Exhibit 4.10
WARRANT AGREEMENT
DATED AS OF SEPTEMBER 29, 1997
BETWEEN
CELLNET DATA SYSTEMS, INC.
AND
THE BANK OF NEW YORK,
AS WARRANT AGENT
------------------------
654,133
WARRANTS TO PURCHASE COMMON STOCK
$.001 PAR VALUE PER SHARE
TABLE OF CONTENTS
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ARTICLE I
ISSUANCE, FORM, EXECUTION, DELIVERY AND
REGISTRATION OF WARRANT CERTIFICATES
SECTION 1.1 Issuance of Warrants................................................................... 1
SECTION 1.2 Form of Warrant Certificates........................................................... 2
SECTION 1.3 Execution of Warrant Certificates...................................................... 2
SECTION 1.4 Authentication and Delivery............................................................ 2
SECTION 1.5 Temporary Warrant Certificates......................................................... 3
SECTION 1.6 Registration........................................................................... 3
SECTION 1.7 Registration of Transfers and Exchanges................................................ 3
SECTION 1.8 Lost, Stolen, Destroyed, Defaced or Mutilated Warrant Certificates..................... 7
SECTION 1.9 Offices for Exercise, etc.............................................................. 8
ARTICLE II
DURATION, EXERCISE OF WARRANTS AND EXERCISE PRICE
SECTION 2.1 Duration of Warrants................................................................... 8
SECTION 2.2 Exercise, Exercise Price, Settlement and Delivery...................................... 9
SECTION 2.3 Cancellation of Warrant Certificates................................................... 10
ARTICLE III
OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS OF WARRANTS
SECTION 3.1 Enforcement of Rights.................................................................. 10
ARTICLE IV
CERTAIN COVENANTS OF THE COMPANY
SECTION 4.1 Payment of Taxes....................................................................... 11
SECTION 4.2 [Intentionally Omitted]................................................................ 11
SECTION 4.3 Rules 144 and 144A..................................................................... 11
ARTICLE V
ADJUSTMENTS
SECTION 5.1 Adjustment of Exercise Rate; Notices................................................... 11
SECTION 5.2 Fractional Shares...................................................................... 14
SECTION 5.3 Certain Distributions.................................................................. 15
ARTICLE VI
THE WARRANT AGENT
SECTION 6.1 Warrant Agent.......................................................................... 15
SECTION 6.2 Conditions of Warrant Agent's Obligations.............................................. 15
SECTION 6.3 Resignation and Appointment of Successor............................................... 18
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ARTICLE VII
MISCELLANEOUS
SECTION 7.1 Amendment.............................................................................. 19
SECTION 7.2 Notices and Demands to the Company and Warrant Agent................................... 19
SECTION 7.3 Addresses for Notices to Parties and Transmission of Documents......................... 20
SECTION 7.4 Notices to Holders..................................................................... 20
SECTION 7.5 APPLICABLE LAW......................................................................... 20
SECTION 7.6 Persons Having Rights Under Agreement.................................................. 20
SECTION 7.7 Headings............................................................................... 20
SECTION 7.8 Counterparts........................................................................... 20
SECTION 7.9 Inspection of Agreement................................................................ 21
EXHIBIT A-- Form of Warrant Certificate
EXHIBIT B-- Certificate To Be Delivered Upon Exchange or Registration of
Transfer of Warrants
EXHIBIT C-- Transferee Letter of Representation
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WARRANT AGREEMENT
WARRANT AGREEMENT ("AGREEMENT"), dated as of September 29, 1997 by and
between CELLNET DATA SYSTEMS, INC., a Delaware corporation (together with any
successor thereto, the "COMPANY"), and THE BANK OF NEW YORK, a New York banking
corporation, not in its individual capacity but solely as warrant agent (with
any successor Warrant Agent, the "WARRANT AGENT").
WHEREAS, the Company has entered into a placement agreement dated September
24, 1997 with Xxxxxx Xxxxxxx & Co. Incorporated and Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation (collectively, the "PLACEMENT AGENTS") pursuant to which
the Company has agreed to sell to the Placement Agents (the "OFFERING") units
(the "UNITS") consisting in the aggregate of (i) $197,500,000 principal amount
at maturity of 14% Senior Discount Notes due 2007 (the "NOTES") of the Company
to be issued under an indenture dated as of June 15, 1995 (as heretofore
supplemented and as further supplemented from time to time, the "INDENTURE"),
between the Company and The Bank of New York, as trustee (in such capacity, the
"TRUSTEE"), and (ii) 197,500 Warrants (together with the Warrants issued
pursuant to the Consent Solicitation and the Exchange Offer Memorandum, each as
described below, the "WARRANTS" and the certificates evidencing the Warrants
being hereinafter referred to as "WARRANT CERTIFICATES") representing the right
to purchase initially 2,700,022 shares of Common Stock, $.001 par value per
share, of the Company (the "COMMON STOCK"), subject to adjustment in accordance
with the terms hereof;
WHEREAS, pursuant to a Consent Solicitation dated August 20, 1997, whereby
the holders of the Company's Series B 13% Senior Discount Notes due 2005 (the
"1995 Notes") consented to a Third Supplemental Indenture allowing, among other
things, the Company to issue the Units, the Company has agreed to issue,
concurrently with the Offering, additional 1,795 Units to certain 1995 Note
holders who elected payment of their consent fee in the form of Units;
WHEREAS, pursuant to an Exchange Offer Memorandum dated September 3, 1997,
the Company has agreed to issue, concurrently with the Offering, additional
454,838 Units in exchange for the valid tender and acceptance of its 1995 Notes;
WHEREAS, the Notes and the Warrants will be automatically separated upon the
earliest to occur of (i) Xxxxx 00, 0000, (xx) the commencement of an exchange
offer for the Notes pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), (iii) the effective
date of a shelf registration statement with respect to the Notes, and (iv) the
commencement of an offer to repurchase the Notes pursuant to the terms of the
Indenture; and
WHEREAS, the Company desires the 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:
ARTICLE I
ISSUANCE, FORM, EXECUTION, DELIVERY AND
REGISTRATION OF WARRANT CERTIFICATES
SECTION 1.1 ISSUANCE OF WARRANTS. Warrants comprising part of the Units
shall be originally issued in connection with the issuance of the Units.
