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EXHIBIT 10.2
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WARRANT AGREEMENT
Dated as of June 24, 1997
By and Between
VERIO INC.
and
FIRST TRUST NATIONAL ASSOCIATION
as Warrant Agent
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Warrants to Purchase Common Stock
Par Value $.001 Per Share
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TABLE OF CONTENTS
Page
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ARTICLE I
ISSUANCE, FORM, EXECUTION, DELIVERY AND
REGISTRATION OF WARRANT CERTIFICATES
SECTION 1.01. Issuance of Warrants....................................................2
SECTION 1.02. Form of Warrant Certificates............................................2
SECTION 1.03. Execution of Warrant Certificates.......................................3
SECTION 1.04. Authentication and Delivery.............................................3
SECTION 1.05. Temporary Warrant Certificates..........................................4
SECTION 1.06. Separation of Warrants and Notes........................................5
SECTION 1.07. Registration............................................................5
SECTION 1.08. Registration of Transfers or Exchanges..................................6
SECTION 1.09. Lost, Stolen, Destroyed, Defaced or Mutilated Warrant Certificates.....13
SECTION 1.10. Offices for Exercise, etc..............................................14
ARTICLE II
DURATION, EXERCISE OF WARRANTS;
EXERCISE PRICE AND REPURCHASE OF WARRANTS
SECTION 2.01. Duration of Warrants...................................................14
SECTION 2.02. Exercise, Exercise Price, Settlement and Delivery......................15
SECTION 2.03. Cancellation of Warrant Certificates...................................19
SECTION 2.04. Notice of an Exercise Event............................................19
ARTICLE III
OTHER PROVISIONS RELATING TO
RIGHTS OF HOLDERS OF WARRANTS
SECTION 3.01. Enforcement of Rights..................................................20
SECTION 3.02. Obtaining Stock Exchange Listings......................................20
ARTICLE IV
CERTAIN COVENANTS OF THE COMPANY
SECTION 4.01. Payment of Taxes.......................................................20
SECTION 4.02. Qualification Under the Securities Laws................................21
SECTION 4.03. Rules 144 and 144A.....................................................22
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SECTION 4.04. Form of Initial Public Equity Offering...........................22
SECTION 4.05. Registration of Shares...........................................22
ARTICLE V
ADJUSTMENTS
SECTION 5.01. Adjustment of Exercise Rate; Notices.............................23
SECTION 5.02. Fractional Shares................................................31
SECTION 5.03. Certain Distributions............................................31
ARTICLE VI
CONCERNING THE WARRANT AGENT
SECTION 6.01. Warrant Agent....................................................32
SECTION 6.02. Conditions of Warrant Agent's Obligations........................32
SECTION 6.03. Resignation and Appointment of Successor.........................37
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Amendment........................................................39
SECTION 7.02. Notices and Demands to the Company and Warrant Agent.............40
SECTION 7.03. Addresses for Notices to Parties and for Transmission
of Documents.....................................................40
SECTION 7.04. Notices to Holders...............................................41
SECTION 7.05. APPLICABLE LAW; SUBMISSION TO JURISDICTION.......................41
SECTION 7.06. Persons Having Rights Under Agreement............................41
SECTION 7.07. Headings.........................................................42
SECTION 7.08. Counterparts.....................................................42
SECTION 7.09. Inspection of Agreement..........................................42
SECTION 7.10. Availability of Equitable Remedies...............................42
SECTION 7.11. Obtaining of Governmental Approvals..............................42
EXHIBIT A -Form of Warrant Certificate.........................................A-1
EXHIBIT B -Certificate To Be Delivered upon Exchange or Registration
of Transfer of Warrants.............................................B-1
EXHIBIT C -Form of Transferee Certificate for Institutional
Accredited Investors................................................C-1
EXHIBIT D -Form of Transferee Certificate for Regulation S Transfers...........D-1
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INDEX OF DEFINED TERMS
Defined Term Section
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Affiliate............................................................... 5.01(b)
Agreement............................................................... Recitals
Business Day............................................................ 2.01
Capital Stock........................................................... 5.01(l)
Cashless Exercise....................................................... 2.02(c)
Cashless Exercise Ratio................................................. 2.02(c)
Common Stock............................................................ Recitals
Company ............................................................... Recitals
Current Market Value.................................................... 5.01(l)
Definitive Warrants..................................................... 1.02
Distribution............................................................ 5.03
Distribution Rights..................................................... 5.03
Election To Exercise.................................................... 2.02(b)
Exercisability Date..................................................... 2.02(a)
Exercise Date........................................................... 2.02(d)
Exercise Event.......................................................... 2.02(a)
Exercise Price.......................................................... 2.02(a)
Exercise Rate........................................................... 2.02(a)
Expiration Date......................................................... 2.01
Fundamental Transaction................................................. 5.01(d)
Global Shares........................................................... 2.02(f)
Global Warrants......................................................... 1.02
Indenture............................................................... Recitals
Independent Financial Expert............................................ 5.01(1)
Initial Public Equity Offering.......................................... 2.02(a)
Initial Purchasers...................................................... Recitals
Notes ............................................................... Recitals
Notice Date............................................................. 2.05(b)
Officers' Certificate................................................... 1.08(d)
Person ............................................................... 2.02(a)
Private Placement Legend................................................ 1.08(g)
Prospectus.............................................................. 4.02
Registrar............................................................... 1.07
Registration Rights Agreement........................................... Recitals
Related Parties......................................................... 6.02(e)
Requisite Warrant Holders............................................... 7.01
Resale Restriction Termination Date..................................... 1.08
Securities Act.......................................................... 1.06
Separability Date....................................................... 1.06
Separation.............................................................. 1.06
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Defined Term Section
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Shares ............................................................... 1.01
Subject Class........................................................... 4.04
Surviving Person........................................................ 5.01(d)
Time of Determination................................................... 5.01(1)
Trustee ............................................................... Recitals
Units ............................................................... Recitals
Warrant Agent........................................................... Recitals
Warrant Agent Office.................................................... 1.10
Warrant Certificates.................................................... Recitals
Warrant Exercise Office................................................. 2.02(b)
Warrant Register........................................................ 1.07
Warrants ............................................................... Recitals
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WARRANT AGREEMENT
WARRANT AGREEMENT ("Agreement"), dated as of June 24, 1997 by and between
VERIO INC., a Delaware corporation (together with any successor thereto, the
"Company"), and FIRST TRUST NATIONAL ASSOCIATION, as warrant agent (with any
successor Warrant Agent, the "Warrant Agent").
WHEREAS, the Company has entered into a purchase agreement (the "Purchase
Agreement") dated June 17, 1997 with Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ("Xxxxxxx Xxxxx") and Lazard Freres & Co. LLC (collectively, the
"Initial Purchasers") in which the Company has agreed to sell to the Initial
Purchasers 150,000 units (the "Units") consisting in the aggregate of (i)
$150,000,000 aggregate principal amount of Senior Notes due 2004 (the "Notes")
of the Company to be issued under an indenture dated as of June 24, 1997 (the
"Indenture"), between the Company and First Trust National Association, as
trustee (in such capacity, the "Trustee"), and (ii) 1,200,000 Warrants (the
"Warrants"), each Warrant initially entitling the holder thereof to purchase
1.7604 shares of Common Stock, par value $.001 per share (the "Common Stock"),
of the Company. The certificates evidencing the Warrants are herein referred to
collectively as the "Warrant Certificates"; and
WHEREAS, each Unit will consist of one Note in the principal amount of
$1,000 and 8 Warrants; the Notes and the Warrants comprising part of the Units
shall not be separately transferable until the Separability Date (as defined
below); and
WHEREAS, the holders of the Warrants are entitled to the benefits of a
Common Stock Registration Rights Agreement dated as of June 17, 1997 between the
Company and the Initial Purchasers (the "Registration Rights Agreement"); and
WHEREAS, the Company desires the Warrant Agent as warrant agent to assist
the Company in connection with the issuance, exchange, cancellation, replacement
and exercise of the Warrants, and in this Agreement wishes to set forth, among
other things, the terms and conditions on which the Warrants may be issued,
exchanged, cancelled, replaced and exercised;
NOW, THEREFORE, the parties hereto agree as follows:
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ARTICLE I
ISSUANCE, FORM, EXECUTION, DELIVERY AND
REGISTRATION OF WARRANT CERTIFICATES
SECTION 1.01. Issuance of Warrants. Warrants comprising part of the Units
shall be originally issued in connection with the issuance of the Units and such
Warrants shall not be separately transferable from the Notes until on or after
the Separability Date as provided in Section 1.06 hereof.
Each Warrant Certificate shall evidence the number of Warrants specified
therein, and each Warrant evidenced thereby shall, when exercisable as provided
herein and therein, represent the right, subject to the provisions contained
herein and therein, to purchase from the Company (and the Company shall issue
and sell to the holder of such Warrant) 1.7604 fully paid, registered and
non-assessable shares of Common Stock at an exercise price of $0.01 per share.
The number of Shares issuable upon exercise of a Warrant is subject to
adjustment as provided herein and in the Warrant. The shares purchasable upon
exercise of a Warrant are hereinafter referred to as the "Shares" and, unless
the context otherwise requires, such term shall also include any other
securities or property purchasable and deliverable upon exercise of a Warrant as
provided in Article V, subject to adjustment as provided herein and in the
Warrant.
SECTION 1.02. Form of Warrant Certificates. The Warrant Certificates will
initially be issued either in global form (the "Global Warrants"), substantially
in the form of Exhibit A hereto, or in registered form as definitive Warrant
Certificates (the "Definitive Warrants") substantially in the form of Exhibit A
attached hereto. Any Global Warrants to be delivered pursuant to this Agreement
shall bear the legend set forth in Exhibit B attached hereto. Such Global
Warrants shall represent such of the outstanding Warrants as shall be specified
therein and each shall provide that it shall represent the aggregate amount of
outstanding Warrants from time to time endorsed thereon and that the aggregate
amount of outstanding Warrants represented thereby may from time to time be
reduced or increased, as appropriate. Any endorsement of a Global Warrant to
reflect the amount of any increase or decrease in the amount of outstanding
Warrants represented thereby shall be made by the Warrant Agent and the
Depositary (as defined below) in accordance with instructions given by the
holder thereof. The Depository Trust Company shall act as the Depositary with
respect to the Global Warrants until a successor shall be appointed
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by the Company and the Warrant Agent. Upon written request, a holder of Warrants
may receive from the Warrant Agent or the Depository Definitive Warrants as set
forth in Section 1.08 hereof.
SECTION 1.03. Execution of Warrant Certificates. The Warrant Certificates
shall be executed on behalf of the Company by the chairman of its Board of
Directors, its president or any vice president and attested by its secretary or
assistant secretary. Such signatures may be the manual or facsimile signatures
of the present or any future such officers. Typographical and other minor errors
or defects in any such reproduction of any such signature shall not affect the
validity or enforceability of any Warrant Certificate that has been duly
countersigned and delivered by the Warrant Agent.
In case any officer of the Company who shall have signed any of the Warrant
Certificates shall cease to be such officer before the Warrant Certificate so
signed shall be countersigned and delivered by the Warrant Agent or disposed of
by the Company, such Warrant Certificate nevertheless may be countersigned and
delivered or disposed of as though the person who signed such Warrant
Certificate had not ceased to be such officer of the Company; and any Warrant
Certificate may be signed on behalf of the Company by such persons as, at the
actual date of the execution of such Warrant Certificate, shall be the proper
officers of the Company, although at the date of the execution and delivery of
this Agreement any such person was not such an officer.
SECTION 1.04. Authentication and Delivery. Subject to the immediately
following paragraph, Warrant Certificates shall be authenticated by manual
signature and dated the date of authentication by the Warrant Agent and shall
not be valid for any purpose unless so authenticated and dated. The Warrant
Certificates shall be numbered and shall be registered in the Warrant Register
(as defined in Section 1.07 hereof).
Upon the receipt by the Warrant Agent of a written order of the Company,
which order shall be signed by the chairman of its Board of Directors, its
president or any vice president and attested by its secretary or assistant
secretary, and shall specify the amount of Warrants to be authenticated, whether
the Warrants are to be Global Warrants or Definitive Warrants, the date of such
Warrants and such other information as the Warrant Agent may reasonably request,
without any further action by the Company, the Warrant Agent is authorized, upon
receipt from the Company at any time and from time to time
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of the Warrant Certificates, duly executed as provided in Section 1.03 hereof,
to authenticate the Warrant Certificates and upon the holder's request deliver
them. Such authentication shall be by a duly authorized signatory of the Warrant
Agent (although it shall not be necessary for the same signatory to sign all
Warrant Certificates).
In case any authorized signatory of the Warrant Agent who shall have
authenticated any of the Warrant Certificates shall cease to be such authorized
signatory before the Warrant Certificate shall be disposed of by the Company or
the Warrant Agent, such Warrant Certificate nevertheless may be delivered or
disposed of as though the person who authenticated such Warrant Certificate had
not ceased to be such authorized signatory of the Warrant Agent; and any Warrant
Certificate may be authenticated on behalf of the Warrant Agent by such persons
as, at the actual time of authentication of such Warrant Certificates, shall be
the duly authorized signatories of the Warrant Agent, although at the time of
the execution and delivery of this Agreement any such person is not such an
authorized signatory.
The Warrant Agent's authentication on all Warrant Certificates shall be in
substantially the form set forth in Exhibit A hereto.
SECTION 1.05. Temporary Warrant Certificates. Pending the preparation of
definitive Warrant Certificates, the Company may execute, and the Warrant Agent
shall authenticate and deliver, temporary Warrant Certificates, which are
printed, lithographed, typewritten or otherwise produced, substantially of the
tenor of the definitive Warrant Certificates in lieu of which they are issued
and with such appropriate insertions, omissions, substitutions and other
variations as the officers executing such Warrant Certificates may determine, as
evidenced by their execution of such Warrant Certificates.
