Exhibit 4.3
WARRANT AGREEMENT
between
CFW COMMUNICATIONS COMPANY
and
THE BANK OF NEW YORK
Dated as of July 26, 2000
TABLE OF CONTENTS
Page
ARTICLE I 1
ARTICLE II 5
Section 2.1. Form of Warrant Certificates. 5
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Section 2.2. Restrictive Legends. 6
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Section 2.3. Execution and Delivery of Warrant Certificates. 7
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Section 2.4. Certificated Warrants. 8
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ARTICLE III 8
Section 3.1. Exercise Price. 8
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Section 3.2. Exercise; Restrictions on Exercise. 8
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Section 3.3. Method of Exercise; Payment of Exercise Price. 8
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ARTICLE IV 10
Section 4.1. Adjustments. 10
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Section 4.2. Notice of Adjustment. 17
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Section 4.3. Statement on Warrants. 18
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Section 4.4. Notice of Consolidation, Merger, Etc. 18
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Section 4.5. Fractional Interests. 18
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Section 4.6. When Issuance or Payment May Be Deferred. 19
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Section 4.7. Par Value; Valid Issuance. 19
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ARTICLE V 19
ARTICLE VI 19
ARTICLE VII 20
ARTICLE VIII 20
Section 8.1. Transfer and Exchange. 20
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Section 8.2. Book-Entry Provisions for the Global Warrants. 21
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Section 8.3. Special Transfer Provisions. 23
Section 8.4. Surrender of Warrant Certificates. 24
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Section 9.1. Warrant Holder Deemed Not a Shareholder. 26
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Section 9.2. Right of Action. 26
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ARTICLE X 26
Section 10.1. Duties and Liabilities. 26
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Section 10.2. Right to Consult Counsel. 28
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Section 10.3. Compensation; Indemnification. 28
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Section 10.4. No Restrictions on Actions. 28
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Section 10.5. Discharge or Removal; Replacement Warrant Agent. 28
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Section 10.6. Successor Warrant Agent. 29
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ARTICLE XI 30
Section 11.1. Monies Deposited with the Warrant Agent. 30
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Section 11.2. Payment of Taxes. 30
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Section 11.3. No Merger, Consolidation or Sale of Assets of the Company. 30
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Section 11.4. Reports to Holders. 31
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Section 11.5. Notices; Payment. 31
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Section 11.6. Binding Effect. 32
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Section 11.7. Counterparts. 32
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Section 11.8. Amendments. 33
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Section 11.9. Headings. 33
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Section 11.10. Common Shares Legend. 33
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Section 11.11. Third Party Beneficiaries. 34
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Section 11.12. Termination. 34
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Section 11.13. Method of Payment. 34
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Section 11.14. Governing Law. 34
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EXHIBIT A FORM OF WARRANT CERTIFICATE
EXHIBIT B-1 FORM OF CERTIFICATE TO BE DELIVERED BY TRANSFERORS IN
CONNECTION WITH TRANSFERS TO INSTITUTIONAL
ACCREDITED INVESTORS
EXHIBIT B-2 FORM OF CERTIFICATE TO BE DELIVERED BY TRANSFEREES IN
CONNECTION WITH TRANSFERS TO INSTITUTIONAL
ACCREDITED INVESTORS
APPENDIX A LIST OF FINANCIAL EXPERTS
WARRANT AGREEMENT
WARRANT AGREEMENT, dated as of July 26, 2000 (this
"Agreement"), between CFW Communications Company, a Virginia corporation (the
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"Company"), and The Bank of New York, a New York banking corporation (the
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"Warrant Agent").
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W I T N E S S E T H:
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WHEREAS, pursuant to the terms of a Placement Agreement dated
July 21, 2000 (the "Placement Agreement"), among the Company, Morgan Stanley &
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Co. Incorporated, First Union Securities, Inc. and SunTrust Equitable Securities
Corporation, as placement agents (collectively, the "Placement Agents"), the
Company has agreed to issue and sell to the Placement Agents an aggregate of
280,000 warrants (each, a "Warrant" and, collectively, the "Warrants"), each
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Warrant initially entitling the holder thereof to purchase 1.8 shares of Common
Stock (as defined below) at a per share exercise price equal to $47.58 as part
of 280,000 Units (the "Units"), each Unit consisting of $1,000 principal amount
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of 13% Senior Notes due 2010 of the Company (each, a "Note" and, collectively,
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the "Notes") to be issued pursuant to the provisions of an Indenture, dated as
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of the date hereof, between the Company and The Bank of New York (the
"Indenture"), and one Warrant;
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WHEREAS, the Notes and the Warrants included in each Unit will
become separately transferable at the close of business upon the earliest to
occur of (i) the date that is 180 days after the Closing Date (as defined
below), (ii) the commencement of an exchange offer with respect to the Notes
undertaken pursuant to the Notes Registration Rights Agreement (as defined
below), (iii) the effectiveness of a shelf registration statement with respect
to resales of the Notes, (iv) the commencement of an offer to purchase the Notes
upon a change of control and (v) such date as determined by Morgan Stanley & Co.
Incorporated in its sole discretion (the "Separation Date"); and
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WHEREAS, the Company desires to engage the Warrant Agent to
act on the Company's behalf, and the Warrant Agent desires to act on behalf of
the Company, in connection with the issuance of the Warrant Certificates (as
defined below) and the other matters as provided herein, including, without
limitation, for the purpose of defining the terms and provisions of the Warrants
and the respective rights and obligations thereunder of the Company and the
record holders thereof (together with the holders of shares of Common Stock (or
other securities) received upon exercise thereof, the "Holders").
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NOW, THEREFORE, in consideration of the foregoing and of the
mutual agreements contained herein and in the Placement Agreement, the Company
and the Warrant Agent hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
"Affiliate" of any specified Person means any other Person,
directly or indirectly, controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agent Members" has the meaning specified in Section 8.2
hereof.
"Auditors" means, at any time, the independent auditors of the
Company at such time.
"Board" means the board of directors of the Company from time
to time.
"Business Day" means a day except a Saturday, Sunday or other
day on which commercial banks in The City of New York, or in the city of the
corporate trust office of the Warrant Agent, are authorized by law to close.
"Certificate for Surrender" means the subscription form on the
reverse side of the Warrant Certificate substantially in the form of Exhibit A
hereto.
"Certificated Warrants" has the meaning specified in Section
2.1 hereof.
"Closing Date" means the date hereof.
"Commission" means the United States Securities and Exchange
Commission.
"Common Shares" means the shares of the Common Stock of the
Company.
"Common Stock" means the voting Common Stock, no value per
share of the Company, and any other capital stock of the Company into which such
Common Stock may be converted or reclassified or that may be issued in respect
of, in exchange for or in substitution of such Common Stock by reason of any
stock splits, stock dividends, distributions, mergers, consolidations or other
like events.
"Company" has the meaning specified in the recitals to this
Agreement.
"Current Market Value" has the meaning specified in Section
4.1(f) hereof.
"Depositary" means The Depository Trust Company, its nominees
and their respective successors.
"Exchange Act" means the United States Securities Exchange Act
of 1934, as amended.
"Exchange Offer" has the meaning specified in Section 11.4
hereof.
"Exercise Date" means the date upon which a Holder exercises a
Warrant or Warrants in accordance with Section 3.2.
"Exercise Price" has the meaning specified in Section 3.1
hereof.
"Expiration Date" means August 15, 2010.
"Financial Expert" means one of the Persons listed in Appendix
A hereto.
"Holders" has the meaning specified in the recitals to this
Agreement.
"IAI Certificated Warrants" has the meaning provided in
Section 2.1.
"Indenture" has the meaning provided in the recitals to this
Agreement.
"Independent Financial Expert" means a Financial Expert that
does not (and whose directors, executive officers and 5.0% stockholders do not)
have a direct or indirect financial interest in the Company or any of its
subsidiaries or Affiliates, which has not been for at least five years and, at
the time that it is called upon to give independent financial advice to the
Company, is not (and none of its directors, executive officers or 5.0%
stockholders is) a promoter, director or officer of the Company or any of its
subsidiaries or Affiliates.
"Institutional Accredited Investor" shall mean an institution
that is an "accredited investor" as that term is defined in Rule 501(a)(1), (2),
(3) or (7) of Regulation D under the Securities Act.
"Notes" has the meaning provided in the recitals to this
Agreement.
"Notes Registration Rights Agreement" means the Notes
Registration Rights Agreement with respect to the Notes dated July 26, 2000
between the Company and the Placement Agents.
"Officer" means, with respect to the Company, (i) any member
of the Board of the Company, or the Chairman, the President, the Chief Executive
Officer, any Vice President, the Chief Operating Officer or the Chief Financial
Officer of the Company, any officer of a subsidiary designated by the Board to
act as such officer of the Company or any other person duly authorized and
empowered by the Board to execute for and on behalf and in the name of the
Company (any officer or other person described in this clause (i), a "Senior
Officer") and (ii) the Treasurer, Assistant Treasurer, the Secretary or an
Assistant Secretary of the Company or any officer of a subsidiary designated by
the Board to act as such officer of the Company.
"Officers' Certificate" means a certificate signed by one
Senior Officer and one other Officer or by two Senior Officers.
"Opinion of Counsel" means a written opinion signed by legal
counsel who may be an employee of or counsel to the Company.
"Parent" means any Person of which the Company is a direct or
indirect subsidiary.
"Permitted Holders" has the meaning ascribed thereto in the
Indenture.
"Person" means an individual, corporation, partnership,
limited liability company, joint venture association, joint-stock company trust,
unincorporated organization, government or agency thereof.
"Preferred Shares" has the meaning ascribed thereto in the
Indenture.
"Private Placement Legend" means the legend set forth on the
Warrant Certificates in the form set forth in Section 2.2(a).
"Placement Agreement" has the meaning specified in the
recitals to this Agreement.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"R&B Acquisition" has the meaning ascribed thereto in the
Indenture.
"Registration" means the date of the commencement of an
exchange offer for, or the effectiveness of a shelf registration statement with
respect to, the Notes.
"Relevant Value" means the value of the Warrants as set forth
in a Value Report.
"Restricted Certificated Warrants" has the meaning specified
in Section 2.1 hereof.
"Restricted Global Warrant" has the meaning specified in
Section 2.1 hereof.
"Rule 144A" means Rule 144A under the Securities Act.
"Securities Act" means the United States Securities Act of
1933, as amended.
"Separation Date" has the meaning specified in the recitals to
this Agreement.
"Subscription Form" means the form on the reverse side of the
Warrant Certificate substantially in the form of Exhibit A hereto.
"Underlying Securities" shall mean the Common Shares (or other
securities) purchasable upon exercise of the Warrants.
"Units" has the meaning specified in the recitals to this
Agreement.
"Value Report" has the meaning specified in Section 4.1(k)
hereof.
"Warrant" has the meaning specified in the recitals to this
Agreement.
"Warrant Agent" has the meaning specified in the preamble to
this Agreement.
"Warrant Certificates" has the meaning specified in Section
2.1 hereof.
"Warrants Registration Rights Agreement" means the Warrants
Registration Rights Agreement relating to the Warrants, dated July 26, 2000,
between the Company and the Placement Agents.
ARTICLE II
ISSUE OF WARRANTS
Section 2.1. Form of Warrant Certificates.
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Certificates representing the Warrants (the "Warrant
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Certificates") shall be substantially in the form attached hereto as Exhibit A,
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shall be dated the date on which such Warrant Certificates are countersigned by
the Warrant Agent and shall have such insertions as are appropriate or required
or permitted by this Agreement and may have such letters, numbers or other marks
of identification and such legends and endorsements stamped, printed,
lithographed or engraved thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be required to
comply with any law or with any rule or regulation pursuant thereto or with any
rule or regulation of any securities exchange on which the Warrants may be
listed or any depositary, or to conform to custom or usage.
Warrants offered and sold in reliance on Rule 144A shall be
issued initially in the form of one or more global Warrant Certificates in
definitive, fully registered form, substantially in the form set forth in
Exhibit A (collectively, the "Global Warrants") deposited with the Warrant
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Agent, as custodian for, and registered in the name of the nominee for, the
Depositary, duly executed by the Company and countersigned by the Warrant Agent
as hereinafter provided. The aggregate number of Warrants represented by the
Global Warrants may from time to time be increased or decreased by adjustments
made on the records of the Warrant Agent, as custodian for the Depositary, or
its nominee, as provided in Section 2.4 and Section 8.3 hereof.
Warrants transferred to Institutional Accredited Investors who
are not QIBs shall be issued in registered form substantially in the form set
forth in Exhibit A ("IAI Certificated Warrants").