Each Warrant Certificate shall evidence the number of Warrants specified
therein, and each Warrant evidenced thereby shall 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) 13.671
fully paid and non-assessable shares of the Company's Common Stock (the shares
purchasable upon exercise of a Warrant being hereinafter referred to as the
"SHARES" and, where appropriate, such term shall also mean the other securities
or property purchasable and deliverable upon exercise of a Warrant as
provided in Article V) at the price specified herein and therein, in each case
subject to adjustment as provided herein and therein.
SECTION 1.2 FORM OF WARRANT CERTIFICATES. The Warrant Certificates will
initially be issued either in global form (the "GLOBAL WARRANTS"), each
substantially in the form of EXHIBIT A hereto (including footnote 1 thereto) or
in registered form as definitive Warrant Certificates (the "DEFINITIVE
WARRANTS"). The Warrant Certificates evidencing the Global Warrants or the
Definitive Warrants to be delivered pursuant to this Agreement shall each be
substantially in the form set forth in EXHIBIT A attached hereto. The Global
Warrants shall provide that it shall represent the aggregate number of
outstanding Warrants from time to time endorsed thereon and that the aggregate
number 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 number of outstanding
Warrants represented thereby shall be made by the Warrant Agent and 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 by the Company and the
Warrant Agent. Upon written request, a Warrant holder may receive from the
Warrant Agent Definitive Warrants as set forth in Section 1.7 hereof.
SECTION 1.3 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, chief financial officer 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 Warrant
Certificate shall cease to be such officer before any such 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 1.4 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 1.6 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, chief financial officer or any vice president and attested by its
secretary or assistant secretary, and shall specify the number 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 of the Warrant Certificates, duly executed as provided in Section
1.3 hereof, to authenticate the Warrant Certificates and 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,
such Warrant Certificate nevertheless may be delivered or disposed of as
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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.
SECTION 1.5 TEMPORARY WARRANT CERTIFICATES. Pending the preparation of
definitive Warrant Certificates, the Company may execute, and the Warrant Agent
shall thereupon 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 Warrant Agent Office (as
defined) maintained by the Company for that purpose pursuant to Section 1.9
hereof. Subject to the provisions of Section 4.1 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 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 1.6 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 such 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 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 1.7 REGISTRATION OF TRANSFERS AND EXCHANGES.
(a) TRANSFER AND EXCHANGE OF DEFINITIVE WARRANTS. When Definitive Warrants
are presented to the Warrant Agent with a request to register the transfer of
the Definitive Warrants, or 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 1.7 for
such transactions are met; PROVIDED, HOWEVER, that the Definitive Warrants
presented or surrendered for registration of transfer or exchange:
(A) shall be duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Company and the Warrant Agent, duly
executed by the holder thereof or by such holder's attorney, duly authorized
in writing; and
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(B) 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 (I) the date which is two years after the later of the
date of original issue and the last date on which the Company or any
affiliate of the Company was the owner of such Warrant, or any predecessor
thereto and (II) 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, in the sole discretion of the
Company, by the following additional information and documents, as
applicable, however, it being understood that the Warrant Agent need not
determine which clause (1) through (4) below is applicable:
(1) if such Warrant is being delivered to the Warrant Agent by a
holder for registration in the name of such holder, without transfer, a
certification from such holder to that effect in substantially the form
of EXHIBIT B hereto; or
(2) if such Warrant is 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 or pursuant
to an exemption from registration in accordance with Rule 144 or
Regulation S under the Securities Act or pursuant to an effective
registration statement under the Securities Act, a certification to that
effect in substantially the form of EXHIBIT B hereto; or
(3) if such Warrant is 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, delivery of a
certificate of transfer in substantially the form of EXHIBIT C hereto and
an opinion of counsel and/or other information reasonably acceptable to
the Company to the effect that such transfer is in compliance with the
Securities Act; or
(4) if such Warrant is being transferred in reliance on another
exemption from the registration requirements of the Securities Act, a
certification to that effect in substantially the form of EXHIBIT B
hereto and an opinion of counsel and/ or other information reasonably
acceptable to the Company to the effect that such transfer is in
compliance with the Securities Act.
