by dividing (x) the total
consideration receivable by the Company in consideration of the sale and
issuance of such Right, plus the total consideration payable to the Company upon
exercise, conversion or exchange thereof, by (y) the total number of Common
Shares covered by such Right) that is lower than the Current Market Value per
Common Share in effect immediately prior to such sale or issuance (only to the
extent securities under this clause (v) plus securities under clause (iv) above
do not have an aggregate value in excess of 15% of the equity value of the
Company on a fully diluted basis, as determined in good faith by the Board),
then the number of Common Shares thereafter purchasable upon the exercise of
each Warrant shall be determined by multiplying the number of Common Shares
theretofore purchasable upon exercise of such Warrant by a fraction, the
numerator of which shall be the number of Common Shares outstanding immediately
after such sale or issuance and the denominator of which shall be the number of
Common Shares outstanding immediately prior to such sale or issuance plus the
number of Common Shares which the aggregate consideration received (determined
as provided below) for such sale or issuance would purchase at such Current
Market Value per Common Share. For purposes of this Section 4.1(c), the Common
Shares which the holder of any such Right shall be entitled to subscribe for or
purchase shall be deemed to be issued and outstanding as of the date of such
sale and issuance and the consideration received by the Company therefor shall
be deemed to be the consideration received by the Company for such Right, plus
the consideration or premiums stated in such Right to be paid for the Common
Shares covered thereby. In case the Company shall sell and issue any Right
together with one or more other securities as part of a unit at a price per
unit, then in determining the "price per Common Share" and the "consideration
received by the Company" for purposes of the first sentence of this Section
4.1(c), the Board shall determine, in good faith, the fair value of the Right
then being sold as part of such unit. For purposes of this paragraph, a "RIGHT"
shall mean any right, option, warrant or convertible or exchangeable security
containing the Right to subscribe for or acquire one or more Common Shares,
excluding the Warrants. This Section 4.1(c) shall not apply to: (i) the exercise
of Warrants, or the conversion or exchange of other securities outstanding on
the date hereof and set forth on Schedule 4.1(c) that are convertible or
exchangeable for Common Shares; or (ii) Common Shares issued upon the exercise
of Rights or warrants issued to all holders of Common Shares.
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(d) DISTRIBUTIONS OF DEBT, ASSETS, SUBSCRIPTION RIGHTS OR
CONVERTIBLE SECURITIES. In case the Company shall make a distribution to all
holders of its Common Shares of evidences of its indebtedness, or assets, or
other distributions (excluding distributions in connection with the dissolution,
liquidation or winding-up of the Company which shall be governed by Section
4.1(j) and distributions of securities referred to in Section 4.1(a), Section
4.1(b) or Section 4.1(c)), then, in each case, the number of Common Shares
purchasable after such record date upon the exercise of each Warrant shall be
determined by multiplying the number of Common Shares purchasable upon the
exercise of such Warrant immediately prior to such record date by a fraction,
the numerator of which shall be the Current Market Value per Common Share
immediately prior to the record date for such distribution and the denominator
of which shall be the Current Market Value per Common Share immediately prior to
the record date for such distribution less the then fair value (as determined in
good faith by the Board) of the evidences of indebtedness, or assets, or other
distributions so distributed attributable to one Common Share. Such adjustment
shall be made whenever any such distribution is made, and shall become effective
on the date of distribution retroactive to the record date for the determination
of shareholders entitled to receive such distribution.
(e) EXPIRATION OF RIGHTS, OPTIONS AND CONVERSION PRIVILEGES. Upon
the expiration of any rights, options, warrants or conversion or exchange
privileges (including, without limitation, any Rights) that have previously
resulted in an adjustment hereunder, if any thereof shall not have been
exercised, exchanged or converted, the Exercise Price and the number of Common
Shares issuable upon the exercise of each Warrant shall, upon such expiration,
be readjusted and shall thereafter, upon any future exercise, 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 Common
Shares so issued were the Common Shares, if any, actually issued or sold upon
the exercise, exchange or conversion of such rights, options, warrants or
conversion or exchange rights (including, without limitation, any Rights) and
(ii) such Common Shares, if any, were issued or sold for the consideration
actually received by the Company upon such exercise, exchange or conversion plus
the consideration, if any, actually received by the Company for issuance, sale
or grant of all such rights, options, warrants or conversion or exchange rights
(including, without limitation, any Rights) whether or not exercised.
(f) CURRENT MARKET VALUE. For the purposes of any computation under
this Article IV, the "CURRENT MARKET VALUE" per Common Share or of any other
security (herein collectively referred to as a "security") at any date herein
specified shall be:
(i) if the security is not registered under the Exchange Act, the
value of the security (1) most recently determined as of a date within the
six months preceding such date by an Independent Financial Expert selected
by the Board in accordance with the criteria for such valuation set out in
Section 4.1(k), or (2) if no such determination shall have been made
within such six-month period or if the Company so chooses, determined as
of such a date by an Independent Financial Expert selected by the Board in
accordance with the criteria for such valuation set out in Section 4.1(k),
or
(ii) if the security is registered under the Exchange Act, the
average of the daily market prices of the security for the 20 consecutive
trading days immediately preceding such date or, if the security has been
11
registered under the Exchange Act for less than 20 consecutive trading
days before such date, then the average of the daily market prices for all
of the trading days before such date for which daily market prices are
available. The market price for each such trading day shall be: (A) in the
case of a security listed or admitted to trading on any national
securities exchange, the closing sales price, regular way, on such day, or
if no sale takes place on such day, the average of the closing bid and
asked prices on such day on the principal national securities exchange on
which such security is listed or admitted, as determined by the Board, in
good faith, (B) in the case of a security not then listed or admitted to
trading on any national securities exchange, the last reported sale price
on such day, or if no sale takes place on such day, the average of the
closing bid and asked prices on such day, as reported by a reputable
quotation source designated by the Company, (C) in the case of a security
not then listed or admitted to trading on any national securities exchange
and as to which no such reported sale price or bid and asked prices are
available, the average of the reported high bid and low asked prices on
such day, as reported by a reputable quotation service, or a newspaper of
general circulation in the Borough of Manhattan, City and State of New
York customarily published on each Business Day, designated by the
Company, or, if there shall be no bid and asked prices on such day, the
average of the high bid and low asked prices, as so reported, on the most
recent day (not more than 30 days prior to the date in question) for which
prices have been so reported and (D) if there are no bid and asked prices
reported during the 30 days prior to the date in question, the Current
Market Value of the security shall be determined as if the security were
not registered under the Exchange Act.