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Warrants issued pursuant to Section 2.4 and Section 8.2(b) in
exchange for interests in the Global Warrants shall be issued in the form of
permanent Warrant Certificates in registered form, substantially in the form set
forth in Exhibit A (the "Restricted Certificated Warrants" and, together with
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the IAI Certificated Warrants, the "Certificated Warrants").
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The definitive Warrant Certificates shall be typed, printed,
lithographed or engraved or produced by any combination of these methods or may
be produced in any other manner permitted by the rules of any securities
exchange on which the Warrants may be listed,
all as determined by the Officer or Officers executing such Warrant
Certificates, as evidenced by the execution of such Warrant Certificates.
Section 2.2. Restrictive Legends.
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(a) The Warrant Certificates shall bear the following
legend on the face thereof:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT (1) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (3) TO
AN INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS UNDER REGULATION D UNDER THE SECURITIES ACT
OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH CASE, IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES.
(b) Each Restricted Global Warrant shall also bear the
following legend on the face thereof:
UNLESS THIS WARRANT CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE COMPANY OR THE
WARRANT AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY OR
TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN ARTICLE VIII OF THE WARRANT AGREEMENT.
(c) Each Warrant Certificate issued prior to the Separation
Date shall bear the following legend on the face thereof:
THE WARRANTS EVIDENCED BY THIS CERTIFICATE ARE INITIALLY ISSUED AS PART
OF AN ISSUANCE OF UNITS, EACH OF WHICH CONSISTS OF $1,000 PRINCIPAL
AMOUNT OF 13% SENIOR NOTE DUE 2010 OF THE COMPANY (COLLECTIVELY, THE
"NOTES") AND ONE WARRANT INITIALLY ENTITLING THE HOLDER THEREOF TO
PURCHASE 1.8 COMMON SHARES, NO PAR VALUE, OF THE COMPANY. PRIOR TO THE
CLOSE OF BUSINESS UPON THE EARLIEST TO OCCUR OF (i) 180 days from the
Closing Date, (ii) THE COMMENCEMENT OF AN EXCHANGE OFFER WITH RESPECT
TO THE NOTES, (iii) THE EFFECTIVENESS OF A SHELF REGISTRATION STATEMENT
WITH RESPECT TO THE NOTES, (iv) THE COMMENCEMENT OF AN OFFER TO
PURCHASE THE NOTES UPON A CHANGE OF CONTROL AND (v) SUCH DATE AS
DETERMINED BY MORGAN STANLEY & CO. INCORPORATED IN ITS SOLE DISCRETION,
THE WARRANTS EVIDENCED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED OR
EXCHANGED SEPARATELY FROM, BUT MAY BE TRANSFERRED OR EXCHANGED ONLY
TOGETHER WITH, THE NOTES.
Section 2.3. Execution and Delivery of Warrant Certificates.
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Warrant Certificates evidencing 280,000 Warrants and
entitling the Holders to purchase initially an aggregate of 504,000 Common
Shares, may be executed, on or after the date of this Agreement, by the Company
and delivered to the Warrant Agent for countersignature, and the Warrant Agent
shall thereupon countersign and deliver such Warrant Certificates upon the order
and at the written direction of the Company in form attached hereto as Exhibit A
signed by one or more Senior Officers to the purchasers thereof on the date of
issuance. The Warrant Agent is hereby authorized to countersign and deliver
Warrant Certificates as required by this Section 2.3 or by Section 3.3, Article
VI or Article VIII hereof.
The Warrant Certificates shall be executed on behalf of the
Company by one or more Senior Officers of the Company either manually or by
facsimile signature printed thereon. The Warrant Certificates shall be
countersigned by manual signature of the Warrant Agent and shall not be valid
for any purpose unless so countersigned. In case any Senior Officer of the
Company whose signature shall have been placed upon any of the Warrant
Certificates shall cease to be such Senior Officer of the Company before
countersignature by the Warrant Agent and the issuance and delivery thereof,
such Warrant Certificates may nevertheless be
countersigned by the Warrant Agent and issued and delivered with the same force
and effect as though such person had not ceased to be such Senior Officer of the
Company.
Section 2.4. Certificated Warrants.
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Beneficial owners of interests in Global Warrants shall
receive Certificated Warrants (which, except as set forth in Section 8.3(d),
shall bear the Private Placement Legend) in accordance with the procedures of
the Warrant Agent and the Depositary, as and when permitted by Article VIII
hereof. In connection with the execution and delivery of such Certificated
Warrants, the Warrant Agent shall reflect on its books and records the date and
a decrease in the number of Warrants represented by the Global Warrant equal to
the number of such Certificated Warrants and the Company shall execute and the
Warrant Agent shall countersign and deliver to said beneficial owners one or
more Certificated Warrants in an equal aggregate number.
ARTICLE III
EXERCISE PRICE, EXERCISE AND REPURCHASE OF WARRANTS
Section 3.1. Exercise Price.
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Each Warrant Certificate shall, when countersigned by the
Warrant Agent, initially entitle the Holder thereof, subject to the provisions
of this Agreement, to purchase the number of Common Shares indicated thereon at
a per share purchase price (the "Exercise Price") equal to $47.58, subject to
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adjustment as provided in Section 4.1 and Article V hereof.
Section 3.2. Exercise; Restrictions on Exercise.
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At any time beginning one year after the Closing Date and
prior to 5:00 p.m. (New York City time) on the Expiration Date, any outstanding
Warrants may be exercised on any Business Day; provided that Holders of Warrants
will be able to exercise their Warrants only if a registration statement
relating to the Common Shares (or other securities) issuable upon exercise of
the Warrants is then effective and available, or the exercise of such Warrants
is exempt from the registration requirements of the Securities Act, as
reasonably determined by the Company based on advice from its counsel, and such
securities are qualified for sale or exempt from qualification under the
applicable securities laws of the states or other jurisdictions in which such
Holders reside. Any Warrants not exercised by 5:00 p.m., New York City time, on
the Expiration Date shall expire and all rights of the Holders of such Warrants
shall terminate. Additionally, pursuant to Section 4.1(j)(ii) hereof, the
Warrants shall expire and all rights of the Holders of such Warrants shall
terminate in the event the Company merges or consolidates with or sells all or
substantially all of its property and assets to a Person (other than an
Affiliate of the Company) if the consideration payable to holders of Common
Stock in exchange for their Common Stock in connection with such merger,
consolidation or sale consists solely of cash or in the event of the
dissolution, liquidation or winding up of the Company.
Section 3.3. Method of Exercise; Payment of Exercise Price.
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In order to exercise all or any of the Warrants represented
by a Warrant Certificate, the Holder thereof must surrender for exercise the
Warrant Certificate to the Warrant Agent at its corporate trust office address
set forth in Section 11.5 hereof, with the Subscription Form set forth on the
reverse of the Warrant Certificate duly executed, together with payment in full
of the Exercise Price then in effect for each Common Share (or other securities)
purchasable upon exercise of the Warrants as to which a Warrant is exercised;
such payment may be made in cash or by certified or official bank check payable
to the order of the Company or by wire transfer to an account designated by the
Company for such purpose. Any payment shall be made in care of the Warrant Agent
at its corporate trust office address set forth in Section 11.5 hereof prior to
the close of business on the date the Warrant Certificate is surrendered to the
Warrant Agent for exercise. All payments received upon exercise of Warrants
shall be delivered to the Company by the Warrant Agent as instructed in writing
by the Company. The Warrant Agent shall transmit the entire amount that it has
received, without any deduction of any wire, cable, service or other charges.
If less than all the Warrants represented by a Warrant
Certificate are exercised, such Warrant Certificate shall be surrendered and a
new Warrant Certificate of the same tenor and for the number of Warrants which
were not exercised shall be executed by the Company and delivered to the Warrant
Agent and the Warrant Agent shall countersign the new Warrant Certificate,
registered in such name or names as may be directed in writing by the Holder,
and shall deliver the new Warrant Certificate to the Person or Persons entitled
to receive the same; provided that such Holder (x) shall be responsible for the
payment of any transfer taxes required as a result of any change in ownership of
such Warrants and (y) must comply with Article VIII, and any other provision of
this Agreement relating to transfer, with respect to any such requested
registration or delivery involving such a change in ownership. Upon the exercise
of any Warrants following the surrender of a Warrant Certificate in conformity
with the foregoing provisions, the Warrant Agent shall cause the Company to
transfer promptly to the Holder or, upon the written order of the Holder of such
Warrant Certificate, appropriate evidence of ownership of any Common Shares or
other securities or property to which the Holder is entitled as a result of
exercise, registered or otherwise placed in such name or names as may be
directed in writing by the Holder, and to deliver such evidence of ownership to
the Person or Persons entitled to receive the same, and, at the Company's
option, an amount in cash, in lieu of any fractional shares, as provided in
Section 4.5 hereof; provided that the Holder of such Warrant (x) shall be
responsible for the payment of any transfer taxes required as the result of any
change in ownership of such Warrants or the issuance of such Common Shares other
than to the Holder of such Warrants and (y) must comply with Article VIII, and
any other provision of this Agreement relating to transfer, with respect to any
such requested registration or delivery involving such a change in ownership.
Upon the exercise of a Warrant or Warrants, the Company shall
as promptly as practicable but not later than 14 Business Days after such
exercise enter, or cause any transfer agent of the Common Shares to enter, the
name of the person entitled to receive the Common Shares upon exercise of such
Warrants into the Company's register of shareholders. Thereupon,
the Company or the applicable transfer agent shall issue certificates (bearing
the legend set forth in Section 11.10 hereof, if applicable, unless a
registration statement with the Commission relating to such Common Shares shall
then be in effect or the Company and the Holder exercising such Warrants
otherwise agree) for the necessary number of Common Shares to which said Holder
is entitled and deliver such certificate to the Warrant Agent who in turn will
deliver it to the Person entitled to receive the Common Shares.
A Warrant shall be deemed by the Company to be exercised
immediately prior to the close of business on the date of surrender for
exercise, as provided above, of the Warrant Certificate representing such
Warrant and, for all purposes under this Agreement, the Person entitled to
receive any Common Shares upon such exercise shall receive the Common Shares
such person would have been entitled to had it been the registered holder on
such date, except for purposes of transferring the Common Shares or voting in a
general shareholders' meeting, such Person shall, in its relation with the
Company, be deemed to be the holder thereof only when such Common Shares are
entered in the register of shareholders in the name of such person; provided,
however, that, with respect to Warrants which have been exercised but for which
the corresponding Common Shares have not been recorded in the register of
shareholders, the provisions of Article IV shall continue to apply as if the
number of Warrants held prior to exercise remained outstanding on the date of
any action or event of the type giving rise to an adjustment under Article IV.
ARTICLE IV
ADJUSTMENTS
Section 4.1. Adjustments.
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The Exercise Price and the number of Common Shares (or other
securities) purchasable upon exercise of each Warrant shall be subject to
adjustment from time to time as follows (subject in each case to Section 4.1(l)
hereof):
(a) Divisions; Combinations, Reclassifications. In case the
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Company shall, on or before the Expiration Date, (i) issue any Common Shares or
other capital stock of the Company in payment of a dividend or other
distribution with respect to its Common Shares, (ii) subdivide its issued and
outstanding Common Shares, (iii) combine its issued and outstanding Common
Shares into a smaller number of shares, (iv) reclassify or convert the Common
Shares (other than a reclassification in connection with a merger, consolidation
or other business combination which will be governed by Section 4.1(j)) or (v)
distribute to all holders of its Common Shares any of the Company's assets, debt
securities or any options, warrants or rights to purchase securities (excluding
those options, warrants and rights the issuance of which does not require or
otherwise result in an adjustment pursuant to Section 4.1(b) and cash dividends
and other cash distributions from current or retained earnings), then the number
of Common Shares purchasable upon exercise of each Warrant immediately prior to
the record date for such issue or distribution or the effective date of such
subdivision, consolidation, reclassification or conversion shall be adjusted so
that the Holder of each Warrant shall thereafter be entitled to receive the kind
and number of Common Shares which such Holder would have
been entitled to receive after the happening of any of the events described
above had such Warrant been exercised immediately prior to the happening of such
event or any record date with respect thereto. An adjustment made pursuant to
this Section 4.1(a) shall become effective immediately after the effective date
of such event retroactive to the record date, if any, for such event.