If temporary Warrant Certificates are issued, the Company will cause
definitive Warrant Certificates to be prepared without unreasonable delay. After
the preparation of definitive Warrant Certificates, the temporary Warrant
Certificates shall be exchangeable for definitive Warrant Certificates upon
surrender of the temporary Warrant Certificates at any office or agency
maintained by the Company for that purpose pursuant to Section 1.10 hereof.
Subject to the provisions of Section 4.01 hereof, such exchange shall be without
charge to the holder. Upon surrender for cancellation of any one or more
temporary Warrant Certificates, the Company shall execute, and
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the Warrant Agent shall authenticate and deliver in exchange therefor, one or
more definitive Warrant Certificates representing in the aggregate a like number
of Warrants. Until so exchanged, the holder of a temporary Warrant Certificate
shall in all respects be entitled to the same benefits under this Agreement as a
holder of a definitive Warrant Certificate.
SECTION 1.06. Separation of Warrants and Notes. The Notes and the Warrants
will not be separately transferable until the Separability Date. "Separability
Date" shall mean the earliest to occur of: (i) December 15, 1997, (ii) the
occurrence of an Exercise Event (as defined herein), (iii) the occurrence of an
Event of Default (as defined in the Indenture), (iv) the date on which a
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to a registered exchange offer for the Notes or
covering the sale by holders of the Notes is declared effective under the
Securities Act, (v) immediately prior to any redemption of Notes by the Company
following an Equity Sale (as defined in the Indenture), or (vi) such earlier
date as may be determined by Xxxxxxx Xxxxx in its sole discretion and specified
to the Company, the Trustee, the Warrant Agent and the Unit Agent in writing.
Notwithstanding the foregoing, the Warrants shall become separately transferable
on the date of commencement of a Change of Control Offer (as defined in the
Indenture). The separation of the Warrants and the Notes is herein referred to
as a "Separation."
SECTION 1.07. Registration. The Company will keep, at the office or agency
maintained by the Company for such purpose, a register or registers in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of, and registration of transfer and exchange of,
Warrants as provided in this Article. Each person designated by the Company from
time to time as a person authorized to register the transfer and exchange of the
Warrants is hereinafter called, individually and collectively, the "Registrar."
The Company hereby initially appoints the Warrant Agent as Registrar. Upon
written notice to the Warrant Agent and any acting Registrar, the Company may
appoint a successor Registrar for such purposes.
The Company will at all times designate one person (who may be the Company
and who need not be a Registrar) to act as repository of a master list of names
and addresses of the holders of Warrants (the "Warrant Register"). The Warrant
Agent will act as such repository unless and until some other person is, by
written notice from the Company to the Warrant
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Agent and the Registrar, designated by the Company to act as such. The Company
shall cause each Registrar to furnish to such repository, on a current basis,
such information as to all registrations of transfer and exchanges effected by
such Registrar, as may be necessary to enable such repository to maintain the
Warrant Register on as current a basis as is practicable.
SECTION 1.08. Registration of Transfers or Exchanges.
(a) Transfer or Exchange of Definitive Warrants. When Definitive
Warrants are presented to the Warrant Agent with a request from the holder:
(i) to register the transfer of the Definitive Warrants; or
(ii) to exchange such Definitive Warrants for an equal number of Definitive
Warrants of other authorized denominations,
the Warrant Agent shall register the transfer or make the exchange as requested
if the requirements under this Warrant Agreement as set forth in this Section
1.08 hereof for such transactions are met; provided, however, that the
Definitive Warrants presented or surrendered by a holder for registration of
transfer or exchange:
(x) shall be duly endorsed or accompanied by a written instruction of
transfer or exchange in form satisfactory to the Company and the
Warrant Agent, duly executed by such holder or by his attorney, duly
authorized in writing; and
(y) in the case of Warrants the offer and sale of which have not been
registered under the Securities Act and are presented for transfer or
exchange prior to (X) the date which is two years (or such shorter
period as may be prescribed by Rule 144(k) (or any successor provision
thereto)) after the later of the date of original issuance of the
Warrants and the last date on which the Company or any affiliate of the
Company was the owner of such Warrants, or any predecessor thereto, and
(Y) such later date, if any, as may be required by any subsequent
change in applicable law (the "Resale Restriction Termination Date"),
such Warrants shall be accompanied by the
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following additional information and documents, as applicable:
(A) if such Warrants are 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 C hereto); or
(B) if such Warrants are being transferred to a qualified
institutional buyer (as defined in Rule 144A under
the Securities Act) (a "QIB") in accordance with Rule
144A under the Securities Act, a certification from
the transferor to that effect (in substantially the
form of Exhibit C hereto); or
(C) if such Warrants are being transferred to an
institutional "accredited investor" within the
meaning of subparagraphs (a)(1), (a)(2), (a)(3) or
(a)(7) of Rule 501 under the Securities Act (an
"Institutional Accredited Investor"), delivery by the
transferor of a certification to that effect (in
substantially the form of Exhibit C hereto), and
delivery by the proposed transferee of a Transferee
Certificate for Institutional Accredited Investors
(in substantially the form of Exhibit D hereto); or
(D) if such Warrants are being transferred in reliance on
Regulation S under the Securities Act, delivery by
the transferor of a certification to that effect (in
substantially the form of Exhibit C hereto), and a
Certificate for Regulation S Transfers in the form of
Exhibit E hereto; or
(E) if such Warrants are being transferred in reliance on
Rule 144 under the Securities Act, delivery by the
transferor of (i) a certification from the transferor
to that effect (in substantially the form of Exhibit
C hereto), and (ii) an opinion of counsel reasonably
satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act; or
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(F) if such Warrants are being transferred in reliance on
another exemption from the registration requirements
of the Securities Act, a certification from the
transferor to that effect (in substantially the form
of Exhibit C hereto) and an opinion of counsel
reasonably satisfactory to the Company to the effect
that such transfer is in compliance with the
Securities Act; provided that the Company may, based
upon the views of its own counsel, instruct the
Warrant Agent not to register such transfer in any
case where the proposed transferee is not a QIB,
Non-U.S.
Person or Institutional Accredited Investor.
(b) Restrictions on Transfer of a Definitive Warrant for
a Beneficial Interest in a Global Warrant. A Definitive Warrant may not be
transferred by a holder for a beneficial interest in a Global Warrant except
upon satisfaction of the requirements set forth below. Upon receipt by the
Warrant Agent of a Definitive Warrant, duly endorsed or accompanied by
appropriate instruments of transfer, in form satisfactory to the Warrant Agent,
together with:
(A) certification from such holder (in substantially the
form of Exhibit C hereto) that such Definitive
Warrant is being transferred to a QIB in accordance
with Rule 144A under the Securities Act; and
(B) written instructions directing the Warrant Agent to
make, or to direct the Depositary to make, an
endorsement on the Global Warrant to reflect an
increase in the aggregate amount of the Warrants
represented by the Global Warrant,
then the Warrant Agent shall cancel such Definitive Warrant and cause, or direct
the Depositary to cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Warrant Agent, the number of
Shares represented by the Global Warrant to be increased accordingly. If no
Global Warrant is then outstanding, the Company shall issue and the Warrant
Agent shall upon written instructions from the Company authenticate a new Global
Warrant in the appropriate amount.
(c) Transfer or Exchange of Global Warrants. The transfer or
exchange of Global Warrants or beneficial interests therein shall be effected
through the Depositary, in accordance
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with this Section 1.08, the Private Placement Legend, this Agreement (including
the restrictions on transfer set forth herein) and the procedures of the
Depositary therefor.
(d) Transfer or Exchange of a Beneficial Interest in a Global
Warrant for a Definitive Warrant.
(i) Any person having a beneficial interest in a Global Warrant
may transfer or 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, including a written order containing
registration instructions and, in the case of any such
transfer or exchange prior to the Resale Restriction
Termination Date, the following additional information and
documents:
(A) if such beneficial interest is being transferred to
the person designated by the Depositary as being the
beneficial owner, a certification from such person to
that effect (in substantially the form of Exhibit C
hereto); or
(B) if such beneficial interest is being transferred to a
QIB in accordance with Rule 144A under the Securities
Act, a certification from the transferor to that
effect (in substantially the form of Exhibit C
hereto); or
(C) if such beneficial interest is being transferred to
an Institutional Accredited Investor, delivery by the
transferor of a certification to that effect (in
substantially the form of Exhibit C hereto), and
delivery by the proposed transferee of a Transferee
Certificate for Institutional Accredited Investors
(in substantially the form of Exhibit D hereto); or
(D) if such beneficial interest is being transferred in
reliance on Regulation S under the Securities Act,
delivery by the transferor of (i) a certification to
that effect (in substantially in the form of Exhibit
C hereto), and (ii) a Certificate for Regulation S
Transfers in the form of Exhibit E hereto; or
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(E) if such beneficial interest is being transferred in
reliance on Rule 144 under the Securities Act,
delivery by the transferor of (i) a certification to
that effect (in substantially the form of Exhibit C
hereto) and (ii) an opinion of counsel reasonably
satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act; or
(F) if such beneficial interest is being transferred in
reliance on another exemption from the registration
requirements of the Securities Act, a certification
from the transferor to that effect (in substantially
the form of Exhibit C hereto) and an opinion of
counsel reasonably satisfactory to the Company to the
effect that such transfer is in compliance with the
Securities Act; provided that the Company may
instruct the Warrant Agent not to register such
transfer in any case where the proposed transferee is
not a QIB, Non-U.S. Person or Institutional
Accredited Investor.
then the Warrant Agent will cause, in accordance with the
standing instructions and procedures existing between the
Depositary and the Warrant Agent, the aggregate amount of the
Global Warrant to be reduced and, following such reduction,
the Company will execute and, upon receipt of an
authentication order in the form of an officers' certificate
(a certificate signed by two officers of such company, one of
whom must be the principal executive officer, principal
financial officer or principal accounting officer) (an
"Officers' Certificate"), the Warrant Agent will authenticate
and deliver to the transferee a Definitive Warrant.
(ii) Definitive Warrants issued in exchange for a beneficial
interest in a Global Warrant pursuant to this Section 1.08(d)
shall be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions from
its direct or indirect participants or otherwise, shall
instruct the Warrant Agent in writing. The Warrant Agent shall
deliver such Definitive Warrants to the persons in whose names
such Warrants are so registered and adjust the Global Warrant
pursuant to paragraph (h) of this Section 1.08.
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(e) Restrictions on Transfer or Exchange of Global Warrants.
Notwithstanding any other provisions of this Agreement (other than the
provisions set forth in subsection (f) of this Section 1.08), a Global Warrant
may not be transferred or exchanged as a whole except by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(f) Authentication of Definitive Warrants in Absence of
Depositary. If at any time:
(i) the Depositary for the Global Warrants notifies the Company
that the Depositary is unwilling or unable to continue as
Depositary for the Global Warrant and a successor Depositary
for the Global Warrant is not appointed by the Company within
90 days after delivery of such notice; or
(ii) the Company, at its sole discretion, notifies the Warrant
Agent in writing that it elects to cause the issuance of
Definitive Warrants for all Global Warrants under this
Agreement,
then the Company will execute, and the Warrant Agent will, upon receipt of an
Officers' Certificate requesting the authentication and delivery of Definitive
Warrants, authenticate and deliver Definitive Warrants, in an aggregate number
equal to the aggregate number of warrants represented by the Global Warrant, in
exchange for such Global Warrant.
(g) Private Placement Legend. Upon the registration of
transfer, exchange or replacement of Warrant Certificates not bearing the legend
set forth in the first paragraph of Exhibit A attached hereto (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 Warrant Certificates that bear the
Private Placement Legend unless, and the Warrant Agent is hereby authorized to
deliver Warrant Certificates without the Private Placement Legend if, (i) the
requested transfer is not prior to the date which is three years (or such
shorter period as may be prescribed by Rule 144(k) (or any successor provision
thereto) under the Securities Act or any successor provision thereunder) after
the later of the original Issue Date of the Warrants or the last
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day on which the Company or any of its Affiliates was the owner of the Warrant
or any predecessor security, (ii) there is delivered to the Warrant Agent an
opinion of counsel reasonably satisfactory to the Company 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 or (iii) the Warrants to be transferred or exchanged represented
by such Warrant Certificates are being transferred or exchanged pursuant to an
effective registration statement under the Securities Act.
(h) Cancellation or Adjustment of a Global Warrant. At such
time as all beneficial interests in a Global Warrant have either been exchanged
for Definitive Warrants, redeemed, repurchased or cancelled, such Global Warrant
shall be returned to the Company or, upon written order to the Warrant Agent in
the form of an Officers' Certificate from the Company, retained and cancelled by
the Warrant Agent. At any time prior to such cancellation, if any beneficial
interest in a Global Warrant is exchanged for Definitive Warrants, redeemed,
repurchased or cancelled, the number of Warrants represented by such Global
Warrant shall be reduced and an endorsement shall be made on such Global Warrant
by the Warrant Agent to reflect such reduction.
(i) Obligations with Respect to Transfers or Exchanges of
Definitive Warrants.
(i) To permit registrations of transfers or exchanges, the Company
shall execute, at the Warrant Agent's request, and the Warrant
Agent shall authenticate Definitive Warrants and Global
Warrants.
(ii) All Definitive Warrants and Global Warrants issued upon any
registration, transfer or exchange of Definitive Warrants or
Global Warrants shall be the valid obligations of the Company,
entitled to the same benefits under this Warrant Agreement as
the Definitive Warrants or Global Warrants surrendered upon
the registration of transfer or exchange.