(b) RESTRICTIONS ON TRANSFER OF A DEFINITIVE WARRANT FOR A BENEFICIAL
INTEREST IN A GLOBAL WARRANT. A Definitive Warrant may not be exchanged for a
beneficial interest in a Global Warrant except upon satisfaction of the
requirements set forth below. Upon receipt by the Warrant Agent of a Definitive
Warrant, duly endorsed or accompanied by appropriate instruments of transfer, in
form satisfactory to the Warrant Agent, together with (i) certification,
substantially in the form of EXHIBIT B hereto, that such Definitive Warrant is
being transferred to a QIB in accordance with Rule 144A under the Securities Act
or pursuant to an exemption from registration in accordance with Rule 144 or
Regulation S under the Securities Act or pursuant to an effective registration
statement under the Securities Act, and (ii) 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 Warrants 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 authenticate a
new Global Warrant in the appropriate amount.
(c) TRANSFER AND EXCHANGE OF GLOBAL WARRANTS. The transfer and exchange of
Global Warrants or beneficial interests therein shall be effected through the
Depositary, in accordance with this Warrant Agreement (including the
restrictions on transfer set forth herein) and the procedures of the Depositary
therefor.
(d) TRANSFER OF A BENEFICIAL INTEREST IN A GLOBAL WARRANT FOR A DEFINITIVE
WARRANT.
(i) Any person having a beneficial interest in a Global Warrant may upon
request exchange such beneficial interest for a Definitive Warrant. Upon receipt
by the Warrant Agent of written instructions or
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such other form of instructions as is customary for the Depositary from the
Depositary or its nominee on behalf of any person having a beneficial interest
in a Global Warrant and upon receipt by the Warrant Agent of a written order or
such other form of instructions as is customary for the Depositary or the person
designated by the Depositary as having such a beneficial interest 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, however, it being understood that the Warrant Agent
need not determine which clause (A) through (D) below is applicable:
(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 B
hereto; or
(B) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A under the Securities Act or pursuant to an
exemption from registration in accordance with Rule 144 or Regulation S
under the Securities Act or pursuant to an effective registration statement
under the Securities Act, a certification to that effect from the transferee
or transferor in substantially the form of EXHIBIT B hereto; or
(C) if such beneficial interest is 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, delivery of a
certificate of transfer in substantially the form of EXHIBIT C hereto and an
opinion of counsel and/or other information reasonably acceptable to the
Company to the effect that such transfer is in compliance with the
Securities Act;
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 (as defined),
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 1.7(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.
(e) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL
WARRANTS. Notwithstanding any other provisions of this Warrant Agreement (other
than the provisions set forth in subsection (f) of this Section 1.7), a Global
Warrant may not be transferred except as a whole by the Depositary to a nominee
of the Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(f) AUTHENTICATION OF DEFINITIVE WARRANTS IN ABSENCE OF DEPOSITARY. If at
any time the Depositary for the 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 the Company, at its
sole discretion, notifies the Warrant Agent in writing that it elects to cause
the issuance of Definitive Warrants under this Warrant Agreement, then the
Company will execute, and the Warrant Agent, upon receipt of an officers'
certificate signed by two officers of the Company (one of whom must be the
principal executive officer, principal financial officer or principal accounting
officer) (an "OFFICERS' CERTIFICATE") requesting the authentication and delivery
of Definitive Warrants, will 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.
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(g) LEGENDS.
(i) Except as permitted by the following paragraph (ii), each Warrant
Certificate evidencing the Global Warrants and the Definitive Warrants (and all
Warrants issued in exchange therefor or substitution thereof) shall bear a
legend substantially similar to the following effect:
THE WARRANTS HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR
FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT(A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D
UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT
IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT; (2)
AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD REFERRED TO IN RULE 144(k),
RESELL OR OTHERWISE TRANSFER THE WARRANTS EXCEPT (A) TO CELLNET DATA
SYSTEMS, INC. (THE "COMPANY") OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT,
(C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT,
PRIOR TO SUCH TRANSFER, FURNISHES TO THE WARRANT AGENT A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THE WARRANTS (THE FORM OF WHICH LETTER CAN BE
OBTAINED FROM THE WARRANT AGENT) AND IF SUCH TRANSFER IS SUBSEQUENT TO THE
DATE ON WHICH THE WARRANTS BECOME SEPARATELY TRANSFERABLE, AN OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH
THE SECURITIES ACT, (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION
IN COMPLIANCE WITH RULE 904 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 (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHICH THE WARRANTS ARE TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE WARRANTS WITHIN THE TIME
PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET
FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND
SUBMIT THIS CERTIFICATE TO THE WARRANT AGENT. IF THE PROPOSED TRANSFEREE IS
AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO EACH OF THE WARRANT AGENT AND THE COMPANY SUCH
CERTIFICATION, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY
REASONABLY REQUIRED TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO
AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO
THEM BY REGULATION S UNDER THE SECURITIES ACT. THE WARRANT AGREEMENT
CONTAINS A PROVISION REQUIRING THE WARRANT AGENT TO REFUSE TO REGISTER ANY
TRANSFER OF THE WARRANTS IN VIOLATION OF THE FOREGOING RESTRICTIONS.