(g) CONSIDERATION RECEIVED. For purposes of any computation
respecting consideration received pursuant to this Section 4.1, the following
shall apply:
(i) in the case of the issuance of Common Shares for cash, the
consideration shall be the amount of such cash; PROVIDED that in no case
shall any deduction be made for any commissions, discounts or other
expenses incurred by the Company for any underwriting of the issue or
otherwise in connection therewith;
(ii) in the case of the issuance of Common Shares for a
consideration in whole or in part other than cash, the consideration other
than cash shall be deemed to be the fair market value thereof as
determined in good faith by the Board (irrespective of the accounting
treatment thereof), whose determination shall be conclusive and described
in reasonable detail in a board resolution which shall be provided as soon
as practicable thereafter to the Warrant Agent; and
(iii) in the case of the issuance of rights, options, warrants or
securities convertible into or exchangeable for Common Shares, (including,
without limitation, any Rights), the aggregate consideration received
therefor shall be deemed to be the consideration received by the Company
for the issuance of such rights, options, warrants or securities
convertible into or exchangeable for Common Shares, plus the additional
minimum consideration, if any, to be received by the Company upon the
exercise, conversion or exchange thereof (the consideration in each case
to be determined in the same manner as provided in clauses (i) and (ii) of
this Section 4.1(g)).
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(h) DE MINIMIS ADJUSTMENTS. No adjustment in the number of Common
Shares purchasable hereunder shall be required unless such adjustment would
require an increase or decrease of at least one percent (1%) in the number of
Common Shares purchasable upon the exercise of each Warrant; PROVIDED, HOWEVER,
that any adjustments which by reason of this Section 4.1(h) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations shall be made to the nearest one-thousandth of a
share.
(i) ADJUSTMENT OF EXERCISE PRICE. Whenever the number of Common
Shares purchasable upon the exercise of each Warrant is adjusted, as herein
provided, the Exercise Price per Common Share payable upon exercise of such
Warrant shall be adjusted (calculated to the nearest $.01) so that it shall
equal the price determined by multiplying such Exercise Price immediately prior
to such adjustment by a fraction the numerator of which shall be the number of
Common Shares purchasable upon the exercise of each Warrant immediately prior to
such adjustment and the denominator of which shall be the number of Common
Shares so purchasable immediately thereafter. Following any adjustment to the
Exercise Price pursuant to this Article IV, the amount payable, when adjusted,
together with the amount paid in connection with the original issuance of the
Warrants, shall never be less than the par value per Common Share at the time of
such adjustment; provided, that, in the event that, but for this provision, the
Exercise Price would be reduced to an amount less than the par value per Common
Share, the number of Common Shares for which the Warrants are exercisable shall
increase automatically by an amount entitling the Holders to the same economic
benefit they would have received if the Exercise Price were reduced to an amount
less than the par value per Common Share.
If after an adjustment, a Holder of a Warrant upon exercise of it
may receive shares of two or more classes in the capital of the Company, the
Company shall determine the allocation of the adjusted Exercise Price between
such classes of shares in a manner that the Board deems fair and equitable to
the Holders. After such allocation, the exercise privilege and the Exercise
Price of each class of shares shall thereafter be subject to adjustment on terms
comparable to those applicable to Common Shares in this Article IV.
Such adjustment shall be made successively whenever any event listed
above shall occur.
(j) CONSOLIDATION, MERGER, ETC.
(i) Subject to the provisions of Subsection (ii) below of this
Section 4.1(j), in case of the consolidation of the Company with, or
merger of the Company with or into, or of the sale of all or substantially
all of the properties and assets of the Company to, any Person, and in
connection therewith consideration is payable to holders of Common Shares
(or other securities or property purchasable upon exercise of Warrants) in
exchange therefor, then, as a condition of such transaction, lawful and
adequate provision shall be made whereby the Warrants shall remain subject
to the terms and conditions set forth in this Agreement and each Warrant
shall, after such consolidation, merger or sale, entitle the Holder to
receive upon exercise the number of shares in the capital or other
securities or property (including cash) of or from the Person resulting
from such consolidation or surviving such merger or to which such sale
shall be made or of the parent of such Person, as the case may be, that
13
would have been distributable or payable on account of the Common Shares
if such Holder's Warrants had been exercised immediately prior to such
merger, consolidation or sale (or, if applicable, the record date
therefor); and in any such case the provisions of this Agreement with
respect to the rights and interests thereafter of the Holders of Warrants
shall be appropriately adjusted by the Board in good faith so as to be
applicable, as nearly as may reasonably be, to any shares, other
securities or any property thereafter deliverable on the exercise of the
Warrants.
(ii) Notwithstanding the foregoing, (x) if the Company merges or
consolidates with, or sells all or substantially all of its property and
assets to, another Person (other than an Affiliate of the Company) and
consideration is payable to holders of Common Shares in exchange for their
Common Shares in connection with such merger, consolidation or sale which
consists solely of cash, or (y) in the event of the dissolution,
liquidation or winding up of the Company, then the Holders of Warrants
shall be entitled to receive distributions on the date of such event on an
equal basis with holders of Common Shares (or other securities issuable
upon exercise of the Warrants) as if the Warrants had been exercised
immediately prior to such event (whether or not such Warrant is then
exercisable), less the Exercise Price. Upon receipt of such payment, if
any, the rights of a Holder shall terminate and cease and such Holder's
Warrants shall expire. In case of any such merger, consolidation or sale
of assets, the surviving or acquiring Person and, in the event of any
dissolution, liquidation or winding up of the Company, the Company shall
deposit promptly with the Warrant Agent the funds, if any, necessary to
pay the Holders of the Warrants. After receipt of such deposit from such
Person or the Company and after receipt of surrendered Warrant
Certificates, the Warrant Agent shall make payment by delivering a check
in such amount as is appropriate (or, in the case of consideration other
than cash, such other consideration as is appropriate) to such Person or
Persons as it may be directed in writing by the Holder surrendering such
Warrants.