(b) Rights; Options; Warrants. In case the Company shall issue
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rights, options, warrants or convertible or exchangeable securities (other than
a distribution of debt securities, options, warrants or rights subject to
Section 4.1(a)) to all holders of its Common Shares, entitling them to subscribe
for or purchase Common Shares, or securities convertible into or exchangeable or
exercisable for Common Shares, at an offering price (or with an initial
conversion, exercise or exchange plus such offering price) per share which is
lower (at the record date for such issuance) than the then Current Market Value
per Common Share, then the Company shall ensure that at the time of such
issuance, the same or a like offer or invitation is made to the Holders of the
Warrants as if their Warrants had been exercised on the day immediately
preceding the record date of such offer or invitation on the terms (subject to
any adjustment pursuant to Section 4.1(a) for a prior event) on which such
Warrants could have been exercised on such date; provided that if the Board so
resolves, the Company shall not be required to ensure that the same offer or
invitation is made to the Holders of the Warrants, but the number of Common
Shares thereafter purchasable upon the exercise of each Warrant shall instead be
adjusted and shall be determined by multiplying the number of Common Shares
theretofore purchasable upon exercise of each Warrant by a fraction, the
numerator of which shall be the sum of (i) the number of Common Shares
outstanding immediately prior to the issuance of such rights, options, warrants
or convertible or exchangeable securities plus (ii) the number of additional
Common Shares which may be purchased or subscribed for upon exercise, exchange
or conversion of such rights, options, warrants or convertible or exchangeable
securities and the denominator of which shall be the sum of (x) the number of
Common Shares outstanding immediately prior to the issuance of such rights,
options, warrants or convertible or exchangeable securities plus (y) the number
of shares which the total consideration received by the Company for such rights,
options, warrants or convertible or exchangeable securities so offered would
purchase at the then Current Market Value per Common Share.
Except as otherwise provided above, such adjustment shall be
made whenever such rights, options, warrants or convertible or exchangeable
securities are issued and shall become effective retroactively immediately after
the record date for the determination of shareholders entitled to receive such
rights, options, warrants or convertible or exchangeable securities.
(c) Issuance of Common Shares at Lower Values. In case the
-----------------------------------------
Company shall sell and issue any Common Share or Right (as defined below)
(excluding (i) any offering underwritten by or a private placement arranged by,
an investment bank of national standing or, (ii) issuances of Common Shares in
respect of rights, options or warrants or convertible or exchangeable securities
the issuance of which either did not require or otherwise result in an
adjustment pursuant to Section 4.1(b)) that is lower than the Current Market
Value per Common Share in effect immediately prior to such sale or issuance,
then the number of Common Shares
thereafter purchasable upon the exercise of each Warrant shall be determined by
multiplying the number of Common Shares theretofore purchasable upon exercise of
such Warrant by a fraction, the numerator of which shall be the number of Common
Shares outstanding immediately after such sale or issuance and the denominator
of which shall be the number of Common Shares outstanding immediately prior to
such sale or issuance plus the number of Common Shares which the aggregate
consideration received (determined as provided below) for such sale or issuance
would purchase at such Current Market Value per Common Share. For purposes of
the calculation provided for in this Section 4.1(c), the Common Shares which the
holder of any such Right shall be entitled to subscribe for or purchase shall be
deemed to be issued and outstanding as of the date of such sale and issuance of
such Right and the consideration received by the Company therefor shall be
deemed to be the consideration received by the Company for such Right, plus the
consideration or premiums stated in such Right to be paid for the Common Shares
covered thereby. In case the Company shall sell and issue any Right together
with one or more other securities as part of a unit at a price per unit, then in
determining the "price per Common Share" and the "consideration received by the
Company" for purposes of this Section 4.1(c), the Board shall determine, in good
faith, the fair value of the Right then being sold as part of such unit. For
purposes of this paragraph, a "Right" shall mean any right, option, warrant or
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convertible or exchangeable security containing the Right to subscribe for or
acquire one or more Common Shares, excluding the Warrants.
(d) Distributions of Debt, Assets, Subscription Rights or
-----------------------------------------------------
Convertible Securities. In case the Company shall make a distribution to all
- ----------------------
holders of its Common Shares of evidences of its assets, debt securities or any
options, warrants or rights to purchase securities, or other distributions
(excluding any issuance of Common Shares referred to in Section 4.1(a) above and
excluding distributions in connection with the dissolution, liquidation or
winding-up of the Company which shall be governed by Section 4.1(j) and
distributions of securities referred to in Section 4.1(a), Section 4.1(b) or
Section 4.1(c)), then, in each case, the number of Common Shares purchasable
after the record date for such distribution upon the exercise of each Warrant
shall be determined by multiplying the number of Common Shares purchasable upon
the exercise of such Warrant immediately prior to such record date by a
fraction, the numerator of which shall be the Current Market Value per Common
Share immediately prior to the record date for such distribution and the
denominator of which shall be the Current Market Value per Common Share
immediately prior to the record date for such distribution less the then fair
value (as determined in good faith by the Board) of the evidences of its
indebtedness, or assets or other distributions so distributed attributable to
one Common Share; provided, however, that in lieu of making the foregoing
adjustment the Company may make the same or a like distribution to the Holders
of the Warrants as if their Warrants had been exercised on the day immediately
preceding the record date of such distribution on the terms (subject to any
adjustment pursuant to Section 4.1(a) for a prior event) on which such Warrants
could have been exercised on such date.
Such adjustment shall be made whenever any such distribution
is made, and shall become effective on the date of distribution retroactive to
the record date for the determination of shareholders entitled to receive such
distribution.
(e) Expiration of Rights, Options and Conversion Privileges.
-------------------------------------------------------
Upon the expiration of any rights, options, warrants or conversion or exchange
privileges (including, without limitation, any Rights) that have previously
resulted in an adjustment hereunder, if any thereof shall not have been
exercised, exchanged or converted, the Exercise Price and the number of Common
Shares purchasable upon the exercise of each Warrant shall, upon such
expiration, be readjusted and shall thereafter, upon any future exercise, be
such as they would have been had they been originally adjusted (or had the
original adjustment not been required, as the case may be) as if (i) the only
Common Shares so issued were the Common Shares, if any, actually issued or sold
upon the exercise, exchange or conversion of such rights, options, warrants or
conversion or exchange rights (including, without limitation, any Rights) and
(ii) such Common Shares, if any, were issued or sold for the consideration
actually received by the Company upon such exercise, exchange or conversion plus
the consideration, if any, actually received by the Company for issuance, sale
or grant of all such rights, options, warrants or conversion or exchange rights
(including, without limitation, any Rights) whether or not exercised.
(f) Current Market Value. For the purposes of any
--------------------
computation under this Article IV, the "Current Market Value" per Common Share
--------------------
or of any other security (herein collectively referred to as a "security") at
any date herein specified shall be:
(i) if the security is registered under the Exchange Act, the
average of the daily closing sale prices (or the equivalent in an
over-the-counter market) for the security, on the stock exchange or
over the counter market that is the primary trading market for the
security, for the 20 consecutive trading days immediately preceding
such date or, if the security has been registered under the Exchange
Act for less than 20 days trading days before such date, then the
average of the daily closing sale prices (or such equivalent) for all
of the trading days before such date for which closing sale prices (or
such equivalent) are available or
(ii) if the security is not registered under the Exchange Act,
(a) the value of the security, determined in good faith by the Board of
Directors and certified by a board resolution, based on the most
recently completed arm's-length transaction between the Company and a
Person other than an Affiliate of the Company, the closing of which
occurred on such date or within the six-month period preceding such
date, or (b) if no such transaction shall have occurred on such date or
within such six-month period, the value of the security as determined
by an Independent Financial Expert, in each case, without giving effect
to any discount for lack of liquidity, the fact that the Company has no
class of equity securities registered under the Exchange Act or the
fact that the security issuable upon exercise of the Warrants represent
a minority in the Company but which may give effect to the value of any
rights, preferences or privileges of any security other than Common
Stock.
(g) Consideration Received. For purposes of any
----------------------
computation respecting consideration received pursuant to this Section 4.1, the
following shall apply:
(i) in the case of the issuance of Common Shares for cash,
the consideration shall be the amount of such cash;
(ii) in the case of the issuance of Common Shares for a
consideration in whole or in part other than cash, the consideration
other than cash shall be deemed to be the fair market value thereof as
determined in good faith by the Board (irrespective of the accounting
treatment thereof), whose determination shall be conclusive and
described in reasonable detail in a board resolution which shall be
provided as soon as practicable thereafter to the Warrant Agent; and
(iii) in the case of the issuance of rights, options, warrants
or securities convertible into or exchangeable for Common Shares
(including, without limitation, any Rights), the aggregate
consideration received therefor shall be deemed to be the consideration
received by the Company for the issuance of such rights, options,
warrants or securities convertible into or exchangeable for Common
Shares, plus the additional minimum consideration, if any, to be
received by the Company upon the exercise, conversion or exchange
thereof (the consideration in each case to be determined in the same
manner as provided in clauses (i) and (ii) of this Section 4.1(g));
provided that in no case shall any deduction be made for any commissions,
discounts or other expenses incurred by the Company for any underwriting of the
issue or otherwise in connection therewith.
(h) De Minimus Adjustments. No adjustment in the number of
----------------------
Common Shares (or other securities) purchasable hereunder or in the Exercise
Price shall be required unless such adjustment would require an increase or
decrease of at least one percent (1%) in the number of Common Shares (or other
securities) purchasable upon the exercise of each Warrant or in the Exercise
Price; provided, however, that any adjustments which by reason of this Section
4.1(h) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations shall be made to the
nearest one-thousandth of a share.
(i) Adjustment of Exercise Price. (i) Whenever the number of
----------------------------
Common Shares purchasable upon the exercise of each Warrant is adjusted, as
herein provided, the Exercise Price per Common Share payable upon exercise of
such Warrant shall be adjusted (calculated to the nearest $.01) so that it shall
equal the price determined by multiplying such Exercise Price immediately prior
to such adjustment by a fraction the numerator of which shall be the number of
Common Shares purchasable upon the exercise of each Warrant immediately prior to
such adjustment and the denominator of which shall be the number of Common
Shares so purchasable immediately thereafter.
(ii) Following any adjustment to the Exercise Price pursuant
to this Article IV, the Adjusted Exercise Price shall never be less
than an amount (such amount per Common Share, the "Minimum Price")
-------------
equal to the par value per Common Share at the time of such adjustment,
except to the extent permitted by applicable law. "Adjusted Exercise
Price" means the Exercise Price payable per Common Share, when adjusted
pursuant to this Article IV.
(iii) If, following any adjustment to the Exercise Price
pursuant to this Article IV, the Minimum Price is payable at the time
of exercise by Holders, and but for the provisions of the preceding
clause (ii), the Adjusted Exercise Price would (except to the extent
permitted by applicable law) equal an amount that is less than the
Minimum Price at the time of such adjustment (such lesser amount, the
"Sub-Par Price"), the Company will take such action that the Board of
-------------
Directors may in good faith determine is fair and appropriate to
protect the rights of the Holders against dilution or other impairment
as contemplated by this Article IV; provided, however, that no such
action shall cause the aggregate amount payable per Warrant, after
giving effect to this clause (iii) (and taking into account any
payments to be received hereunder) to be greater than the aggregate
amount payable per Warrant which would have been payable but for the
preceding clause (ii). Such action may include, without limitation:
(A) payment to the Holder of each Warrant of
liquidated damages per Common Share purchasable upon Exercise
equal to the Minimum Price less the Sub-Par Price; or
(B) reduction, if permitted by applicable law, of the
par value per Common Share.
Any such payment shall be made or any other such action shall
be consummated not later than the earlier of (a) 180 days following the
consummation of the transaction giving rise to such adjustment and (b)
with respect to each Warrant, on the date such Warrant is exercised. If
such transaction is annulled, rescinded, revoked, or reversed or
otherwise canceled, or any subsequent adjustment is made pursuant to
this Article IV such that the adjusted Exercise Price is greater than
or equal to the Minimum Price (without applying the preceding clause
(ii) to that or any preceding adjustment pursuant to this Article IV),
then (x) in the case of such a payment, if such payment has not yet
been made to a Holder by the Company (or by any agent of the Company,
including for this purpose the Warrant Agent), such payment may be
annulled, rescinded, revoked or otherwise canceled and any deposit made
in respect thereof returned to the Company and (y) in the case of any
such other action, such other action may be annulled, rescinded,
revoked, reversed or otherwise canceled.
(iv) If after an adjustment, a Holder of a Warrant upon
exercise of it may receive shares of two or more classes in the capital
of the Company, the Company shall determine the allocation of the
adjusted Exercise Price between such classes of shares in a manner that
the Board deems fair and equitable to the Holders. After such
allocation, the exercise privilege and the Exercise Price of each class
of shares shall thereafter be subject to adjustment on terms comparable
to those applicable to Common Shares in this Article IV.
(v) Such adjustment shall be made successively whenever
any event listed above shall occur.
