1
EXHIBIT 4.4
FORM OF WARRANT
THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), AND THEY MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED, ASSIGNED
OR TRANSFERRED EXCEPT (i) PURSUANT TO A REGISTRATION STATEMENT UNDER THE ACT
WHICH HAS BECOME EFFECTIVE AND IS CURRENT WITH RESPECT TO SUCH SECURITIES, OR
(ii) PURSUANT TO A SPECIFIC EXEMPTION FROM REGISTRATION UNDER THE ACT BUT ONLY
UPON A HOLDER HEREOF FIRST HAVING OBTAINED THE WRITTEN OPINION OF COUNSEL TO THE
CORPORATION, OR OTHER COUNSEL REASONABLY ACCEPTABLE TO THE CORPORATION, THAT THE
PROPOSED DISPOSITION IS CONSISTENT WITH ALL APPLICABLE PROVISIONS OF THE ACT AS
WELL AS ANY APPLICABLE "BLUE SKY" OR OTHER STATE SECURITIES LAW.
CONNECTICUT
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER SECTION 36-485
OF THE CONNECTICUT UNIFORM SECURITIES ACT (THE "ACT") AND, THEREFORE, CANNOT BE
RESOLD UNLESS THEY ARE REGISTERED UNDER THE ACT, OR UNLESS AN EXEMPTION FROM
REGISTRATION IS AVAILABLE.
__________________, 1995
TELCOM GROUP USA, INC.
COMMON STOCK
PURCHASE WARRANT
The Transferability of this Warrant is
Restricted as Provided in Section 3
______________ Warrants
For good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by TELCOM GROUP USA, INC., a
Delaware corporation (the "Company"), __________ is hereby granted the right to
purchase, at the initial exercise price of $5.75 per share (subject to
adjustment as provided herein) at any time commencing on the effective date (the
"Effective Date") of the registration statement to be filed by the Company in
connection with
1
2
the Company's proposed initial public offering (the "Initial Public Offering")
until 5:00 p.m. on the five-year anniversary of the Effective Date,
shares of Common Stock, $.01 par value, of the Company (the "Shares"). Upon
consummation of the Initial Public Offering, the Warrants will be exchanged for
an Initial Public Offering Warrant Certificate representing the right to
purchase the same number of shares. If the Initial Public Offering is not
consummated by __________, 1997 [eighteen (18) months from the closing of this
Private Placement Offering] based upon the Company's decision not to proceed
with the Initial Public Offering, each Warrant shall automatically convert on
such date into one share of Common Stock. If the Initial Public Offering is not
consummated by __________, 1997 [eighteen (18) months from the closing of this
Private Placement Offering] for any other reason, these Warrants shall
automatically become null and void.
Each Common Stock Purchase Warrant (the "Warrant") initially
is exercisable at a price of $5.75 per Share payable in cash or by certified or
official bank check in New York Clearing House funds, subject to adjustments as
provided in Section 5 hereof Upon surrender of this Warrant, with the annexed
Subscription Form duly executed, together with payment of the Purchase Price (as
hereinafter defined) for the Shares purchased at the offices of the Company, the
registered holder of this Warrant (the "Holder") shall be entitled to receive a
certificate or certificates for the Shares so purchased.
(a). Exercise of Warrant.
The purchase rights represented by this Warrant are
exercisable at the option of the Holder, in whole or in part (but not as to
fractional Shares underlying this Warrant), during the period in which this
Warrant may be exercised as set forth above. In the case of the purchase of less
than all the Shares purchasable under this Warrant, the Company shall cancel
this Warrant upon the surrender hereof and shall execute and deliver a new
Warrant of like tenor for the balance of the Shares purchasable hereunder.
(b). Issuance of Certificates.