(k) VALUE REPORTS. If required pursuant to Section 4.1(f)(i), the
Current Market Value shall be deemed to be equal to the value set forth in the
Value Report (as defined below) as determined by an Independent Financial
Expert, which shall be selected by the Board in its sole discretion, and
retained on customary terms and conditions, using one or more valuation methods
that the Independent Financial Expert, in its best professional judgment,
determines to be most appropriate. The Company shall use its reasonable best
efforts to cause the Independent Financial Expert to deliver to the Company,
with a copy to the Warrant Agent, within 45 days of the appointment of the
Independent Financial Expert, a value report (the "VALUE REPORT") stating the
value of the Common Shares and other securities or property of the Company, if
any, being valued as of the Valuation Date and containing a brief statement as
to the nature and scope of the examination or investigation upon which the
determination of value was made. The Warrant Agent shall have no duty with
respect to the Value Report of any Independent Financial Expert, except to keep
it on file and available for inspection by the Holders. The determination as to
Current Market Value in accordance with the provisions of this Section 4.1(k)
shall be conclusive on all Persons. The Independent Financial Expert shall
consult with management of the Company in order to allow management to comment
on the proposed value prior to delivery to the Company of any Value Report.
14
(l) WHEN NO ADJUSTMENT REQUIRED. Without limiting any other
exception contained in this Section 4.1, and in addition thereto, no adjustment
need be made for:
(i) (A) grants to, exercises of Rights by, or issuances of equity
securities to employees, directors, consultants or advisors of the Company
or any of its subsidiaries and (B) exercises of Rights by, or issuances of
equity securities in connection with Rights previously issued to former
employees, former directors, former consultants or former advisors of KMC
Telecom, Inc., including, for these purposes those securities set forth on
Schedule 4.1(c) hereto (in any case only to the extent that all such
securities do not have an aggregate value in excess of 15% of the equity
value of the Company on a fully diluted basis, as determined in good faith
by the Board);
(ii) grants of options, warrants or other agreements or rights to
purchase capital stock of the Company entered into prior to the date
hereof as set forth on Schedule 4.1(c) hereto or any issuance of capital
stock pursuant thereto;
(iii) rights to purchase Common Shares pursuant to a Company plan
for the reinvestment of dividends or interest;
(iv) future options, warrants or other rights with an exercise or
conversion price at least equal to the Current Market Value of the related
shares on the date of grant;
(v) a change in the par value of the Common Shares (including a
change from par value to no par value or vice versa); and
(vi) firm commitment underwritten public offerings or private
placements in either case through investment banks of national standing.
To the extent the Warrants become convertible into cash, no
adjustment need be made thereafter as to the cash. Interest will not accrue on
the cash.
(m) STATEMENT OF INTENT. It is the intent of the parties hereto,
that after giving effect to the exercise of all of the Warrants (assuming any
combination of the First Trigger Event and the Second Trigger Event occur and
assuming no additional issuances of securities by the Company except with
respect to securities outstanding on the date hereof), the Holders would be the
owner of (or have the right to acquire pursuant to the Warrants) a number of
Common Shares representing 5% of the outstanding shares of the Company
immediately after the date hereof on a fully-diluted basis. If any event shall
occur as to which the provisions of this Section 4.1 are not strictly applicable
but as to which the failure to make any adjustment would, in the reasonable
judgment of the Holders of a majority of the Warrants, adversely affect the
purchase rights represented by the Warrant in accordance with the essential
intent and principles of this Section 4.1 (which are to place the Holders in a
position as nearly as possible to the position such Holder would have occupied
had such Holders purchased the Common Shares on the date hereof), then, in such
case, the Holders may notify the Company of such determination and if the
Company does not dispute the same, the Company shall forthwith reissue the
Warrants with appropriate adjustments. If the Company shall dispute such
determination and the parties cannot otherwise resolve the dispute promptly and
in good faith, then the Company shall appoint a firm of independent public
accountants of recognized national standing (which may not be the regular
15
auditors of the Company), which shall give their opinion as to the adjustment,
if any, on a basis consistent with the essential intent and principles
established in this Section 4.1, necessary to protect the rights represented by
the Warrants. Upon receipt of such opinion, the Company shall promptly mail a
copy thereof to the Holders and shall make the adjustment described therein.
(n) NO AVOIDANCE. The Company shall not structure or engage in
transactions with the intent of avoiding the application of the adjustment
provisions of this Section 4.1.
SECTION 4.2 NOTICE OF ADJUSTMENT. Whenever the number of Common
Shares purchasable upon the exercise of each Warrant or the Exercise Price is
adjusted, as herein provided, the Company shall promptly provide to the Warrant
Agent, and the Warrant Agent shall promptly mail, at the expense of the Company,
to each Holder notice of such adjustment or adjustments and shall promptly
deliver to the Warrant Agent an Officer's Certificate setting forth the number
of Common Shares purchasable upon the exercise of each Warrant and the Exercise
Price after such adjustment, setting forth a brief statement of the facts
requiring such adjustment and setting forth the computation by which such
adjustment was made. Such certificate shall be conclusive evidence of the
correctness of such adjustment except in the case of manifest error. The Warrant
Agent shall be entitled to rely on such 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 upon reasonable notice. The Warrant Agent shall not at
any time be under any duty or responsibility to any Holders to determine whether
any facts exist which may require any adjustment of the Exercise Price or the
number of Common Shares purchasable on exercise of the Warrants or any of the
other adjustments set forth in Section 4.1, 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 Common Shares which may be purchasable 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 Common Shares or share
certificates upon the exercise of any Warrant.