(iii) Prior to due presentment for registration of transfer of any
Warrant, the Warrant Agent and the Company may deem and treat
the person in whose name any Warrant is registered as the
absolute owner of such Warrant, and neither the Warrant Agent
nor the Company shall be affected by notice to the contrary.
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SECTION 1.09. Lost, Stolen, Destroyed, Defaced or Mutilated
Warrant Certificates. Upon receipt by the Company and the Warrant Agent (or any
agent of the Company or the Warrant Agent, if requested by the Company) of
evidence satisfactory to them of the loss, theft, destruction, defacement, or
mutilation of any Warrant Certificate and of an indemnity bond satisfactory to
them and, in the case of mutilation or defacement, upon surrender thereof to the
Warrant Agent for cancellation, then, in the absence of notice to the Company or
the Warrant Agent that such Warrant Certificate has been acquired by a bona fide
purchaser or holder in due course, the Company shall execute, and an authorized
signatory of the Warrant Agent shall manually authenticate and deliver, in
exchange for or in lieu of the lost, stolen, destroyed, defaced or mutilated
Warrant Certificate, a new Warrant Certificate representing a like number of
Warrants, bearing a number or other distinguishing symbol not contemporaneously
outstanding. Upon the issuance of any new Warrant Certificate under this Section
in a name other than the prior registered holder of the lost, stolen, destroyed,
defaced or mutilated Warrant Certificate, the Company may require the payment
from the holder of such Warrant Certificate of a sum sufficient to cover any
tax, stamp tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Warrant
Agent and the Registrar) in connection therewith. Every substitute Warrant
Certificate executed and delivered pursuant to this Section in lieu of any lost,
stolen or destroyed Warrant Certificate shall constitute an additional
contractual obligation of the Company, whether or not the lost, stolen or
destroyed Warrant Certificate shall be at any time enforceable by anyone, and
shall be entitled to the benefits of (but shall be subject to all the
limitations of rights set forth in) this Agreement equally and proportionately
with any and all other Warrant Certificates duly executed and delivered
hereunder. The provisions of this Section 1.09 are exclusive with respect to the
replacement of lost, stolen, destroyed, defaced or mutilated Warrant
Certificates and shall preclude (to the extent lawful) any and all other rights
or remedies notwithstanding any law or statute existing or hereafter enacted to
the contrary with respect to the replacement of lost, stolen, destroyed, defaced
or mutilated Warrant Certificates.
The Warrant Agent is hereby authorized to authenticate in
accordance with the provisions of this Agreement, and deliver the new Warrant
Certificates required pursuant to the provisions of this Section.
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SECTION 1.10. Offices for Exercise, etc. So long as any of the
Warrants remain outstanding, the Company will designate and maintain in the
Borough of Manhattan, The City of New York: (a) an office or agency where the
Warrant Certificates may be presented for exercise, (b) an office or agency
where the Warrant Certificates may be presented for registration of transfer and
for exchange (including the exchange of temporary Warrant Certificates for
definitive Warrant Certificates pursuant to Section 1.05 hereof), and (c) an
office or agency where notices and demands to or upon the Company in respect of
the Warrants or of this Agreement may be served. The Company may from time to
time change or rescind such designation, as it may deem desirable or expedient;
provided, however, that an office or agency shall at all times be maintained in
the Borough of Manhattan, The City of New York, as provided in the first
sentence of this Section. In addition to such office or offices or agency or
agencies, the Company may from time to time designate and maintain one or more
additional offices or agencies within or outside The City of New York, where
Warrant Certificates may be presented for exercise or for registration of
transfer or for exchange, and the Company may from time to time change or
rescind such designation, as it may deem desirable or expedient. The Company
will give to the Warrant Agent written notice of the location of any such office
or agency and of any change of location thereof. The Company hereby designates
the Warrant Agent at its principal corporate trust office identified in Section
7.03 in the Borough of Manhattan, The City of New York (the "Warrant Agent
Office"), as the initial agency maintained for each such purpose. In case the
Company shall fail to maintain any such office or agency or shall fail to give
such notice of the location or of any change in the location thereof,
presentations and demands may be made and notice may be served at the Warrant
Agent Office and the Company appoints the Warrant Agent as its agent to receive
all such presentations, surrenders, notices and demands.
ARTICLE II
DURATION, EXERCISE OF WARRANTS; EXERCISE
PRICE AND REPURCHASE OF WARRANTS
SECTION 2.01. Duration of Warrants. Subject to the terms and
conditions established herein, the Warrants shall expire at 5:00 p.m., New York
City time, on June 15, 2004. The applicable date of expiration of a particular
Warrant is referred to herein as the "Expiration Date" of such Warrant. Each
Warrant may be exercised on any Business Day (as defined
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below) on or after the Exercisability Date (as defined in Section 2.02) and on
or prior to the close of business on the Expiration Date.
Any Warrant not exercised before the close of business on the
Expiration Date shall become void, and all rights of the holder under the
Warrant Certificate evidencing such Warrant and under this Agreement shall
cease.
"Business Day" shall mean any day on which (i) banks in New
York City, (ii) the principal U.S. securities exchange or market, if any, on
which any Common Stock is listed or admitted to trading and (iii) the principal
U.S. securities exchange or market, if any, on which the Warrants are listed or
admitted to trading are open for business.
SECTION 2.02. Exercise, Exercise Price, Settlement and
Delivery. (a) Subject to the provisions of this Agreement, a holder of a Warrant
shall have the right to purchase from the Company on or after the Exercisability
Date and on or prior to the close of business on the Expiration Date 1.7604
fully paid, registered and non-assessable shares of Common Stock (and any other
securities or property purchasable or deliverable upon exercise of such Warrant
as provided in Article V), subject to adjustment in accordance with Article V
hereof, at the purchase price of $0.01 for each share purchased (the "Exercise
Price"). The number of Shares for which a particular Warrant may be exercised
(the "Exercise Rate") shall be subject to adjustment from time to time as set
forth in Article V hereof.
"Exercisability Date" means, with respect to each Warrant, the
date as of which both of the following shall have occurred (whether before or on
such date): (i) the Separability Date and (ii) an Exercise Event.
"Exercise Event" means, with respect to each Warrant, the date
of the occurrence of the earliest of: (1) immediately prior to a Warrant Change
of Control (as defined in the Registration Rights Agreement), (2) (a) the 90th
day (or such fewer number of days as determined by the Company in its sole
discretion) after the consummation of an Initial Public Equity Offering or (b)
upon the closing of the Initial Public Equity Offering but only in respect of
Warrants, if any, required to be exercised to permit the holders thereof to sell
Shares pursuant to their registration rights, (3) a class of equity securities
of the Company is listed on a United States national securities exchange or
authorized for quotation on the Nasdaq National
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Market or is otherwise subject to registration under the Exchange Act, (4)
December 15, 1999.
"Initial Public Equity Offering" means a primary public
offering (whether or not underwritten, but excluding any offering pursuant to
Form S-8 under the Securities Act or any other publicly registered offering
pursuant to the Securities Act pertaining to an issuance of shares of Common
Stock or securities exercisable therefor under any benefit plan, employee
compensation plan, or employee or director stock purchase plan) of Common Stock
of the Company pursuant to an effective registration statement under the
Securities Act.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency or political
subdivision thereof or any other entity, including any predecessor of any such
entity.
(b) Warrants may be exercised on or after the date they are
exercisable hereunder by (i) surrendering at any office or agency maintained for
that purpose by the Company pursuant to Section 1.10 (each a "Warrant Exercise
Office") the Warrant Certificate evidencing such Warrants with the form of
election to exercise Shares set forth on the reverse side of the Warrant
Certificate (the "Election to Exercise") duly completed and signed by the
registered holder or holders thereof or by the duly appointed legal
representative thereof or by a duly authorized attorney, and in the case of a
transfer, such signature shall be guaranteed by an eligible guarantor
institution, and (ii) paying in full the Exercise Price for each such Warrant
exercised. Each Warrant may be exercised only in whole.
(c) Simultaneously with the exercise of each Warrant, payment
in full of the aggregate Exercise Price may be made, at the option of the
holder, (i) by United States dollars or by certified or official bank check,
(ii) by the surrender (which surrender shall be evidenced by cancellation of the
number of Warrants represented by any Warrant Certificate presented in
connection with a Cashless Exercise) of a Warrant or Warrants (represented by
one or more Warrant Certificates), and without payment of the Exercise Price in
cash, for such number of Shares equal to the product of (1) the number of Shares
for which such Warrant is exercisable with payment in cash of the aggregate
Exercise Price as of the date of exercise and (2) the Cashless Exercise Ratio or
(iii) with any combination of (i) and (ii). For purposes of this Agreement, the
"Cashless Exercise
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Ratio" shall equal a fraction, the numerator of which is the excess of the
Current Market Value per share of the Common Stock on the date of exercise over
the Exercise Price per share as of the date of exercise and the denominator of
which is the Current Market Value per share of the Common Stock on the date of
exercise. An exercise of a Warrant in accordance with the immediately preceding
sentences is herein called a "Cashless Exercise." Upon surrender of a Warrant
Certificate representing more than one Warrant in connection with the holder's
option to elect a Cashless Exercise, the number of Shares deliverable upon a
Cashless Exercise shall be equal to the Cashless Exercise Ratio multiplied by
the product of (a) the number of Warrants that the holder specifies is to be
exercised pursuant to a Cashless Exercise and (b) the number of Shares for which
such Warrant is then exercisable (without giving effect to the Cashless Exercise
option). All provisions of this Agreement shall be applicable with respect to an
exercise of a Warrant Certificate pursuant to a Cashless Exercise for less than
the full number of Warrants represented thereby. No payment or adjustment shall
be made on account of any dividends on the Shares issued upon exercise of a
Warrant. If the Company has not effected the registration under the Securities
Act of the offer and sale of the Shares by the Company to the holders of the
Warrants upon the exercise thereof, the Company may elect to require that
holders of the Warrants effect the exercise of the Warrants solely pursuant to
the Cashless Exercise option and may also amend the Warrants to eliminate the
requirement for payment of the Exercise Price with respect such Cashless
Exercise option. The Warrant Agent shall have no obligation under this section
to calculate the Cashless Exercise Ratio.
(d) Upon such surrender of a Warrant Certificate and payment
and collection of the Exercise Price at any Warrant Exercise Office (other than
any Warrant Exercise Office that also is an office of the Warrant Agent), such
Warrant Certificate and payment shall be promptly delivered to the Warrant
Agent. The "Exercise Date" for a Warrant shall be the date when all of the items
referred to in the first sentence of paragraphs (b) and (c) of this Section 2.02
are received by the Warrant Agent at or prior to 11:00 a.m., New York City time,
on a Business Day and the exercise of the Warrants will be effective as of such
Exercise Date. If any items referred to in the first sentence of paragraphs (b)
and (c) are received after 11:00 a.m., New York City time, on a Business Day,
the exercise of the Warrants to which such item relates will be effective on the
next succeeding Business Day. Notwithstanding the foregoing, in the case of an
exercise of Warrants on the Expiration Date, if all of the items referred to in
the first sentence of paragraphs
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(b) and (c) are received by the Warrant Agent at or prior to 5:00 p.m., New York
City time, on the Expiration Date, the exercise of the Warrants to which such
items relate will be effective on the Expiration Date.
(e) Upon the exercise of a Warrant in accordance with the
terms hereof, the receipt of a Warrant Certificate and payment of the Exercise
Price (or election of the Cashless Exercise option), the Warrant Agent shall:
(i) except to the extent exercise of the Warrant has been effected through
Cashless Exercise, cause an amount equal to the aggregate Exercise Price to be
paid to the Company by crediting the same to the account designated by the
Company in writing to the Warrant Agent for that purpose; (ii) advise the
Company immediately by telephone of the amount so deposited to the Company's
account and promptly confirm such telephonic advice in writing; and (iii) as
soon as practicable, advise the Company in writing of the number of Warrants
exercised in accordance with the terms and conditions of this Agreement and the
Warrant Certificates, the instructions of each exercising holder of the Warrant
Certificates with respect to delivery of the Shares to which such holder is
entitled upon such exercise, and such other information as the Company shall
reasonably request.
(f) Subject to Section 5.02 hereof, as soon as practicable
after the exercise of any Warrant or Warrants in accordance with the terms
hereof, the Company shall issue or cause to be issued to or upon the written
order of the registered holder of the Warrant Certificate evidencing such
exercised Warrant or Warrants, a certificate or certificates evidencing the
Shares to which such holder is entitled, in fully registered form, registered in
such name or names as may be directed by such holder pursuant to the Election to
Exercise, as set forth on the reverse of the Warrant Certificate. Such
certificate or certificates evidencing the Shares shall be deemed to have been
issued and any persons who are designated to be named therein shall be deemed to
have become the holder of record of such Shares as of the close of business on
the Exercise Date; the Shares may initially be issued in global form (the
"Global Shares"). Such Global Shares shall represent such of the outstanding
Shares as shall be specified therein and each shall provide that it shall
represent the aggregate amount of outstanding Shares from time to time endorsed
thereon and that the aggregate amount of outstanding Shares represented thereby
may from time to time be reduced or increased, as appropriate. Any endorsement
of a Global Share to reflect the amount of any increase or decrease in the
amount of outstanding Shares represented thereby shall be made by the registrar
for the Shares
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and the Depositary (referred to below) in accordance with instructions given by
the holder thereof. The Depository Trust Company shall (if possible) act as the
Depositary with respect to the Global Shares until a successor shall be
appointed by the Company and the registrar for the Shares. After such exercise
of any Warrant or Shares, the Company shall also issue or cause to be issued to
or upon the written order of the registered holder of such Warrant Certificate,
a new Warrant Certificate, countersigned by the Warrant Agent pursuant to
written instruction, evidencing the number of Warrants, if any, remaining
unexercised unless such Warrants shall have expired.