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(ii) Upon any sale or transfer of a Warrant pursuant to Rule 144 under the
Securities Act in accordance with Section 1.7 hereof or under an effective
registration statement under the Securities Act, in the case of any Warrant that
is a Definitive Warrant, the Warrant Agent shall permit the holder thereof to
exchange such Warrant for a Definitive Warrant that does not bear the legends
set forth above and rescind any related restriction on the transfer of such
Warrant, and any such Warrant represented by a Global Warrant shall not be
subject to the provisions set forth in clause (i) above (such sales or transfers
being subject only to the provisions of Section 1.7(c) hereof); PROVIDED,
HOWEVER, that with respect to any request for an exchange of a Warrant that is
represented by a Global Warrant for a Definitive Warrant that does not bear the
legends set forth above, which request is made in reliance upon Rule 144 under
the Securities Act, the holder thereof shall certify in writing to the Warrant
Agent that such request is being made pursuant to Rule 144 under the Securities
Act (such certification to be substantially in the form of EXHIBIT B hereto).
(h) CANCELLATION AND/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 or 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 AND EXCHANGES OF DEFINITIVE
WARRANTS.
(i) To permit registrations of transfers and 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.
(j) PAYMENT OF TAXES. Subject to Section 4.1 hereof, the Company shall pay
all documentary stamp taxes attributable to the initial issuance of the Shares
upon the exercise of Warrants.
SECTION 1.8 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 indemnity 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
1.8, 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 reasonable fees and expenses of the Warrant Agent and
the Registrar) in connection therewith. Every substitute Warrant Certificate
executed and delivered pursuant to this Section 1.8 in lieu of any lost, stolen
or destroyed Warrant Certificate shall
7
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 1.8 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 any new Warrant Certificates from
time to time required pursuant to the provisions of this Section 1.8.
SECTION 1.9 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 1.5 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 1.9. 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 in the Borough of
Manhattan, The City of New York (the "WARRANT AGENT OFFICE"), as the initial
agency maintained for each purpose described in the first sentence of this
Section 1.9. 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 AND EXERCISE PRICE
SECTION 2.1 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 October 1, 2007 (the "EXPIRATION DATE"). Each Warrant may be exercised on any
Business Day (as defined below) on or after September 29, 1998 and on or prior
to the close of business on the Expiration Date (such period, the "EXERCISE
PERIOD"). 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. For purposes of this Agreement, "BUSINESS DAY" shall mean any day on
which (i) banks in New York City, (ii) the principal national securities
exchange or market on which the Common Stock is listed or admitted to trading
and (iii) the principal national securities exchange or market, if any, on which
the Warrants are listed or admitted to trading, are open for business.
8
SECTION 2.2 EXERCISE, EXERCISE PRICE, SETTLEMENT AND DELIVERY.
(a) Subject to the provisions of this Agreement, a holder of Warrants shall
have the right to purchase from the Company on any Business Day during the
Exercise Period 13.671 fully paid, registered and nonassessable Shares for each
Warrant, subject to adjustment in accordance with Article V hereof, at the
purchase price of $14.30 per Share (the "EXERCISE PRICE"). The number and kind
of Shares for which a Warrant may be exercised (the "EXERCISE RATE") shall be
subject to adjustment from time to time as set forth in Article V hereof.
(b) Warrants may be exercised by (i) surrendering at any Warrant Agent
Office maintained for that purpose by the Company pursuant to Section 1.9 the
Warrant Certificate evidencing such Warrants with the form of election to
purchase 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 and any other amounts required to
be paid pursuant to Section 4.1 hereof. Each Warrant may be exercised only in
whole.
(c) Simultaneously with the exercise of each Warrant, payment in full of the
Exercise Price shall be made by wire transfer or certified or official bank
check to be delivered to the Warrant Agent Office where the Warrant Certificate
is being surrendered. Notwithstanding the foregoing sentence, 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
(i) the number of Shares for which such Warrant is exercisable with payment of
the Exercise Price as of the date of exercise and (ii) the Cashless Exercise
Ratio. For purposes of this Agreement, 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 (calculated as set forth in
Section 5.1(n) hereof) over the Exercise Price Per Share (as defined below) as
of the date of exercise and the denominator of which is the Current Market Value
of the Common Stock on the date of exercise (calculated as set forth in Section
5.1(n) hereof). 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 number of Shares relating to the
Warrants that the holder specifies is to be exercised pursuant to a Cashless
Exercise multiplied by the Cashless Exercise Ratio. 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. "EXERCISE PRICE PER SHARE" means the Exercise
Price divided by the number of Shares for which a Warrant is then exercisable
(without giving effect to the Cashless Exercise option). No payment or
adjustment shall be made on account of any dividends on the Shares issued upon
exercise of a Warrant. If, pursuant to the Securities Act, the Company is not
able to effect the registration of the offer and sale of the Warrant Shares by
the Company to the holders of the Warrants upon the exercise thereof as required
by Section 4.2 hereof, the holders of the Warrants agree to effect the exercise
of the Warrants solely pursuant to the Cashless Exercise option to the extent
that such Cashless Exercise is not adverse to the interests of the holders of
the Warrants.
(d) Upon such surrender of a Warrant Certificate and payment and collection
of the Exercise Price at any Warrant Agent Office other than any Warrant Agent
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
sentences of Sections 2.2(b) and (c) 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 sentences of Sections 2.2(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
9
Expiration Date, if all of the items referred to in the first sentence of
paragraphs (b) and (c) are received by the Warrant 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.