SECTION 4.3 STATEMENT ON WARRANTS. Irrespective of any adjustment 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 4.4 NOTICE OF CONSOLIDATION, MERGER, ETC. In case at any
time after the date hereof and prior to 5:00 p.m. (New York City time) on the
Expiration Date, there shall be any (i) consolidation or merger involving the
Company or sale, transfer or other disposition of all or substantially all of
the Company's property, assets or business (except (A) a merger or other
reorganization in which the Company shall be the surviving corporation and
holders of Common Shares receive no consideration in respect of their shares and
(B) a merger of the Company into a wholly owned subsidiary of the Company, the
principal purpose of which, in the good faith determination of the Board, is to
change the state of incorporation of the Company) or (ii) any other transaction
contemplated by Section 4.1(j)(ii) above then, in any one or more of such cases,
the Company shall cause to be mailed to the Warrant Agent, and the Warrant Agent
shall promptly mail, at Company's expense, to each Holder of a Warrant, at the
earliest practicable time (and, in any event, not less than 20 days before any
16
date set for definitive action), notice of the date on which such
reorganization, sale, consolidation, merger, dissolution, liquidation or winding
up shall take place, as the case may be. Such notice shall also set forth such
facts as shall indicate the effect of such action (to the extent such effect may
be known at the date of such notice) on the Exercise Price and the kind and
amount of the Common Shares and other securities, money and other property
deliverable upon exercise of the Warrants. Such notice shall also specify the
date as of which the holders of record of the Common Shares or other securities
or property issuable upon exercise of the Warrants shall be entitled to exchange
their shares for securities, money or other property deliverable upon such
reorganization, sale, consolidation, merger, dissolution, liquidation or winding
up, as the case may be.
SECTION 4.5 FRACTIONAL INTERESTS. If more than one Warrant shall be
presented for exercise in full at the same time by the same Holder, the number
of full Common Shares which shall be issuable upon such exercise thereof shall
be computed on the basis of the aggregate number of Common Shares purchasable on
exercise of the Warrants so presented. The Company shall not be required to
issue fractional Common Shares upon the exercise of Warrants. If any fraction of
a Common Share would, except for the provisions of this Section 4.5, be issuable
on the exercise of any Warrant (or specified portion thereof), the Company may
pay an amount in cash calculated by it to be equal to the then Current Market
Value per Common Share multiplied by such fraction computed to the nearest whole
cent.
SECTION 4.6 WHEN ISSUANCE OR PAYMENT MAY BE DEFERRED. In any case in
which this Article IV shall require that an adjustment in the Exercise Price be
made effective as of a record date for a specified event, the Company may elect
to defer until the occurrence of such event (i) issuing to the Holder of any
Warrant exercised after such record date the Common Shares and other shares in
the capital of the Company, if any, issuable upon such exercise over and above
the Common Shares and other shares in the capital of the Company, if any,
issuable upon such exercise and (ii) paying such Holder any amount in cash in
lieu of a fractional share; PROVIDED, HOWEVER, that the Company shall deliver to
such Holder a due xxxx or other appropriate instrument evidencing such Holder's
right to receive such additional Common Shares, other shares and cash upon the
occurrence of the event requiring such adjustment.
SECTION 4.7 INITIAL PUBLIC OFFERING. Notwithstanding anything to the
contrary herein contained, if the Company conducts an initial public offering of
equity securities (other than nonconvertible preferred shares), the Company will
give the Holders the opportunity to convert (i) such Warrants into warrants to
purchase such equity securities (other than nonconvertible preferred shares) and
(ii) any Common Shares or other securities that have been previously received by
the Holders upon the exercise of Warrants into such equity securities (other
than nonconvertible preferred shares). Such conversion opportunity will be on
terms and conditions determined to be fair and reasonable by the Board.
ARTICLE V
DECREASE IN EXERCISE PRICE
RESERVED.
17
ARTICLE VI
LOSS OR MUTILATION
Upon receipt by the Company and the Warrant Agent of evidence
satisfactory to them of the ownership and the loss, theft, destruction or
mutilation of any Warrant Certificate and of indemnity or bond satisfactory to
them and (in the case of mutilation) upon surrender and cancellation thereof,
then, in the absence of notice to the Company or the Warrant Agent that the
Warrants represented thereby have been acquired by a bona fide purchaser, the
Company shall execute and the Warrant Agent shall countersign and deliver to the
registered Holder of the lost, stolen, destroyed or mutilated Warrant
Certificate, in exchange for or in lieu thereof, a new Warrant Certificate of
the same tenor and for a like aggregate number of Warrants. Upon the issuance of
any new Warrant Certificate under this Article VI, the Company may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and other expenses (including the fees and
expenses of the Warrant Agent) in connection therewith. Every new Warrant
Certificate executed and delivered pursuant to this Article VI in lieu of any
lost, stolen or destroyed Warrant Certificate shall constitute a contractual
obligation of the Company whether or not the allegedly lost, stolen or destroyed
Warrant Certificates shall be at any time enforceable by anyone and shall be
entitled to the benefits of this Agreement equally and proportionately with any
and all other Warrant Certificates duly executed and delivered hereunder. The
provisions of this Article VI are exclusive and shall preclude (to the extent
lawful) all other rights or remedies with respect to the replacement of
mutilated, lost, stolen, or destroyed Warrant Certificates.
ARTICLE VII
RESERVATION AND AUTHORIZATION OF COMMON SHARES
The Company shall at all times reserve and keep available such
number of its authorized but unissued Common Shares deliverable upon exercise of
the Warrants as will be sufficient to permit the exercise in full of all
outstanding Warrants and will cause appropriate evidence of ownership of such
Common Shares to be delivered to the Warrant Agent upon its request for delivery
thereof upon the exercise of Warrants. The Company covenants that all Common
Shares of the Company that may be issued upon the exercise of the Warrants will,
upon issuance, be duly authorized, validly issued, fully paid and not subject to
any calls for funds and free from pre-emptive rights and all taxes, liens,
charges and security interests with respect to the issue thereof.
ARTICLE VIII
WARRANT TRANSFER BOOKS; RESTRICTIONS ON TRANSFER
SECTION 8.1 TRANSFER AND EXCHANGE.
(a) The Warrant Certificates shall be issued in registered form
only. The Warrant Agent shall keep at its office a register for the registration
of Warrant Certificates and transfers or exchanges of Warrant Certificates as
18
herein provided and other appropriate data as determined by the Warrant Agent.
The Company shall, upon reasonable notice to the Warrant Agent, have access to
such register during the Warrant Agent's regular business hours. All Warrant
Certificates issued upon any registration of transfer or exchange of Warrant
Certificates shall be the valid obligations of the Company, evidencing the same
obligations, and entitled to the same benefits under this Agreement, as the
Warrant Certificates surrendered for such registration of transfer or exchange.