SECTION 2.03. Cancellation of Warrant Certificates. In the
event the Company shall purchase or otherwise acquire Warrants, the Warrant
Certificates evidencing such Warrants may thereupon be delivered to the Warrant
Agent, and if so delivered, shall at the Company's written instruction be
canceled by it and retired. The Warrant Agent shall cancel all Warrant
Certificates properly surrendered for exchange, substitution, transfer or
exercise. Upon the Company's written request, the Warrant Agent shall deliver
such canceled Warrant Certificates to the Company.
SECTION 2.04. Notice of an Exercise Event. The Company shall,
as soon as practicable after the occurrence of an Exercise Event, send or cause
to be sent to each holder of Warrants and to each beneficial owner of the
Warrants with respect to which such Exercise Event has occurred to the extent
that the Warrants are held of record by a depositary or other agent (with a copy
to the Warrant Agent), by first-class mail, at the addresses appearing on the
Warrant Register, a notice prepared by the Company advising such holder of the
Exercise Event which has occurred, which notice shall describe the type of
Exercise Event and the date of the occurrence thereof, as applicable, and the
date of expiration of the right to exercise the Warrants prominently set forth
in the face of such notice. The Company agrees to make available the foregoing
right notwithstanding any other provision herein to the contrary. Such right
may, if it would be in the best interests of holders of Warrants, be in lieu of
the right to receive the number of Shares to which the holder would have been
entitled.
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ARTICLE III
OTHER PROVISIONS RELATING TO
RIGHTS OF HOLDERS OF WARRANTS
SECTION 3.01. Enforcement of Rights. (a) Notwithstanding any
of the provisions of this Agreement, any holder of any Warrant Certificate,
without the consent of the Warrant Agent, the holder of any Shares or the holder
of any other Warrant Certificate, may, in and for his own behalf, enforce, and
may institute and maintain any suit, action or proceeding against the Company
suitable to enforce, his right to exercise the Warrant or Warrants evidenced by
his Warrant Certificate in the manner provided in such Warrant Certificate and
in this Agreement.
(b) Neither the Warrants nor any Warrant Certificate shall
entitle the holders thereof to any of the rights of a holder of Shares,
including, without limitation, the right to vote or to receive any dividends or
other payments or to consent or to receive notice as stockholders in respect of
the meetings of stockholders or for the election of directors of the Company or
any other matter, or any rights whatsoever as stockholders of the Company,
except as expressly provided herein (including Section 5.03 hereof).
SECTION 3.02. Obtaining Stock Exchange Listings. The Company
will from time to time take all action which may be necessary so that the
Shares, immediately upon their issuance upon the exercise of Warrants, will be
listed on the principal securities exchanges and markets within the United
States (including the Nasdaq National Market), if any, on which other shares of
Common Stock are then listed.
ARTICLE IV
CERTAIN COVENANTS OF THE COMPANY
SECTION 4.01. Payment of Taxes. The Company will pay all
documentary stamp taxes attributable to the initial issuance of Warrants and of
the Shares upon the exercise of Warrants; provided, however, that the Company
shall not be required to pay any tax or other governmental charge which may be
payable in respect of any transfer or exchange of any Warrant Certificates or
any certificates for Shares in a name other than the registered holder of a
Warrant Certificate surrendered upon the exercise of a Warrant. In any such
case, no transfer
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or exchange shall be made unless or until the person or persons requesting
issuance thereof shall have paid to the Company the amount of such tax or other
governmental charge or shall have established to the satisfaction of the Company
that such tax or other governmental charge has been paid or an exemption is
available therefrom.
SECTION 4.02. Qualification Under the Securities Laws. (a)
Immediately prior to the occurrence of an Exercise Event arising as a result of
an Initial Public Equity Offering, the Company will, if permitted by applicable
law, take all such action as is necessary to cause the offer and sale by the
Company of the Shares issuable or deliverable upon exercise of the Warrants to
be registered or otherwise qualified under the provisions of the Securities Act
and pursuant to all applicable state securities laws and to provide for the
issuance of all Shares delivered upon exercise of the Warrants pursuant to an
effective shelf registration statement under the Securities Act. Subject to the
last sentence of this Section 4.02(a) and to paragraph (b) of this Section 4.02,
so long as any unexpired Warrants which have become exercisable due to the
occurrence of such an Exercise Event remain outstanding, the Company will file
such amendments and/or supplements to any registration statement under the
Securities Act or under any state securities laws covering the issuance of such
Shares and supplement and keep current any prospectus forming a part of such
registration statement as may be necessary to permit the Company to deliver to
each person exercising a Warrant a prospectus meeting the requirements of
Section 10(a)(3) of the Securities Act (a "Prospectus") and the regulations of
the Securities and Exchange Commission and otherwise complying with the
Securities Act and regulations thereunder, and as may be necessary to comply
with any applicable state securities laws. The Warrant Agent shall have no duty
to monitor when such registration or qualification is necessary nor shall the
Warrant Agent be responsible for the Company's failure to comply with this
Section 4.02. The Company's obligation to maintain a Prospectus for delivery to
each person exercising a Warrant shall be terminated on the date the Company
delivers to the Warrant Agent an unqualified opinion of counsel reasonably
satisfactory to the Warrant Agent to the effect that all Shares registrable or
deliverable upon exercise of the Warrants may be issued without the requirement
of registration under the Securities Act and will be freely transferable after
receipt without limitation under the Securities Act.
(b) The Company may suspend the effectiveness of such shelf
registration statement and the use of any related
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prospectus in the event that, and for a period not to exceed an aggregate of 45
days in any calendar year if, (i) an event occurs and is continuing as a result
of which the shelf registration statement would, in the Company's good faith
judgement, which determination shall be evidence by a resolution of the
Company's board of directors, contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make statements therein, in
the light of the circumstances under which they were made, not misleading, and
(ii) (a) the Company determines in its good faith judgment, which determination
shall be evidenced by a resolution of the Company's board of directors, that the
disclosure of an event at such time would be required to be disclosed in the
registration statement and would have a material adverse effect on the business,
operations or prospects of the Company (provided the Company would not otherwise
be required to disclose such event) or (b) the disclosure otherwise relates to a
pending material business transaction which has not yet been publicly disclosed.
SECTION 4.03. Rules 144 and 144A. The Company covenants that
it will file the reports required to be filed by it under the Securities Act and
the Exchange Act and the rules and regulations adopted by the Securities and
Exchange Commission thereunder in a timely manner in accordance with the
requirements of the Securities Act and the Exchange Act and, if at any time the
Company is not required to file such reports, it will, upon the request of any
holder or beneficial owner of Warrants, make available such information
necessary to permit sales pursuant to Rule 144A under the Securities Act.
SECTION 4.04. Form of Initial Public Equity Offering. The
Company agrees that it will not make an Initial Public Equity Offering of any
class of its Capital Stock (other than the Shares) without amending the terms of
the Company's certificate of incorporation to provide that the Shares are
convertible into the class of Capital Stock subject to the Initial Public Equity
Offering (the "Subject Class") on a share-for-share basis and that the rights,
conditions and privileges of the Subject Class shall not be adverse to the
holders of the Shares.
SECTION 4.05. Registration of Shares. The Company agrees that
it will comply with all applicable laws, including the Securities Act and any
applicable state securities laws, in connection with the offer and sale of
Common Stock (and other securities and property deliverable) upon exercise of
the Warrants.
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ARTICLE V
ADJUSTMENTS
SECTION 5.01. Adjustment of Exercise Rate; Notices. The
Exercise Rate is subject to adjustment from time to time as provided in this
Section.
(a) Adjustment for Change in Capital Stock. If, after the
date hereof, the Company:
(i) pays a dividend or makes a distribution on any of its
Common Stock in shares of any of its Common Stock (other than any such
dividend to the extent covered by Section 5.03);
(ii) subdivides any of its outstanding shares of Common
Stock into a greater number of shares;
(iii) combines any of its outstanding shares of Common Stock
into a smaller number of shares;
(iv) pays a dividend or makes a distribution on any of its
Common Stock in shares of any of its Capital Stock (as defined below)
(other than Common Stock or rights, warrants, or options for its Common
Stock to the extent such issuance or distribution is covered by Section
5.03); or
(v) issues by reclassification of any of its Common Stock
any shares of any of its Capital Stock;
then the Exercise Rate in effect immediately prior to such action for each
Warrant then outstanding shall be adjusted so that the holder of a Warrant
thereafter exercised may receive the number of shares of Capital Stock of the
Company which such holder would have owned immediately following such action if
such holder had exercised the Warrant immediately prior to such action or
immediately prior to the record date applicable thereto, if any (regardless of
whether the Warrants then outstanding are then exercisable and without giving
effect to the Cashless Exercise option). If there are no outstanding shares of
Common Stock that are of the same class as the Shares at the time of any such
action and such action has therefore been taken only in respect of the Shares,
the adjustment shall relate to the Shares in their same form if it would not
frustrate the intent and purposes of this Section 5.01.
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The adjustment shall become effective immediately after the
record date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or reclassification. In
the event that such dividend or distribution is not so paid or made or such
subdivision, combination or reclassification is not effected, the Exercise Rate
shall again be adjusted to be the Exercise Rate which would then be in effect if
such record date or effective date had not been so fixed.
If after an adjustment a holder of a Warrant upon exercise of
such Warrant may receive shares of two or more classes of Capital Stock of the
Company, the Exercise Rate shall thereafter be subject to adjustment upon the
occurrence of an action taken with respect to any such class of Capital Stock as
is contemplated by this Article V with respect to the Common Stock, on terms
comparable to those applicable to Common Stock in this Article V.
(b) Adjustment for Sale of Common Stock Below Current Market
Value. If, after the date hereof, the Company grants or sells to any Affiliate
of the Company (other than a wholly-owned subsidiary) any Common Stock or any
securities convertible into or exchangeable or exercisable for any Common Stock
at a price below the then Current Market Value (other than (1) pursuant to the
exercise of the Warrants, (2) pursuant to any security convertible into, or
exchangeable or exercisable for shares of Common Stock outstanding as of the
date of this Agreement, (3) upon the conversion, exchange or exercise of any
convertible, exchangeable or exercisable security as to which upon the issuance
thereof an adjustment pursuant to this Article V has been made, (4) upon the
conversion, exchange or exercise of convertible, exchangeable or exercisable
securities of the Company outstanding on the date of this Agreement (to the
extent in accordance with the terms of such securities as in effect on the date
of this Agreement), and (5) in connection with a Rollup (as defined in the
Indenture), the Exercise Rate for each Warrant then outstanding shall be
adjusted in accordance with the formula:
E' = E x (O + N)
----------------
(O + (N x P/M))
where:
E' = the adjusted Exercise Rate for each Warrant then outstanding;
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E = the then current Exercise Rate for each Warrant then
outstanding;
O = the number of shares of Common Stock outstanding immediately
prior to the sale of Common Stock or issuance of securities
convertible, exchangeable or exercisable for Common Stock;
N = the number of shares of Common Stock so sold or the maximum
stated number of shares of Common Stock issuable upon the
conversion, exchange or exercise of any such convertible,
exchangeable or exercisable securities, as the case may be;
P = the proceeds per share of Common Stock received by the Company,
which (i) in the case of shares of Common Stock is the amount
received by the Company in consideration for the sale and
issuance of such shares; and (ii) in the case of securities
convertible into or exchangeable or exercisable for shares of
Common Stock is the amount received by the Company in
consideration for the sale and issuance of such convertible or
exchangeable or exercisable securities, plus the minimum
aggregate amount of additional consideration, other than the
surrender of such convertible or exchangeable securities,
payable to the Company upon exercise, conversion or exchange
thereof; and
M = the Current Market Value as of the Time of Determination or at
the time of sale, as the case may be.
The adjustment shall become effective immediately after the
record date for the determination of stockholders entitled to receive the
rights, warrants or options to which this paragraph (b) applies or upon
consummation of the sale of Common Stock, as the case may be. To the extent that
shares of Common Stock are not delivered after the expiration of such rights or
warrants, the Exercise Rate for each Warrant then outstanding shall be
readjusted to the Exercise Rate which would otherwise be in effect had the
adjustment made upon the issuance of such rights or warrants been made on the
basis of delivery of only the number of shares of Common Stock actually
delivered. In the event that such rights or warrants are not so issued, the
Exercise Rate for each Warrant then outstanding shall again be adjusted to be
the Exercise Rate which would then be in effect if such date fixed for
determination of
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stockholders entitled to receive such rights or warrants had not been so fixed.
No adjustment shall be made under this paragraph (b) if the
application of the formula stated above in this paragraph (b) would result in a
value of E' that is lower than the value of E.
No adjustment shall be made under this paragraph (b) for any
adjustment which is the subject of paragraph (c) of this Section 5.01.
No adjustment in the Exercise Rate shall be made under this
paragraph (b) upon the conversion, exchange or exercise of options to acquire
shares of Common Stock by officers, directors or employees of the Company;
provided that the exercise price of such options, at the time of issuance
thereof, is at least equal to the then Current Market Value of the Common Stock
underlying such options.
"Affiliate" of any specified Person means any other Person
which, directly or indirectly, controls, is controlled by or is under direct or
indirect common control with such specified Person. For purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlling," "controlled by" and "under common control with") when used with
respect to any Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise.
(c) Notice of Adjustment. Whenever the Exercise Rate is
adjusted, the Company shall promptly mail to holders of Warrants then
outstanding at the addresses appearing on the Warrant Register a notice of the
adjustment. The Company shall file with the Warrant Agent and any other
Registrar such notice and a certificate from the Company's independent public
accountants briefly stating the facts requiring the adjustment and the manner of
computing it. The certificate shall be conclusive evidence that the adjustment
is correct. Neither the Warrant Agent nor any such Registrar shall be under any
duty or responsibility with respect to any such certificate except to exhibit
the same during normal business hours to any holder desiring inspection thereof.