(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, as the
case may be, election of the Cashless Exercise option, the Warrant Agent shall
(i) except to the extent exercise of the Warrant has been effected through a
Cashless Exercise, cause an amount equal to the 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 5.2 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. 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. After such exercise of any Warrant or Warrants, 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 2.3 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 cancelled by it and
retired. The Warrant Agent shall cancel all Warrant Certificates properly
surrendered for exchange, substitution, transfer or exercise. The Warrant Agent
shall deliver such cancelled Warrant Certificates to the Company.
ARTICLE III
OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS OF WARRANTS
SECTION 3.1. 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 such
holder's own behalf, enforce, institute and maintain any suit, action or
proceeding against the Company suitable to enforce, such holder's right to
exercise any Warrants evidenced by such holder's Warrant Certificate in the
manner provided in such Warrant Certificate and in this Agreement.
(b) Subject to Section 5.3 hereof, 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.
10
ARTICLE IV
CERTAIN COVENANTS OF THE COMPANY
SECTION 4.1 PAYMENT OF TAXES. The Company shall 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 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 4.2 [INTENTIONALLY OMITTED.]
SECTION 4.3 RULES 144 AND 144A. The Company covenants that it shall file
the reports required to be filed by it under the Securities Act and the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT") and the rules
and regulations adopted by the 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 shall, 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. The Company further covenants that it shall take such further action as any
holder or beneficial owner of Warrants may reasonably request, all to the extent
required from time to time to enable such holder or beneficial owner to sell
Warrants without registration under the Securities Act within the limitation of
the exemptions provided by (a) Rule 144(k) and Rule 144A under the Securities
Act, as such Rules may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the Commission (it being expressly understood
that the foregoing shall not create any obligation on the part of the Company to
file periodic or other reports under the Exchange Act at any time that it is not
then required to file such reports pursuant to the Exchange Act or the
Indenture).
ARTICLE V
ADJUSTMENTS
SECTION 5.1 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 pays (i) a dividend or makes a distribution on its Common Stock in
shares of its Common Stock, (ii) subdivides its outstanding shares of Common
Stock into a greater number of shares, (iii) combines its outstanding shares of
Common Stock into a smaller number of shares, (iv) pays a dividend or makes a
distribution on its Common Stock in shares 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 5.3), or
(v) issues by reclassification of its Common Stock any shares of its Capital
Stock (other than rights, warrants or options for its Common Stock), then the
Exercise Rate in effect immediately prior to such action 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 are then
exercisable and without giving effect to the Cashless Exercise option).
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
11
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 sells any Common Stock or any securities
convertible into or exchangeable or exercisable for the Common Stock (other than
(i) pursuant to the exercise of the Warrants, (ii) any security convertible
into, or exchangeable or exercisable for, the Common Stock which was outstanding
as of the date of this Agreement or as to which the issuance thereof has
previously been the subject of any required adjustment pursuant to this Article
V, (iii) the issuance of Common Stock 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) or (iv) any
security issued pursuant to any stock plan for employees, officers, directors or
consultants of the Company approved by the non-management members of the Board
of Directors of the Company) at a price per share less than the Current Market
Value, the Exercise Rate shall be adjusted in accordance with the formula:
E' = E x (O + N)
(O + (N x P/M))
where:
E' = the adjusted Exercise Rate;
E = the current Exercise Rate;
O = the number of shares of Common Stock outstanding on the date of sale of Common
Stock at a price per share less than the Current Market Value to which this
paragraph (b) applies;
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 offering price per share pursuant to any such convertible, exchangeable or
exercisable securities so sold or the sale price of the shares so sold, as the case
may be; and
M = the Current Market Value as of the Time of Determination (as defined) 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
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 shall again be adjusted to be the Exercise Rate which would then
be in effect if such date fixed for determination of 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.
12
(c) NOTICE OF ADJUSTMENT. Whenever the Exercise Rate is adjusted, the
Company shall promptly mail to holders of Warrants 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. If the Company, in a
single transaction or through a series of related transactions, consolidates
with or merges with or into any other person or transfers (by lease, assignment,
sale or otherwise) all or substantially all of its properties and assets to
another person or group of affiliated persons (other than a sale of all or
substantially all of the assets of the Company in a transaction in which the
holders of Common Stock immediately prior to such transaction do not receive
securities, cash, or other assets of the Company or any other person) or is a
party to a merger or binding share exchange which reclassifies or changes its
outstanding Common Stock, the person obligated to deliver securities, cash or
other assets upon exercise of Warrants shall enter into a supplemental warrant
agreement. If the issuer of securities deliverable upon exercise of Warrants is
an affiliate of the successor Company, that issuer shall join in the
supplemental warrant agreement.
The supplemental warrant agreement shall provide that the holder of a
Warrant may exercise it for the kind and amount of securities, cash or other
assets which such holder would have received immediately after the
consolidation, merger, binding share exchange or transfer if such holder had
exercised the Warrant immediately before the effective date of the transaction
(whether or not the Warrants were 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. 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 successor Company shall mail to holders of Warrants at the addresses
appearing on the Warrant Register a notice briefly describing the supplemental
warrant agreement.
If this Section 5.1(d) applies, Section 5.1(a) shall not apply.