(b) A Holder may transfer its Warrants only by written application
to the Warrant Agent stating the name of the proposed transferee and otherwise
complying with the terms of this Agreement. No such transfer shall be effected
until, and such transferee shall succeed to the rights of a Holder only upon,
final acceptance and registration of the transfer by the Warrant Agent in the
register. Prior to the registration of any transfer of Warrants by a Holder as
provided herein, the Company, the Warrant Agent, and any agent of the Company or
the Warrant Agent may treat the Person in whose name the Warrants are registered
as the owner thereof for all purposes and as the Person entitled to exercise the
rights represented thereby, any notice to the contrary notwithstanding. When
Warrant Certificates are presented to the Warrant Agent with a request to
register the transfer or to exchange them for an equal amount of Warrants of
other authorized denominations, the Warrant Agent shall register such transfer
or make such exchange as requested if its requirements for such transactions are
met. To permit registrations of transfers and exchanges, the Company shall
execute Warrant Certificates at the Warrant Agent's request. No service charge
shall be made for any registration of transfer or exchange of Warrants, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of
transfer of Warrants.
(c) PRIVATE PLACEMENT LEGEND. Upon the registration of transfer,
exchange or replacement of Warrant Certificates not bearing the Private
Placement Legend, the Warrant Agent shall deliver Warrant Certificates that do
not bear the Private Placement Legend. Upon the registration of transfer,
exchange or replacement of Warrant Certificates bearing the Private Placement
Legend, the Warrant Agent shall deliver only Warrant Certificates that bear the
Private Placement Legend unless there is delivered to the Warrant Agent an
Opinion of Counsel reasonably satisfactory to the Company, its Counsel and the
Warrant Agent to the effect that neither such legend nor the related
restrictions on transfer are required in order to maintain compliance with the
provisions of the Securities Act.
(d) GENERAL. By its acceptance of any Warrants represented by a
Warrant Certificate bearing the Private Placement Legend, each Holder of such
Warrants acknowledges the restrictions on transfer of such Warrants set forth in
this Agreement and in the Private Placement Legend and agrees that it will
transfer such Warrants only as provided in this Agreement. The Warrant Agent
shall not register a transfer of any Warrants unless such transfer complies with
the restrictions on transfer of such Warrants set forth in this Agreement. In
connection with any transfer of Warrants, each Holder agrees by its acceptance
of Warrants to furnish the Warrant Agent or the Company such certifications,
legal opinions or other information as either of them may reasonably require to
confirm that such transfer is being made pursuant to an exemption from, or a
transaction not subject to, the registration requirements of the Securities Act
or any applicable laws of any state or foreign jurisdiction; PROVIDED that the
Warrant Agent shall not be required to determine (but may rely on a
19
determination made by the Company with respect to) the sufficiency of any such
certifications, legal opinions or other information.
(e) The Warrant Agent shall retain, in accordance with its customary
procedure, copies of all letters, notices and other written communications
received pursuant to this Section 8.1. The Company shall have the right to
inspect and make copies of all such letters, notices or other written
communications at any reasonable time upon the giving of reasonable written
notice to the Warrant Agent.
SECTION 8.2 SURRENDER OF WARRANT CERTIFICATES. Any Warrant
Certificate surrendered for registration of transfer, exchange or exercise of
the Warrants represented thereby shall, if surrendered to the Company, be
delivered to the Warrant Agent, and all Warrant Certificates surrendered or so
delivered to the Warrant Agent shall be promptly cancelled by the Warrant Agent
and shall not be reissued by the Company and, except as provided in this Article
VIII in case of an exchange, Article III hereof in case of the exercise of less
than all the Warrants represented thereby or Article VI in case of a mutilated
Warrant Certificate, no Warrant Certificate shall be issued hereunder in lieu
thereof. The Warrant Agent shall deliver to the Company from time to time or
otherwise dispose of such cancelled Warrant Certificates as the Company may
direct in writing.
ARTICLE IX
WARRANT HOLDERS
SECTION 9.1 WARRANT HOLDER DEEMED NOT A SHAREHOLDER. The Company and
the Warrant Agent may deem and treat the registered Holder(s) of the Warrant
Certificates as the absolute owner(s) thereof (notwithstanding any notation of
ownership or other writing thereon made by anyone), for the purpose of any
exercise thereof and for all other purposes, and neither the Company nor the
Warrant Agent nor any agent thereof shall be affected by any notice to the
contrary. Accordingly, the Company and/or the Warrant Agent shall not, except as
ordered by a court of competent jurisdiction as required by law, be bound to
recognize any equitable or other claim to or interest in the Warrants on the
part of any Person other than such registered Holder, whether or not it shall
have express or other notice thereof. Prior to the valid exercise of the
Warrants, no Holder of a Warrant Certificate, as such, shall be entitled to any
rights of a shareholder of the Company, including, without limitation, the right
to vote or to consent to any action of the shareholders (except as otherwise
provided in Section 4.1(j)(ii) herein), to receive dividends or other
distributions, to exercise any preemptive right or to receive any notice of
meetings of shareholders and, except as otherwise provided in this Agreement,
shall not be entitled to receive any notice of any proceedings of the Company.
SECTION 9.2 RIGHT OF ACTION. All rights of action with respect to
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 Holders 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 right
to exercise such Warrants in the manner provided in the Warrant Certificate
representing such Warrants and in this Agreement.
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ARTICLE X
THE WARRANT AGENT
SECTION 10.1 DUTIES AND LIABILITIES. The Warrant Agent hereby
accepts the agency established by this Agreement and agrees to perform the same
upon the terms and conditions herein set forth, by all of which the Company and
the Holders of Warrants, by their acceptance thereof, shall be bound. The
Warrant Agent shall not, by countersigning Warrant Certificates or by any other
act hereunder, be deemed to make any representations as to the validity or
authorization of the Warrants or the Warrant Certificates (except as to its
countersignature thereon) or of any Common Shares issued upon exercise of any
Warrant, or as to the accuracy of the computation of the Exercise Price or the
number or kind or amount of Common Shares deliverable upon exercise of any
Warrant or the correctness of the representations of the Company made in the
certificates that the Warrant Agent receives. The Warrant Agent shall not be
accountable for the use or application by the Company of the proceeds of the
exercise of any Warrant. The Warrant Agent shall not have any duty to calculate
or determine any adjustments with respect to either the Exercise Price or the
kind and amount of Common Shares receivable by Holders upon the exercise of
Warrants required from time to time and the Warrant Agent shall have no duty or
responsibility in determining the accuracy or correctness of such calculation.