Upon the exercise of this Warrant and payment in full for the
Shares, the issuance of certificates for Shares underlying this Warrant shall be
made forthwith (and in any event within five (5) business days thereafter)
without charge to the Holder, including, without limitation, any tax which may
be payable in respect of the issuance thereof, and such certificates shall be
issued in the name of, or (subject to the provisions of Section 3.1 hereof) in
such names as may be directed by, the Holder; provided, however that the Company
shall not be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of any such certificates in a
name other than that of the Holder and the Company shall not be required to
issue or deliver such certificates unless or until
2
3
the person or persons requesting the issuance thereof shall have paid to the
Company the amount of such tax or shall have established to the satisfaction of
the Company that such tax has been paid. The certificates representing the
Shares underlying this Warrant shall be executed on behalf of the Company by the
manual or facsimile signature of the Chairman or President and the Chief
Financial Officer, the Secretary or Assistant Secretary of the Company holding
office at the time such Shares are issued.
(c). Restriction on Transfer: Registration Under the
Securities Act of 1933, as amended.
(d)..(e) Neither the Warrants nor any Share issuable upon
exercise hereof has been registered under the Securities Act of 1933, as amended
(the "Act"), and none of such securities may be offered, sold, pledged,
hypothecated, assigned or transferred except (i) pursuant to a registration
statement under the Act which has become effective and is current with respect
to such securities, or, (ii) pursuant to a specific exemption from registration
under the Act but only upon a Holder hereof first having obtained the written
opinion of counsel to the Company, or other counsel reasonably acceptable to the
Company, that the proposed disposition is consistent with all applicable
provisions of the Act as well as any applicable "Blue Sky" or other state
securities law. Upon exercise, in part or in whole, of this Warrant, each
certificate issued representing the Shares underlying this Warrant shall bear a
legend to the foregoing effect.
(f)..(g) If at any time after the date hereof and expiring
five (5) years thereafter, the Company proposes to register any of its
securities under the Act (other than in connection with a merger, acquisition or
exchange offer on Form S-4 or pursuant to Form S-8 or successor forms), it will
give written notice by registered mail, at least thirty (30) days prior to the
filing of each such registration statement to the Holder(s) of the Warrants
and/or Shares of its intention to do so. Upon the written request of any Holder
of the Warrants and/or Shares given within ten (10) days after receipt of any
such notice of its or their desire to include any such Warrants and/or Shares in
such proposed registration statement, the Company shall afford such Holder(s) of
the Warrants and/or Shares the opportunity to have any such Warrants and/or
Shares registered under such registration statement.
Notwithstanding the provisions of this Section 3.2, the
Company shall have the right at any time after it shall have given written
notice pursuant to this Section 3.2 (irrespective of whether a written request
for inclusion of any such securities shall have been made) to elect not to file
any such proposed registration statement, or to withdraw the same after the
filing but prior to the effective date thereof.
If any registration pursuant to this Section 3.2 shall be
underwritten in
3
4
whole or in part, the Company may require that the Warrants and/or Shares
requested for inclusion pursuant to this Section 3.2 be included in the
underwriting on the same terms and conditions as the securities otherwise being
sold through the underwriters.
Notwithstanding the provisions of this Section 3.2, if the
managing underwriter in an underwritten public offering of securities shall
advise the Company in writing that inclusion of some or all of the Warrants
and/or Shares would, in such managing underwriter's opinions materially
interfere with the proposed distribution of the securities to be offered by the
Company, in respect of which registration was originally to be effected, then
the number of Warrants and/or Shares to be included in the registration
statement may be reduced pro rata (by number of shares) among any holders of
securities requesting registration or excluded in their entirety if so required
by the underwriter from the registration statement.
(h)..(i) In connection with any registration under Sections
3.2 or 6 hereof, the Company covenants and agrees as follows:
(j) The Company shall pay all costs (excluding fees and
expenses of Holder(s)' counsel and any underwriting or selling commissions or
other charges of any broker-dealer acting on behalf of Holder(s)), fees and
expenses in connection with all registration statements filed pursuant to
Sections 3.2 and 6 hereof including, without limitation, the Company's legal and
accounting fees, printing expenses and blue sky fees and expenses.
(k) The Company will take all necessary action which may be
required in qualifying or registering the Warrants and/or Shares included in a
registration statement for offering and sale under the securities or blue sky
laws of such states as reasonably are requested by the Holder(s), provided that
the Company shall not be obligated to qualify as a foreign corporation to do
business under the laws of any such jurisdiction.