(d) Reorganization of Company; Special Distributions. (i) If
the Company, in a single transaction or through a series of related
transactions, merges, consolidates or amalgamates
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with or into any other person or sells, assigns, transfers, leases, conveys or
otherwise disposes of all or substantially all of its properties and assets to
another person or group of affiliated persons or is a party to a merger or
binding share exchange which reclassifies or changes its outstanding Common
Stock (a "Fundamental Transaction"), as a condition to consummating any such
transaction the person formed by or surviving any such consolidation or merger
if other than the Company or the person to whom such transfer has been made (the
"Surviving Person") shall enter into a supplemental warrant agreement. The
supplemental warrant agreement shall provide (a) that the holder of a Warrant
then outstanding may exercise it for the kind and amount of securities, cash or
other assets which such holder would have received immediately after the
Fundamental Transaction if such holder had exercised the Warrant immediately
before the effective date of the transaction (regardless of whether the Warrants
are then exercisable and without giving effect to the Cashless Exercise option,
assuming (to the extent applicable) that such holder (i) was not a constituent
person or an affiliate of a constituent person to such transaction, (ii) made no
election with respect thereto, and (iii) was treated alike with the plurality of
non-electing holders, and (b) that the Surviving Person shall succeed to and be
substituted to every right and obligation of the Company in respect of this
Agreement and the Warrants. The supplemental warrant agreement shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article V. The Surviving Person shall mail to
holders of Warrants at the addresses appearing on the Warrant Register a notice
briefly describing the supplemental warrant agreement. If the issuer of
securities deliverable upon exercise of Warrants is an affiliate of the
Surviving Person, that issuer shall join in the supplemental warrant agreement.
(ii) Notwithstanding the foregoing, if the Company enters
into a Fundamental Transaction with another Person (other than a subsidiary of
the Company) and consideration is payable to holders of shares of Capital Stock
(or other securities or property) issuable or deliverable upon exercise of the
Warrants that are exercisable in exchange for their shares in connection with
such Fundamental Transaction which consists solely of cash, then the holders of
Warrants shall be entitled to receive distributions on the date of such event on
an equal basis with holders of such shares (or other securities issuable upon
exercise of the Warrants) as if the Warrants had been exercised immediately
prior to such event, less the Exercise Price therefor. Upon receipt of such
payment, if any, the
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rights of a holder of such a Warrant shall terminate and cease and such holder's
Warrants shall expire.
(iii) If this paragraph (d) applies, it shall supersede the
application of paragraph (a) of this Section 5.01.
(e) Company Determination Final. Any determination that the
Company or the Board of Directors of the Company must make pursuant to this
Article V is conclusive.
(f) Warrant Agent's Adjustment Disclaimer. The Warrant Agent
has no duty to determine when an adjustment under this Article V should be made,
how it should be made or what it should be. The Warrant Agent has no duty to
determine whether a supplemental warrant agreement under paragraph (f) need be
entered into or whether any provisions of any supplemental warrant agreement are
correct. The Warrant Agent shall not be accountable for and makes no
representation as to the validity or value of any securities or assets issued
upon exercise of Warrants. The Warrant Agent shall not be responsible for the
Company's failure to comply with this Article V.
(g) Adjustment for Tax Purposes. The Company may make such
increases in the Exercise Rate, in addition to those otherwise required by this
Section, as it considers to be advisable in order that any event treated for
Federal income tax purposes as a dividend of stock or stock rights shall not be
taxable to the recipients.
(h) Underlying Shares. The Company shall at all times reserve
and keep available, free from preemptive rights, out of its authorized but
unissued Common Stock or Common Stock held in the treasury of the Company, for
the purpose of effecting the exercise of Warrants, the full number of Shares
then deliverable upon the exercise of all Warrants then outstanding and payment
of the exercise price, and the shares so deliverable shall be fully paid and
nonassessable and free from all liens and security interests.
(i) Specificity of Adjustment. Irrespective of any adjustments
in the number or kind of shares purchasable upon the exercise of the Warrants,
Warrant Certificates theretofore or thereafter issued may continue to express
the same number and kind of Shares per Warrant as are stated on the Warrant
Certificates initially issuable pursuant to this Agreement.
(j) Voluntary Adjustment. The Company from time to time may
increase the Exercise Rate by any number and for any
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period of time (provided that such period is not less than 20 Business Days).
Whenever the Exercise Rate is so increased, the Company shall mail to holders at
the addresses appearing on the Warrant Register and file with the Warrant Agent
a notice of the increase. The Company shall give the notice at least 15 days
before the date the increased Exercise Rate takes effect. The notice shall state
the increased Exercise Rate and the period it will be in effect. A voluntary
increase in the Exercise Rate does not change or adjust the Exercise Rate
otherwise in effect as determined by this Section 5.01.
(k) Multiple Adjustments. After an adjustment to the Exercise
Rate for outstanding Warrants under this Article V, any subsequent event
requiring an adjustment under this Article V shall cause an adjustment to the
Exercise Rate for outstanding Warrants as so adjusted.
(l) Definitions.
"Capital Stock" means, with respect to any person, any and all
shares, interests, participations, rights in, or other equivalents (however
designated and whether voting or non-voting) of, such person's capital stock,
whether outstanding on the Issue Date (as defined in the Indenture) or issued
after the Issue Date, and any and all rights, warrants or options exchangeable
for or convertible into such capital stock.
"Current Market Value" per share of Common Stock of the
Company or any other security at any date means (i) if the security is not
registered under the Exchange Act, (a) the value of the security, determined in
good faith by the Board of Directors of the Company and certified in a board
resolution, based on the most recently completed arm's-length transaction
between the Company and a person other than an Affiliate of the Company and the
closing of which occurs on such date or shall have occurred within the six-month
period preceding such date, or (b) if no transaction shall have occurred on such
date, the fair market value of the security as determined by an Independent
Financial Expert (provided that, in the case of the calculation of Current
Market Value for determining the cash value of fractional shares, any such
determination within six months that is, in the good faith judgment of the
Board, a reasonable determination of value, may be utilized) or (ii) (a) if the
security is registered under the Exchange Act, the average of the daily closing
sales prices of the securities for the 20 consecutive days immediately preceding
such date, or (b) if the security has been registered under the Exchange Act for
less than 20 consecutive days immediately preceding such date,
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then the average of the closing sales prices for all of the trading days before
such date for which closing sales prices are available, in the case of each of
(ii)(a) and (ii)(b), as certified to the Warrant Agent by the President, any
Vice President or the Chief Financial Officer of the Company. The closing sales
price for each such trading day shall be: (A) in the case of a security listed
or admitted to trading on any United States national securities exchange or
quotation system, 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, (B) in the case of a security not then listed or admitted to trading
on any United States national securities exchange or quotation system, 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 United States national
securities exchange or quotation system 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 not bid and asked prices reported during
the 30 days prior to the date in question, the Current Market Value shall be
determined as if the Shares (or other securities) were not registered under the
Exchange Act.
"Independent Financial Expert" means a United States
investment banking firm of national or regional standing in the United States
(i) which does not, and whose directors, officers and employees or Affiliates do
not have a direct or indirect material financial interest for its proprietary
account in the Company or any of its Affiliates and (ii) which, in the judgment
of the Board of Directors of the Company, is otherwise independent with respect
to the Company and its Affiliates and qualified to perform the task for which it
is to be engaged.
"Time of Determination" means, (i) in the case of any
distribution of securities or other property to existing stockholders to which
paragraph (b) applies, the time and date of the determination of stockholders
entitled to receive such
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securities or property or (ii) in the case of any other issuance and sale to
which paragraph (b) applies, the time and date of such issuance or sale.
(m) When De Minimis Adjustment may be Deferred. No Adjustment
in the Exercise Rate need be made unless the adjustment would require an
increase of at least 1% in the Exercise Rate. Any adjustments that are not made
shall be carried forward and taken into account in any subsequent adjustments.
All calculations under this Section 5 shall be made to the nearest 1/1000th of a
share, as the case may be.
SECTION 5.02. Fractional Shares. The Company will not be
required to issue fractional Shares upon exercise of the Warrants or distribute
Share certificates that evidence fractional Shares. In the event a holder is
required by Section 2.02(c) to make a Cashless Exercise, the number of Shares
issuable shall be rounded up to the nearest whole number. In addition, in no
event shall any holder of Warrants be required to make any payment of a
fractional cent. In lieu of fractional Shares, there shall be paid to the
registered holders of Warrant Certificates at the time Warrants evidenced
thereby are exercised as herein provided an amount in cash equal to the same
fraction of the Current Market Value, per Share on the Business Day preceding
the date the Warrant Certificates evidencing such Warrants are surrendered for
exercise. Such payments will be made by check or by transfer to an account
maintained by such registered holder with a bank in The City of New York. If any
holder surrenders for exercise more than one Warrant Certificate, the number of
Shares deliverable to such holder may, at the option of the Company, be computed
on the basis of the aggregate amount of all the Warrants exercised by such
holder.
SECTION 5.03. Certain Distributions. If at any time the
Company grants, issues or sells options, convertible securities, or rights to
purchase Capital Stock, warrants or other securities pro rata to the record
holders of any Common Stock (the "Distribution Rights") or, without duplication,
makes any dividend or otherwise makes any distribution, including, subject to
applicable law, pursuant to any plan of liquidation ("Distribution") on Common
Stock (whether in cash, property, evidences of indebtedness or otherwise), then
the Company shall grant, issue, sell or make to each registered holder of
Warrants then outstanding, the aggregate Distribution Rights or Distribution, as
the case may be, which such holder would have acquired if such holder had held
the maximum number of Shares acquirable upon complete exercise of such holder's
Warrants
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(regardless of whether the Warrants are then exercisable and without giving
effect to the Cashless Exercise option) immediately before the record date for
the grant, issuance or sale of such Distribution Rights or Distribution, as the
case may be, or, if there is no such record date, the date as of which the
record holders of Common Stock are to be determined for the grant, issue or sale
of such Distribution Rights or Distribution, as the case may be.
ARTICLE VI
CONCERNING THE WARRANT AGENT
SECTION 6.01. Warrant Agent. The Company hereby appoints First
Trust National Association as Warrant Agent of the Company in respect of the
Warrants and the Warrant Certificates upon the terms and subject to the
conditions herein and in the Warrant Certificates set forth; and First Trust
National Association hereby accepts such appointment. The Warrant Agent shall
have the powers and authority specifically granted to and conferred upon it in
the Warrant Certificates and hereby and such further powers and authority to act
on behalf of the Company as the Company may hereafter grant to or confer upon it
and it shall accept in writing. All of the terms and provisions with respect to
such powers and authority contained in the Warrant Certificates are subject to
and governed by the terms and provisions hereof. The Warrant Agent may act
through agents and shall not be responsible for the misconduct or negligence of
any such agent appointed with due care.
SECTION 6.02. Conditions of Warrant Agent's Obligations. The
Warrant Agent accepts its obligations herein set forth upon the terms and
conditions hereof and in the Warrant Certificates, including the following, to
all of which the Company agrees and to all of which the rights hereunder of the
holders from time to time of the Warrant Certificates shall be subject:
(a) The Warrant Agent shall be entitled to compensation to be
agreed upon with the Company in writing for all services rendered by it
and the Company agrees promptly to pay such compensation and to
reimburse the Warrant Agent for its reasonable out-of-pocket expenses
(including reasonable fees and expenses of counsel) incurred without
gross negligence or willful misconduct on its part in connection with
the services rendered by it hereunder. The Company also agrees to
indemnify the Warrant Agent and any
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predecessor Warrant Agent, their directors, officers, affiliates,
agents and employees for, and to hold them and their directors,
officers, affiliates, agents and employees harmless against, any loss,
liability or expense of any nature whatsoever (including, without
limitation, reasonable fees and expenses of counsel) incurred without
gross negligence or willful misconduct on the part of the Warrant
Agent, arising out of or in connection with its acting as such Warrant
Agent hereunder and its exercise of its rights and performance of its
obligations hereunder. The obligations of the Company under this
Section 6.02 shall survive the exercise and the expiration of the
Warrant Certificates and the resignation and removal of the Warrant
Agent.
(b) In acting under this Agreement and in connection with the
Warrant Certificates, the Warrant Agent is acting solely as agent of
the Company and does not assume any obligation or relationship of
agency or trust for or with any of the owners or holders of the Warrant
Certificates.
(c) The Warrant Agent may consult with counsel of its
selection and any advice or written opinion of such counsel shall be
full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion.
(d) The Warrant Agent shall be fully protected and shall incur
no liability for or in respect of any action taken or omitted to be
taken or thing suffered by it in reliance upon any Warrant Certificate,
notice, direction, consent, certificate, affidavit, opinion of counsel,
instruction, statement or other paper or document reasonably believed
by it to be genuine and to have been presented or signed by the proper
parties.
(e) The Warrant Agent, and its officers, directors, affiliates
and employees ("Related Parties"), may become the owners of, or acquire
any interest in, Warrant Certificates, shares or other obligations of
the Company with the same rights that it or they would have it if were
not the Warrant Agent hereunder and, to the extent permitted by
applicable law, it or they may engage or be interested in any financial
or other transaction with the Company and may act on, or as depositary,
trustee or agent for, any committee or body of holders of shares or
other obligations of the Company as freely as if it were not the
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Warrant Agent hereunder. Nothing in this Agreement shall be deemed to
prevent the Warrant Agent or such Related Parties from acting in any
other capacity for the Company.