The Warrant Agent shall not be (a) liable for any recital or statement of fact
contained herein or in the Warrant Certificates or for any action taken,
suffered or omitted by it in good faith in the belief that any Warrant
Certificate or any other documents or any signatures are genuine or properly
authorized, (b) responsible for any failure on the part of the Company to comply
with any of its covenants and obligations contained in this Agreement or in the
Warrant Certificates or (c) liable for any act or omission in connection with
this Agreement except for its own gross negligence, bad faith or willful
misconduct. The Warrant Agent is hereby authorized to accept instructions with
respect to the performance of its duties hereunder from the Chairman of the
Board, the Vice Chairman of the Board, the President, Chief Executive Officer,
the Chief Operating Officer, the Chief Financial Officer, or any other executive
officer of the Company and to apply to any such officer for instructions (which
instructions will be promptly given in writing when requested) and the Warrant
Agent shall not be liable for any action taken or suffered to be taken by it in
good faith in accordance with the instructions of any such officer; PROVIDED,
HOWEVER, that, in its discretion, the Warrant Agent may, in lieu thereof, accept
other evidence of such or may require such further or additional evidence as it
may deem reasonable. The Warrant Agent shall not be liable for any action taken
with respect to any matter in the event it requests instructions from the
Company as to that matter and does not receive such instructions within a
reasonable period of time after the request therefor.
The Warrant Agent may execute and exercise any of the rights and
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys, agents or employees, and the Warrant Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys, agents or employees; PROVIDED that reasonable care has been
exercised with respect to the retention of any such attorney, agent or employee.
The Warrant Agent shall not be under any obligation or duty to institute, appear
in or defend any action, suit or legal proceeding in respect hereof, unless
first indemnified to its reasonable satisfaction. The Warrant Agent shall
promptly notify the Company in writing of any claim made or action, suit or
21
proceeding instituted against it arising out of or in connection with this
Agreement.
The Company will perform, execute, acknowledge and deliver or cause
to be delivered all such further acts, instruments and assurances as are
consistent with this Agreement and as may reasonably be required by the Warrant
Agent in order to enable it to carry out or perform its duties under this
Agreement. The Warrant Agent shall act solely as agent of the Company hereunder.
The Warrant Agent shall not be liable except for the failure to perform such
duties as are specifically set forth herein or for its own gross negligence, bad
faith or willful misconduct, and no implied covenants or obligations shall be
read into this Agreement against the Warrant Agent, whose duties and obligations
shall be determined solely by the express provisions hereof.
SECTION 10.2 RIGHT TO CONSULT COUNSEL. The Warrant Agent may at any
time consult with legal counsel (who may be legal counsel for the Company), and
the written opinion or advice of such counsel shall be full and complete
authorization and protection to the Warrant Agent and the Warrant Agent shall
incur no liability or responsibility to the Company or to any Holder for any
action taken, suffered or omitted by it in good faith in accordance with the
opinion or advice of such counsel.
SECTION 10.3 COMPENSATION; INDEMNIFICATION. The Company agrees
promptly to pay the Warrant Agent from time to time and in any case within 30
days of receipt of an invoice, compensation for its services hereunder as the
Company and the Warrant Agent may agree from time to time, and to reimburse it
upon its request (which shall be accompanied by reasonable supporting
documentation) for reasonable fees or expenses and reasonable counsel fees and
expenses incurred in connection with the execution and administration of this
Agreement, and further agrees to indemnify the Warrant Agent and save it
harmless against any losses, liabilities or reasonable expenses arising out of
or in connection with the acceptance and administration of this Agreement,
including, without limitation, the reasonable costs and expenses of
investigating or defending any claim of such liability, except that the Company
shall have no liability hereunder to the extent that any such loss, liability or
expense results from the Warrant Agent's own gross negligence, bad faith or
willful misconduct. The obligations of the Company under this Section 10.3 shall
survive the exercise and the expiration of the Warrants, the termination of this
Agreement and the resignation or removal of the Warrant Agent in respect of
services or expenses incurred in connection with the Warrants or this Agreement.
SECTION 10.4 NO RESTRICTIONS ON ACTIONS. Nothing in this Agreement
shall be deemed to prevent the Warrant Agent and any shareholder, director,
officer or employee of the Warrant Agent from buying, selling or dealing in any
of the Warrants or other securities of the Company or becoming pecuniarily
interested in transactions in which the Company may be interested, or
contracting with or lending money to the Company or otherwise acting as fully
and freely as though it were not the 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.
SECTION 10.5 DISCHARGE OR REMOVAL; REPLACEMENT WARRANT AGENT. The
Warrant Agent may resign from its position as such and be discharged from all
22
further duties and liabilities hereunder (except liability arising as a result
of the Warrant Agent's own gross negligence, bad faith or willful misconduct),
after giving one month's prior written notice to the Company. The Company may at
any time remove the Warrant Agent upon one month's written notice specifying the
date when such discharge shall take effect, 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 mail to each Holder of a
Warrant, at the Company's expense, 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 or removed Warrant Agent or the Holder of any
Warrant may apply to any court of competent jurisdiction for the appointment of
a new warrant agent. After 30 days from receipt of, or giving, notice, as the
case may be, and pending appointment of a successor to the original Warrant
Agent, either by the Company or by such a court, the duties of the Warrant Agent
shall be carried out by the Company. Any new warrant agent, whether appointed by
the Company or by such a court, shall be a bank or trust company 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 $250,000,000. 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; however, the original Warrant Agent shall in
all events deliver and transfer to the successor Warrant Agent all property
(including, without limitation, documents and recorded information), if any, at
the time held hereunder by the original Warrant Agent and 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 file notice thereof with the resigning or removed
Warrant Agent and shall use its reasonable best efforts to forthwith cause a
copy of such notice to be mailed by the successor Warrant Agent to each Holder
of a Warrant. Failure to give any notice provided for in this Section 10.5,
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. No Warrant Agent hereunder shall be liable for any acts or
omissions of any successor Warrant Agent.