(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 Section 5.1(d) hereof 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 5.1,
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
13
then deliverable upon the exercise of all Warrants then outstanding, and the
shares so deliverable shall be fully paid and non-assessable and free from all
liens and security interests.
(i) SPECIFICITY OF ADJUSTMENT. Irrespective of any adjustments in the
number or kind of Shares, 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) ADJUSTMENTS TO PAR VALUE. The Company shall make such adjustments to
the par value of the Common Stock in order that, upon exercise of the Warrants,
the Shares will be fully paid and non-assessable.
(k) VOLUNTARY ADJUSTMENT. The Company from time to time may increase the
Exercise Rate by any number and for any 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 of Warrants at their respective
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 5.1.
(l) NO OTHER ADJUSTMENT FOR DIVIDENDS. Except as provided in this Article
V, no payment or adjustment will be made for dividends on any Common Stock.
(m) MULTIPLE ADJUSTMENTS. After an adjustment to the Exercise Rate under
this Article V, any subsequent event requiring an adjustment under this Article
V shall cause an adjustment to the Exercise Rate as so adjusted.
(n) DEFINITIONS.
"CAPITAL STOCK" means, with respect to any corporation, any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests (however designated) in stock issued by that
corporation.
"CURRENT MARKET VALUE" per share of Common Stock or of any other security at
any date shall be (i) if the security is not registered under the Exchange Act,
the value of the security determined reasonably and in good faith by a
disinterested majority of the Board of Directors of the Company and certified in
a board resolution, or, if at the time there are not at least three
disinterested members of the Board of Directors, by a nationally recognized
investment banking firm or appraisal firm which is not an affiliate of the
Company, or (ii) if the security is registered under the Exchange Act, the
average of the daily closing bid prices for each Business Day during the period
commencing 15 Business Days before such date and ending on the date one day
prior to such date or, if the security has been registered under the Exchange
Act for less than 15 consecutive Business Days before such date, then the
average of the daily closing bid prices for all of the Business Days before such
date for which daily closing bid prices are available. If the closing bid is not
determinable for at least 10 Business Days in such period, the Current Market
Value of the security shall be determined as if the security were not registered
under the Exchange Act.
"TIME OF DETERMINATION" means the time and date of the determination of
stockholders entitled to receive rights, warrants, or options or a distribution,
in each case, to which Section 5.1(b) hereof applies.
SECTION 5.2 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 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, as defined in Section 5.1(n)
hereof, 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
14
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 5.3 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 the Common
Stock (the "DISTRIBUTION RIGHTS") or, without duplication, makes any dividend or
otherwise makes any distribution ("DISTRIBUTION") on shares of Common Stock
(whether in cash, property, evidence of indebtedness or otherwise), then the
Company shall grant, issue, sell or make to each registered holder of Warrants
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 (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
THE WARRANT AGENT
SECTION 6.1 WARRANT AGENT. The Company hereby appoints The Bank of New
York 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, and The Bank of New York 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.
SECTION 6.2 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 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 6.2 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.
15
(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 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 (i) an
Officers' Certificate 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 (ii) 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 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 a statement that the person making such certificate
or opinion has read such covenant or condition, 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, 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 a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
16
(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 7.2 hereof, to make any demand upon the
Company.
(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 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 ten 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 Section 6.2(n) and that
unless objected to prior to such date specified in the application, the
Warrant Agent will not be liable for any such action or omission to the
extent set forth in this Section 6.2(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 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
17
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 6.3 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 6.3(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 6.3(d) hereof, such resignation shall become effective upon
the earlier of (i) the acceptance of the appointment by the successor Warrant
Agent or (ii) 60 days after receipt by the Company of 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
6.3(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 holder of the Warrants in the manner provided
for in Section 7.4 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 $50,000,000.
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 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 6.2(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.
18
(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 set forth in Section 6.3(d) hereof) 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 7.1 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 5.1(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 modify this Agreement and the terms of
the Warrants with the consent of not less than a majority in number of the then
outstanding Warrants for the purpose of adding any provision to or 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 decreases the Exercise Rate, reduces the
period of time during which the Warrants are exercisable hereunder, otherwise
materially and adversely affects the exercise rights of the holders of the
Warrants, reduces the percentage required for modification, or effects any
change to this Section 7.1 may be made with respect to an outstanding Warrant
without the consent of the holder of such Warrant. 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 6.3(b) hereof).
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 7.2 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.
19
SECTION 7.3 ADDRESSES FOR NOTICES TO PARTIES AND TRANSMISSION OF
DOCUMENTS. All notices hereunder to the parties hereto shall be deemed to have
been given when sent by 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:
Cellnet Data Systems, Inc.
000 Xxxxxxxx Xxxx
Xxx Xxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: General Counsel
with copies to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C.
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
To the Warrant Agent:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Trustee Administration
or at any other address of which either of the foregoing shall have notified the
other in writing.
SECTION 7.4 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 7.5 APPLICABLE LAW. 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 7.6 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 and the
holders of the Warrant Certificates 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, conditions, stipulations, promises and
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 7.7 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 7.8 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.
20
SECTION 7.9 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.
[Remainder of Page Intentionally Left Blank]
21
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as of the day and year first above written.
CELLNET DATA SYSTEMS, INC.