(f) The Warrant Agent shall not be under any liability for
interest on, and shall not be required to invest, any monies at any
time received by it pursuant to any of the provisions of this Agreement
or of the Warrant Certificates.
(g) The Warrant Agent shall not be under any responsibility in
respect of the validity of this Agreement (or any term or provision
hereof) or the execution and delivery hereof (except the due execution
and delivery hereof by the Warrant Agent) or in respect of the validity
or execution of any Warrant Certificate (except its authentication
thereof).
(h) The recitals and other statements contained herein and in
the Warrant Certificates (except as to the Warrant Agent's
authentication thereon) shall be taken as the statements of the Company
and the Warrant Agent assumes no responsibility for the correctness of
the same. The Warrant Agent does not make any representation as to the
validity or sufficiency of this Agreement or the Warrant Certificates,
except for its due execution and delivery of this Agreement; provided,
however, that the Warrant Agent shall not be relieved of its duty to
authenticate the Warrant Certificates as authorized by this Agreement.
The Warrant Agent shall not be accountable for the use or application
by the Company of the proceeds of the exercise of any Warrant.
(i) Before the Warrant Agent acts or refrains from acting with
respect to any matter contemplated by this Warrant Agreement, it may
require:
(1) an Officers' Certificate (as defined in the
Indenture) stating on behalf of the Company that, in the
opinion of the signers, all conditions precedent, if any,
provided for in this Warrant Agreement relating to the
proposed action have been complied with; and
(2) if reasonably necessary in the sole judgment of
the Warrant Agent, an opinion of counsel for the Company
stating that, in the opinion of such counsel, all such
conditions precedent have been complied
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with provided that such matter is one customarily opined on
by counsel.
Each Officers' Certificate or, if requested, an opinion of
counsel with respect to compliance with a condition or covenant
provided for in this Warrant Agreement shall include:
(1) a statement that the person making such
certificate or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of
the examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such
person, he or she has made such examination or investigation
as is necessary to enable him or her to express an informed
opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the
opinion of such person, such condition or covenant has been
complied with.
(j) The Warrant Agent shall be obligated to perform such
duties as are herein and in the Warrant Certificates specifically set
forth and no implied duties or obligations shall be read into this
Agreement or the Warrant Certificates against the Warrant Agent. The
Warrant Agent shall not be accountable or under any duty or
responsibility for the use by the Company of any of the Warrant
Certificates authenticated by the Warrant Agent and delivered by it to
the Company pursuant to this Agreement. The Warrant Agent shall have no
duty or responsibility in case of any default by the Company in the
performance of its covenants or agreements contained in the Warrant
Certificates or in the case of the receipt of any written demand from a
holder of a Warrant Certificate with respect to such default,
including, without limiting the generality of the foregoing, any duty
or responsibility to initiate or attempt to initiate any proceedings at
law or otherwise or, except as provided in Section 7.02 hereof, to make
any demand upon the Company.
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(k) Unless otherwise specifically provided herein, any order,
certificate, notice, request, direction or other communication from the
Company made or given under any provision of this Agreement shall be
sufficient if signed by its chairman of the Board of Directors, its
president, its treasurer, its controller or any vice president or its
secretary or any assistant secretary.
(l) The Warrant Agent shall have no responsibility in respect
of any adjustment pursuant to Article V hereof.
(m) The Company agrees that it will perform, execute,
acknowledge and deliver, or cause to be performed, executed,
acknowledged and delivered, all such further and other acts,
instruments and assurances as may reasonably be required by the Warrant
Agent for the carrying out or performing by the Warrant Agent of the
provisions of this Agreement.
(n) The Warrant Agent is hereby authorized and directed to
accept written instructions with respect to the performance of its
duties hereunder from any one of the chairman of the Board of
Directors, the president, the treasurer, the controller, any vice
president or the secretary or assistant secretary of the Company or any
other officer or official of the Company reasonably believed to be
authorized to give such instructions and to apply to such officers or
officials for advice or instructions in connection with its duties, and
it shall not be liable for any action taken or suffered to be taken by
it in good faith in accordance with instructions with respect to any
matter arising in connection with the Warrant Agent's duties and
obligations arising under this Agreement. Such application by the
Warrant Agent for written instructions from the Company may, at the
option of the Warrant Agent, set forth in writing any action proposed
to be taken or omitted by the Warrant Agent with respect to its duties
or obligations under this Agreement and the date on or after which such
action shall be taken and the Warrant Agent shall not be liable for any
action taken or omitted in accordance with a proposal included in any
such application on or after the date specified therein (which date
shall be not less than 10 Business Days after the Company receives such
application unless the Company consents to a shorter period), provided
that (i) such application includes a statement to the effect that it is
being made pursuant to this paragraph (n) and that unless objected to
prior to such date specified in the application, the Warrant
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Agent will not be liable for any such action or omission to the extent
set forth in such paragraph (n) and (ii) prior to taking or omitting
any such action, the Warrant Agent has not received written
instructions objecting to such proposed action or omission.
(o) Whenever in the performance of its duties under this
Agreement the Warrant Agent shall deem it necessary or desirable that
any fact or matter be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a
certificate signed on behalf of the Company by any one of the chairman
of the Board of Directors, the president, the treasurer, the
controller, any vice president or the secretary or assistant secretary
of the Company or any other officer or official of the Company
reasonably believed to be authorized to give such instructions and
delivered to the Warrant Agent; and such certificate shall be full
authorization to the Warrant Agent for any action taken or suffered in
good faith by it under the provisions of this Agreement in reliance
upon such certificate.
(p) The Warrant Agent shall not be required to risk or expend
its own funds in the performance of its obligations and duties
hereunder.
SECTION 6.03. Resignation and Appointment of Successor. (a)
The Company agrees, for the benefit of the holders from time to time of the
Warrant Certificates, that there shall at all times be a Warrant Agent
hereunder.
(b) The Warrant Agent may at any time resign as Warrant Agent
by giving written notice to the Company of such intention on its part,
specifying the date on which its desired resignation shall become effective;
provided, however, that such date shall be at least 60 days after the date on
which such notice is given unless the Company agrees to accept less notice. Upon
receiving such notice of resignation, the Company shall promptly appoint a
successor Warrant Agent, qualified as provided in Section 6.03(d) hereof, by
written instrument in duplicate signed on behalf of the Company, one copy of
which shall be delivered to the resigning Warrant Agent and one copy to the
successor Warrant Agent. As provided in Section 6.03(d) hereof, such resignation
shall become effective upon the earlier of (x) the acceptance of the appointment
by the successor Warrant Agent or (y) 60 days after receipt by the Company of
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notice of such resignation. The Company may, at any time and for any reason, and
shall, upon any event set forth in the next succeeding sentence, remove the
Warrant Agent and appoint a successor Warrant Agent by written instrument in
duplicate, specifying such removal and the date on which it is intended to
become effective, signed on behalf of the Company, one copy of which shall be
delivered to the Warrant Agent being removed and one copy to the successor
Warrant Agent. The Warrant Agent shall be removed as aforesaid if it shall
become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Warrant Agent or of its property shall be appointed, or any
public officer shall take charge or control of it or of its property or affairs
for the purpose of rehabilitation, conservation or liquidation. Any removal of
the Warrant Agent and any appointment of a successor Warrant Agent shall become
effective upon acceptance of appointment by the successor Warrant Agent as
provided in Section 6.03(d). As soon as practicable after appointment of the
successor Warrant Agent, the Company shall cause written notice of the change in
the Warrant Agent to be given to each of the registered holders of the Warrants
in the manner provided for in Section 8.04 hereof.
(c) Upon resignation or removal of the Warrant Agent, if the
Company shall fail to appoint a successor Warrant Agent within a period of 60
days after receipt of such notice of resignation or removal, then the holder of
any Warrant Certificate or the retiring Warrant Agent may apply to a court of
competent jurisdiction for the appointment of a successor to the Warrant Agent.
Pending appointment of a successor to the Warrant Agent, either by the Company
or by such a court, the duties of the Warrant Agent shall be carried out by the
Company.
(d) Any successor Warrant Agent, whether appointed by the
Company or by a court, shall be a bank or trust company in good standing,
incorporated under the laws of the United States of America or any State thereof
and having, at the time of its appointment, a combined capital surplus of at
least $50 million. Such successor Warrant Agent shall execute and deliver to its
predecessor and to the Company an instrument accepting such appointment
hereunder and all the provisions of this Agreement, and thereupon such successor
Warrant Agent, without any further act, deed or conveyance, shall become vested
with all the rights, powers, duties and obligations of its predecessor
hereunder, with like effect as if originally named as Warrant Agent hereunder,
and such predecessor shall thereupon become obligated to (i) transfer and
deliver, and
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such successor Warrant Agent shall be entitled to receive, all securities,
records or other property on deposit with or held by such predecessor as Warrant
Agent hereunder and (ii) upon payment of the amounts then due it pursuant to
Section 6.02(a) hereof, pay over, and such successor Warrant Agent shall be
entitled to receive, all monies deposited with or held by any predecessor
Warrant Agent hereunder.
(e) Any corporation or bank into which the Warrant Agent
hereunder may be merged or converted, or any corporation or bank with which the
Warrant Agent may be consolidated, or any corporation or bank resulting from any
merger, conversion or consolidation to which the Warrant Agent shall be a party,
or any corporation or bank to which the Warrant Agent shall sell or otherwise
transfer all or substantially all of its corporate trust business, shall be the
successor to the Warrant Agent under this Agreement (provided that such
corporation or bank shall be qualified as aforesaid) without the execution or
filing of any document or any further act on the part of any of the parties
hereto.
(f) No Warrant Agent under this Warrant Agreement shall be
personally liable for any action or omission of any successor Warrant Agent.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Amendment. This Agreement and the terms of the
Warrants may be amended by the Company and the Warrant Agent, without the
consent of the holder of any Warrant Certificate, for the purpose of curing any
ambiguity, or of curing, correcting or supplementing any defective or
inconsistent provision contained herein or therein, or to effect any assumptions
of the Company's obligations hereunder and thereunder by a successor corporation
under the circumstances described in Section 5.01(d) hereof or in any other
manner which the Company may deem necessary or desirable and which shall not
adversely affect the interests of the holders of the Warrant Certificates.
The Company and the Warrant Agent may amend, modify or
supplement this Agreement and the terms of the Warrants, and waivers to
departures from the terms hereof and thereof may be given, with the consent of
the Requisite Warrant Holders (as defined below) for the purpose of adding any
provision to or
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changing in any manner or eliminating any of the provisions of this Agreement or
modifying in any manner the rights of the holders of the outstanding Warrants;
provided, however, that no such modification that increases the Exercise Price
or decreases the Exercise Rate, makes any change to the last paragraph of
Section 5.01(d), reduces the period of time during which the Warrants are
exercisable hereunder, or effects any change to this Section 7.01 may be made
with respect to any Warrant without the consent of the holder of such Warrant.
"Requisite Warrant Holders" means (i) in the case of any amendment,
modification, supplement or waiver affecting Warrant Holders as such holders of
a majority in number of the outstanding Warrants so affected, or (ii) in the
case of any amendment, modification, supplement or waiver affecting Warrant
Holders, a majority in number of Shares represented by the Warrants that would
be issuable assuming exercise thereof at the time such amendment, modification,
supplement or waiver is voted upon. Notwithstanding any other provision of this
Agreement, the Warrant Agent's consent must be obtained regarding any supplement
or amendment which alters the Warrant Agent's rights or duties (it being
expressly understood that the foregoing shall not be in derogation of the right
of the Company to remove the Warrant Agent in accordance with Section 6.03
hereof). For purposes of any amendment, modification or waiver hereunder,
Warrants held by the Company or any of its Affiliates shall be disregarded.
Any modification or amendment made in accordance with this
Agreement will be conclusive and binding on all present and future holders of
Warrant Certificates whether or not they have consented to such modification or
amendment or waiver and whether or not notation of such modification or
amendment is made upon such Warrant Certificates. Any instrument given by or on
behalf of any holder of a Warrant Certificate in connection with any consent to
any modification or amendment will be conclusive and binding on all subsequent
holders of such Warrant Certificate.
SECTION 7.02. Notices and Demands to the Company and Warrant
Agent. If the Warrant Agent shall receive any notice or demand addressed to the
Company by the holder of a Warrant Certificate pursuant to the provisions hereof
or of the Warrant Certificates, the Warrant Agent shall promptly forward such
notice or demand to the Company.
SECTION 7.03. Addresses for Notices to Parties and for
Transmission of Documents. All notices hereunder to the parties hereto shall be
deemed to have been given when sent by
46
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certified or registered mail, postage prepaid, or by facsimile transmission,
confirmed by first class mail, postage prepaid, addressed to any party hereto as
follows:
To the Company:
Verio Inc.
0000 Xxxxxxxx Xxx., Xxxxx 000
Xxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: General Counsel
To the Warrant Agent:
First Trust National Association
000 Xxxx 0xx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Corporate Trust Department
or at any other address of which either of the foregoing shall have notified the
other in writing.
SECTION 7.04. Notices to Holders. Notices to holders of
Warrants shall be mailed to such holders at the addresses of such holders as
they appear in the Warrant Register. Any such notice shall be sufficiently given
if sent by first-class mail, postage prepaid.
SECTION 7.05. APPLICABLE LAW; SUBMISSION TO JURISDICTION. THE
VALIDITY, INTERPRETATION AND PERFORMANCE OF THIS AGREEMENT AND EACH WARRANT
CERTIFICATE ISSUED HEREUNDER AND OF THE RESPECTIVE TERMS AND PROVISIONS THEREOF
SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
THE CONFLICT OF LAWS PROVISIONS THEREOF.