(j) Consolidation, Merger, Etc. (i) Subject to the provisions
--------------------------
of Subsection (ii) below of this Section 4.1(j), in case of the consolidation of
the Company with, or merger of the Company with or into, or of the sale of all
or substantially all of the properties and assets of the Company to, any Person,
and in connection therewith consideration is payable to holders of Common Shares
(or other securities or property purchasable upon exercise of Warrants) in
exchange therefor, the Warrants shall remain subject to the terms and conditions
set forth in this Agreement and each Warrant shall, after such consolidation,
merger or sale, entitle the Holder to receive upon exercise the number of shares
in the capital or other securities or property (including cash) of or from the
Person resulting from such consolidation or surviving such merger or to which
such sale shall be made or of the parent of such Person, as the case may be,
that would have been distributable or payable on account of the Common Shares if
such Holder's Warrants had been exercised immediately prior to such merger,
consolidation or sale (or, if applicable, the record date therefor); and in any
such case the provisions of this Agreement with respect to the rights and
interests thereafter of the Holders of Warrants shall be appropriately adjusted
by the Board in good faith so as to be applicable, as nearly as may reasonably
be, to any shares, other securities or any property thereafter deliverable on
the exercise of the Warrants.
(ii) Notwithstanding the foregoing, (x) if the Company merges
or consolidates with, or sells all or substantially all of its property
and assets to, another Person (other than an Affiliate of the Company)
and consideration is payable to holders of Common Shares in exchange
for their Common Shares in connection with such merger, consolidation
or sale which consists solely of cash, or (y) in the event of the
dissolution, liquidation or winding up of the Company, then the Holders
of Warrants shall be entitled to receive payments or distributions as
of the date of such event on an equal basis with, and on the same day
as, holders of Common Shares (or other securities purchasable upon
exercise of the Warrants) as if the Warrants had been exercised
immediately prior to such event, less an amount equal to the Exercise
Price. Upon receipt of such payment, if any, the rights of a Holder
shall terminate and cease and such Holder's Warrants shall expire. In
case of any such merger, consolidation or sale of assets, the surviving
or acquiring Person or, in the event of any dissolution, liquidation or
winding up of the Company, the Company shall deposit promptly with the
Warrant Agent the funds or other consideration, if any, necessary to
pay the Holders of the Warrants. After receipt of such deposit from
such Person or the Company and after receipt of surrendered Warrant
Certificates, the Warrant Agent shall make payment by delivering a
check in such amount as is appropriate (or, in the case of
consideration other than cash, such other consideration as is
appropriate) to such Person or Persons as it may be directed in writing
by the Holder surrendering such Warrants.
(k) If required pursuant to Section 4.1(f)(ii), the Current
Market Value shall be deemed to be equal to the value set forth in the Value
Report (as defined below) as determined by an Independent Financial Expert,
which shall be selected by the Board in its sole discretion, and retained on
customary terms and conditions, using one or more valuation methods that the
Independent Financial Expert, in its best professional judgment, determines to
be most appropriate. The Company shall cause the Independent Financial Expert to
deliver to the Company, with a copy to the Warrant Agent, within 90 days of the
appointment of the
Independent Financial Expert, a value report (the "Value Report") stating the
------------
value of the Common Shares and other securities or property, if any, being
valued as of the relevant date and containing a brief statement as to the nature
and scope of the examination or investigation upon which the determination of
value was made. The Warrant Agent shall have no duty with respect to the Value
Report of any Independent Financial Expert, except to keep it on file and
available for inspection by the Holders. The determination as to Current Market
Value in accordance with the provisions of this Section 4.1(k) shall be
conclusive on all Persons. The Independent Financial Expert shall consult with
management of the Company in order to allow management to comment on the
proposed value prior to delivery to the Company of any Value Report.
(l) When No Adjustment Required. Without limiting any
---------------------------
other exception contained in this Section 4.1, and in addition thereto, no
adjustment need be made for:
(i) grants (or exercises) of options or other rights to
purchase Common Shares or the issuance of Common Shares to directors,
advisors, employees or consultants of the Company pursuant to a stock
option plan, employee stock purchase plan, restricted stock plan or
other agreement approved by the Board of Directors;
(ii) the issuance of Common Shares in connection with
acquisitions of assets or securities of another Person (other than
issuances to Affiliates of the Company);
(iii) the issuance of Common Shares upon exercise of the
Warrants or options, warrants or other agreements or rights to purchase
capital stock of the Company entered into prior to the date of the
issuance of the Warrants or for which the issuance of which had
previously been the subject of an adjustment required by the Warrant
Agreement;
(iv) the issuance of Common Shares or warrants to purchase
Common Shares in connection with any debt, equity or lease financing
from or with one or more third parties that are not Affiliates approved
by the Board of Directors (including upon the exercise of any warrants
issued in connection with such financing); and
(v) grants (or exercises) of options or other rights to
purchase Common Shares or the issuance of Common Shares in connection
with (i) the R&B Acquisition (ii) the issuance and sale to the
Permitted Holders of an aggregate amount of $250.0 million of the
Preferred Shares and (iii) the issuance and sale to the Permitted
Holders of 300,000 warrants to purchase Common Shares in connection
with certain financings and the Company's subordinated notes.
To the extent the Warrants become convertible into cash, no
adjustment need be made thereafter as to the cash. Interest will not accrue on
the cash.
Section 4.2. Notice of Adjustment.
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Whenever the number of Common Shares purchasable upon the
exercise of each Warrant or the Exercise Price is adjusted, as herein provided,
the Company shall cause, so far as it is able, the Warrant Agent promptly to
mail, at the expense of the Company, to each Holder
notice of such adjustment or adjustments and shall deliver to the Warrant Agent
a certificate of the Auditors setting forth the number of Common Shares
purchasable upon the exercise of each Warrant and the Exercise Price after such
adjustment, setting forth a brief statement of the facts requiring such
adjustment and setting forth the computation by which such adjustment was made.
Such certificate shall be conclusive evidence of the correctness of such
adjustment except in the case of manifest error. The Warrant Agent shall be
entitled to rely on such certificate and shall be under no duty or
responsibility with respect to any such certificate, except to exhibit the same,
from time to time, to any Holder desiring an inspection thereof during
reasonable business hours upon reasonable notice. The Warrant Agent shall not at
any time be under any duty or responsibility to any Holders to determine whether
any facts exist which may require any adjustment of the Exercise Price or the
number of Common Shares purchasable on exercise of the Warrants or any of the
other adjustments set forth in Section 4.1, or with respect to the nature or
extent of any such adjustment when made, or with respect to the method employed
in making such adjustment, or the validity or value (or the kind or amount) of
any Common Shares which may be purchasable on exercise of the Warrants. The
Warrant Agent shall not be responsible for any failure of the Company to make
any cash payment or to issue, transfer or deliver any Common Shares or share
certificates upon the exercise of any Warrant.
Section 4.3. Statement on Warrants.
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Irrespective of any adjustment in the Exercise Price or the
number or kind of shares purchasable upon the exercise of the Warrants, Warrants
theretofore or thereafter issued may continue to express the same price and
number and kind of shares as are stated in the Warrants initially purchasable
pursuant to this Agreement.
Section 4.4. Notice of Consolidation, Merger, Etc.
-----------
In case at any time after the date hereof and prior to 5:00
p.m., New York City time, on the Expiration Date, there shall be any (i)
consolidation or merger involving the Company or sale, transfer or other
disposition of all or substantially all of the Company's property, assets or
business (except a merger or other reorganization in which the Company shall be
the surviving corporation and holders of Common Shares receive no consideration
in respect of their shares) or (ii) any other transaction contemplated by
Section 4.1(j)(ii) above, then, in any one or more of such cases, the Company
shall cause to be mailed to the Warrant Agent and shall cause the Warrant Agent
to mail, at Company's expense, to each Holder of a Warrant, at the earliest
practicable time (and, in any event, not less than 20 days before any date set
for definitive action), notice of the date on which such reorganization, sale,
consolidation, merger, dissolution, liquidation or winding up shall take place,
as the case may be. Such notice shall also set forth such facts as shall
indicate the effect of such action (to the extent such effect may be known at
the date of such notice) on the Exercise Price and the kind and amount of the
Common Shares and other securities, money and other property deliverable upon
exercise of the Warrants. Such notice shall also specify the date as of which
the holders of record of the Common Shares or other securities or property
purchasable upon exercise of the Warrants shall be entitled to exchange their
shares for securities, money or other property deliverable upon such
reorganization, sale, consolidation, merger, dissolution, liquidation or winding
up, as the case may be.
Section 4.5. Fractional Interests.
-----------
If more than one Warrant shall be presented for exercise in
full at the same time by the same Holder, the number of full Common Shares which
shall be purchasable upon such exercise thereof shall be computed on the basis
of the aggregate number of Common Shares purchasable on exercise of the Warrants
so presented. The Company shall not be required to issue fractional Common
Shares upon the exercise of Warrants. If any fraction of a Common Share would,
except for the provisions of this Section 4.5, be purchasable on the exercise of
any Warrant (or specified portion thereof), the Company may pay an amount in
cash calculated by it to be equal to the then Current Market Value per Common
Share multiplied by such fraction computed to the nearest whole cent.
Section 4.6. When Issuance or Payment May Be Deferred.
-----------
In any case in which this Article IV shall require that an
adjustment in the Exercise Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event (i) issuing to the holder of any Warrant exercised after such record date
the Common Shares and other shares in the capital of the Company, if any,
purchasable upon such exercise over and above the Common Shares and other shares
in the capital of the Company, if any, purchasable upon such exercise and (ii)
paying such holder any amount in cash in lieu of a fractional share; provided,
however, that the Company shall deliver to such Holder a due bill or other
appropriate instrument evidencing such Holder's right to receive such additional
Common Shares, other shares and cash upon the occurrence of the event requiring
such adjustment.
Section 4.7. Par Value; Valid Issuance.
-----------
The Company will not increase the par value of the Common
Shares above the Exercise Price (as adjusted hereunder from time to time),
except to the extent required by applicable law. The Company will take all such
corporate action, to the extent permitted by applicable law (including, without
limitation, reducing the par value thereof), as may be necessary or appropriate
in order that the Company may validly and legally issue stock upon the exercise
of Warrants.
ARTICLE V
DECREASE IN EXERCISE PRICE
The Board, in its sole discretion, shall have the right at any
time, or from time to time, to decrease the Exercise Price of the Warrants
and/or increase the number of shares issuable upon the exercise of the Warrants.
ARTICLE VI
LOSS OR MUTILATION
Upon receipt by the Company and the Warrant Agent of evidence
satisfactory to them of the ownership and the loss, theft, destruction or
mutilation of any Warrant Certificate and of an affidavit, indemnity or bond
satisfactory to them and (in the case of mutilation) upon surrender and
cancellation thereof, then, in the absence of notice to the Company or the
Warrant Agent that the Warrants represented thereby have been acquired by a bona
fide purchaser, the Company shall execute and the Warrant Agent shall
countersign and deliver to the registered Holder of the lost, stolen, destroyed
or mutilated Warrant Certificate, in exchange for or in lieu thereof, a new
Warrant Certificate of the same tenor and for a like aggregate number of
Warrants. Upon the issuance of any new Warrant Certificate under this Article
VI, the Company may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and other
expenses (including the fees and expenses of the Warrant Agent) in connection
therewith. Every new Warrant Certificate executed and delivered pursuant to this
Article VI in lieu of any lost, stolen or destroyed Warrant Certificate shall
constitute a contractual obligation of the Company whether or not the allegedly
lost, stolen or destroyed Warrant Certificates shall be at any time enforceable
by anyone and shall be entitled to the benefits of this Agreement equally and
proportionately with any and all other Warrant Certificates duly executed and
delivered hereunder. The provisions of this Article VI are exclusive and shall
preclude (to the extent lawful) all other rights or remedies with respect to the
replacement of mutilated, lost, stolen, or destroyed Warrant Certificates.
ARTICLE VII
RESERVATION AND AUTHORIZATION
OF COMMON SHARES
The Company shall, subject to the following paragraph, at all
times reserve and keep available such number of its authorized but unissued
Common Shares deliverable upon exercise of the Warrants as will be sufficient to
permit the exercise in full of all outstanding Warrants and will cause
appropriate evidence of ownership of such Common Shares to be delivered to the
Warrant Agent upon its request for delivery thereof upon the exercise of the
Warrants. The Company covenants that all Common Shares (or other Securities)
that may be issued upon the exercise of the Warrants will, upon issuance, be
duly and validly issued, fully paid and nonassessable, free of pre-emptive
rights and free from all taxes, liens, charges and security interests created by
or through the Company.
ARTICLE VIII
WARRANT TRANSFER BOOKS; RESTRICTIONS ON TRANSFER
Section 8.1. Transfer and Exchange.