SECTION 10.6 SUCCESSOR WARRANT AGENT. Any corporation into which the
Warrant Agent or any new warrant agent may be merged or converted, or any
corporation resulting from any consolidation to which the Warrant Agent or any
new warrant agent shall be a party or any corporation succeeding to all or
substantially all the corporate agency business of the Warrant Agent, shall be a
successor Warrant Agent under this Agreement without any further act, PROVIDED
that such corporation would be eligible for appointment as successor to the
Warrant Agent under the provisions of Section 10.5 hereof. Any such successor
23
Warrant Agent shall promptly cause notice of its succession as Warrant Agent to
be mailed to each Holder of a Warrant.
ARTICLE XI
REPRESENTATION OF HOLDER
SECTION 11.1 PRIVATE PLACEMENT. Each Holder represents and warrants
that:
(a) Such Holder understands that (i) the offering and issuance of
the Warrants is intended to be exempt from registration under the Securities Act
pursuant to Section 4(2) of the Securities Act and (ii) there is no existing
public or other market for any of the Warrants and there can be no assurance
that it will be able to sell or dispose of such Warrants issued to it pursuant
to this Agreement.
(b) Such Holder is an "Accredited Investor" as such term is defined
in Regulation D promulgated pursuant to the Securities Act.
(c) Such Holder has sufficient knowledge and experience in financial
and business matters so as to be capable of evaluating the merits and risks of
its investment in the Warrants and it is capable of bearing the economic risks
of such investment, including a complete loss of its investment in the Warrants.
(d) Such Holder understands that the Warrants and the shares of
Common Stock issuable upon exercise of the Warrants are characterized as
"restricted securities" under the federal securities laws inasmuch as they are
being acquired from the Company in a transaction not involving a public offering
and that under such laws and applicable regulations such securities may be
resold without registration under the Securities Act only in certain limited
circumstances. In this connection, it represents that it is familiar with SEC
Rules 144 and 144A, as presently in effect, and understands the resale
limitations imposed thereby and by the Securities Act.
ARTICLE XII
MISCELLANEOUS
SECTION 12.1 MONIES DEPOSITED WITH THE WARRANT AGENT. The Warrant
Agent shall not be required to pay interest on any monies deposited pursuant to
the provisions of this Agreement except such as it shall agree in writing with
the Company to pay thereon. Any monies, securities or other property which at
any time shall be deposited by the Company or on its behalf with the Warrant
Agent pursuant to this Agreement shall be and are hereby assigned, transferred
and set over to the Warrant Agent in trust for the purpose for which such
monies, securities or other property shall have been deposited; but such monies,
securities or other property need not be segregated from other funds, securities
or other property except to the extent required by law. Any monies, securities
or other property deposited with the Warrant Agent for payment or distribution
to the Holders that remains unclaimed for one year after the date the monies,
24
securities or other property was deposited with the Warrant Agent shall be
delivered to the Company upon its request therefor.
SECTION 12.2 PAYMENT OF TAXES. All Common Shares issuable upon the
exercise of Warrants shall be validly issued, fully paid and not subject to any
calls for funds, and, subject to Article VI hereof, the Company shall pay any
taxes and other governmental charges that may be imposed under the laws of the
United States of America or any political subdivision or taxing authority
thereof or therein in respect of the issue or delivery thereof upon exercise of
Warrants (other than income taxes imposed on the Holders). The Company shall not
be required, however, to pay any tax or other charge imposed in connection with
any transfer involved in the issue of any certificate for Common Shares
(including other securities or property issuable upon the exercise of the
Warrants) or payment of cash to any Person other than the Holder of a Warrant
Certificate surrendered upon the exercise of a Warrant and in case of such
transfer or payment, the Warrant Agent and the Company shall not be required to
issue any share certificate or pay any cash until such tax or charge has been
paid or it has been established to the Warrant Agent's and the Company's
satisfaction that no such tax or charge is due.
SECTION 12.3 NO MERGER, CONSOLIDATION OR SALE OF ASSETS OF THE
COMPANY. The Company will not merge into or consolidate with any other Person,
or sell or otherwise transfer its property, assets and business substantially as
an entirety to a successor of the Company, unless the Person resulting from such
merger or consolidation, or such successor of the Company, shall expressly
assume, by supplemental agreement satisfactory in form to the Warrant Agent and
executed and delivered to the Warrant Agent, the due and punctual performance
and observance of each and every covenant and condition of this Agreement or
contained in the Warrants to be performed and observed by the Company.
SECTION 12.4 REPORTS TO HOLDERS. Whether or not the Company is
required to file reports with the Commission, the Company shall file with the
Commission all reports and other information it would be required to file with
the Commission by Section 13(a) or 15(d) under the Exchange Act if it were
subject thereto. The Company shall supply the Warrant Agent and each Holder or
shall supply to the Warrant Agent for forwarding to each such Holder, without
cost to such Holder, copies of such reports and other information. In addition,
at all times, upon the request of any Holder or any prospective purchaser of the
Warrants designated by a Holder, the Company shall supply to such Holder or such
prospective purchaser the information required under Rule 144A under the
Securities Act.
SECTION 12.5 NOTICES; PAYMENT. (a) Except as otherwise provided in
Section 12.5(b) hereof, any notice, demand or delivery authorized by this
Agreement shall be sufficiently given or made when mailed, if sent by first
class mail, postage prepaid, addressed to any Holder of a Warrant at such
Holder's last known address appearing on the register of the Company maintained
by the Warrant Agent and to the Company or the Warrant Agent as follows:
To the Company:
KMC Telecom Holdings, Inc.
0000 Xxxxx 000, Xxxxx 000
00
Xxxxxxxxxx, XX 00000
Attention: Chief Financial Officer
To the Warrant Agent:
First Union National Bank,
as Warrant Agent
000 Xxxxx Xxxxxxx Xxxxxx, XX-0
Xxxxxxxxx, XX 00000-0000
Attention: Xxxxxxxxx Xxxxxxx
or such other address as shall have been furnished to the party giving or making
such notice, demand or delivery. Any notice that is mailed in the manner herein
provided shall be conclusively presumed to have been duly given when mailed,
whether or not the Holder receives the notice.
(b) Payment of the Exercise Price should be made in accordance with
the provisions of this Agreement at the office of the Warrant Agent set forth
above.