SECTION 7.06. Persons Having Rights Under Agreement. Nothing
in this Agreement expressed or implied and nothing that may be inferred from any
of the provisions hereof is intended, or shall be construed, to confer upon, or
give to, any person or corporation other than the Company, the Warrant Agent,
the holders of the Warrant Certificates and, with respect to Section 4.04 and
4.05, the holders of Shares issued pursuant to Warrants, any right, remedy or
claim under or by reason of this Agreement or of any covenant, condition,
stipulation, promise or agreement hereof; and all covenants (except for Section
4.04 which shall be for the benefit of all holders of Shares issued pursuant to
Warrants), conditions, stipulations, promises and
47
-42-
agreements in this Agreement contained shall be for the sole and exclusive
benefit of the Company and the Warrant Agent and their successors and of the
holders of the Warrant Certificates.
SECTION 7.07. Headings. The descriptive headings of the
several Articles and Sections of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of any of the
provisions hereof.
SECTION 7.08. Counterparts. This Agreement may be executed
in any number of counterparts, each of which so executed shall be deemed to be
an original; but such counterparts shall together constitute but one and the
same instrument.
SECTION 7.09. Inspection of Agreement. A copy of this
Agreement shall be available during regular business hours at the principal
corporate trust office of the Warrant Agent, for inspection by the holder of any
Warrant Certificate. The Warrant Agent may require such holder to submit his
Warrant Certificate for inspection by it.
SECTION 7.10. Availability of Equitable Remedies. Since a
breach of the provisions of this Agreement could not adequately be compensated
by money damages, holders of Warrants shall be entitled, in addition to any
other right or remedy available to them, to an injunction restraining such
breach or a threatened breach and to specific performance of any such provision
of this Agreement, and in either case no bond or other security shall be
required in connection therewith, and the parties hereby consent to such
injunction and to the ordering of specific performance.
SECTION 7.11. Obtaining of Governmental Approvals. The Company
will from time to time take all action required to be taken by it which may be
necessary to obtain and keep effective any and all permits, consents and
approvals of governmental agencies and authorities and securities acts filings
under United States Federal and state laws, and the rules and regulations of all
stock exchanges on which the Warrants are listed which may be or become
requisite in connection with the issuance, sale, transfer, and delivery of the
Warrant Certificates, the exercise of the Warrants or the issuance, sale,
transfer and delivery of the Shares issued upon exercise of the Warrants.
[SIGNATURE PAGE FOLLOWS]
48
S-1
IN WITNESS WHEREOF, this Warrant Agreement has been duly
executed by the parties hereto as of the day and year first above written.
VERIO INC.
By: /s/ Xxxxx Xxxxx Xxxxxxxx
-----------------------------------
Name: Xxxxx Xxxxx Xxxxxxxx
Title: Vice President, General
Counsel and Secretary
FIRST TRUST NATIONAL ASSOCIATION,
as Warrant Agent
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Trust Officer
49
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
[FACE]
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
OR OTHER SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF
THIS SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT "RULE 144A") OR (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT) (AN "ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S.
PERSON AND IS ACQUIRING THIS SECURITY IN AN "OFFSHORE TRANSACTION"
PURSUANT TO RULE 903 OR 904 OF REGULATION S UNDER THE SECURITIES ACT
("REGULATION S"), (2) AGREES THAT IT WILL NOT PRIOR TO (X) THE DATE
WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE
144(k) UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER)
AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR OF ANY
PREDECESSOR OF THIS SECURITY) OR THE LAST DAY ON WHICH THE COMPANY OR
ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY OR ANY
PREDECESSOR OF THIS SECURITY AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE
REQUIRED BY APPLICABLE LAWS (THE "RESALE RESTRICTION TERMINATION
DATE"), OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO
THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT,
(C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A, TO A
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50
PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT
THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO
OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED
STATES WITHIN THE MEANING OF REGULATION S, PURSUANT TO RULE 904 OF
REGULATION S, (E) TO AN ACCREDITED INVESTOR THAT IS ACQUIRING THE
SECURITIES FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH ACCREDITED
INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER
OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES THAT IT
WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED
UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION
DATE. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES"
AND "U.S. PERSON" HAVE THE RESPECTIVE MEANINGS GIVEN TO THEM IN
REGULATION S.
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51
CUSIP #[ ]
No. [ ] [ ] Warrants
WARRANT CERTIFICATE
VERIO INC.
This Warrant Certificate certifies that [ ], or registered
assigns, is the registered holder of [ ] Warrants (the "Warrants") to purchase
shares of Common Stock, par value $0.001 per share (the "Common Stock"), or,
subject to the conditions contained herein and in the Warrant Agreement, of
VERIO INC., a Delaware corporation (the "Company," which term includes its
successors and assigns). Each Warrant entitles the holder to purchase from the
Company at any time from 9:00 a.m. New York City time on or after the
Exercisability Date until 5:00 p.m., New York City time, on June 15, 2004 (the
"Expiration Date"), 1.7604 fully paid, registered and non-assessable shares of
Common Stock, subject to adjustment as provided in Article V of the Warrant
Agreement, at the exercise price of $0.01 for each share purchased (the
"Exercise Price") (the shares of Common Stock purchasable upon exercise of a
Warrant being herein referred to as the "Shares" and, unless the context
otherwise requires, such term shall also mean the other securities or property
purchasable and deliverable upon exercise of a Warrant as provided in the
Warrant Agreement), upon surrender of this Warrant Certificate and payment of
the Exercise Price (i) in United States dollars or certified official or bank
check, (ii) pursuant to the next sentence or (iii) in any combination of (i) and
(ii), at any office or agency maintained for that purpose by the Company (the
"Warrant Agent Office"), subject to the conditions set forth herein and in the
Warrant Agreement. A Warrant may also be exercised solely by the surrender of
the Warrant, and without the payment of the Exercise Price in cash, for such
number of Shares equal to the product of (1) the number of Shares for which such
Warrant is exercisable with payment of the Exercise Price as of the date of
exercise and (2) the Cashless Exercise Ratio. For purposes of this Warrant, the
"Cashless Exercise Ratio" shall equal a fraction, the numerator of which is the
excess of the Current Market Value per share of the Common Stock on the date of
exercise over the Exercise Price per share as of the date of exercise
A-3
52
and the denominator of which is the Current Market Value per share of the Common
Stock on the date of exercise. An exercise of a Warrant in accordance with the
immediately preceding sentences is herein called a "Cashless Exercise." Upon
surrender of a Warrant Certificate representing more than one Warrant in
connection with the Holder's option to elect a Cashless Exercise, the number of
Shares deliverable upon a Cashless Exercise shall be equal to the Cashless
Exercise Ratio multiplied by the product of (a) the number of Warrants that the
holder specifies is to be exercised pursuant to a Cashless Exercise and (b) the
number of Shares for which such Warrant is then exercisable (without giving
effect to the Cashless Exercise Option). If the Company has not effected the
registration under the Securities Act of the offer and sale of the Shares by the
Company to the holders of the Warrants upon the exercise thereof, the Company
may elect to require that holders of the Warrants effect the exercise of the
Warrants solely pursuant to the Cashless Exercise option and may also amend the
Warrants to eliminate the requirement for payment of the Exercise Price with
respect such Cashless Exercise option. All provisions of the Warrant Agreement
shall be applicable with respect to an exercise of a Warrant Certificate
pursuant to a Cashless Exercise for less than the full number of Warrants
represented thereby. Capitalized terms used herein without being defined herein
shall have the definitions ascribed to such terms in the Warrant Agreement.
"Current Market Value" per share of Common Stock of the
Company or any other security at any date means (i) if the security is not
registered under the Exchange Act, (a) the value of the security, determined in
good faith by the Board of Directors of the Company and certified in a board
resolution, based on the most recently completed arm's-length transaction
between the Company and a person other than an Affiliate of the Company and the
closing of which occurs on such date or shall have occurred within the six-month
period preceding such date or (b) if no transaction shall have occurred on such
date, the fair market value of the security as determined by an Independent
Financial Expert (provided that, in the case of the calculation of Current
Market Value for determining the cash value of fractional shares, any such
determination within six months that is, in the good faith judgment of the
Board, a reasonable determination of value, may be utilized) or (ii) (a) if the
security is registered under the Exchange Act, the average of the daily closing
sales prices of the securities for the 20 consecutive
A-4
53
trading days immediately preceding such date, or (b) if the security has been
registered under the Exchange Act for less than 20 consecutive trading days
before such date, then the average of the closing sales prices for all of the
trading days before such date for which closing sales prices are available, in
the case of each of (ii)(a) and (ii)(b), as certified to the Warrant Agent by
the President, any Vice President or the Chief Financial Officer of the Company.
The closing sales price for each such trading day shall be: (A) in the case of a
security listed or admitted to trading on any United States national securities
exchange or quotation system, 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, (B) in the case of a security not then listed or admitted to
trading on any United States national securities exchange or quotation system,
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 United States national
securities exchange or quotation system 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 not bid and asked prices reported during
the 30 days prior to the date in question, the Current Market Value shall be
determined as if the Shares (or other securities) were not registered under the
Exchange Act.
"Exercise Event" means, with respect to each Warrant, the date
of the occurrence of the earliest of: (1) immediately prior to a Warrant Change
of Control (as defined in the Registration Rights Agreement), (2)(a) the 90th
day (or such fewer number of days as determined by the Company in its sole
discretion) after the consummation of an Initial Public Equity Offering or (b)
upon the closing of the Initial Public Equity Offering, but only in respect of
Warrants, if any, required to be
A-5
54
exercised to permit the holders thereof to sell Shares pursuant to their
registration rights, (3) a class of equity securities of the Company is listed
on a national securities exchange or authorized for quotation on the Nasdaq
National Market or is otherwise subject to registration under the Exchange Act,
or (4) December 15, 1999.
"Independent Financial Expert" means a United States
investment banking firm of national or regional standing, (i) which does not,
and whose directors, officers and employees or Affiliates do not have a direct
or indirect material financial interest for its proprietary account in the
Company or any of its Affiliates and (ii) which, in the judgment of the Board of
Directors of the Company, is otherwise independent with respect to the Company
and its Affiliates and qualified to perform the task for which it is to be
engaged.
"Separability Date" shall mean the earliest to occur of: (i)
December 15, 1997, (ii) the occurrence of an Exercise Event, (iii) the
occurrence of an Event of Default (as defined in the Indenture), (iv) the date
on which a registration statement under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to a registered exchange offer for the
Notes or covering the sale by holders of the Notes is declared effective under
the Securities Act, (v) with respect to any Notes called for redemption by the
Company following an Equity Sale (as defined in the Indenture), immediately
prior to any such redemption, or (vi) such date as may be determined by Xxxxxxx
Xxxxx in its sole discretion and specified to the Company, the Trustee, the
Warrant Agent and the Unit Agent in writing. Notwithstanding the foregoing, in
the event a Warrant Change of Control (as defined in the Registration Rights
Agreement) is proposed, the Separability Date shall be the date of commencement
of a Change of Control Offer (as defined in the Indenture).
The Company has initially designated the principal corporate
trust office of the Warrant Agent in the Borough of Manhattan, The City of New
York, as the initial Warrant Agent Office. The number of Shares issuable upon
exercise of the Warrants ("Exercise Rate") is subject to adjustment upon the
occurrence of certain events set forth in the Warrant Agreement.
A-6
55
Any Warrants not exercised on or prior to 5:00 p.m., New York
City time, on June 15, 2004 shall thereafter be void.
If the Company merges, amalgamates or consolidates with or
into, or sells all or substantially all of its property and assets to, another
Person solely for cash, the holders of Warrants shall be entitled to receive
distributions on the date of such event on an equal basis with holders of Shares
(or other securities issuable upon exercise of the Warrants) as if the Warrants
had been exercised immediately prior to such event (less the Exercise Price).
Reference is hereby made to the further provisions on the
reverse hereof which provisions shall for all purposes have the same effect as
though fully set forth at this place.
This Warrant Certificate shall not be valid unless
authenticated by the Warrant Agent, as such term is used in the Warrant
Agreement.
THIS WARRANT CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
PROVISIONS THEREOF.
A-7
56
WITNESS the seal of the Company and signatures of its duly
authorized officers.
Dated:
VERIO INC.
By:
----------------------------
Name:
Title:
Attest:
By:
----------------------------
Name:
Title:
Certificate of Authentication:
This is one of the Warrants
referred to in the within
mentioned Warrant Agreement:
FIRST TRUST NATIONAL ASSOCIATION,
as Warrant Agent
By:
----------------------------
Authorized Signatory
A-8
57
[FORM OF WARRANT CERTIFICATE]
[REVERSE]
VERIO INC.
The Warrants evidenced by this Warrant Certificate are part of
a duly authorized issue of Warrants expiring at 5:00 p.m., New York City time,
on June 15, 2004 (the "Expiration Date"), each of which represents the right to
purchase at any time on or after the Exercisability Date (as defined in the
Warrant Agreement) and on or prior to the Expiration Date 1.7604 shares of
Common Stock, subject to adjustment as set forth in the Warrant Agreement. The
Warrants are issued pursuant to a Warrant Agreement dated as of June 15, 1997
(the "Warrant Agreement"), duly executed and delivered by the Company to First
Trust National Association, as Warrant Agent (the "Warrant Agent"), which
Warrant Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights, limitation
of rights, obligations, duties and immunities thereunder of the Warrant Agent,
the Company and the holders (the words "holders" or holder" meaning the
registered holders or registered holder) of the Warrants.
Warrants may be exercised by (i) surrendering at any Warrant
Agent Office this Warrant Certificate with the form of Election to Exercise set
forth hereon duly completed and executed and (ii) to the extent such exercise is
not being effected through a Cashless Exercise by paying in full the Warrant
Exercise Price for each such Warrant exercised and any other amounts required to
be paid pursuant to the Warrant Agreement.