By: /s/ XXXX X. XXXXX
-----------------------------------------
Name: Xxxx X. Xxxxx
Title: VICE PRESIDENT AND CHIEF FINANCIAL
OFFICER
THE BANK OF NEW YORK,
as Warrant Agent
By: /s/ XXXX XXXX LEWICKIE
-----------------------------------------
Name: Xxxx Xxxx Lewickie
Title: ASSISTANT VICE PRESIDENT
22
EXHIBIT A
FORM OF WARRANT CERTIFICATE
[FACE]
[UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR WARRANTS IN
CERTIFICATED FORM, THIS WARRANT MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY, OR BY ANY SUCH NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON
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.](1)
THE WARRANTS HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER") (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN
"INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS
ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION
S UNDER THE SECURITIES ACT; (2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD
REFERRED TO IN RULE 144(k), RESELL OR OTHERWISE TRANSFER THE WARRANTS EXCEPT (A)
TO CELLNET DATA SYSTEMS, INC. (THE "COMPANY") OR ANY SUBSIDIARY THEREOF, (B) TO
A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED
INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE WARRANT AGENT A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THE WARRANTS (THE FORM OF WHICH LETTER CAN BE
OBTAINED FROM THE WARRANT AGENT) AND IF SUCH TRANSFER IS SUBSEQUENT TO THE DATE
ON WHICH THE WARRANTS BECOME SEPARATELY TRANSFERABLE, AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 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 (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHICH THE WARRANTS ARE
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
------------------------
(1) This paragraph is to be included only if the Warrant is in global form.
A-1
EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE WARRANTS WITHIN
THE TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET
FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT
THIS CERTIFICATE TO THE WARRANT AGENT. IF THE PROPOSED TRANSFEREE IS AN
INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO EACH OF THE WARRANT AGENT AND THE COMPANY SUCH CERTIFICATION, LEGAL
OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRED TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES
ACT. THE WARRANT AGREEMENT CONTAINS A PROVISION REQUIRING THE WARRANT AGENT TO
REFUSE TO REGISTER ANY TRANSFER OF THE WARRANTS IN VIOLATION OF THE FOREGOING
RESTRICTIONS.
CUSIP #
No. Warrants
WARRANT CERTIFICATE
CELLNET DATA SYSTEMS, INC.
This Warrant Certificate certifies that , or registered
assigns, is the registered holder of Warrants (the "WARRANTS") to
purchase shares of Common Stock, $.001 par value per share (the "COMMON STOCK"),
of CELLNET DATA SYSTEMS, INC., a Delaware corporation (the "COMPANY"). 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 September 29, 1998 until 5:00 p.m., New York
City time on or prior to October 1, 2007 (the "EXPIRATION DATE"), 13.671 fully
paid and nonassessable shares of Common Stock (the "SHARES," which may also
include any other securities or property purchasable upon exercise of a Warrant,
such adjustment and inclusion each as provided in the Warrant Agreement (as
defined)) at the exercise price (the "EXERCISE PRICE") of $14.30 per Share upon
surrender of this Warrant Certificate and payment of the Exercise Price at any
office or agency (the "WARRANT AGENT OFFICE"), subject to the conditions set
forth herein and in the Warrant Agreement. Notwithstanding the foregoing, 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
(calculated as set forth in Section 5.1(n) of the Warrant Agreement) over the
Exercise Price Per Share as of the date of exercise and the denominator of which
is the Current Market Value of the Common Stock on the date of exercise
(calculated as set forth in Section 5.1(n) of the Warrant Agreement). 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 number of Shares relating to the Warrants that
the Holder specifies is to be exercised pursuant to a Cashless Exercise
multiplied by the Cashless Exercise Ratio. All provisions of this Warrant
Certificate 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.
The Exercise Price, in the case of any exercise other than a Cashless
Exercise, shall be payable by wire transfer or certified or official bank check
or by such other means as is acceptable to the Company in
A-2
immediately available funds in the lawful currency of the United States of
America which as of the time of payment is legal tender for payment of public or
private debts. 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.
Any Warrants not exercised on or prior to 5:00 p.m. New York City time, on
the Expiration Date shall thereafter be void.
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.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
manually or by facsimile by its duly authorized officers.
CELLNET DATA SYSTEMS, INC.
By:
-----------------------------------------
Name:
Title:
Attest:
-------------------------------------------
Name:
Title:
By:
Dated: September , 1997
Certificate of Authentication:
This is one of the Warrants referred
to in the within mentioned
Warrant Agreement:
THE BANK OF NEW YORK,
as Warrant Agent
-------------------------------------------
Authorized Signatory
By:
A-3
[FORM OF WARRANT CERTIFICATE]
[REVERSE]
CELLNET DATA SYSTEMS, 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 or
prior to the Expiration Date representing the right to purchase on or prior to
such date 13.671 shares of Common Stock of the Company, subject to adjustment as
set forth in the Warrant Agreement. The Warrants are issued pursuant to a
Warrant Agreement dated as of September 29, 1997 (the "WARRANT AGREEMENT"), duly
executed and delivered by the Company and The Bank of New York, a New York
banking corporation, 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. Terms defined in the
Warrant Agreement, whether directly or indirectly by reference, and used herein
without other definition shall have the meaning herein ascribed thereto therein.