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The Warrant Certificates shall be issued in registered form
only. The Warrant Agent shall keep at its office a register for the registration
of Warrant Certificates and transfers or exchanges of Warrant Certificates as
herein provided and other appropriate data as determined by the Warrant Agent.
The Company shall, upon reasonable notice to the Warrant Agent, have access to
such register during the Warrant Agent's regular business hours. All Warrant
Certificates issued upon any registration of transfer or exchange of Warrant
Certificates shall be the valid obligations of the Company, evidencing the same
obligations, and entitled to the same benefits under this Agreement, as the
Warrant Certificates surrendered for such registration of transfer or exchange.
The Warrants shall initially be issued as part of the issuance
of the Units. Prior to the Separation Date, the Warrants may not be transferred
or exchanged separately from, but may be transferred or exchanged only together
with, the Notes issued as part of such Units.
A Holder may transfer its Warrants only by written application
to the Warrant Agent stating the name of the proposed transferee and otherwise
complying with the terms of this Agreement. No such transfer shall be effected
until, and such transferee shall succeed to the rights of a Holder only upon,
final acceptance and registration of the transfer by the Warrant Agent in the
register. Prior to the registration of any transfer of Warrants by a Holder as
provided herein, the Company, the Warrant Agent, and any agent of the Company
may treat the person in whose name the Warrants are registered as the owner
thereof for all purposes and as the person entitled to exercise the rights
represented thereby, any notice to the contrary notwithstanding. Owners of a
beneficial interest in a Restricted Global Warrant will not be entitled to have
Warrants registered in their names, and will not receive or be entitled to
receive Certificated Warrants except pursuant to Section 2.4. Furthermore, any
holder of a Global Warrant shall, by acceptance of such Global Warrant, agree
that transfers of beneficial interests in such Global Warrant may be effected
only through a book-entry system maintained by the holder of such Global Warrant
(or its agent), and that ownership of a beneficial interest in the Warrants
represented thereby shall be required to be reflected in a book-entry. When
Warrant Certificates are presented to the Warrant Agent with a request to
register the transfer or to exchange them for an equal amount of Warrants of
other authorized denominations, the Warrant Agent shall register such transfer
or make such exchange as requested if its requirements for such transactions are
met. To permit registrations of transfers and exchanges, the Company shall
execute Warrant Certificates at the Warrant Agent's request. No service charge
shall be made for any registration of transfer or exchange of Warrants, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of
transfer of Warrants.
Section 8.2. Book-Entry Provisions for the Global Warrants.
-----------
(a) The Global Warrants initially shall (i) be registered in
the name of the Depositary or the nominee of such Depositary, (ii) be delivered
to the Warrant Agent as custodian for such Depositary and (iii) bear legends as
set forth in Section 2.2 hereof.
Members of, or participants in, the Depositary ("Agent
-----
Members") shall have no rights under this Agreement with respect to the Global
- -------
Warrants held on their behalf by the Depositary or the Warrant Agent as its
custodian, and the Depositary may be treated by the Company, the Warrant Agent
and any agent of the Company or the Warrant Agent as the absolute owner of such
Global Warrant for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Warrant Agent or any agent of the
Company or the Warrant Agent, from giving effect to any written certification,
proxy or other authorization furnished by the Depositary or impair, as between
the Depositary and its Agent Members, the operation of customary practices
governing the exercise of the rights of a Holder of any Warrants.
(b) Transfers of a Global Warrant shall be limited to
transfers of such Global Warrant in whole, but not in part, to the Depositary,
its successors or their respective nominees. Interests of beneficial owners in
the Global Warrants may be transferred in accordance with the rules and
procedures of the Depositary and the provisions of Section 8.3 hereof.
Certificated Warrants shall be transferred to beneficial owners in exchange for
their beneficial interests in a Global Warrant if the Depositary notifies the
Company that it is unwilling or unable to continue as Depositary for such Global
Warrant and a successor depositary is not appointed by the Company within 90
days of such notice.
(c) In connection with the transfer of the entire Global
Warrants to beneficial owners pursuant to paragraph (b) of this Section 8.2, the
Global Warrants shall be surrendered to the Warrant Agent for cancellation, and
the Company shall execute, and the Warrant Agent shall countersign and deliver,
to each beneficial owner identified by the Depositary in exchange for its
beneficial interest in the Global Warrants, Certificated Warrants of authorized
denominations representing, in the aggregate, the number of Warrants theretofore
represented by the Global Warrants, as the case may be.
(d) Any Certificated Warrant delivered in exchange for an
interest in a Global Warrant pursuant to paragraph (b) or (c) of this Section
shall, except as otherwise provided by paragraph (d) of Section 8.3 hereof bear
the legend regarding transfer restrictions applicable to the Certificated
Warrant set forth in Section 2.2.
(e) The registered holder of a Global Warrant may grant
proxies and otherwise authorize any person, including Agent Members and persons
that may hold interests through Agent Members, to take any action which a Holder
is entitled to take under this Agreement or the Warrants.
(f) Any beneficial interest in one of the Global Warrants that
is transferred to a person who takes delivery in the form of an interest in any
other Global Warrant will, upon transfer, cease to be an interest in such Global
Warrant and become an interest in such other Global Warrant and, accordingly,
will thereafter be subject to all transfer restrictions, if any, and other
procedures applicable to beneficial interests in such other Global Warrant for
as long as it remains such an interest.
Section 8.3. Special Transfer Provisions.
The following provisions shall apply:
(a) Transfers to QIBs. The following provisions shall
-----------------
apply with respect to the registration of any proposed transfer of Warrants to
a QIB:
(i) If the Warrants to be transferred are represented by (x)
IAI Certificated Warrants, the Warrant Agent shall register the
transfer if such transfer is being made by a proposed transferor who
has checked the box provided for on the form of Warrant Certificate
stating, or has otherwise advised the Company and the Warrant Agent in
writing, that the sale has been made in compliance with the provisions
of Rule 144A to a transferee who has signed the certification provided
for on the form of Warrant Certificate stating, or has otherwise
advised the Company and the Warrant Agent in writing, that it is
purchasing the Warrants for its own account or an account with respect
to which it exercises sole investment discretion and that it and any
such account is a QIB within the meaning of Rule 144A, and is aware
that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the
Company as it has requested pursuant to Rule 144A or has determined not
to request such information and that it is aware that the transferor is
relying upon its foregoing representations in order to claim the
exemption from registration provided by Rule 144A or (y) an interest in
the Global Warrants, the transfer of such interest may be effected only
through the book entry system maintained by the Depositary.
(ii) If the proposed transferee is an Agent Member, and the
Warrants to be transferred are represented by IAI Certificated
Warrants, upon receipt by the Warrant Agent of the documents referred
to in clause (i) above and instructions given in accordance with the
Depositary's and the Warrant Agent's procedures, the Warrant Agent
shall reflect on its books and records the date and an increase in the
amount of Warrants represented by the Restricted Global Warrant in an
amount equal to the amount of Warrants represented by the IAI
Certificated Warrants to be transferred, and the Warrant Agent shall
cancel the IAI Certificated Warrants.
(b) Transfers to Any Other Person. The following
-----------------------------
provisions shall apply with respect to the registration of any proposed transfer
of Warrants to any Institutional Accredited Investor which is not a QIB:
(i) The Warrant Agent shall register any proposed transfer of
Warrants to any such Person if (x) the transferor has delivered to the
Warrant Agent and the Company a certificate substantially in the form
of Exhibit B-1 hereto and, if required by paragraph (d) thereof, an
opinion of counsel to the effect set forth therein and (y) the proposed
transferee has delivered to the Warrant Agent and the Company a
certificate substantially in the form of Exhibit B-2 hereto and an
opinion of counsel acceptable to the Company that such transfer is in
compliance with the Securities Act.
(ii) If the proposed transferor is an Agent Member holding a
beneficial interest in the Restricted Global Warrant, upon receipt by
the Warrant Agent and the Company of the documents referred to in
clause (i) above and instructions given in accordance with the
Depositary's and the Warrant Agent's procedures, the Company shall
execute and the Warrant Agent shall countersign Certificated Warrants
in an amount equal to the number of Warrants represented by the
Restricted Global Warrant to be transferred and the Warrant Agent shall
decrease the number of Warrants represented by the Restricted Global
Warrant so transferred.
(c) Private Placement Legend. Upon the transfer, exchange or
------------------------
replacement of Warrant Certificates not bearing the Private Placement Legend,
the Warrant Agent shall deliver Warrant Certificates that do not bear the
Private Placement Legend. Upon the transfer, exchange or replacement of Warrant
Certificates bearing the Private Placement Legend, the Warrant Agent shall
deliver only Warrant Certificates that bear the Private Placement Legend unless
there is delivered to the Warrant Agent an opinion of counsel reasonably
satisfactory to the Company and its Counsel and the Warrant Agent to the effect
that neither such legend nor the related restrictions on transfer are required
in order to maintain compliance with the provisions of the Securities Act.
(d) General. (i) By its acceptance of any Warrants represented
-------
by a Warrant Certificate bearing the Private Placement Legend, each Holder of
such Warrants acknowledges the restrictions on transfer of such Warrants set
forth in this Agreement and in the Private Placement Legend and agrees that it
will transfer such Warrants only as provided in this Agreement. The Warrant
Agent shall not register a transfer of any Warrants unless such transfer
complies with the restrictions on transfer of such Warrants set forth in this
Agreement. In connection with any transfer of Warrants, each Holder agrees by
its acceptance of Warrants to furnish the Warrant Agent or the Company such
certifications, legal opinions or other information as either of them may
reasonably require to confirm that such transfer is being made pursuant to an
exemption from, or a transaction not subject to, the registration requirements
of the Securities Act; provided that the Warrant Agent shall not be required to
determine (but may rely on a determination made by the Company with respect to)
the sufficiency of any such certifications, legal opinions or other information.
(ii) The Warrant Agent shall retain copies of all letters,
notices and other written communications received pursuant to Section 8.2 hereof
or this Section 8.3. The Company shall have the right to inspect and make copies
of all such letters, notices or other written communications at any reasonable
time upon the giving of reasonable written notice to the Warrant Agent.
Section 8.4. Surrender of Warrant Certificates.
-----------
Any Warrant Certificate surrendered for registration of
transfer, exchange or exercise of the Warrants represented thereby shall, if
surrendered to the Company, be delivered to the Warrant Agent, and all Warrant
Certificates surrendered or so delivered to the Warrant Agent shall be promptly
cancelled by the Warrant Agent and shall not be reissued by the
Company and, except as provided in this Article VIII in case of an exchange,
Article III hereof in case of the exercise of less than all the Warrants
represented thereby or Article VI in case of a mutilated Warrant Certificate, no
Warrant Certificate shall be issued hereunder in lieu thereof. The Warrant Agent
shall deliver to the Company from time to time or otherwise dispose of such
cancelled Warrant Certificates in accordance with its customary procedures.
ARTICLE IX
WARRANT HOLDERS
Section 9.1. Warrant Holder Deemed Not a Shareholder.
-----------
The Company and the Warrant Agent may deem and treat the
registered Holder(s) of the Warrant Certificates as the absolute owner(s)
thereof (notwithstanding any notation of ownership or other writing thereon made
by anyone), for the purpose of any exercise thereof and for all other purposes,
and neither the Company nor the Warrant Agent shall be affected by any notice to
the contrary. Accordingly, the Company and/or the Warrant Agent shall not,
except as ordered by a court of competent jurisdiction as required by law, be
bound to recognize any equitable or other claim to or interest in the Warrants
on the part of any person other than such registered Holder, whether or not it
shall have express or other notice thereof. Prior to the exercise of the
Warrants, no Holder of a Warrant Certificate, as such, shall be entitled to any
rights of a shareholder of the Company, including, without limitation, the right
to vote or to consent to any action of the shareholders, except as otherwise
provided in this Agreement, to receive dividends or other distributions, to
exercise any preemptive right or to receive any notice of meetings of
shareholders and, except as otherwise provided in this Agreement, shall not be
entitled to receive any notice of any proceedings of the Company.
Section 9.2. Right of Action.
-----------
All rights of action with respect to this Agreement are
vested in the Holders of the Warrants, and any Holder of any Warrant, without
the consent of the Warrant Agent or the Holders of any other Warrant, may, on
such Holder's own behalf and for such Holder's own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company
suitable to enforce, or otherwise in respect of, such Holder's right to exercise
such Warrants in the manner provided in the Warrant Certificate representing
such Warrants and in this Agreement.
ARTICLE X
THE WARRANT AGENT
Section 10.1. Duties and Liabilities.