If all of the items referred to in the preceding paragraph are
received by the Warrant Agent at or prior to 11:00 a.m., New York City time, on
a Business Day, the exercise of the Warrant to which such items relate will be
effective on such Business Day. If any items referred to in the preceding
paragraph are received after 11:00 a.m., New York City time, on a Business Day,
the exercise of the Warrants to which such item relates will be deemed to be
effective on the next succeeding Business Day. Notwithstanding the foregoing, in
the case of an exercise of Warrants on June 15, 2004, if all of the items
referred to in the preceding paragraph are received by the Warrant
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58
Agent at or prior to 5:00 p.m., New York City time, on such Expiration Date, the
exercise of the Warrants to which such items relate will be effective on the
Expiration Date.
As soon as practicable after the exercise of any Warrant or
Warrants, the Company shall issue or cause to be issued to or upon the written
order of the registered holder of this Warrant Certificate, a certificate or
certificates evidencing the Share or Shares to which such holder is entitled, in
fully registered form, registered in such name or names as may be directed by
such holder pursuant to the Election to Exercise, as set forth on the reverse of
this Warrant Certificate. Such certificate or certificates evidencing the Share
or Shares shall be deemed to have been issued and any persons who are designated
to be named therein shall be deemed to have become the holder of record of such
Share or Shares as of the close of business on the date upon which the exercise
of this Warrant was deemed to be effective as provided in the preceding
paragraph.
The Company will not be required to issue fractional shares of
Common Stock upon exercise of the Warrants or distribute Share certificates that
evidence fractional shares of Common Stock. In lieu of fractional shares of
Common Stock, there shall be paid to the registered Holder of this Warrant
Certificate at the time such Warrant Certificate is exercised an amount in cash
equal to the same fraction of the Current Market Value per share of Common Stock
on the Business Day preceding the date this Warrant Certificate is surrendered
for exercise.
Warrant Certificates, when surrendered at any office or agency
maintained by the Company for that purpose by the registered holder thereof in
person or by legal representative or attorney duly authorized in writing, may be
exchanged for a new Warrant Certificate or new Warrant Certificates evidencing
in the aggregate a like number of Warrants, in the manner and subject to the
limitations provided in the Warrant Agreement, without charge except for any tax
or other governmental charge imposed in connection therewith.
Upon due presentment for registration of transfer of this
Warrant Certificate at any office or agency maintained by the Company for that
purpose, a new Warrant Certificate evidencing in the aggregate a like number of
Warrants shall be issued
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to the transferee in exchange for this Warrant Certificate, subject to the
limitations provided in the Warrant Agreement, without charge except for any tax
or other governmental charge imposed in connection therewith.
The Company and the Warrant Agent may deem and treat the
registered holder hereof as the absolute owner of this Warrant Certificate
(notwithstanding any notation of ownership or other writing hereon made by
anyone) for the purpose of any exercise hereof and for all other purposes, and
neither the Company nor the Warrant Agent shall be affected by any notice to the
contrary.
The term "Business Day" shall mean any day on which (i) banks
in New York City, (ii) the principal U.S. securities exchange or market, if any,
on which the Common Stock is listed or admitted to trading and (iii) the
principal U.S. securities exchange or market, if any, on which the Warrants are
listed or admitted to trading are open for business.
The Warrants and the Shares are entitled to the benefits of a
registration rights agreement relating to the Warrants and the shares of Common
Stock issuable upon exercise thereof (the "Registration Rights Agreement"),
pursuant to which the holders representing not less than a majority of
Registrable Securities (as defined in the Registration Rights Agreement) have
the right under certain circumstances to require the Company to effect one
demand registration of the Registrable Securities. The Registration Rights
Agreement also provides the holders of Registrable Securities with the right,
subject to the conditions and limitations contained therein, to include the
Registrable Securities in certain registration statements filed by the Company
for its account or for the account of any of its securityholders.
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(FORM OF ELECTION TO EXERCISE)
(To be executed upon exercise of Warrants on the Exercise Date)
The undersigned hereby irrevocably elects to exercise [ ] of
the Warrants represented by this Warrant Certificate and purchase the whole
number of Shares issuable upon the exercise of such Warrants and herewith
tenders payment for such Shares as follows:
$[ ] in cash or by certified or official bank check; or by
surrender of Warrants pursuant to a Cashless Exercise (as defined in the Warrant
Agreement) for [ ] shares of Common Stock at the current Cashless Exercise
Ratio.
The undersigned requests that a certificate representing such
Shares be registered in the name of ____________________ whose address is
_________________________ and that such shares be delivered to
__________________________ whose address is __________________________. Any cash
payments to be paid in lieu of a fractional Share should be made to
__________________ whose address is ________________________ and the check
representing payment thereof should be delivered to ______________________ whose
address is _______________________________ .
Dated __________________, ____
Name of holder of
Warrant Certificate: ________________________________________
(Please Print)
Tax Identification or
Social Security Number: _____________________________________
Address: ____________________________________________________
____________________________________________________
Signature: __________________________________________________
Note: The above signature must correspond with
the name as written upon the face of this
Warrant Certificate in every particular,
without alteration or enlargement
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or any change whatever and if the
certificate representing the Shares or
any Warrant Certificate representing
Warrants not exercised is to be
registered in a name other than that in
which this Warrant Certificate is
registered, or if any cash payment to be
paid in lieu of a fractional share is to
be made to a person other than the
registered holder of this Warrant
Certificate, the signature of the holder
hereof must be guaranteed as provided in
the Warrant Agreement.
Dated ____________________, ___
Signature: __________________________________________________
Note: The above signature must correspond with
the name as written upon the face of this
Warrant Certificate in every particular,
without alteration or enlargement or any
change whatever.
Signature Guaranteed: _______________________________________
[FORM OF ASSIGNMENT]
For value received _______________________ hereby sells,
assigns and transfers unto _____________________ the within Warrant Certificate,
together with all right, title and interest therein, and does hereby irrevocably
constitute and appoint __________________________ attorney, to transfer said
Warrant Certificate on the books of the within-named Company, with full power of
substitution in the premises.
Dated ____________________, 199__
Signature: ________________________________________
Note: The above signature must correspond with
the name as written upon the face of this
Warrant
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62
Certificate in every particular, without
alteration or enlargement or any change
whatever.
Signature Guaranteed: _______________________________________
X-00
00
XXXXXXXX XX XXXXXXXXX OF CERTIFICATED WARRANTS1
The following exchanges of a part of this Global Warrant for
certificated Warrants have been made:
Number of Warrants
Amount of Amount of of this Global
decrease in Number increase in Number Warrant
of Warrants of of Warrants of following such Signature of
Date of this Global this Global decrease (or authorized officer
Exchange Warrant Warrant increase) of Warrant Agent
----------------------- --------------------- ---------------------- ---------------------- ---------------------
---------------
(1) This is to be included only if the Warrant is in global form.
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EXHIBIT B
FORM OF LEGEND FOR GLOBAL WARRANT
Any Global Warrant authenticated and delivered hereunder shall
bear a legend in substantially the following form:
THIS SECURITY IS A GLOBAL WARRANT WITHIN THE MEANING OF THE
WARRANT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY.
THIS SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME
OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE WARRANT AGREEMENT, AND NO
TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A
WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE
OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE WARRANT AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
("DTC"), TO ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE,
OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO 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.
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EXHIBIT C
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF WARRANTS
Re: Warrants to Purchase Common Stock (the
"Warrants") of VERIO INC.
This Certificate relates to ____ Warrants held in* ___
book-entry or* _______ certificated form by ______ (the "Transferor").
The Transferor:*
[ ] has requested the Warrant Agent by written order to deliver in
exchange for its beneficial interest in the Global Warrant held by the
Depositary a Warrant or Warrants in definitive, registered form of authorized
denominations and an aggregate number equal to its beneficial interest in such
Global Warrant (or the portion thereof indicated above); or
[ ] has requested the Warrant Agent by written order to exchange
or register the transfer of a Warrant or Warrants.
In connection with such request and in respect of each such
Warrant, the Transferor does hereby certify that Transferor is familiar with the
Warrant Agreement relating to the above captioned Warrants and the restrictions
on transfers thereof as provided in Section 1.08 of such Warrant Agreement, and
that the transfer of this Warrant does not require registration under the
Securities Act of 1933, as amended (the "Act") because*:
[ ] Such Warrant is being acquired for the Transferor's own
account, without transfer (in satisfaction of Section 1.08(a)(y)(A) or Section
1.08(d)(i)(A) of the Warrant Agreement).
[ ] Such Warrant is being transferred to a qualified institutional
buyer (as defined in Rule 144A under the Act), in reliance on Rule 144A.
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[ ] Such Warrant is being transferred to an institutional
"accredited investor" (within the meaning of subparagraphs (a)(1), (2), (3) or
(7) of Rule 501 under the Act).
[ ] Such Warrant is being transferred in reliance on Regulation S
under the Act.
[ ] Such Warrant is being transferred in accordance with Rule 144
under the Act.
[ ] Such Warrant is being transferred in reliance on and in
compliance with an exemption from the registration requirements of the Act.
[INSERT NAME OF TRANSFEROR]
By:
------------------------------------
Date:
--------------------------------
*Check applicable box.
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EXHIBIT D
Form of Certificate to Be
Delivered in Connection with
Transfers to Institutional Accredited Investors
-------------, ----
First Trust National Association
Attention: Corporate Trust Department
Ladies and Gentlemen:
In connection with our proposed purchase of warrants (the
"Warrants") to purchase Common Stock of Verio Inc. (the "Company"), we confirm
that:
1. We have received such information as we deem necessary in
order to make our investment decision.
2. We understand that any subsequent transfer of the Warrants
is subject to certain restrictions and conditions set forth in the Warrant
Agreement and the undersigned agrees to be bound by, and not to resell, pledge
or otherwise transfer the Warrants except in compliance with, such restrictions
and conditions and the Securities Act of 1933, as amended (the "Securities
Act").
3. We understand that the offer and sale of the Warrants have
not been registered under the Securities Act, and that the Warrants may not be
offered or sold within the United States or to, or for the account or benefit
of, U.S. persons except as permitted in the following sentence. We agree, on our
own behalf and on behalf of any accounts for which we are acting as hereinafter
stated, that if we should sell any Warrants prior to (x) the date which is three
years after the later of the date of original issuance of the Warrants (or such
shorter period as may be prescribed by Rule 144(k) under the
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Securities Act or any successor provision thereto) or the last day on which the
Company or any affiliate of the Company was owner of such Warrants, or any
predecessor thereto, and (y) such later date, if any, as may be required by
applicable laws, we will do so only (A) to the Company, (B) inside the United
States in accordance with Rule 144A under the Securities Act to a "qualified
institutional buyer" (as defined therein), (C) inside the United States to an
institutional "accredited investor" (as defined below) that, prior to such
transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to
the Warrant Agent a signed letter substantially in the form hereof, (D) outside
the United States in accordance with Regulation S under the Securities Act, (E)
pursuant to the exemption from registration provided by Rule 144 under the
Securities Act (if available) or (F) pursuant to an effective registration
statement under the Securities Act and (G) pursuant to another available
exemption under the Securities Act, and we further agree to provide to any
person purchasing Warrants from us a notice advising such purchaser that resales
of the Warrants are restricted as stated herein.
4. We understand that, on any proposed resale of Warrants, we
will be required to furnish to the Warrant Agent and the Company, such
certification, legal opinions and other information as the Warrant Agent and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Warrants purchased by
us will bear a legend to the foregoing effect.
5. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Warrants,
and we and any accounts for which we are acting are each able to bear the
economic risk of our or their investment, as the case may be.
6. We are acquiring the Warrants purchased by us for our
account or for one or more accounts (each of which is an institutional
"accredited investor") as to each of which we exercise sole investment
discretion.
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You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By:
--------------------------------
[Authorized Signatory]
Upon transfer the Warrants would be registered in the name of
the new beneficial owner as follows:
Name:
------------------------------------
Address:
---------------------------------
Taxpayer ID Number:
----------------------
70
EXHIBIT E
Form of Certificate to Be
Delivered in Connection
with Regulation S Transfers
---------------, ----
First Trust National Association
Attention: Corporate Trust Department
Ladies and Gentlemen:
In connection with our proposed sale of Warrants of Verio Inc.
(the "Company"), we confirm that such sale has been effected pursuant to and in
accordance with Regulation S under the Securities Act of 1933, as amended (the
"Securities Act"), and, accordingly, we represent that:
(1) the offer of the Warrants was not made to a person in
the United States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on
our behalf reasonably believed that the transferee was outside the
United States, or (b) the transaction was executed in, on or through
the facilities of a designated off-shore securities market and neither
we nor any person acting on our behalf knows that the transaction has
been pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United
States in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S under the Securities Act, as applicable;
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(4) the transaction is not part of a plan or scheme to
evade the registration requirements of the Securities Act;
(5) we have advised the transferee of the transfer
restrictions applicable to the Warrants; and
(6) if the circumstances set forth in Rule 904(c) under the
Securities Act are applicable, we have complied with the additional
conditions therein, including (if applicable) sending a confirmation or
other notice stating that the Warrants may be offered and sold during
the restricted period specified in Rule 903(c)(2) or (3), as
applicable, in accordance with the provisions of Regulation S; pursuant
to registration of the Warrants under the Securities Act; or pursuant
to an available exemption from the registration requirements under the
Act.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Defined terms used herein without
definition have the respective meanings provided in Regulation S under the
Securities Act.
Very truly yours,
[Name of Transferee]
By:
--------------------------------
[Authorized Signatory]
Upon transfer the Warrants would be registered in the name of
the new beneficial owner as follows:
Name:
------------------------------------
Address:
---------------------------------
Taxpayer ID Number:
----------------------
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