(c) Any notice required to be given by the Company to the Holders
shall be made by mailing to the Holders at their last known addresses appearing
on the register maintained by the Warrant Agent. The Company hereby irrevocably
authorizes the Warrant Agent, in the name and at the expense of the Company, to
mail any such notice upon receipt thereof from the Company. Any notice that is
mailed in the manner herein provided shall be conclusively presumed to have been
duly given when mailed, whether or not the Holder receives the notice.
SECTION 12.6 BINDING EFFECT. This Agreement shall be binding upon
and inure to the benefit of the Company and the Warrant Agent and their
respective successors and assigns, and the Holders from time to time of the
Warrants and their respective successors and assigns. Nothing in this Agreement
is intended or shall be construed to confer upon any Person, other than the
Company, the Warrant Agent, the Agent and the Holders of the Warrants, any
right, remedy or claim under or by reason of this Agreement or any part hereof.
SECTION 12.7 COUNTERPARTS. This Agreement may be executed manually
or by facsimile in any number of counterparts, each of which shall be deemed an
original, but all of which together constitute one and the same instrument.
SECTION 12.8 AMENDMENTS. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given unless the Company and the Warrant Agent have obtained the written consent
of Holders of at least a majority of the outstanding Warrants affected by such
amendment, modification, supplement, waiver or consent.
26
SECTION 12.9 HEADINGS. The descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
SECTION 12.10 COMMON SHARES LEGEND. Unless and until the Common
Shares issuable upon the exercise of the Warrants are registered under the
Securities Act, or unless otherwise agreed by the Company and the Holder
thereof, such Common Shares will bear a legend to the following effect:
"THE COMMON SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR ANY STATE
SECURITIES LAWS AND ACCORDINGLY MAY NOT BE SOLD, TRANSFERRED,
PLEDGED, HYPOTHECATED OR OTHERWISE ENCUMBERED OR DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS."
SECTION 12.11 THIRD PARTY BENEFICIARIES. The Holders (other than the
Holders signatory hereto) shall be third party beneficiaries to the agreements
made hereunder between the Company, on the one hand, and the Warrant Agent and
the Holders signatory hereto, on the other hand, and each Holder shall have the
right to enforce such agreements directly to the extent it deems such
enforcement necessary or advisable to protect its rights or the rights of
Holders hereunder. By acquiring Warrants, each Holder agrees to be bound by the
obligations of Holders generally as set forth herein and as such obligations may
be applicable to such Holder.
SECTION 12.12 TERMINATION. Except as otherwise specified herein,
this Agreement shall terminate at 5:00 p.m. (New York City time) on the
Expiration Date. Notwithstanding the foregoing, this Agreement shall terminate
on any earlier date as of which all Warrants have been exercised.
SECTION 12.13 GOVERNING LAW. This Agreement shall be governed by the
laws of the State of New York.
27
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed, as of the day and year first above written.
KMC TELECOM HOLDINGS, INC.
By: /S/ XXXXXXXXX XXXXXXXXX
-----------------------
Name: Xxxxxxxxx Xxxxxxxxx
Title: Treasurer
FIRST UNION NATIONAL BANK, as Warrant
Agent
By: /S/ X.X. XXXXXXX
----------------
Name: X.X. Xxxxxxx
Title: Senior Vice President
FIRST UNION NATIONAL BANK, as the Agent
and as a Lender
By: /S/ X.X. XXXXXXX
----------------
Name: X.X. Xxxxxxx
Title: Senior Vice President
CIT LENDING SERVICES CORPORATION (f/k/a
NEWCOURT COMMERCIAL FINANCE
CORPORATION), as a Lender
By: /S/ XXXX X'XXXXXX
-----------------
Name: Xxxx X'Xxxxxx
Title: Vice President
CANADIAN IMPERIAL BANK OF COMMERCE, as a
Lender
By: /S/ XXXXXXXXXX XXXXXXX
----------------------
Name: Xxxxxxxxxx Xxxxxxx
Title: Executive Director
S-1
GENERAL ELECTRIC CAPITAL CORPORATION, as
a Lender
By: /S/ XXXXX X. XXXX
-----------------
Name: Xxxxx X. Xxxx
Title: Manager-Operations
LUCENT TECHNOLOGIES INC., as a Lender
By: /S/ XXXX XXXX
-------------
Name: Xxxx Xxxx
Title: Director - NA Customer Finance
CREDIT SUISSE FIRST BOSTON, as a Lender
By: /S/ XXXXX X. XXXXXX /S/XXXXXX XXXXXX
------------------- ----------------
Name: Xxxxx X. Xxxxxx Xxxxxx Xxxxxx
Title: Vice President Assistant Vice
President
DRESDNER BANK AG NEW YORK AND GRAND
CAYMAN BRANCHES, as a Lender
By: /S/ XXXXX XXXXXXXXX
-------------------
Name: Xxxxx Xxxxxxxxx
Title: Assistant Vice President
By: /S/ XXXXXXX X. XXXXXXXXX
------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Assistant Vice President
S-2
XXXXXX XXXXXXX SENIOR FUNDING, INC., as
a Lender
By: /S/ T. XXXXXX XXXXXXX XX
------------------------
Name: T. Xxxxxx Xxxxxxx XX
Title: Vice President
By:
------------------------
Name:
Title:
XXXXXX XXXXXXX XXXX XXXXXX PRIME INCOME
TRUST, as a Lender
By: /S/ XXXXXX XXXXXXXX
-------------------
Name: Xxxxxx Xxxxxxxx
Title: Senior Vice President
UNION BANK OF CALIFORNIA, N.A., as a
Lender
By: /S/ XXXXXXX X. XXXXXXX XX
-------------------------
Name: Xxxxxxx X. Xxxxxxx XX
Title: Vice President
XXXXX XXX & FARNHAM INCORPORATED as
agent for KEYPORT LIFE INSURANCE
COMPANY, as a Lender
By: /S/ XXXXX X. XXXXXXX
--------------------
Name: Xxxxx X. Xxxxxxx
Title: Sr. Vice President & Portfolio
Manager
S-3
XXXXX XXX FLOATING RATE LIMITED
LIABILITY COMPANY, as a Lender
By: /S/ XXXXX X. XXXXXXX
--------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
IBM CREDIT CORPORATION, as a Lender
By: /S/ XXXXXX X. XXXXXX
--------------------
Name: Xxxxxx X. Xxxxxx
Title: Manager of Credit, Commercial and
Specialty Financing
S-4