(l) The Company shall indemnify the Holder(s) of the Warrants
and/or Shares to be sold pursuant to any registration statement and each person,
if any, who controls such Holder(s) within the meaning of Section 15 of the Act
or Section 20(a) of the Securities Exchange Act of 1934, as amended ("Exchange
Act"), against all loss, claim, damage, expense or liability (including all
expenses reasonably incurred in investigating, preparing or defending against
any claim whatsoever) to which any of them may become subject under the Act, the
Exchange Act or any other statute, common law or otherwise, arising out of or
based upon any untrue statement or alleged untrue statement of a material fact
contained in such registration statement executed by the Company or based upon
written information furnished by the Company filed in any jurisdiction in order
to qualify the Warrants
4
5
and/or the Shares under the securities laws thereof or filed with the Securities
and Exchange Commission (the "Commission"), any state securities commission or
agency, the National Association of Securities Dealers, Inc., The Nasdaq Stock
Market or any securities exchange, or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements contained therein not misleading, unless such statement or omission
was made in reliance upon and in conformity with written information furnished
to the Company by the Holder(s) expressly for use in such registration
statement, any amendment or supplement thereto or any application, as the case
may be. If any action is brought against the Holder(s) or any controlling person
of the Holder(s) in respect of which indemnity may be sought against the Company
pursuant to this Section 3.3(c), the Holder(s) or such controlling person shall,
within thirty (30) days after the receipt of a summons or complaint, notify the
Company in writing of the institution of such action and the Company shall
assume the defense of such action, including the employment and payment of
reasonable fees and expenses of counsel (which counsel shall be reasonably
satisfactory to the Holder(s) or such controlling person), but the failure to
give such notice shall not affect such indemnified person's right to
indemnification hereunder except to the extent that the Company's defense of
such action was materially adversely affected thereby. The Holder(s) or such
controlling person shall have the right to employ its or their own counsel in
any such case, but the fees and expenses of such counsel shall be at the expense
of the Holder(s) or such controlling person unless the employment of such
counsel shall have been authorized in writing by the Company in connection with
the defense of such action, the Company shall not have employed counsel to have
charge of the defense of such action or such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or them
which are different from or additional to those available to the Company (in
which case the Company shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
the fees and expenses of not more than one additional firm of attorneys for the
Holder(s) and/or such controlling person shall be borne by the Company. Except
as expressly provided in the previous sentence, in the event that the Company
shall have assumed the defense of any such action or claim, the Company shall
not thereafter be liable to the Holder(s) or such controlling person in
investigating, preparing or defending any such action or claim. The Company
agrees promptly to notify the Holder(s) of the commencement of any litigation or
proceedings against the Company or any of its officers, directors or controlling
persons in connection with the resale of the Warrants and/or the Shares or in
connection with such registration statement.
(m) The Holder(s) of the Warrants and/or Shares to be sold
pursuant to a registration statement, and their successors and assigns, shall
severally, and not jointly, indemnify the Company, its officers and directors
and each person, if any, who controls the Company within the meaning of Section
15 of the Act or Section 20(a) of the Exchange Act, against all loss, claim,
damage, expense or liability
5
6
(including all expenses reasonably incurred in investigating, preparing or
defending against any claim whatsoever) to which they may become subject under
the Act, the Exchange Act or otherwise, arising from written information
furnished by or on behalf of such Holders, or their successors or assigns,
expressly for use in such registration statement.
(n) Nothing contained herein shall be construed as requiring
the Holder(s) to exercise their Warrants prior to the initial filing of any
registration statement or the effectiveness thereof.
(o)..(p) In connection with any registration made pursuant to
Sections 3.2 or 6 hereof, the Holder(s) of the Warrants and/or Shares agree as
follows:
(q) Any public sale of the Warrants and/or Shares included in
such registration statement shall be effected through the underwriter for such
registration and the Holder(s) shall compensate the underwriter in accordance
with its customary compensation practices for such transactions.
(r). Price.