------------
The Warrant Agent hereby accepts the agency established by
this Agreement and agrees to perform the same upon the terms and conditions
herein set forth, by all of which the Company and the Holders of Warrants, by
their acceptance thereof, shall be bound. The Warrant Agent shall not, by
countersigning Warrant Certificates or by any other act hereunder, be deemed to
make any representations as to the validity or authorization of the Warrants or
the Warrant Certificates (except as to its countersignature thereon) or of any
Common Shares issued upon exercise of any Warrant, or as to the accuracy of the
computation of the Exercise Price or the number or kind or amount of Common
Shares deliverable upon exercise of any Warrant or the correctness of the
representations of the Company made in the certificates that the Warrant Agent
receives. The Warrant Agent shall not be accountable for the use or application
by the Company of the proceeds of the exercise of any Warrant. The Warrant Agent
shall not have any duty to calculate or determine any adjustments with respect
to either the Exercise Price or the kind and amount of Common Shares receivable
by Holders upon the exercise of Warrants required from time to time and the
Warrant Agent shall have no duty or responsibility in determining the accuracy
or correctness of such calculation. The Warrant Agent shall not be (a) liable
for any recital or statement of fact contained herein or in the Warrant
Certificates or for any action taken, suffered or omitted by it in good faith in
the belief that any Warrant Certificate or any other documents or any signatures
are genuine or properly authorized, (b) responsible for any failure on the part
of the Company to comply with any of its covenants and obligations contained in
this Agreement or in the Warrant Certificates or (c) liable for any act or
omission in connection with this Agreement except for its own gross negligence,
bad faith or willful misconduct. The Warrant Agent is hereby authorized to
accept instructions with respect to the performance of its duties hereunder from
a Senior Officer of the Company and to apply to any such Senior Officer for
instructions (which instructions will be promptly given in writing when
requested) and the Warrant Agent shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with the instructions of
any such Senior Officer; provided, however, that, in its discretion, the Warrant
Agent may, in lieu thereof, accept other evidence of such or may require such
further or additional evidence as it may deem reasonable. The Warrant Agent
shall not be liable for any action taken with respect to any matter in the event
it requests instructions from the Company as to that matter and does not receive
such instructions within a reasonable period of time after the request therefor.
The Warrant Agent may execute and exercise any of the rights
and powers hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys, agents or employees, and the Warrant Agent shall not
be answerable or accountable for any act, default, neglect or misconduct of any
such attorneys, agents or employees; provided that reasonable care has been
exercised with respect to the retention of any such attorney, agent or employee.
The Warrant Agent shall not be under any obligation or duty to institute, appear
in or defend any action, suit or legal proceeding in respect hereof, unless
first indemnified to its satisfaction. The Warrant Agent shall promptly notify
the Company in writing of any claim made or action, suit or proceeding
instituted against it arising out of or in connection with this Agreement.
The Company will perform, execute, acknowledge and deliver or
cause to be delivered all such further acts, instruments and assurances as are
consistent with this Agreement and as may reasonably be required by the Warrant
Agent in order to enable it to carry out or perform its duties under this
Agreement.
The Warrant Agent shall act solely as agent of the Company
hereunder. The Warrant Agent shall not be liable except for the failure to
perform such duties as are specifically set forth herein, and no implied
covenants or obligations shall be read into this Agreement against the Warrant
Agent, whose duties and obligations shall be determined solely by the express
provisions hereof.
Section 10.2. Right to Consult Counsel.
------------
The Warrant Agent may at any time consult with legal counsel
of its selection (who may be legal counsel for the Company), and the opinion of
such counsel shall be full and complete authorization and protection to the
Warrant Agent and the Warrant Agent shall incur no liability or responsibility
to the Company or to any Holder for any action taken, suffered or omitted by it
in good faith in accordance with the opinion or advice of such counsel.
Section 10.3. Compensation; Indemnification.
------------
The Company agrees promptly to pay the Warrant Agent from
time to time and in any case within 60 days of receipt of an invoice,
compensation for its services hereunder as the Company and the Warrant Agent may
agree from time to time in writing, and to reimburse it upon its request for
reasonable fees or expenses and reasonable counsel fees and expenses incurred in
connection with the execution and administration of this Agreement, and further
agrees to indemnify the Warrant Agent which shall include for purposes of this
Section 10.3 its directors, officers, agents or employees and save it harmless
against any losses, liabilities or expenses (including the fees and expenses of
its counsel) arising out of or in connection with the acceptance and
administration of this Agreement and under the Warrant Registration Rights
Agreement, including, without limitation, the reasonable costs and expenses of
investigating or defending any claim of such liability, except that the Company
shall have no liability hereunder to the extent that any such loss, liability or
expense results from the Warrant Agent's own gross negligence, bad faith or
willful misconduct. The obligations of the Company under this Section 10.3 shall
survive the exercise and the expiration of the Warrants, the termination of this
Agreement and the resignation or removal of the Warrant Agent in respect of
services or expenses incurred in connection with the Warrants or this Agreement.
Section 10.4. No Restrictions on Actions.
------------
Nothing in this Agreement shall be deemed to prevent the
Warrant Agent and any shareholder, director, officer or employee of the Warrant
Agent from buying, selling or dealing in any of the Warrants or other securities
of the Company or becoming pecuniarily interested in transactions in which the
Company may be interested, or contracting with or lending money to the Company
or otherwise acting as fully and freely as though it were not the Warrant Agent
under this Agreement. Nothing herein shall preclude the Warrant Agent from
acting in any other capacity for the Company or for any other legal entity.
Section 10.5. Discharge or Removal; Replacement Warrant Agent.
------------
The Warrant Agent may resign from its position as such and
be discharged from all further duties and liabilities hereunder (except
liability arising as a result of the Warrant Agent's own gross negligence, bad
faith or willful misconduct), after giving two month's prior written notice to
the Company. The Company may at any time remove the Warrant Agent upon two
month's written notice specifying the date when such discharge shall take
effect, and the Warrant Agent shall thereupon in like manner be discharged from
all further duties and liabilities hereunder, except as aforesaid. The Warrant
Agent shall mail to each Holder of a Warrant, at the
Company's expense, a copy of said notice of resignation or notice of removal, as
the case may be. Upon such resignation or removal the Company shall appoint in
writing a new warrant agent. If the Company shall fail to make such appointment
within a period of 60 days after it has been notified in writing of such
resignation by the resigning Warrant Agent or after such removal, then the
resigning or removed Warrant Agent or the Holder of any Warrant may apply to any
court of competent jurisdiction for the appointment of a new warrant agent, at
the expense of the Company. After 60 days from receipt of, or giving, notice, as
the case may be, and pending appointment of a successor to the original Warrant
Agent, either by the Company or by such a court, the duties of the Warrant Agent
shall be carried out by the Company. Any new warrant agent, whether appointed by
the Company or by such a court, shall be a bank or trust company doing business
under the laws of the United States or any state thereof, in good standing and
having a combined capital and surplus of not less than $10,000,000. The combined
capital and surplus of any such new warrant agent shall be deemed to be (or if
such warrant agent is a member of a bank holding system, its bank holding
company shall have) the combined capital and surplus as set forth in the most
recent annual report of its condition published by such warrant agent prior to
its appointment, provided that such reports are published at least annually
pursuant to law or to the requirements of a federal or state supervising or
examining authority. After acceptance in writing of such appointment by the new
warrant agent, it shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named herein as the Warrant Agent,
without any further assurance, conveyance, act or deed; however, the original
Warrant Agent shall in all events deliver and transfer to the successor Warrant
Agent all property (including, without limitation, documents and recorded
information), if any, at the time held hereunder by the original Warrant Agent
and if for any reason it shall be necessary or expedient to execute and deliver
any further assurance, conveyance, act or deed, the same shall be done at the
expense of the Company and shall be legally and validly executed and delivered
by the resigning or removed Warrant Agent. Not later than the effective date of
any such appointment, the Company shall file notice thereof with the resigning
or removed Warrant Agent and shall forthwith cause a copy of such notice to be
mailed by the successor Warrant Agent to each Holder of a Warrant. Failure to
give any notice provided for in this Section 10.5, however, or any defect
therein, shall not affect the legality or validity of the resignation of the
Warrant Agent or the appointment of a new warrant agent, as the case may be. No
Warrant Agent hereunder shall be liable for any acts or omissions of any
successor Warrant Agent.
Section 10.6. Successor Warrant Agent.
------------
Any corporation into which the Warrant Agent or any new
warrant agent may be merged or converted, or any corporation resulting from any
consolidation to which the Warrant Agent or any new warrant agent shall be a
party or any corporation succeeding to all or substantially all the corporate
agency business of the Warrant Agent, shall be a successor Warrant Agent under
this Agreement without any further act, provided that such corporation would be
eligible for appointment as successor to the Warrant Agent under the provisions
of Section 10.5 hereof. Any such successor Warrant Agent shall promptly cause
notice of its succession as Warrant Agent to be mailed to each Holder of a
Warrant.
ARTICLE XI
MISCELLANEOUS
Section 11.1. Monies Deposited with the Warrant Agent.
------------
The Warrant Agent shall be required to place any monies deposited with it
pursuant to the provisions of this Agreement in an interest bearing account. Any
monies, securities or other property which at any time shall be deposited by the
Company or on its behalf with the Warrant Agent pursuant to this Agreement shall
be and are hereby assigned, transferred and set over to the Warrant Agent in
trust for the purpose for which such monies, securities or other property shall
have been deposited; but such monies, securities or other property need not be
segregated from other funds, securities or other property except to the extent
required by law. Any monies, securities or other property deposited with the
Warrant Agent for payment or distribution to the Holders that remains unclaimed
for one year after the date the monies, securities or other property was
deposited with the Warrant Agent shall be delivered, subject to applicable state
escheatment laws, to the Company upon its request therefor.
Section 11.2. Payment of Taxes.
------------
Subject to Article VI hereof, all Common Shares purchasable upon the
exercise of Warrants shall be validly issued, fully paid and not subject to any
calls for funds, and the Company shall pay any taxes and other governmental
charges that may be imposed under the laws of the United States of America or
any political subdivision or taxing authority thereof or therein in respect of
the issue or delivery thereof upon exercise of Warrants (other than taxes on or
measured by income imposed on any Holder). The Company shall not be required,
however, to pay any tax or other charge imposed in connection with any transfer
involved in the issue of any certificate for Common Shares (including other
securities or property purchasable upon the exercise of the Warrants) or payment
of cash to any Person other than the Holder of a Warrant Certificate surrendered
upon the exercise of a Warrant and in case of such transfer or payment, the
Warrant Agent and the Company shall not be required to issue any share
certificate or pay any cash until such tax or charge has been paid or it has
been established to the Warrant Agent's and the Company's satisfaction that no
such tax or charge is due.
Section 11.3. No Merger, Consolidation or Sale of Assets of the Company.
------------
Except as otherwise provided herein, the Company will not merge into or
consolidate with any other Person, or sell or otherwise transfer all or
substantially all of its property and assets to a successor of the Company,
unless the Person resulting from such merger or consolidation, or such successor
of the Company, shall expressly assume, by supplemental agreement reasonably
satisfactory in form to the Warrant Agent and executed and delivered to the
Warrant Agent, the due and punctual performance and observance of each and every
covenant and condition of this Agreement or contained in the Warrants to be
performed and observed by the Company.
Section 11.4. Reports to Holders.
------------
At all times from and after the earlier of (i) the Registration with
respect to the Notes and (ii) the date that is six months after the Closing
Date, in either case, whether or not the Company is then required to file
reports with the Commission, the Company shall file with the Commission to the
extent then permitted by the Exchange Act and by the Commission, all such
information on an appropriate available form as it would be required to file
with the Commission by Section 13(a) or 15(d) under the Exchange Act if it were
a U.S. company and subject thereto, including information required by annual,
quarterly or current reports whether or not required to be so filed. When not
subject to Section 13(a) or 15(d), the Company shall supply the Warrant Agent
and each Holder or shall supply to the Warrant Agent for forwarding to all such
Holders, without cost to such Holders, copies of such reports and other
information. The Warrant Agent's receipt of such reports and other information
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Warrant Agent is
entitled to rely exclusively on Officers' Certificates). In addition, at all
times prior to the earlier of the date of the Registration and the date that is
six months after the Closing Date, the Company shall, at its cost, supply to the
Warrant Agent, for forwarding to all Holders, without cost to such Holders,
quarterly and annual reports substantially equivalent to those described above
or which would otherwise be required by the Exchange Act, commencing with the
report for the fiscal quarter ending immediately after the Closing Date;
provided that the Company may deliver copies of the registration statement
(including pre-effective amendments thereto) with respect to the exchange offer
for the Notes. In addition, at all times prior to the Registration, upon the
request of any such holder or any prospective purchaser of the Warrants
designated by a Holder, the Company shall supply to such Holder or such
prospective purchaser the information required under Rule 144A.