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, 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 last sentence of 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 October 1, 2007, if all of
the items referred to in the last sentence of the preceding paragraph are
received by the Warrant 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 the Warrants represented by
this Warrant Certificate, 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 by check equal to the same
fraction of the Current Market Value (as defined in the Warrant Agreement) per
share 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
A-4
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 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 national securities exchange or market on which the
Common Stock is listed or admitted to trading and (iii) the principal national
securities exchange or market on which the Warrants are listed or admitted to
trading, are open for business.
A-5
[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 in the amount of $ by wire transfer or certified or official
bank check, in accordance with the terms hereof. In lieu of payment of the cash
exercise price, the holder hereof is electing to exercise Warrants
pursuant to a Cashless Exercise (as defined in the Warrant Agreement) for
Shares 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 certificate
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:
----------------------------------------------------------------------------
The above signature must correspond with the name as written upon the
Note: face of this Warrant Certificate in every particular, without
alteration or enlargement 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:
A-6
[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 ___________, 19__
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:
A-7
SCHEDULE OF EXCHANGES OF CERTIFICATED WARRANTS(2)
The following exchanges of a part of this Global Warrant for Definitive
Warrants have been made:
NUMBER OF
AMOUNT OF AMOUNT OF WARRANTS OF
DECREASE IN INCREASE IN THIS GLOBAL
NUMBER OF NUMBER OF WARRANT SIGNATURE OF
WARRANTS OF WARRANTS OF FOLLOWING AUTHORIZED
DATE OF THIS THIS SUCH DECREASE OFFICER OF
EXCHANGE GLOBAL WARRANT GLOBAL WARRANT (OR INCREASE) WARRANT AGENT
---------- --------------- --------------- --------------- ---------------
------------------------
(2) This is to be included only if the Warrant is in global form.
A-8
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF WARRANTS
Re: Warrants to Purchase Common Stock (the "Warrants")
of CELLNET DATA SYSTEMS, INC. (the "Company")
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 1.7 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 1.7(a)(B)(1) or Section
1.7(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 or in
accordance with Regulation S under the Act or pursuant to an effective
registration statement 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, other than Rule 144A
or Rule 144 or Regulation S under the Act. An opinion of counsel and other
information reasonably acceptable to the Company to the effect that such
transfer does not require registration under the Act accompanies this
Certificate.
-----------------------------------------
[INSERT NAME OF TRANSFEROR]
By: --------------------------------------
Date: ------------------------------------
*Check applicable box.
X-0
XXXXXXX X
XXXXXXXXXX XXXXXX XX XXXXXXXXXXXXXX
, 0000
CELLNET DATA SYSTEMS, INC.
000 Xxxxxxxx Xxxx
Xxx Xxxxxx, XX 00000
Ladies and Gentlemen:
In connection with our proposed purchase of warrants (the "SECURITIES") to
purchase Common Stock, par value $.001 per share, of Cellnet Data Systems, Inc.
(the "COMPANY") we confirm that:
1. We understand that any subsequent transfer of Securities is subject to
certain restrictions and conditions set forth in the Warrant Agreement (the
"WARRANT AGREEMENT") dated as of September 29, 1997 between the Company and The
Bank of New York, as warrant agent (the "WARRANT AGENT") relating to the
Securities and the undersigned agrees to be bound by, and not to resell, pledge
or otherwise transfer the Securities except in compliance with the Securities
Act of 1933, as amended (the "SECURITIES ACT"), and all applicable state
securities laws.
2. We understand that the offer and sale of the Securities have not been
registered under the Securities Act or pursuant to any state securities laws,
and that the Securities may therefore not be offered or sold within the United
States or to, 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 Securities, we will do so only (i) to the Company or any subsidiary thereof,
(ii) inside the United States in accordance with Rule 144A promulgated under the
Securities Act to a "qualified institutional buyer" (as defined therein), (iii)
to an "institutional accredited investor" (as defined below), that, prior to
such transfer, furnishes (or has furnished on its behalf by a United States
broker-dealer) to the Warrant Agent a signed letter containing certain
representations and agreements relating to the restrictions on transfer of the
Securities (which form can be obtained from the Warrant Agent), (iv) outside the
United States in accordance with Rule 904 of Regulation S promulgated under the
Securities Act, (v) pursuant to the exemption from registration provided by Rule
144 promulgated under the Securities Act (if applicable), or (vi) pursuant to an
effective registration statement under the Securities Act, and we further agree
to provide to any person purchasing any of the Securities from us a notice
advising such purchaser that any resale of the Securities are restricted as
stated herein.
3. We understand that, on any proposed resale of any Securities, we will be
required to furnish to the Company and the Warrant Agent such certification,
written legal opinions and other information as the Company and the Warrant
Agent may reasonably require to confirm that the proposed sale complies with the
foregoing restrictions. We further understand that the Securities purchased by
us will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D promulgated 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
Securities, 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.
5. We are acquiring the Securities 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.
C-1
6. You and the Warrant Agent and your respective counsel 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.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK.
Very truly yours,
By:
-----------------------------------------
Name:
Title:
Address:
Upon transfer, the Securities would be registered in the name of the new
beneficial owner as follows:
Name:
Address:
Taxpayer ID Number:
C-2