(s)..(t) Initial and Adjusted Purchase Price. The initial
purchase price shall be $5.75 per Share. The adjusted purchase price shall be
the price which shall result from time to time from any and all adjustments of
the initial purchase price in accordance with the provisions of Section 5 hereof
and subject to Section 6 hereof.
(u)..(v) Purchase Price. The term "Purchase Price" herein
shall mean the initial purchase price or the adjusted purchase price, depending
upon the context.
(w). Adjustments of Purchase Price and Number of Shares.
In the event that, prior to the issuance by the Company of all
the Shares issuable upon exercise of this Warrant, there shall be any change in
the outstanding common stock of the Company by reason of the declaration of
stock dividends, or through a recapitalization resulting from stock splits or
combinations, without the payment to the Company of any compensation therefor in
money, services or property, the remaining Shares still subject to this Warrant
and the purchase price thereof shall be appropriately adjusted (but without
regard to fractions) by the Board of Directors of the Company to reflect such
change.
(x). Automatic Conversion; Cancellation.
If the Company consummates a public offering of its securities
prior to
6
7
the last day on which the Warrants may be exercised, which offering includes
warrants to purchase shares of common stock of the Company ("Redeemable
Warrants") and the Warrants shall not have been exercised in full, then the
unexercised portion of the Warrants shall automatically, without any action by
the Holder, be converted into Redeemable Warrants (the "New Warrants")
exercisable to purchase the same number of Shares as are purchasable upon the
exercise of the unexercised portion of the Warrants but having terms identical
to those of the Redeemable Warrants, including, but not limited to, the
anti-dilution provisions contained therein and an exercise price per share equal
to the exercise price per share of the Redeemable Warrants offered in the public
offering. The Company shall cause the New Warrants and the underlying shares of
common stock of the Company to be included in the registration statement for
such offering, provided, however, if the managing underwriter, other than J.W.
Barclay & Co., Inc. ("JWBC") or an affiliate of JWBC, in an underwritten public
offering of securities shall advise the Company in writing that inclusion of
some or all of the New Warrants and the underlying shares of Common Stock of the
Company would, in such managing underwriter's reasonable opinion, materially or
adversely affect the proposed distribution of the securities to be offered by
the Company, then the number of New Warrants and the underlying shares of Common
Stock to be included in the registration statement may be reduced pro rata (by
number of shares) among any holders of securities requesting registration if so
required by the underwriter from the registration statement. In the event that
JWBC or an affiliate of JWBC is the managing underwriter of such public
offering, the Company shall cause the New Warrants and the underlying shares of
Common Stock of the Company to be included in the registration statement for
such offering. In the event that the provisions of this Section 6 shall become
applicable, the Holder shall be required to return this Warrant to the Company
for cancellation or, if this Warrant cannot then be located, to execute and
deliver to the Company a lost security affidavit and indemnity agreement
reasonably satisfactory to the Company. In addition, in the event that the
provisions of this Section 6 shall become applicable, this Warrant shall no
longer be of any force or effect and the New Warrant shall set forth the
respective rights and obligations of the Holder and the Company.
If the Initial Public Offering is not consummated by
__________, 1997 [eighteen (18) months from the closing of this Private
Placement Offering] based upon the Company's decision not to proceed with the
Initial Public Offering, each Warrant shall automatically convert on such date
into one share of Common Stock. If the Initial Public Offering is not
consummated by __________, 1997 [eighteen (18) months from the closing of this
Private Placement Offering] for any other reason, these Warrants shall
automatically become null and void.
(y). Merger or Consolidation.
In case of any consolidation of the Company with, or merger of
the
7
8
Company with, or merger of the Company into, another corporation (other than a
consolidation or merger which does not result in any reclassification or change
of the outstanding common stock of the Company), the corporation formed by such
consolidation or merger shall execute and deliver to the Holder a supplemental
warrant agreement providing that the Holder shall have the right thereafter
(until the expiration of such Warrant) to receive, upon exercise of his Warrant,
the kind and amount of shares of stock and other securities and property
receivable upon such consolidation or merger by a holder of the number of shares
of common stock of the Company for which his Warrant might have been exercised
immediately prior to such consolidation, merger, sale or transfer. Such
supplemental warrant agreement shall provide for the automatic conversion
provision of Section 6 and adjustments which shall be identical to the
adjustments provided in Section 5. The above provisions of this Section 7 shall
similarly apply to successive consolidations or mergers.