Section 11.5. Notices; Payment.
------------
(a) Except as otherwise provided in Section 11.5(b) hereof, any notice,
demand or delivery authorized by this Agreement shall be sufficiently given or
made when mailed, if sent by first class mail, postage prepaid, addressed to any
Holder of a Warrant at such Holder's last known address appearing on the
register of the Company maintained by the Warrant Agent and to the Company or
the Warrant Agent as follows:
To the Company:
CFW Communications Company
401 Spring Lane, Suite 300
Waynesboro, Virginia 22980
Telecopier No.: (540) 946-3599
Attention: Chief Financial Officer
With a copy to:
Hunton & Williams
Bank of America Plaza - Suite 4100
600 Peachtree St., N.E.
Atlanta, GA 30308-2216
Telecopier No.: (404) 888-4190
Attention: David M. Carter
To the Warrant Agent:
The Bank of New York
101 Barclay Street
Floor 21-W
New York, NY 10286
Telecopier No.: (212) 815-5915
Attention: Corporate Trust Trustee Administration
or such other address as shall have been furnished to the party giving or making
such notice, demand or delivery. Any notice that is mailed in the manner herein
provided shall be conclusively presumed to have been duly given when mailed,
whether or not the Holder receives the notice.
(b) Payment of the Exercise Price shall be made in accordance with the
provisions of this Agreement at the office of the Warrant Agent set forth above.
(c) Any notice required to be given by the Company to the Holders shall be
made by mailing by registered mail, return receipt requested, to the Holders at
their last known addresses appearing on the register maintained by the Warrant
Agent. The Company hereby irrevocably authorizes the Warrant Agent, in the name
and at the expense of the Company, to mail any such notice upon receipt thereof
from the Company. Any notice that is mailed in the manner herein provided shall
be conclusively presumed to have been duly given when mailed, whether or not the
Holder receives the notice.
Section 11.6. Binding Effect.
------------
This Agreement shall be binding upon and inure to the benefit of the
Company and the Warrant Agent and their respective successors and assigns, and
the Holders from time to time of the Warrants. Nothing in this Agreement is
intended or shall be construed to confer upon any Person, other than the
Company, the Warrant Agent and the Holders of the Warrants, any right, remedy or
claim under or by reason of this Agreement or any part hereof.
Section 11.7. Counterparts.
------------
This Agreement may be executed manually or by facsimile in any number of
counterparts, each of which shall be deemed an original, but all of which
together constitute one and the same instrument.
Section 11.8. Amendments.
------------
The Warrant Agent may, without the consent or concurrence of the Holders of
the Warrants, by supplemental agreement or otherwise, join with the Company in
making any changes or corrections in this Agreement that (a) are required to
cure any ambiguity or to correct any defective or inconsistent provision or
clerical omission or mistake or manifest error herein contained or (b) add to
the covenants and agreements of the Company in this Agreement further covenants
and agreements of the Company thereafter to be observed, or surrender any rights
or power reserved to or conferred upon the Company in this Agreement; provided
that in either case the Company determines in good faith that such changes or
corrections do not and will not materially adversely affect, alter or change the
rights, privileges or immunities of the Holders of Warrants. Any other amendment
or supplement to this Agreement may be effected with the written consent of the
Holders of a majority of the then outstanding Warrants. In determining whether
the Holders of the required number of Warrants have concurred in any direction,
waiver or consent, Warrants owned by the Company or any Affiliate of the Company
shall be disregarded and deemed not to be outstanding. The Company shall
promptly provide an Officers' Certificate and Opinion of Counsel which provide
all conditions precedent to adoption of an amendment that have been satisfied,
which Opinion of Counsel may be subject to customary or otherwise appropriate
assumptions and qualifications and may rely on such Officers' Certificate as to
any matters of fact. The consent of each Holder of the Warrants affected is
required for any amendment pursuant to which the Exercise Price would be
increased or the number of Common Shares (or other securities) issuable upon
exercise of Warrants would be decreased (other than pursuant to Article IV of
this Agreement).
Section 11.9. Headings.
------------
The descriptive headings of the several Sections of this Agreement are
inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
Section 11.10. Common Shares Legend.
-------------
Unless and until the Common Shares purchasable upon the exercise of the
Warrants are registered under the Securities Act, or unless otherwise agreed by
the Company and the Holder thereof, such Common Shares will bear a legend to the
following effect:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT
BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (3) TO AN
INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS UNDER REGULATION D UNDER THE SECURITIES ACT OR (4)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
EACH CASE, IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF
THE UNITED STATES.
Section 11.11. Third Party Beneficiaries.
-------------
The Holders shall be third party beneficiaries to the agreements made
hereunder between the Company, on the one hand, and the Warrant Agent, on the
other hand, and each Holder shall have the right to enforce such agreements
directly to the extent it deems such enforcement necessary or advisable to
protect its rights or the rights of Holders hereunder. By acquiring Warrants,
each Holder agrees to be bound by the obligations of Holders generally as set
forth herein and as such obligations may be applicable to such Holder.
Section 11.12. Termination.
-------------
Except as otherwise specified herein, this Agreement shall terminate at
5:00 p.m. (New York City time) on the tenth anniversary of the Closing Date.
Notwithstanding the foregoing, this Agreement shall terminate on any earlier
date as of which all Warrants have been exercised.
Section 11.13. Method of Payment.
-------------
The U.S. dollar is the sole currency of account and payment for all sums
payable by the Company or the Holders under or in connection with the Warrants,
including damages.
Section 11.14. Governing Law.
-------------
This Agreement shall be governed by the laws of the State of New York. The
Warrant Agent, the Company and the Holders agree to submit to the jurisdiction
of the courts of the State of New York in any action or proceeding arising out
of or related to this Agreement or the Warrants.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed, as of the day and year first above written.
CFW Communications Company
By:
-------------------------------
Name:
Title:
THE BANK OF NEW YORK
By:
-------------------------------
Name:
Title:
EXHIBIT A
FORM OF WARRANT CERTIFICATE
CFW COMMUNICATIONS COMPANY
CUSIP No. 124923111
No.
------
WARRANTS TO PURCHASE COMMON SHARES
This certifies that CEDE & CO. or its registered assigns, is the owner of
280,000 Warrants, each of which represents the right to purchase from CFW
COMMUNICATIONS COMPANY, a Virginia corporation (the "Company"), at any time
-------
beginning July 26, 2001, 1.8 shares of the Common Stock, without par value, of
the Company (the "Common Shares") at a per share exercise price (the "Exercise
------------- --------
Price") equal to $47.58 (subject to adjustment as provided in the Warrant
- -----
Agreement hereinafter referred to below), upon surrender hereof at the office of
The Bank of New York or to its successor, as the warrant agent under the Warrant
Agreement (any such warrant agent being herein called the "Warrant Agent"), with
-------------
the Subscription Form on the reverse hereof duly executed, with signature
guaranteed as therein specified and simultaneous payment in full by wire
transfer or by certified or official bank or bank cashier's check payable to the
order of the Company. At any time beginning July 26, 2001 and on or before the
Expiration Date (unless redeemed as described below), any outstanding Warrants
may be exercised on any Business Day; provided that the Holders of Warrants
shall be able to exercise their Warrants only if a registration statement
relating to the Common Stock (or other securities) issuable upon exercise of the
Warrants is then effective and available or the exercise of such Warrants is
exempt from the registration requirements of the Securities Act, as reasonably
determined by the Company, and such securities are qualified for sale or exempt
from qualification under the applicable securities laws of the states or other
jurisdictions in which such Holder resides.
This Warrant Certificate is issued under and in accordance with a Warrant
Agreement dated as of July 26, 2000 (the "Warrant Agreement"), between the
-----------------
Company and The Bank of New York, as Warrant Agent, and a Registration Rights
Agreement dated as of July 26, 2000 (the "Warrants Registration Rights
----------------------------
Agreement"), between the Company and the Placement Agents, and is subject to the
- ---------
Articles of Incorporation of the Company and to the terms and provisions
contained therein, to all of which terms and provisions the holder of this
Warrant Certificate consents by acceptance hereof. The terms of the Warrant
Agreement and the Warrants Registration Rights Agreement are hereby incorporated
herein by reference and made a part hereof. Reference is hereby made to the
Warrant Agreement and the Warrants Registration Rights Agreement for a full
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Company and the Holders of the Warrants. The
summary of the terms of the Warrant Agreement and the Warrants Registration
Rights Agreement contained in this Warrant Certificate is subject to and
qualified in its entirety by express reference to the Warrant Agreement and the
Warrants Registration Rights Agreement. To the extent permitted by applicable
law, in the event of any inconsistency between the terms of this Warrant and the
terms of the Warrant Agreement or the Warrants Registration Rights Agreement,
the terms of the Warrant Agreement or the Warrants Registration Rights
Agreement, as applicable, shall govern. All terms used in this Warrant
Certificate that are defined in the Warrant Agreement and the Warrants
Registration Rights Agreement shall have the meanings assigned to them in such
agreements.
Copies of the Warrant Agreement and the Warrants Registration Rights
Agreement are on file at the office of the Warrant Agent and may be obtained by
writing to the Warrant Agent at the following address:
The Bank of New York
101 Barclay Street
Floor 21-W
New York, NY 10286
Telecopier No.: (212) 815-5915
Attention: Corporate Trust Trustee Administration
Except as provided in the next paragraph below, in the event that the
Company consolidates with, mergers with or into, or sells all or substantially
all of its property and assets to another Person, each Warrant shall thereafter
entitle the Holder thereof to receive upon exercise thereof the number of shares
of capital stock or other securities or property which the holder of Common
Shares of the Company is entitled to receive upon completion of such
consolidation, merger or sale of assets.
If the Company merges or consolidates with, or sells all or substantially
all of its property and assets to, another Person and, in connection therewith,
consideration to the holders of Common Shares in exchange for their shares is
payable solely of cash, or in the event of the dissolution, liquidation or
winding-up of the Company, then the Holders of Warrants shall be entitled to
receive payments or distributions as of the date of such event on an equal basis
with, and on the same day as, holders of Common Shares (or other securities
purchasable upon exercise of the Warrants) as if the Warrants had been exercised
immediately prior to such event (less an amount equal to the Exercise Price).
Upon receipt of such payment, if any, the rights of a Holder shall terminate and
cease and such Holder's Warrants shall expire. In case of any such merger,
consolidation or sale of assets, the surviving or acquiring Person and, in the
event of any dissolution, liquidation or winding-up of the Company, the Company
must deposit promptly with the Warrant Agent the funds, if any, necessary to pay
to the Holders of the Warrants. After such funds and the surrendered Warrant
Certificate are received, the Warrant Agent must make payment by delivering a
check in such amount as is appropriate (or, in the case of consideration other
than cash, such other consideration as is appropriate) to such Person or Persons
as it may be directed in writing by the Holders surrendering such Warrants.
As to any final fraction of a share which the same Holder of one or more
Warrant Certificates would otherwise be entitled to purchase upon exercise
thereof in the same transaction, the Company may pay the cash value thereof
determined as provided in the Warrant Agreement.
Subject to Articles VI and VII of the Warrant Agreement, all Common Shares
purchasable by the Company upon the exercise of Warrants shall be validly
issued, fully paid and not subject to any calls for funds, and the Company shall
pay any taxes and other governmental charges that may be imposed under the laws
of the United States of America or any political subdivision or taxing authority
thereof or therein in respect of the issue or delivery thereof upon exercise of
Warrants (other than taxes on or measured by income imposed on any Holder). The
Company shall not be required, however, to pay any tax or other charge imposed
in connection with any transfer involved in the issue of any certificate for
Common Shares (including other securities or property purchasable upon the
exercise of
the Warrants) or payment of cash to any Person other than the Holder of a
Warrant Certificate surrendered upon the exercise of a Warrant and in case of
such transfer or payment, the Warrant Agent and the Company shall not be
required to issue any share certificate or pay any cash until such tax or charge
has been paid or it has been established to the Warrant Agent's and the
Company's satisfaction that no such tax or charge is due.