(z). Exchange and Replacement of Warrant.
This Warrant is exchangeable without expense, upon the
surrender hereof by the registered Holder at the principal executive office of
the Company for a new Warrant of like tenor and date representing in the
aggregate the right to purchase the same number of Shares as are purchasable
hereunder in such denominations as shall be designated by the Holder hereof at
the time of such surrender.
Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and, in case of loss, theft or destruction, of indemnity or security
reasonably satisfactory to it, and reimbursement to the Company of all
reasonable expenses incidental thereto, and upon surrender and cancellation of
this Warrant, if mutilated, the Company will make and deliver a new Warrant of
like tenor, in lieu of this Warrant.
(aa). Elimination of Fractional Interests.
The Company shall not be required to issue certificates
representing fractions of Shares on the exercise of this Warrant, nor shall it
be required to issue scrip or pay cash in lieu of fractional interests, it being
the intent of the parties that all fractional interests shall be eliminated.
(bb). Reservation of Securities.
The Company shall at all times reserve and keep available out
of its authorized common stock, solely for the purpose of issuance upon the
exercise of this Warrant, such number of Shares as shall be issuable upon the
exercise hereof. The Company covenants and agrees that, upon exercise of this
Warrant and
8
9
payment of the Purchase Price therefor, all Shares issuable upon such exercise
shall be duly and validly issued, fully paid and nonassessable.
(cc). Notices to Warrant Holders.
Nothing contained in this Warrant shall be construed as
conferring upon the Holder hereof the right to vote or to consent or to receive
notice as a shareholder in respect of any meetings of shareholders for the
election of directors or any other matter, or as having any rights whatsoever as
a shareholder of the Company.
(dd). Notices.
All notices, requests, consents and other communications
required or permitted hereunder shall be in writing and shall be delivered
personally, telegraphed or sent by certified, registered, or express mail,
postage prepaid, and shall be deemed given when so delivered personally,
telegraphed or, if mailed, five days after the date of deposit in the United
States mails, as follows:
(ee). If to the Company, to:
TelCom Group USA, Inc.
575 Lexington Avenue, Suite 410
New York, New York 10022
Attn: Ronald G. Nathan, President
and Chief Executive Officer
With a copy to:
Olshan Grundman Frome & Rosenzweig
505 Park Avenue
New York, New York 10022
Attn: Robert H. Friedman Esq.
(ff). If to the registered Holder, to the address of such
Holder as shown on the books of the Company.
(gg). Successors.
All the covenants, agreements, representations and warranties
contained in this Warrant shall bind the parties hereto and their respective
heirs, executors, administrators, distributees, successors and assigns.
(hh). Headings.
9
10
The headings in this Warrant are inserted for purposes of
convenience only and shall have no substantive effect.
(ii). Law Governing.
This Warrant is delivered in the State of New York and shall
be construed and enforced in accordance with, and governed by, the laws of the
State of New York, without giving effect to conflicts of law principles.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed in its corporate name by, and such signature to be attested to by, a duly
authorized office and has caused its corporate seal to be affixed hereto on the
date first above written.
TELCOM GROUP USA, INC.
By:
------------------------------
Name: Ronald G. Nathan
Title: President and
Chief Executive Officer
[SEAL]
Attest:
- -----------------------
10
11
SUBSCRIPTION FORM
(To be Executed by the Registered Holder
in order to Exercise the Warrant)
The undersigned hereby irrevocably elects to exercise the
right to purchase __________ Shares represented by this Warrant in accordance
with the conditions hereof and herewith makes payment of the Purchase Price of
such Shares in full.
_________________________
Signature
_________________________
Address
_________________________
Dated: Social Security Number or
Taxpayer's Identification
Number
11