Subject to the restrictions on and conditions to transfer set forth in
Article II and Article VIII of the Warrant Agreement, this Warrant Certificate
and all rights hereunder are transferable by the registered Holder hereof, in
whole or in part, on the register of the Company maintained by the Warrant Agent
for such purpose at the Warrant Agent's office in New York, New York, upon
surrender of this Warrant Certificate duly endorsed, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Warrant Agent
duly executed, with signatures guaranteed as specified in the attached Form of
Assignment, by the registered Holder hereof or his attorney duly authorized in
writing and by such other documentation required pursuant to the Warrant
Agreement and upon payment of any necessary transfer tax or other governmental
charge imposed upon such transfer. Upon any partial transfer, the Company will
sign and issue and the Warrant Agent will countersign and deliver to such Holder
a new Warrant Certificate or Certificates with respect to any portion not so
transferred. Each taker and Holder of this Warrant Certificate, by taking and
holding the same, consents and agrees that prior to the registration of transfer
as provided in the Warrant Agreement, the Company and the Warrant Agent may
treat the person in whose name the Warrants are registered as the absolute owner
hereof for any purpose and as the Person entitled to exercise the rights
represented hereby, any notice to the contrary notwithstanding. Accordingly, the
Company and/or the Warrant Agent shall not, except as ordered by a court of
competent jurisdiction as required by law, be bound to recognize any equitable
or other claim to or interest in the Warrants on the part of any person other
than such Registered Holder, whether or not it shall have express or other
notice thereof.
This Warrant Certificate may be exchanged at the office of the Warrant
Agent maintained for such purpose in New York, New York, for Warrant
Certificates representing the same aggregate number of Warrants, each new
Warrant Certificate to represent such number of Warrants as the Holder hereof
shall designate at the time of such exchange.
Prior to the exercise of the Warrants represented hereby, the Holder of
this Warrant Certificate, as such, shall not be entitled to any rights of a
shareholder of the Company, including, without limitation, the right to vote or
to consent to any action of the shareholders, to receive any distributions, to
exercise any pre-emptive right or to receive any notice of meetings of
shareholders, and shall not be entitled to receive any notice of any proceedings
of the Company except as provided in the Warrant Agreement.
This Warrant Certificate shall be void and all rights evidenced hereby
shall cease on August 15, 2010, unless sooner terminated by the liquidation,
dissolution or winding-up of the Company or as otherwise provided in the Warrant
Agreement upon the consolidation or merger of the Company with, or sale of the
Company to, another Person or unless such date is extended as provided in the
Warrant Agreement.
The Warrant Agreement and the Warrants shall be governed by the laws of the
State of New York. The Warrant Agent, the Company and the Holders agree to
submit to the jurisdiction of the courts of the State of New York in any action
or proceeding arising out of or related to this Agreement or the Warrants.
This Warrant Certificate shall not be valid for any purpose until it shall
have been countersigned by the Warrant Agent.
CFW COMMUNICATIONS COMPANY
By:
-----------------------------
Name:
Title:
Dated: July 26, 2000
Countersigned:
THE BANK OF NEW YORK,
as Warrant Agent
By:
---------------------------
Authorized Signatory
FORM OF REVERSE OF WARRANT CERTIFICATE
SUBSCRIPTION FORM
(To be executed only upon exercise of Warrant)
To: The Bank of New York
101 Barclay Street
Floor 21-W
New York, NY 10286
Telecopier No.: (212) 815-5915
Attention: Corporate Trust Trustee Administration
The undersigned irrevocably exercises ________ of the Warrants
represented by this Warrant Certificate and herewith makes payment of $ _______
(such payment being in cash or by certified or official bank or bank cashier's
check payable to the order or at the direction of CFW COMMUNICATIONS COMPANY on
the terms and conditions specified in this Warrant Certificate and in the
Warrant Agreement and the Warrants Registration Rights Agreement referred to
herein and surrenders this Warrant Certificate and all right, title and interest
therein to and directs that the Common Shares, no par value, of CFW
COMMUNICATIONS COMPANY (the "Common Shares") deliverable upon the exercise of
-------------
such Warrants be registered or placed in the name and at the address specified
below and delivered thereto.
Dated:
-------------------------------
(Signature of Owner)
-------------------------------
(Street Address)
-------------------------------
(City) (State) (Zip Code)
Signature Guaranteed By:
-------------------------------
Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Warrant
Agent, which requirements include membership or
participation in the Security Transfer Agent Medallion
Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Warrant Agent in
addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as
amended.
Securities and/or check or other property to be issued or delivered to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
FORM OF ASSIGNMENT
In consideration of monies or other valuable consideration received from
the Assignee(s) named below, the undersigned registered Holder of this Warrant
Certificate hereby sells, assigns, and transfers unto the Assignee(s) named
below (including the undersigned with respect to any Warrants constituting a
part of the Warrants evidenced by this Warrant Certificate not being assigned
hereby) all of the right of the undersigned under this Warrant Certificate, with
respect to the number of Warrants set forth below:
Name(s) of Assignee(s): _____________________________________
Address: __________________________________________________
No. of Warrants: ____________________________________________
Please insert social security or other identifying number of assignee(s):
and does hereby irrevocably constitute and appoint ________________________ the
undersigned's attorney to make such transfer on the books of __________________
maintained for the purposes, with full power of substitution in the premises.
In connection with any transfer of Warrants, the undersigned confirms that
without utilizing any general solicitation or general advertising that:
Check One
---------
(a) these Warrants are being transferred in compliance with the exemption
from registration under the U.S. Securities Act of 1933, as amended,
provided by Rule 144A thereunder.
or
--
(b) these Warrants are being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Warrant Certificate and the
Warrant Agreement.
or
--
(c) these Warrants are being transferred pursuant to an effective
registration statement under the U.S. Securities Act of 1933, as
amended.
If none of the foregoing boxes is checked, the Warrant Agent shall not be
obligated to register the Warrants in the name of any Person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Article VIII of the Warrant Agreement shall
have been satisfied.
Dated:
----------------------------
(Signature of Owner)
----------------------------
(Street Address)
----------------------------
(City) (State) (Zip Code)
Signature Guaranteed By:
---------------------------
Signatures must be guaranteed by an "eligible
guarantor institution" meeting the requirements
of the Warrant Agent, which requirements
include membership or participation in the
Security Transfer Agent Medallion Program
("STAMP") or such other "signature guarantee
program" as may be determined by the Warrant
Agent in addition to, or in substitution for,
STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing the
Warrant(s) for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the U.S. Securities
Act of 1933, as amended, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding CFW Communications Company as the undersigned has requested pursuant
to Rule 144A or has determined not to request such information and that it is
aware that the transferor is relying upon the undersigned's foregoing
representations in order to claim the exemption from registration provided by
Rule 144A.
Dated:________________
----------------------------------------
[NOTE: To be executed by an executive officer]
EXHIBIT B-1
Form of Certificate to Be
Delivered by Transferors in Connection with
Transfers to Institutional Accredited Investors
-----------------------------------------------
[Date]
CFW Communications Company
401 Spring Lane, Suite 3000
Waynesboro, VA 22980
Telecopier No.: (540) 946-3599
Attention: Chief Financial Officer
The Bank of New York
101 Barclay Street
Floor 21-W
New York, NY 10286
Telecopier No.: (212) 815-5915
Attention: Corporate Trust Trustee Administration
Re: Warrants (the "Warrants") to Purchase
Common Shares of CFW Communications Company (the "Company")
-------
Ladies and Gentlemen:
We hereby certify that such transfer is being effected in
compliance with the transfer restrictions applicable to the Warrants or
interests therein transferred pursuant to and in accordance with the U.S.
Securities Act of 1933, as amended (the "Securities Act"), and accordingly we
hereby further certify that (check one):
(a) such transfer is being effected pursuant to and in accordance
with Rule 144 under the Securities Act;
or
(b) such transfer is being effected to the Company or a
subsidiary thereof;
or
(c) such transfer is being effected pursuant to an effective
registration statement under the Securities Act;
or
(d) such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A, Rule 144
or Rule 904 thereunder, and we hereby further certify that such transfer
complies with the transfer restrictions applicable to the Warrants or interests
therein transferred to institutional accredited investors as defined in Rule
501(a)(1), (2), (3) and (7) under the Securities Act and in accordance with the
requirements of the exemption claimed, which certification is supported by an
opinion of counsel provided by us or the transferee (a copy of which we have
attached to this certification), to the effect that such transfer is in
compliance with the Securities Act. Upon consummation of the proposed transfer
in accordance with the terms of the Warrant Agreement, the transferred Warrants
or interests therein will be subject to the restrictions on transfer enumerated
in the private placement legend printed on the Certificated Warrant and in the
Warrant Agreement and the Securities Act.
Very truly yours,
[Name of Transferor]
By:
--------------
Authorized Signatory
EXHIBIT B-2
Form of Certificate to Be
Delivered by Transferees in Connection with
Transfers to Institutional Accredited Investors
-----------------------------------------------
[Date]
CFW Communications Company
401 Spring Lane, Suite 3000
Waynesboro, VA 22980
Telecopier No.: (540) 946-3599
Attention: Chief Financial Officer
The Bank of New York
101 Barclay Street
Floor 21-W
New York, NY 10286
Telecopier No.: (212) 815-5915
Attention: Corporate Trust Trustee Administration
Re: Warrants (the "Warrants") to Purchase
--------
Common Shares of CFW Communications Company (the "Company")
-------
Dear Sirs:
In connection with our proposed purchase of ___________
aggregate number of Warrants, we certify that:
1. We understand that any subsequent transfer of the Warrants,
any interest therein or the Common Shares purchasable upon exercise of
any Warrant (the "Warrant Shares") is subject to certain restrictions
--------------
and conditions set forth in the Warrant Agreement dated as of July 26,
2000 relating to the Warrants (the "Agreement") and the undersigned
---------
agrees to be bound by, and not to resell, pledge or otherwise transfer
the Warrants or Warrant Shares except in compliance with, such
restrictions and conditions and the U.S. Securities Act of 1933, as
amended (the "Securities Act").
--------------
2. We understand that the Warrants and the Warrant Shares have
not been registered under the Securities Act, and that the Warrants and
the Warrant Shares may not be offered or sold except as set forth in the
following sentence. We agree that if, within the time period referred to
under Rule 144(k) of the Securities Act as in effect on the date of such
transfer, we decide (for our self or for any account for which we are
acting) to resell or otherwise transfer the Warrants or Warrant Shares,
we will do so only (a) to the Company or any subsidiary thereof, (b) to
a qualified institutional buyer in compliance with Rule 144A under the
Securities Act, (c) to an institutional accredited investor as defined
in Rule 501(a)(1),(2),(3) or (7) under the Securities Act
that furnishes to the Warrant Agent, with respect to the Warrants, and
to the Transfer Agent and Registrar, with respect to the Warrant
Shares, and the Company, prior to such transfer, a signed letter
containing certain representations and agreements relating to the
restrictions on transfer of the Warrants and the Warrant Shares (the
form of which letter can be obtained from the Warrant Agent or the
Transfer Agent and Registrar, as the case may be) and an opinion of
counsel acceptable to the Company that such transfer is in compliance
with the Securities Act, (d) pursuant to the exemption from
registration provided by Rule 144 under the Securities Act (if
available), or (e) pursuant to an effective registration statement
under the Securities Act. We further understand that the Warrants
purchased by us will bear a legend to the foregoing effect during such
period, which legend may be removed after such period upon receipt of
a certificate by the Warrant Agent or Transfer Agent and Registrar
(the form of which can be obtained from the Warrant Agent or Transfer
Agent and Registrar, as the case may be).
3. We understand that, on any proposed resale of any Warrants,
we will be required to furnish to the Warrant Agent and the Company such
certifications, legal opinions and other information as the Warrant
Agent and the Company may reasonably require to confirm that the
proposed sale complies with the foregoing restrictions.
4. We are an institutional accredited investor (as defined in
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act) and have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of our
investment in the Warrants, and we and any accounts for which we are
acting are each able to bear the economic risk of our or its investment
for an indefinite period of time.
5. We are acquiring the Warrants purchased by us for our own
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.
6. The transfer restrictions applicable to the Warrant and the
provisions of this certificate are also applicable to any Unit of which
this Warrant may form a part.
The Warrant Agent and the Company are entitled to rely upon
this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By:
--------------------
Authorized Signature
APPENDIX A
LIST OF FINANCIAL EXPERTS
- -------------------------
Bear, Stearns & Co. Inc.
CIBC World Markets Corp.
Chase Securities Inc.
Credit Suisse First Boston Corporation
Deutsche Bank Alex. Brown
Donaldson, Lufkin & Jenrette, Inc.
FleetBoston Robertson Stephens Inc.
Jeffries & Company, Inc.
ING Baring LLC.
Lazard Freres & Co. LLC
Lehman Brothers Holdings Inc.
Merrill Lynch & Co., Inc.
Morgan Stanley Dean Witter & Co.
PaineWebber Group Inc.
Prudential Securities Inc.
Salomon Smith Barney Holdings Inc.
The Goldman Sachs Group, Inc.
Warburg Dillon Read LLC.